Murtaza Mussaji v. HHS ( 2018 )

Case: 17-60694 Document: 00514566482 Page: 1 Date Filed: 07/23/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 17-60694 July 23, 2018
Summary Calendar Lyle W. Cayce
Clerk
MURTAZA MUSSAJI, D.O., P.A., doing business as Fairway Medical Clinic,
doing business as Shadow Creek Medical Clinic,
Petitioner
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES,
Respondent
Petition for Review of a Decision of the United States
Department of Health and Human Services,
Departmental Appeals Board,
Decision No. 2811
HHS Nos. A-17-48 & A-17-49
Before KING, ELROD, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:*
The United States Department of Health and Human Services
Departmental Appeals Board dismissed Murtaza Mussaji’s request for a
hearing to challenge revocation of two laboratory certificates issued pursuant
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 17-60694 Document: 00514566482 Page: 2 Date Filed: 07/23/2018
No. 17-60694
to the Clinical Laboratories Improvements Act of 1988. Mussaji now petitions
our court for review of the Board’s decision. The petition is denied.
I.
The Clinical Laboratories Improvements Act of 1988 (CLIA) regulates
labs that conduct diagnostic tests on human specimens. 42 U.S.C. § 263a. The
law requires that such labs obtain a certificate from the U.S. Department of
Health and Human Services (HHS). Id. § 263a(b). Certified labs must conform
to regulations promulgated by HHS, and HHS is authorized to inspect labs to
ensure compliance. Id. §§ 263a(c)(1), (g). If HHS discovers that a lab no longer
meets HHS’s certification requirements, the agency may impose sanctions
including revocation of the certificate. Id. § 263a(i). Before revoking a
certificate, HHS must provide the lab owner or operator “reasonable notice and
opportunity for hearing.” Id.
Under CLIA’s implementing regulations, the Centers for Medicare and
Medicaid Services (CMS), a division of HHS, gives notice to laboratories when
it makes an initial determination to revoke a CLIA certificate. 42 C.F.R. §
493.1844(g)(1). A lab “has 60 days from the notice of sanction to request a
hearing” before an Administrative Law Judge (ALJ). Id. § 493.1844(f)(1); see
also id. § 498.40(a)(2) (“The affected party or its legal representative or other
authorized official must file the [hearing] request in writing within 60 days
from receipt of the notice of initial, reconsidered, or revised determination
unless that period is extended . . . .”). The ALJ may extend the 60-day period
“[f]or good cause shown.” Id. § 498.40(c)(2).
Murtaza Mussaji operated two CLIA certified labs, Shadow Creek
Medical Clinic and Fairway Medical Clinic. On January 29, 2015, the Texas
Department of State Health Services notified Mussaji that a recent inspection
had revealed that Shadow Creek was not in compliance with CLIA
requirements. The letter further asserted that Shadow Creek’s “deficient
2
Case: 17-60694 Document: 00514566482 Page: 3 Date Filed: 07/23/2018
No. 17-60694
practices . . . pose[d] immediate jeopardy to patient health and safety.” The
letter stated that if Shadow Creek did not come into compliance, the case would
be referred to CMS.
CMS faxed Mussaji a letter on July 8, 2015. The letter stated that
Shadow Creek’s CLIA certificate would be revoked if, among other things,
Shadow Creek did not request a hearing by September 8, 2015. CMS faxed
Mussaji a similar letter regarding Fairway on January 12, 2016. This letter
explained that operators of labs that have had a certificate revoked are
prohibited from owning or operating any lab for two years. See 42 U.S.C. §
263a(i)(3). Therefore, because Shadow Creek’s certificate had been revoked,
Fairway’s certificate would be revoked as well. Mussaji denies receiving either
fax.
The parties agree, however, that Mussaji received several other related
letters from CMS. In an April 8, 2015 letter to Shadow Creek, CMS stated:
“Your laboratory’s CLIA certificate will be revoked effective June 9, 2015, if
one or all of the following occurs: . . . a request for a hearing is not received by
June 9, 2015.” (emphasis omitted). Mussaji responded to this letter, and sent
CMS back a plan to correct Shadow Creek’s deficiencies.
On September 23, 2015, CMS faxed Mussaji a letter informing him that
Shadow Creek’s CLIA certificate had been revoked due to, among other things,
Mussaji’s failure to file an appeal by September 8, 2015. Mussaji acknowledged
receiving this fax in an email dated September 29 2015, and again in a letter
to CMS dated October 20, 2015.
On October 30, 2015, CMS sent Mussaji a letter reiterating that Shadow
Creek’s CLIA certificate had been revoked and that the appeal deadline of
September 8, 2015 had passed. Mussaji responded to this letter and
acknowledged receiving it.
3
Case: 17-60694 Document: 00514566482 Page: 4 Date Filed: 07/23/2018
No. 17-60694
On April 5, 2016, CMS sent Mussaji a letter stating that Fairway’s CLIA
certificate had been revoked. The letter referenced the January 12, 2016 letter
and explained that Fairway’s deadline for appealing the revocation passed on
March 14, 2016. Mussaji again responded and acknowledged receiving CMS’s
letter.
On October 14, 2016—more than eighteen months after the first letter
Mussaji acknowledged and more than six months after the last—Mussaji
requested a hearing before an ALJ for both Shadow Creek and Fairway. The
ALJ found that Mussaji had actual knowledge that both certificates had been
revoked more than 60 days before he sought review, and held that his hearing
requests were therefore untimely. The ALJ further found that Mussaji failed
to show good cause for the delay and dismissed the request for a hearing.
HHS’s Departmental Appeals Board sustained the ALJ’s ruling, and Mussaji
now petitions this court for review.
II.
CLIA gives this court “jurisdiction to affirm . . . , or to set . . . aside in
whole or in part, temporarily or permanently” HHS’s decision to suspend a
laboratory’s certificate. 42 U.S.C. § 263a(k)(3). HHS’s factual findings are
conclusive “if supported by substantial evidence.” Id.
The ALJs finding that Mussaji had actual notice that Shadow Creek and
Fairway’s certificates had been revoked months before he requested a hearing
is supported by substantial evidence. As detailed above, Mussaji repeatedly
acknowledged receipt of various letters from CMS explaining that his CLIA
certificates had been revoked.
Mussaji argues however that CMS was required to send him notice by
U.S. mail, and the agency’s failure to do so rendered notice ineffective. He cites
42 C.F.R. § 498.20(a)(1), which states that, as a “[g]eneral rule” CMS “mails
4
Case: 17-60694 Document: 00514566482 Page: 5 Date Filed: 07/23/2018
No. 17-60694
notice of an initial determination to the affected party.” (emphasis added).
HHS disputes whether § 498.20(a)(1) applies, and argues that, even if it does,
faxing Mussaji notice satisfied the regulation. HHS further argues that, even
assuming it was required to send notice by U.S. mail, its procedural error was
rendered harmless by Mussaji’s actual knowledge of the revocations.
“‘Procedural perfection in administrative proceedings is not required’ as
long as ‘the substantial rights of a party have not been affected.’” Audler v.
Astrue, 501 F.3d 446, 448 (5th Cir. 2007) (quoting Mays v. Bowen, 837 F.2d
1362, 1364 (5th Cir. 1988)). Accordingly, this court will not set aside agency
action for mere harmless error. See, e.g, Graves v. Colvin, 837 F.3d 589, 592–
93 (5th Cir. 2016).
In Shinseki v. Sanders, the Supreme Court held that an agency’s notice
error was harmless where petitioner “ha[d] not explained . . . how the notice
error to which he point[ed] could have made any difference.” 556 U.S. 396, 413
(2009); see also Gov’t of Canal Zone v. Brooks, 427 F.2d 346, 348 (5th Cir. 1970)
(government agency’s noncompliance with own notice regulation was de
minimis error). Similarly here, given the ALJ’s finding that Mussaji waited
more than a year after first learning of the revocations to seek review, Mussaji
makes no showing that receiving notice by U.S. mail made any difference.
Therefore, even assuming that the relevant regulations require notice by U.S.
mail, which we do not decide today, CMS’s error in faxing the notice was
harmless. Similarly, given Mussaji’s actual knowledge of the revocation, the
ALJ’s finding that Mussaji failed to show good cause for his delay is supported
by substantial evidence.
III.
The petition for review is DENIED.
5