Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Briarwood Community Mental Health Center
(NPI: 1770792061),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-09-591
Decision No. CR2338

Date: March 11, 2011

DECISION

The application of Petitioner, Briarwood Community Mental Health Center, to participate
in the Medicare program as a community mental health center (CMHC) is denied.

I. Background

Petitioner is located in Houston, Texas, and is represented in this matter by its Chief
Executive Officer and Program Director, Shalaish Pathak, LSW. Petitioner seeks to
enroll in the Medicare program as a CMHC. The parties do not agree as to the date that
Petitioner filed its enrollment application. Petitioner asserts in its letter to me dated
October 13, 2009, that the application was “completed” on December 12, 2005.
Petitioner asserts in a letter to me dated April 27, 2010, that the application was “filed”
on December 12, 2005. The Centers for Medicare and Medicaid Services (CMS) asserts
in its “Brief in Opposition to Appeal” at page 1, that Petitioner’s enrollment application
was filed on July 31, 2006. However, CMS states in its Reply Brief (CMS Reply) at page
3, that the application was filed on February 20, 2006. The copy of the application
offered as evidence by Petitioner reflects that it was signed by Mr. Pathak on December
12, 2005, January 6, 2006, and February 20, 2006. Petitioner’s Exhibit (P. Ex.) 1, at 6-8.
However, the copy of the application offered by Petitioner does not reflect when it was
mailed or received by CMS or its contractor, TrailBlazer Health Enterprises, LLC. The
copy of the application offered as evidence by CMS bears date stamps that show it was
received in various offices of CMS or TrailBlazer on February 23, 2006 (CMS Exhibit 3,
at 6, 8, 13, 15, 17, ), July 26, 2006, and July 31, 2006 (CMS Ex. 3, at 1-2). Petitioner
also offered a letter dated February 27, 2006, from TrailBlazer, which states that the
application date was January 10, 2006. P. Ex. 2, at 1. For purposes of this decision, I
accept January 10, 2006 as the date Petitioner’s application for enrollment was filed.’

TrailBlazer informed Petitioner in its letter dated February 27, 2006, that it recommended
approval of Petitioner’s enrollment application. TrailBlazer advised Petitioner that the
next step of the enrollment process involved a possible site visit or survey. P. Ex. 2.
CMS acknowledged receipt of the application by letter dated March 28, 2006, and
requested additional information. P. Ex. 4, at 1. Petitioner responded on October 30,
2006. P. Ex. 4, at 2. Petitioner applied for and received a National Provider Identifier
(NPI) on May 22, 2007. P. Ex. 4, at 4. On October 9, 2007, a CMS representative
advised Petitioner that it had been determined that Petitioner’s twenty-four hour
emergency service was not available and, based on a visit to the address in the
application, it was determined to be the address for a nursing home; the telephone
number in the application was for a nursing home; and no one at the nursing home
recognized the name of Mr. Pathak. The CMS representative advised Petitioner to
reapply when Petitioner resolved the identified issues. P. Ex. 4, at 6. Petitioner requested
a hearing by an administrative law judge (ALJ) of the Departmental Appeals Board (the
Board) by letter dated October 17, 2007. P. Ex. 5, at 5-6. Petitioner requested review of
the denial of its enrollment application. On December 3, 2007, Petitioner’s request for
hearing was returned with the explanation that the Board did not hear such appeals. P.
Ex. 5, at 4.

On December 15, 2008, CMS conducted a survey of Petitioner’s facility. CMS notified
Petitioner by letter incorrectly dated March 6, 2008, that Petitioner did not meet the
requirements for certification to participate in Medicare as a CMHC. CMS Ex. 1; CMS
Ex. 2, at 21-22. CMS advised Petitioner by letter dated April 10, 2009, referring to the
initial determination letter dated March 6, 2009, that Petitioner could request
reconsideration. CMS Ex. 2, at 13. Petitioner requested reconsideration by letter dated
April 18, 2009. CMS Ex. 2, at 14. CMS advised Petitioner by letter dated July 8, 2009,
that it determined on reconsideration to deny Petitioner’s enrollment as a CMHC. CMS
Ex. 2, at 26-27.

' The date the application was filed has no impact upon my decision in this case.
Petitioner requested a hearing before an ALJ by letter dated July 15, 2009. CMS Ex. 2, at
28. The case was assigned to me for hearing and decision on July 22, 2009. An
Acknowledgement and Prehearing Order dated July 22, 2009 (Prehearing Order), was
issued at my direction. Petitioner waived an oral hearing and requested an expedited
decision on the written record pursuant to 42 C.F.R. § 498.66, by letter dated August 7,
2009. On September 21, 2009, the parties filed an “Agreed Motion for Disposition by
Written Submission and Briefing Schedule” that was received on September 29, 2009.
On October 1, 2009, I issued an order granting the parties’ agreed motion and directing
that they file and serve their evidence and briefs not later than October 17, 2009.
Petitioner submitted a thirteen-page letter dated October 13, 2009, with no certificate of
service and 500 pages of documents, none of which were marked as exhibits and with no
exhibit list. Petitioner’s submissions did not conform to and were in violation of my
Prehearing Order.” On October 15, 2009, CMS filed an agreed motion for a one-week
extension to file its brief and exhibits. I granted CMS’s motion by order dated October
19, 2009. CMS filed its brief and CMS Exs. | through 14 on October 26, 2009.

In an email on November 4, 2009, Petitioner’s representative indicated to the Attorney
Advisor assigned to assist me that he intended to file a reply to the CMS brief or
objections to the CMS evidence. No reply was received by February 12, 2010, and the
Attorney Advisor inquired of Petitioner by email whether he requested that the record
continue to be held open. Petitioner responded by email on February 13 and March 3,
2010, expressing confusion about the procedure for filing a reply or objections and
indicating a desire for more time to reply or object. On April 2, 2010, I issued an Order
to File Reply Briefs that directed that each party file a reply brief and any evidentiary
objections not later than April 30, 2010. Copies of Petitioner’s exhibits as marked by
staff and the exhibit list compiled by staff were provided to CMS and Petitioner with the
Order. The parties timely filed their reply briefs. Petitioner filed a three-page letter to
which it attached various documents, again not marked as exhibits. The documents
attached to Petitioner’s reply-letter were numbered 1| through 18 and I have marked them
collectively P. Ex. 22. On May 18, 2010, Petitioner filed a letter requesting permission to
submit a news article printed from the internet, also not marked as an exhibit. I have
marked the article P. Ex. 23.

Petitioner has not objected to my consideration of the exhibits submitted by CMS, and
CMS Exs. | through 14 are admitted. CMS asserts in its Reply Brief that Petitioner’s
exhibits, specifically P. Exs. 10, 11, 12, 13, 15, 18, and 19, contain patient medical
records dated after the December 15, 2008 survey. CMS argues that I should decline to

> Rather than penalize Petitioner for violating my Prehearing Order, my staff marked
Petitioner’s documents and compiled an exhibit list.
consider any documents dated after the July 8, 2009, reconsideration decision. CMS
argues that the issue before me is whether the reconsideration determination was correct.
CMS argues, without explanation, that Petitioner’s compliance after the December 15,
2008 survey has no bearing upon whether or not the reconsideration determination was
correct on July 8, 2009. CMS Reply at 1-2, 8. Pursuant to the Secretary’s regulations
applicable to provider and supplier enrollment appeals, I am to examine any new
documentary evidence submitted by the provider or supplier to determine whether the
provider or supplier had good cause for submitting the evidence for the first time at the
ALJ level. If I find good cause, than I am to accept the evidence and consider it in
reaching a decision. If I do not find good cause, than I am to reject the evidence. 42
C.F.R. § 498.56(e). In this case, the reconsideration decision does not list what evidence
was considered and I cannot determine, with one exception, whether Petitioner’s
evidence was considered at the reconsideration level. The exception is the evidence
dated after the reconsideration date of July 8, 2009 — clearly, if the evidence did not exist
at the time, it could not be considered. Thus, absent a showing of good cause, evidence
dated after July 8, 2009, is new and should not be considered.

The other CMS argument is that I cannot consider evidence that is not relevant to the
issue of whether Petitioner meets the requirements for a CMHC. 5 U.S.C. § 556(c)(3)
and (d). The CMS position is that only evidence that tends to show Petitioner was or was
not qualified at the time of the survey on December 15, 2008, is relevant to my
determination. However, CMS cites no authority to support this argument, and I find the
argument is unpersuasive. Accordingly, I will admit and consider all evidence bearing a
date prior to July 8, 2009, that has any tendency to show whether or not Petitioner met
the requirements to participate as a CMHC. P. Ex. 10 includes records for the period
April 2009 through July 7, 2009, and accepting Petitioner’s representation that they
reflect services delivered by Petitioner, the documents are relevant and admitted. P. Ex.
11 includes documents with dates of October 2008 through December 2008, and
accepting Petitioner’s representation that they reflect services delivered by Petitioner, the
documents are relevant and admitted. P. Ex. 12 includes documents dated June 2009
through August 3, 2009. The documents included in P. Ex. 12 dated after July 8, 2009,
specifically pages 18 and 32 through 41, are not consider relevant and not admitted. I
accept Petitioner’s representation that the remainder of the documents in P. Ex. 12
reflects services delivered by Petitioner, and the documents are relevant and admitted. P.
Ex. 13 includes documents with dates in March 2009 through April 2009, and accepting
Petitioner’s representation that they reflect services delivered by Petitioner, the
documents are relevant and admitted. P. Ex. 15 includes documents from January 2009
through March 2009, and accepting Petitioner’s representation that they reflect services
delivered by Petitioner, the documents are relevant and admitted. P. Ex. 18 includes
documents dated in March 2009 and April 2009, and accepting Petitioner’s representation
that they reflect services delivered by Petitioner, the documents are relevant and
admitted. The documents in P. Ex. 19 are all dated in March 2009, and accepting
Petitioner’s representation that they reflect services delivered by Petitioner, the

documents are relevant and admitted. No objection has been interposed to the remainder
of Petitioner’s exhibits, and P. Ex. 1 through 9, 14, 16 and 17, and 20 through 23 are also
admitted.

IL. Discussion
A. Issue

The issue in this case is whether CMS had a basis to deny Petitioner enrollment in
the Medicare program as a CMHC providing partial hospitalization services.

B. Applicable Law

Title XVIII of the Social Security Act (Act) establishes the Medicare program that
reimburses health care organizations and practitioners for covered medical items and
services they provide to Medicare beneficiaries. Act §§ 1811-12, 1831-32.° A provider
or supplier of medical items or services must be approved for enrollment in Medicare to
be eligible for reimbursement from Medicare. Act § 1866; 71 Fed. Reg. 20,754 (Apr. 21,
2006). A CMHC is a “provider” (42 C.F.R. § 400.202), and a provider’s enrollment is
documented by a properly executed “provider agreement” (42 C.F.R. § 489.11). Under
the Act, a CMHC may have a provider agreement but only for the purpose of providing
“partial hospitalization services.” Act § 1866(e)(2).

According to the Act, a CMHC is an entity that:

(i)(D provides the mental health services described in section
1913(c)(1) of the Public Health Service Act; or (II) in the case
of an entity operating in a State that by law precludes the
entity from providing itself the service described in
subparagraph (E) of such section, provides for such service
by contract with an approved organization or entity (as
determined by the Secretary);

(ii) meets applicable licensing or certification requirements
for community mental health centers in the State in which it is
located; and

> Citations in this decision are to the sections of the Act rather than the United States
Code (U.S.C.) sections. Title 18 of the Act may be found at
www.ssa.gov/OP_Home/ssact/title1 8/1800.htm, and that resource includes both the
section of the Act and the correct U.S.C. section.
(iii) meets such additional conditions as the Secretary shall
specify to ensure (I) the health and safety of individuals being
furnished such services, (II) the effective and efficient
furnishing of such services, and (III) the compliance of such
entity with the criteria described in section 1931(c)(1) of the
Public Health Service Act.

Act § 1861(f£)(3)(B).

A CMHC must provide the following mental health services under the Public Health
Service Act:

(A) Services principally to individuals residing in a defined
geographic area (hereafter in this subsection referred to as a
“service area’’).

(B) Outpatient services, including specialized outpatient
services for children, the elderly, individuals with a serious
mental illness, and residents of the service areas of the centers
who have been discharged from inpatient treatment at a
mental health facility.
(C) 24-hour-a-day emergency care services.

(D) Day treatment or other partial hospitalization services, or
psychosocial rehabilitation services.

(E) Screening for patients being considered for admission to
State mental health facilities to determine the appropriateness
of such admission.

42 U.S.C. § 300x-2(c)(1) (Public Health Service Act § 1913(c)(1)).

According to the Secretary’s regulations, a CMHC:

(1) Provides outpatient services, including specialized
outpatient services for children, the elderly, individuals who
are chronically mentally ill, and residents of its mental health
service area who have been discharged from inpatient
treatment at a mental health facility;

(2) Provides 24-hour-a-day emergency care services;

(3) Provides day treatment or other partial hospitalization
services, or psychosocial rehabilitation services;

(4) Provides screening for patients being considered for
admission to State mental health facilities to determine the
appropriateness of this admission; and
(5) Meets applicable licensing or certification requirements
for CMHCs in the State in which it is located.

42 C.F.R. § 410.2.

Section 1861ff(3)(A) of the Act defines partial hospitalization services as a program
furnished either by a hospital to its outpatients, or bya CMHC. 42 C.F.R. §§ 410.27,
410.172. Partial hospitalization is an intensive ambulatory outpatient treatment program
that offers less than twenty-four hour psychiatric services to mentally ill patients as an
alternative to inpatient psychiatric care. Green Hills Enters., LLC, DAB No. 2199, at 2
(2008); 42 C.F.R. §§ 410.2, 410.43. The partial hospitalization services that may be
reimbursed by Medicare are described at 42 C.F.R. § 410.43(a). Services that are
separately covered by Medicare are not compensable as partial hospitalization services,
including services furnished to skilled nursing facility residents. 42 C.F.R.

§§ 410.43(b)(5), 411.15(p). Therefore, services provided by a CMHC to a skilled nursing
facility resident may not be reimbursed to the CMHC.

To participate in and receive payment from the Medicare program, a provider, such as a
CMHC, or supplier must submit an enrollment application and meet the enrollment
requirements set forth in the regulation. 42 C.F.R. § 424.510(a) and (d). CMS may
conduct an on-site review to verify enrollment information and compliance with
enrollment requirements. 42 C.F.R. § 424.510(d)(8). CMS may deny a provider’s or
supplier’s enrollment in the Medicare program for failure to comply with any of the
enrollment requirements. 42 C.F.R. § 424.530(a). The denial by CMS ofa provider’s or
supplier’s enrollment in the Medicare program may be based upon an unsatisfactory on-
site review, if that review finds that the provider or supplier is not operational or meeting
enrollment requirements. 42 C.F.R. § 424.530(a)(5).

Pursuant to 1866(h)(1) and (j)(8) of the Act, a provider or supplier denied enrollment is
entitled to a hearing and judicial review. The procedures applicable to a hearing by an
ALJ and review by the Board are set forth in 42 C.F.R. Part 498. 42 C.F.R. § 424.545(a).
The burden is upon the provider or supplier to demonstrate that it meets enrollment
requirements and to produce evidence that satisfies that burden. 42 C.F.R. § 424.545(c).

C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are in bold followed by my statement of pertinent facts and

analysis. I have carefully considered all the evidence and the arguments of both parties,
though not all may be specifically discussed in this decision. I discuss in this decision the
credible evidence given the greatest weight in my decision-making.’ The fact that
evidence is not specifically discussed should not be considered sufficient to rebut the
presumption that I considered all the evidence and assigned such weight or probative
value to the credible evidence that I determined appropriate within my discretion as an
ALJ. There is no requirement for me to discuss the weight given every piece of evidence
considered in this case, nor would it be consistent with notions of judicial economy to do
so.

1. Petitioner has not shown that it was a CMHC within the meaning of
section 1861(ff)(3)(A) of the Act.

2. Petitioner has not shown that it has provided the core services of a
CMHC required by section 1913(c)(1) of the Public Health Service Act
and 42 C.F.R. § 410.2.

a. Facts

Petitioner’s application to enroll as a CMHC reflects that Petitioner’s legal business name
as reported to the Internal Revenue Service is “Shalaish Pathak” doing business as
“Briarwood CMHC” and that the business was started on December 8, 2005. CMS Ex. 3,
at 4. The address for Petitioner was entered as Briarwood Healthcare, 7633 Bellfort,
Houston, Texas, and the application indicated that Petitioner owned or leased the
location. CMS Ex. 3, at 5. Petitioner’s representative in this proceeding, Shalaish
Pathak, LSW was listed as having an ownership interest of five percent or greater (CMS
Ex. 3, at 6, 14; P. Ex. 1, at 3), but the organizational structure was noted to be a sole
proprietorship (CMS Ex. 3, at 4) consistent with Petitioner’s tax status (P. Ex. 2, at 2).
Lakesia Smith, LVN, was listed as the Managing Employee effective December 12,
2005. CMS Ex. 3, at 7, 13; P. Ex. 1, at 4. Mark S. Moeller, MD, was listed as Medical
Director effective December 12, 2005. CMS Ex. 3, at 8; P. Ex. 1, at 2. Petitioner’s
representative, Mr. Pathak, signed the application as “CEO.” CMS Ex. 3, at 9, 17-18; P.
Ex. 1, at 6.

CMS offered as evidence copies of what appear to be a tri-fold brochure for Briarwood
CMHC that is undated. The brochure lists Petitioner’s address as 7633 Bellfort, Houston,
Texas. The brochure lists hours of operation of 9:00 a.m. to 5:00 p.m., Monday through
Friday and states weekend and evening appointments are available. The brochure lists

* “Credible evidence” is evidence that is worthy of belief. Black's Law Dictionary 596
(18th ed. 2004). The “weight of evidence” is the persuasiveness of some evidence
compared to other evidence. Jd. at 1625.
the following services: partial hospitalization program, counseling, inpatient referral,
outpatient therapy, intensive outpatient therapy, placement services, clinical assessment
for mental health warrants, assistance with medical appointments, case management,
medication management, and transportation. The second page or verso lists outpatient
services to children, elderly, chronically mentally ill, and patients discharged from
psychiatric inpatient hospital; twenty-four hour emergency care; referral screening for
state mental hospital admission assessments; and “PHP level of care.” CMS Ex. 3, at 29-
30.

Petitioner introduced as evidence a letter dated February 7, 2006 addressed to Mr. Pathak,
as the “Program Director” for “The Briarwood Health Care Center” at 7633 Bellfort in
Houston from the Mental Health and Mental Retardation Authority (MHMRA) of Harris
County Texas. P. Ex. 3, at 1-2. The letter acknowledged that Mr. Pathak had inquired
about obtaining an agreement with MHMRA as part of providing partial hospitalization
services. The letter instructed Mr. Pathak to submit materials for review. Mr. Pathak
sent the requested information with a letter dated August 28, 2006, on Briarwood Health
Care Center stationary. Mr. Pathak indicated in his letter that Petitioner’s “[p]hone is
available 24/7 and is answered by facility staff and directed to mental health staff if
necessary;” that out-patient services are provided to “elderly resident as ordered by
physician;” and that children and adolescent services are provided at the facility during
the evening and at the local school next door to the facility if needed. P. Ex. 3, at 3-4.
On April 11, 2007, Mr. Pathak sent a letter to MHMRA acknowledging their recent visit
to Briarwood CMHC and PHP (partial hospitalization program). P. Ex. 2, at 5. On May
15, 2007, MHMRA of Harris County offered Petitioner a provisional memorandum of
understanding effective for 180 days with a regular twelve month memorandum of
understanding being contingent upon CMS approving Petitioner as a CMHC. The
provisional memorandum allowed Petitioner to send patients to MHMRA for screening
for admission to state mental health facilities. P. Ex. 3, at 7 to 18; CMS Ex. 14.

Petitioner introduced as evidence a copy of an email dated October 9, 2007, from Sheryl
Barrett-Bowie at CMS advising Mr. Pathak that: CMS intended to deny the CMHC
application because the twenty-four hour emergency service was not operational;
Petitioner’s address was actually a nursing home; and when the number Petitioner
provided was called, it was the nursing home and the person who answered reported they
did not know Mr. Pathak. Mr. Pathak responded by email on October 12, 2007, that he
was the on-call twenty-four hour emergency service and that the telephone is shared
during regular working hours with the nursing home. P. Ex. 4, at 26.

Petitioner sent CMS a letter dated November 8, 2007, forwarding patient records as of
October 25, 2007, with a list of ten patients attached to the letter, seven listed as out-
patient (two of whom are noted to be children) and three partial hospitalization patients
who had been discharged from inpatient hospitalization. P. Ex. 4, at 9-10. However,
10

Petitioner has not provided me copies of the patient records forwarded to CMS in
November 2007.

On December 15, 2008, a CMS surveyor, Thomas Scheidel, RN, made an unannounced
visit to Petitioner’s facility to conduct a survey. Surveyor Scheidel provided sworn
testimony by affidavit that based on his observations, Petitioner’s records, staff
interviews, ° and his experience surveying CMHC applicants, he determined that
Petitioner did not meet the requirements of a CMHC. CMS Ex. 4. Surveyor Scheidel’s
findings were: (1) Petitioner was located inside a skilled nursing facility named
“Briarwood Health Care Center” and did not present itself to the public or other health
care professionals as a distinct entity offering partial hospitalization services to the public
— staff at the front desk of the nursing facility could not identify the location of the
CMHC in the building and there was no signage on or inside the property informing the
public of the existence of the CMHC or CMHC-related literature in the nursing home’s
lobby or the single conference room purportedly used by the CMHC; (2) Surveyor
Scheidel found no evidence that the CMHC advertised itself as serving the community;
(3) no schedule for operations of the CMHC was posted, and Surveyor Scheidel
concluded that Mr. Pathak was not even going to be at the facility the day of the survey
until Surveyor Scheidel contacted him by telephone; (4) the only clinical records for
review were those of the skilled nursing facility, and there were no discrete CMHC
clinical records; (5) based on his interview with Mr. Pathak, the surveyor concluded that
the CMHC did not have alternate sites for operating other than the nursing facility
conference room and client’s homes; and (6) there were no discrete CMHC
interdisciplinary treatment plans and goals. CMS Ex. 4, at 2-3. Copies of clinical
records obtained by Surveyor Scheidel during the survey are in evidence as CMS Exs. 5
through 12. CMS Ex. 4, at 2 n.1.

b. Analysis

A CMEC may participate in and be reimbursed by Medicare, but only for the limited
purpose of providing partial hospitalization services. Act § 1866(e)(2). Section
1861(ff)(3)(B) of the Act is clear that to qualify as a CMHC, an entity must be providing,
directly or by contract, the services specified by section 1913(c)(1) of the Public Health
Service Act (42 U.S.C. § 300x-2(c)(1)). Section 1913(c)(1) requires that a CMHC
provide all the following: (1) services within its geographic service area; (2) outpatient
services for children, the elderly, individuals with a serious mental illness, and residents

> Surveyor Scheidel does not provide the name of Petitioner’s representative who he
interviewed during the survey. But it is clear from the evidence that it was Mr. Pathak
who met with Surveyor Scheidel. P. Ex. 6.
11

of the service areas of the centers who have been discharged from inpatient treatment at a
mental health facility; (3) twenty-four emergency care services; (4) day treatment or other
partial hospitalization services, or psychosocial rehabilitation services; and (5) screening
for patients being considered for admission to state mental health facilities to determine
the appropriateness of such admission. The clear intent of section 1861(ff)(3)(B) of the
Act, based upon the plain meaning of its language, is that an entity qualifies as a CMHC
only if it actually provides the services listed in section 1913(c)(1) of the Public Health
Service Act. Furthermore, section 1913(c)(1) clearly states that all the services must be
provided by a CMHC. The Secretary included the requirements of section 1913(c)(1) of
the Public Health Service Act in his regulations and added the requirement that a CMHC
must meet applicable licensing requirements. 42 C.F.R. § 410.2. It is not sufficient for
an entity to show that it is ready, willing, and able to provide the required services or less
than all of the required services. Comprehensive Behavioral Healthcare, DAB CR890
(2002); Psychstar of Am., DAB CR645, at 6 (2000). In this case, Petitioner has failed to
show that it has consistently provided all the services to eligible individuals in its service
area.

I conclude based upon my review of all the evidence that Petitioner has failed to meet its
burden to show that it has ever met the requirements of the Act, the Public Health Service
Act, or the Secretary’s regulations to be a CMHC. Petitioner does not dispute that its
“facility” is located within a single conference room of a nursing facility. Petitioner does
not dispute the surveyor’s testimony that there was no signage or schedule posted inside
or outside the nursing facility to alert the public or potential clients of the location of
Petitioner within the nursing facility. Petitioner also does not dispute that nursing facility
staff members were either unaware of or unable to state where Petitioner operated within
the facility. Petitioner’s evidence shows that Petitioner did not have an agreement for
screening for psychiatric admissions with MHMRA of Harris County until May 15, 2007,
and the agreement was only effective for 180 days and subject to extension only if CMS
accepted Petitioner as a CMHC. I could infer from these facts that Petitioner never
operated as a CMHC. However, I need not rely only upon that inference as Petitioner has
failed to submit evidence that it provided the services required by the Public Health
Service Act. I note first that the evidence Petitioner has submitted shows that its only
twenty-four hour emergency service was Mr. Pathak being on call. There is no evidence
that Mr. Pathak ever actually provided emergency care services, during regular business
ours or at other times. Other than the brochure I have described, there is no evidence
that Petitioner ever held itself out to the public as being available to provide any mental
ealth services within its geographic service area. There is also no evidence that the
brochure was ever distributed outside the nursing facility in which Petitioner was located.

Both Petitioner and CMS have offered clinical records for my consideration. Surveyor
Scheidel obtained from Petitioner during the survey copies of clinical records for nine
patients. The nine patients Petitioner alleged it served included a 70-year-old man who
was discharged from a psychiatric hospital to Briarwood Health Care Center on

12

September 9, 2008. CMS Ex. 5, at 1-2. The records obtained during the survey included
those of an 18-year-old man who was assessed by MHMRA of Harris County on October
16, 2008. CMS Ex. 6. The records for a third patient, a female, include a document that
purports to be a “Master Treatment Plan” and progress notes dated in October and
November 2007. The records do not reflect the age of the patient but do indicate recent
release from inpatient psychiatric hospitalization. CMS Ex. 7. CMS Ex. 8 is records of a
66-year-old man from 2007 and 2008. The records indicate that he was a resident of
Briarwood Health Care Center. CMS Ex. 8, at 9, 15. The fifth patient was a 75-year-old
female, who was a resident of Briarwood Nursing & Rehabilitation, ° and her records are
from September 2008. CMS Ex. 9. CMS Ex. 10 is records of a 74-year-old female.
CMS Ex. 11 is records of a 79-year-old female. CMS Ex. 12 is records of a 13-year-old
female from 2005, 2006, and 2007. The child’s consent for treatment/counseling services
is dated October 5, 2005, before Petitioner applied to be a CMHC, and the provider of
services is listed as Briarwood Healthcare. CMS Ex. 12, at 23.

Petitioner submitted clinical records for eleven patients. P. Ex. 10 is records of a 78-
year-old female from April through July 2009. P. Ex. 11 is records from October through
December 2008, of a 56-year-old female who was discharged from the psychiatric
hospital to Briarwood Nursing Home on November 14, 2008. P. Ex. 11, at 1-2. P. Ex. 12
includes records of a 32-year-old female for the period June through August 2009. P. Ex.
13 includes records for an 82-year-old female nursing home resident for March and April
2009. P. Ex. 14 is records for a 79-year-old male for the period October to November
2007. The clinical records of an 84-year-old male nursing home resident from January,
February, and March 2009 are P. Ex. 15. P. Ex. 16 is records of a 58-year-old male
resident of Briarwood Health Care Center dated in October and November 2006, and
November 2009. P. Ex. 17 is the records of a 72-year-old female Briarwood Health Care
Center resident dated September through November 2007. P. Ex. 18 includes records of
an 85-year-old female resident of Briarwood Health Care Center dated in March and
April 2009. The records of a 52-year-old male resident of Briarwood Health Care Center
for the period March 2009 are in evidence as P. Ex. 19. P. Ex. 20 is the records of a 54-
year-old female resident of Briarwood Health Care Center from 2006, 2007, and 2008.

The parties have provided me records for twenty of Petitioner’s patients from October
2005 through August 2009. Nine of those records are for residents of Briarwood Health
Care Center or Briarwood Nursing and Rehabilitation and two are for residents of

® The evidence shows that Briarwood Health Care Center, Briarwood Nursing &
Rehabilitation, and Briarwood Nursing Home are different names for the same facility.
There is no dispute that Briarwood Health Care Center, Briarwood Nursing &
Rehabilitation, and Petitioner all share the same address at 7633 Bellfort, Houston, Texas.
13

unspecified nursing facilities. Petitioner may have provided partial hospitalization
services’ to all eleven residents but none are compensable by Medicare as the individuals
are residents of nursing facilities. 42 C.F.R. §§ 410.43(b)(5), 411.15(p). Seven of the
records are for individuals who may not have been nursing facility residents. One of the
seven was 18-years-old, and, therefore, not a child, for as a general rule, one must be
under the age of eighteen to be considered a child under the Act. Act §§ 202(d), 216.
The records include only one child, a 13-year-old. I conclude that evidence that
Petitioner provided treatment to one child in nearly four years is insufficient to show that
Petitioner was providing services to children, a core service required to qualify as a
CMHC. [also conclude that Petitioner has failed to show that it provided twenty-four
hour emergency services, also a core service required to qualify as a CMHC. Finally, I
have received no evidence that Petitioner provided screening for patients being
considered for admission to a state mental health facility and the evidence shows that
Petitioner only had an agreement with MHMRA of Harris County effective for only a
period of 180 days from May 15, 2007 to about November 11, 2007. Accordingly,
Petitioner has failed to show that it ever provided all the core services required by the
Public Health Service Act for a CMHC and Petitioner has failed to show that it qualified
to be enrolled in Medicare as a CMHC.*

7 T make no judgment regarding the quality of any services provided by Petitioner or
whether those services actually satisfy the requirements for partial hospitalization
services under the Act and regulations. My decision turns upon the failure of Petitioner
to provide all the core services it needed to in order to qualify as a CMHC. Contrary to
Petitioner’s arguments in its request for hearing and letters, it cannot qualify as a CMHC
simply by providing partial hospitalization services, no matter the quality of those
services.

® Petitioner’s arguments regarding the delayed processing of its application fails to
acknowledge the delays caused by Petitioner’s failure to submit the completed
application or to respond to requests for documents in a timely fashion. Further, even if
all the delay was the fault of CMS or its contractor, I have no authority to fashion a
remedy for Petitioner. Petitioner also suggests that there may have been some retribution
or retaliation by the agency due to complaints Petitioner made to Congress and the Vice
President. I have no authority or jurisdiction to review such allegations. My review is de
novo and my decision is based only upon the evidence presented and the law applicable.
The fact that Mr. Pathak may have exercised his right to complain to his elected
representatives has no impact upon my decision.
14

III. Conclusion

For the foregoing reasons, the application of Petitioner to participate in the Medicare
program as a CMHC is denied.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Amann's Orthopedics and Prosthetics, Inc.,
(Supplier Number: 0229870001),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-10-1001
Decision No. CR2337

Date: March 15, 2011

DECISION

Petitioner, Amann's Orthopedics and Prosthetics, Inc., appeals a reconsideration decision
by a Medicare hearing officer with National Supplier Clearinghouse (NSC), Palmetto
GBA (Palmetto), a CMS contractor. The undisputed evidence establishes that Petitioner,
a medical equipment supplier, was not in compliance with Medicare program
requirements. As a consequence, I grant the motion of the Centers for Medicare and
Medicaid Services (CMS) for summary judgment and uphold the determination to revoke
Petitioner’s enrollment in the Medicare program.

I. Applicable Law and Regulations

Section 1834(j)(1) of the Social Security Act, 42 U.S.C. § 1395m(j)(1), states the
requirements for the issuance and renewal of a supplier number for suppliers of medical
equipment and supplies. This section provides that “no payment may be made. . . for
items furnished by a supplier of medical equipment and supplies unless such supplier
obtains (and renews at such intervals as the Secretary may require) a supplier number.”

To participate in Medicare as a medical equipment supplier and to maintain a supplier
number and billing privileges, an entity must also meet the specific requirements, referred
2

to as “supplier standards,” set forth at 42 C.F.R. § 424.57(c) for suppliers of “durable
medical equipment, prosthetics, orthotics, and supplies” (DMEPOS). 42 C.F.R.

§ 424.57(a). As relevant here, supplier standard eight requires a supplier to allow CMS
or CMS contractors to conduct on-site inspections to ascertain supplier compliance with
Medicare requirements. 42 C.F.R. § 424.57(c)(8). Also, a supplier’s location must be
accessible to beneficiaries and to CMS during reasonable business hours, and the supplier
must maintain a visible sign and post its hours of operation. 42 C.F.R. § 424.57(c)(7).

Regulations provide that CMS will revoke a supplier’s billing number if it is found not to
meet the supplier standards or other requirements in section 424.57(c). 42 C.F.R.

§ 424.57(d), (e). Furthermore, CMS may revoke a currently enrolled supplier’s
Medicare billing privileges if it determines, based on an on-site review, that the supplier:
(1) is no longer operational to furnish Medicare covered items or services; or (2)
otherwise fails to meet Medicare enrollment requirements. 42 C.F.R. § 424.535(a)(5).

Il. Background and Procedural History

Petitioner is a DMEPOS supplier. NSC conducts site inspections on behalf of CMS to
determine if a supplier is in compliance with applicable Medicare DMEPOS supplier
standards. On March 31, 2010 at 2:00 p.m. and on April 8, 2010 at 2:30 p.m., NSC
attempted to inspect Petitioner’s facility during Petitioner’s posted hours of operation.'
CMS Ex. 8, at 2-3. At both times, the facility was locked, and the inspector observed no
one at Petitioner’s facility. /d. at 7. Photographs included in the site inspection reports
show no note on the facility door to indicate why the facility was not open. Jd. at 9-10.

On April 22, 2010, Palmetto issued a notice informing Petitioner that it was revoking its
supplier number because NSC was twice unable to conduct an on-site inspection during
Petitioner’s posted hours of operation. CMS Ex. 6, at 1. On April 27, 2010, Petitioner
submitted a reconsideration request and a corrective action plan (CAP), explaining that
Petitioner often worked by appointment in hospitals, nursing homes, and patient homes
during business hours. CMS Ex. 5. Petitioner proposed shortening his office hours to
9:00 a.m. to 3:00 p.m. and stated that, when leaving the office, he would post the time he
would return along with his telephone number. Jd.

NSC processed Petitioner’s CAP and attempted to conduct a site inspection on June 4,
2010 at 10:10 a.m. On this date, the facility was locked, and a notice was posted on the
door indicating that Petitioner would return at 1:00 p.m. CMS Ex. 9, at 7, 9. NSC made
another attempt to conduct a site inspection on June 8, 2010 at 1:05 p.m. Again, the
facility was locked, and a posted notice stated that Petitioner would return at 3:00 p.m.
Id. at 7, 10. Date-stamped photographs indicate Petitioner’s posted hours of operation as
9:30 a.m. to 2:30 p.m., Monday through Friday. Jd. at 10.

' During this time period, Petitioner’s posted hours of operation were Monday through
Friday from 8:30 a.m. to 3:30 p.m.
3

On June 17, 2010, Palmetto sent a letter to Petitioner acknowledging receipt of
Petitioner’s request for reconsideration and CAP. However, Palmetto refused to reinstate
Petitioner’s Medicare billing privileges because compliance with Medicare supplier
standards could not be verified. CMS Ex. 3. Palmetto advised Petitioner that it
forwarded Petitioner’s request for reconsideration and CAP to a Medicare Hearing
Officer for review. Jd. On September 3, 2010, a Medicare Hearing Officer issued a
decision denying Petitioner’s request for reconsideration. CMS Ex. 1. The decision
states that Petitioner failed to comply with 42 C.F.R. § 424.535(a)(5)(ii), specifically with
regard to site inspection compliance. Jd. at 3.

On September 20, 2010, Petitioner filed a hearing request (HR) with the Civil Remedies
Division of the Departmental Appeals Board (Board) to appeal the reconsideration
decision. This case was initially assigned to Board Member Leslie A. Sussan, pursuant to
42 C.F.R. § 498.44, which permits a Board Member to hear appeals under 42 C.F.R. Part
498. An Acknowledgment and Pre-hearing Order was sent to the parties on October 4,
2010. On October 8, 2010 Petitioner submitted a letter in response to the Pre-hearing
Order.

On October 25, 2010, this case was reassigned to me for hearing and decision. On
November 15, 2010, CMS filed a motion for summary judgment. With its brief (CMS
Br.), CMS submitted nine exhibits (CMS Exs. 1-9). On December 31, 2010, Petitioner
submitted a letter in response to CMS’s motion for summary judgment (P. Letter).
Petitioner also submitted two exhibits, marked as Exhibit A and B (P. Exs. A and B), and
requested a brief extension to gather evidence. On January 12, 2011, Petitioner submitted
a brief in support of its motion for summary judgment (P. Br.). With its brief, Petitioner
filed seven exhibits (P. Exs. 1-7). In the absence of objection, I admit CMS Exs. 1-9 and
P. Exs. 1-7 and P. Exs. A and B to the record.

Ill. Issue, Findings of Fact, Conclusions of Law
A. Issue

The sole issue in this case is whether CMS was legally authorized to revoke Petitioner’s
enrollment as a supplier in the Medicare program

B. Applicable Standard

The Board stated the standard for summary judgment:
Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to

judgment as a matter of law. . .. The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
4

material fact for trial and that it is entitled to judgment as a matter of

law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. . . . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an Administrative Law Judge (ALJ) in deciding a summary judgment motion
differs from the ALJ’s role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre
Dame, Inc, DAB No. 2291, at 5 (2009). The Board has further stated, “[i]n addition, it is
appropriate for the tribunal to consider whether a rational trier of fact could regard the
parties’ presentation as sufficient to meet their evidentiary burden under the relevant
substantive law.” Dumas Nursing and Rehab., L.P., DAB No. 2347, at 5 (2010).

C. Findings of Fact and Conclusions of Law

My findings and conclusions are in the italicized heading supported by the subsequent
discussion below.

CMS had a legitimate basis to revoke Petitioner’s billing privileges because
Petitioner was not operational pursuant to applicable regulations.

CMS moves for summary judgment asserting that no material facts are in dispute. CMS
contends that it was unable to conduct an on-site inspection of Petitioner’s business on
four separate occasions. CMS Br. at 6. Petitioner does not dispute, in its letter dated
October 8, 2010, that on March 31, 2010 and April 8, 2010 and again on June 4, 2010
and June 8, 2010 that an NSC inspector found Petitioner’s facility closed and locked
during its posted hours of operation. Because neither party asserts that a genuine dispute
as to a material fact exists, and because the evidence does not reflect such a dispute,
summary judgment is appropriate.

The issues in this case turn on the legal interpretation of the regulations, 42 C.F.R. §§
424.57 and 424.535, and other regulatory provisions that govern the revocation of
Medicare billing privileges. It is undisputed that on four occasions CMS attempted and
was unable to conduct an on-site inspection of Petitioner’s facility during its posted hours
of operation because the facility was closed. CMS Ex. 5, 8-9. Petitioner admits that he
often works by himself and leaves the facility at unexpected times during the day, and he
had inadequate staffing in the past. CMS Ex. 5; P. Letter of October 8, 2010; P. Br. at 2.
CMS will revoke a Medicare supplier's billing privileges if CMS determines that the
supplier is not in compliance with any of the supplier enrollment standards. 42 C.F.R. §

5

424.57(d); A to Z DME, LLC, DAB No. 2303, at 3 (2010). A Medicare supplier must be
“open to the public for the purpose of providing health care related services . . .and [be]
properly staffed. . . to furnish these services.” 42 C.F.R. § 424.502 (emphasis added). A
DMEPOS supplier must permit CMS or its agent to conduct on-site inspections to
ascertain supplier compliance with each of the enrollment standards and must be
accessible and staffed during the posted hours of operation. 42 C.F.R. § 424.57(c)(7),
(8). A supplier is neither “staffed” nor “accessible,” if the supplier’s location is closed
and locked. It is incumbent on Petitioner to hire adequate staff and make whatever
reasonable arrangements are necessary to keep its business open while still allowing for
patient visits at nursing homes and hospitals. “A Medicare supplier differs from a strictly
private business in that it is an integral part of a publicly run program. The requirement
that a supplier be open at all times during normal business hours reflects CMS’s
determination that a supplier be available to beneficiaries to meet their needs and to
alleviate their medical conditions.” 4A to Z DME, LLC, DAB CR1995, at 6 (2009).

Petitioner essentially argues that evidence suggesting that a business is customarily
operational can overcome evidence of a brief absence, especially if Petitioner mainly
works by appointment outside of the facility. See P. Letter of October 8, 2010; P. Br.
The Board has held, however, that the supplier standard “would have no meaning if
suppliers could deviate from their posted hours of operation on a regular basis.” Ita
Udeobong, d/b/a/ Midland Care Med. Supply and Equip ’t, DAB No. 2324, at 7 (2010).
In Udeobong, the petitioner admitted that it was closed from noon until 1:00 p.m. every
day for lunch, which was outside of its regularly posted hours of 10 am to 5 pm, Monday
through Friday. The Board further held that “[t]his problem would not be cured even if
... its employees posted temporary signs when they left, stating when they would
return.” Jd. CMS and its contractors have limited resources and cannot be compelled to
attempt multiple on-site inspections during a supplier’s posted business hours to
determine if a supplier is complying with all Medicare requirements.

Petitioner states he was confused regarding which regulations applied to his business.
However, Petitioner noted that he plans to correct his past noncompliance by
implementing Medicare requirements in his office policies in the future. P. Br. at 2.
Even if I assume all Petitioner’s statements are true and Petitioner’s noncompliance
was due to a staffing shortage during an isolated period of time and that Petitioner will
make necessary corrections in the future, applicable regulations still bind me. I lack
authority to invalidate or change an existing regulation or grant Petitioner an exemption
from compliance with regulatory requirements. 1866/CPayday.com, DAB No. 2289,
at 14. I must sustain CMS’s determination if a legitimate basis exists and where the
facts established noncompliance with one or more of the regulatory standards. /d. at 13.
For the reasons explained above, I conclude that CMS appropriately revoked
Petitioner’s supplier number for failure to comply with Medicare DMEPOS supplier
requirements. Accordingly, I grant summary judgment in favor of CMS.
IV. Conclusion

After reviewing the evidence in the light most favorable to Petitioner, I conclude that the
regulatory language is plain, and there is no genuine issue of material fact. I therefore
grant summary judgment to CMS because CMS acted within its regulatory authority to
revoke Petitioner’s billing privileges.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Cich Chiropractic, P.A., LLC, and
Curtis L. Cich, M.D.,

Petitioners
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-11-88
Decision No. CR2336

Date: March 9, 2011

DECISION DISMISSING HEARING REQUEST

The Centers for Medicare and Medicaid Services (CMS) moved to dismiss the hearing
request of Petitioners, Curtis L. Cich and Cich Chiropractic, P.A., LLC, under 42 C.F.R.
§ 498.72(b), because the revocations that are the subject of this appeal have been
rescinded, and the appeal is now moot. I grant CMS’s Motion to Dismiss Petitioners’
hearing request.

Dr. Cich is a chiropractor whose license was suspended for two years by the Minnesota
Board of Chiropractic Examiners on March 27, 2008. On May 10, 2010, the Wisconsin
Physicians Service (WPS), a Medicare contractor, sent a letter revoking the billing
privileges for both Dr. Cich and Cich Chiropractic, P.A., Dr. Cich’s solely owned
practice, which employed other chiropractors. Petitioners timely requested a
reconsideration decision. WPS issued an unfavorable reconsideration decision on
September 8, 2010. Petitioners appealed the reconsideration decision to the
Departmental Appeals Board on November 1, 2010. This case was assigned to me for
hearing and decision on November 17, 2010. On December 17, 2010, WPS rescinded the
revocations of the billing privileges of both Dr. Cich and Cich Chiropractic. CMS Ex. 9.
CMS filed a Motion to Dismiss along with nine exhibits on December 17, 2010.
Petitioner responded by an electronic mail message dated February 22, 2011. CMS filed
a reply brief accompanied by two attachments, labeled attachment (Att.) A and B,
received on March 1, 2011. I admit all exhibits into the record.

Petitioners responded to CMS’s Motion to Dismiss by stating that, although the
revocation of their Medicare billing privileges were rescinded on December 17, 2010,
another revocation was subsequently issued. Petitioner Dr. Cich states that “[o]n Feb. 15,
2011, I received a letter . . . informing me that my Medicare billing privileges were again
revoked with the same issues only correcting the date to June 25, 2008. CMS has filed
the Motion to Dismiss only for the express purpose of correcting a fatal error in their
original decision.” Petitioners argue that CMS’s Motion to Dismiss should be granted
only if WPS and CMS are prohibited from issuing subsequent revocations against
Petitioner.

The February 15, 2011 revocation is materially different from the May 10, 2010
revocation in this case. CMS Ex. 6; CMS Att. A. The May 10, 2010 revocation letter
revokes the billing privileges of both Dr. Cich and Cich Chiropractic effective March 27,
2008. However, the February 15, 2011 letter revokes only the billing privileges of Cich
Chiropractic as of June 25, 2008. The May 10, 2010 revocation letter gives two reasons
or the revocations: first, the failure to comply with enrollment requirements under 42
C.F.R. § 424.535(a)(1) because under 42 C.F.R. § 410.20 all services must be performed
by a licensed physician; and second, the failure to report an adverse legal action
regarding the March 27, 2008 suspension of Dr. Cich’s medical license pursuant to 42
C.F.R. § 424.535(a)(9). CMS Ex. 6. However, the February 15, 2011 letter revokes only
the billing privileges of Cich Chiropractic, not of Dr. Cich himself, based on the
ollowing three reasons: first, the failure to comply with enrollment requirements under
42 C.F.R. § 424.535(a)(1) because under 42 C.F.R. § 424.516 Cich Chiropractic was not
in compliance with State statutes since Dr. Cich retained his ownership interest in the
firm more than 90 days after his license was suspended; second, under 42 C.F.R. §
424.520(b), Cich Chiropractic did not comply with the reporting requirement of reporting
changes of information within 90 days of the effective date of the change; and third, Cich
Chiropractic failed to make a required disclosure under 42 C.F.R. § 420.206.

The second revocation of February 15, 2011 is a different initial determination, and
Petitioner must pursue an appeal through the reconsideration process prior to a hearing
before an ALJ. Petitioner may not circumvent the administrative appeals process by
appealing the February 15, 2011 revocation directly to an ALJ without going through the
reconsideration process, which will develop the administrative record. Therefore, I grant
CMS’s Motion to Dismiss pursuant to 42 C.F.R. § 498.70(b) because the revocations that
are the subject of this appeal have been rescinded, and the appeal is now moot.
This dismissal will not affect any future request for hearing that Petitioner may have
regarding the February 15, 2011 revocation. Petitioner should note, however, that a
Petitioner must request reconsideration before a contractor hearing officer in writing
within 60 days of the postmark of the February 15, 2011 revocation letter.
Thereafter, if Petitioner is not satisfied with the reconsideration decision, Petitioner may
still timely request a hearing before an ALJ.

/s/
Joseph Grow
Administrative Law Judge