Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Leroy Manor
(CCN: 145674/0047704),
Petitioner,

v.

Centers for Medicare & Medicaid Services.

Docket No. C-17-2
Decision No. CR4749

Date: December 1, 2016

DECISION ON REMAND

I impose the following remedies against Petitioner, Leroy Manor, a skilled nursing
facility:

¢ Civil money penalties of $7000 per day for each day of a period that began on
February 23, 2014, and that continued through February 25, 2014.

¢ Civil money penalties of $200 per day for each day of a period that began on
February 26, 2014, and that continued through March 6, 2014.

I base my remedy determination in part on my findings that Petitioner contravened two
regulations governing its participation in the Medicare program at a level of
noncompliance that was so egregious as to comprise immediate jeopardy for residents of
Petitioner’s facility from February 23 through February 25, 2014. I do not find that
Petitioner failed to comply substantially with a third regulation, as is alleged by the
Centers for Medicare & Medicaid Services (CMS). I also base my remedy determination
on my finding that Petitioner remained out of compliance with participation
requirements, albeit at a level that is less egregious than immediate jeopardy, through
March 6, 2014.

I. Background

l originally entered partial summary judgment in favor of CMS and partial summary
judgment in favor of Petitioner, affirming the same findings of noncompliance and the
same remedy determinations that I sustain in this decision. Petitioner appealed that
decision to the appellate panel of the Departmental Appeals Board, which remanded the
case to me based on evidence that Petitioner had not offered in the case before me.

On remand, I instructed the parties to file final briefs addressing all issues in the case. I
denied Petitioner’s motion to cross-examine Patricia Fountain, R.N., whose direct
testimony is set forth in CMS Ex. 23.

lam receiving into evidence exhibits offered by CMS and identified as CMS Ex. 1-CMS
Ex. 22. I do not receive CMS Ex. 23. As I explained in my ruling denying cross-
examination of Ms. Fountain, her testimony is inadmissible because it consists of
conclusions of law. I also receive into evidence Petitioner’s exhibits identified as P. Ex.
1-P. Ex. 18. That includes the exhibit (P. Ex. 18) that Petitioner offered on appeal but did
not offer originally.

IL. Issues, Findings of Fact and Conclusions of Law
A. Issues

The issues are whether: Petitioner was noncompliant with Medicare participation
requirements; CMS’s determination of immediate jeopardy was clearly erroneous; and,
CMS’s remedy determinations are reasonable.

In this decision — as with my original decision in this case — I address only CMS’s
findings of immediate jeopardy level noncompliance. I find it unnecessary to adjudicate
the findings of non-immediate jeopardy level noncompliance. Petitioner’s immediate
jeopardy level noncompliance and failure to abate completely that noncompliance for a
period of days after immediate jeopardy was removed justify all of the remedies that I
sustain.

B. Findings of Fact and Conclusions of Law
In my original decision I applied the well-known standards for issuing summary

judgment, basing that decision entirely on facts that were undisputed and declining to
draw inferences favorable to a party where other inferences, even if unlikely, could be
drawn from those facts. I am not bound by those standards here. I draw such inferences
from the evidence as I find to be reasonable even if other and less likely inferences could
be drawn from the same evidence.

As I noted in my original decision, the case revolves around the care that Petitioner gave
to two of its residents, identified as Resident # 4 and Resident # 5. These two residents,
both elderly and demented women, were roommates in Petitioner’s facility. At about

1 a.m. on February 23, 2014, Resident # 4 assaulted Resident #5, who was 91 years old
at the time, by lying on Resident #5’s body while she covered the resident’s nose and
mouth with her hands. CMS Ex. 14 at 16; CMS Ex. 15; CMS Ex. 20 at 1, 3, 7. All of
CMS’s allegations of noncompliance relate to that assault.

CMS makes the following allegations of immediate jeopardy level noncompliance.

First, CMS asserts that Petitioner failed to comply with the requirements of 42 C.F.R.

§ 483.13(b). This regulation provides, among other things, that every resident of a skilled
nursing facility has the right to be free from physical abuse. CMS contends that
Petitioner failed to comply with this section because it allowed Resident # 4 to assault
Resident # 5. Elaborating on this assertion, CMS argues that Petitioner knew or should
have known that Resident # 4 posed a threat to Resident # 5 and failed to take meaningful
measures to address that threat. It argues, essentially, that the proximate cause of the
February 23, 2014 assault was the alleged failure by Petitioner to protect other residents
from Resident # 4.

Second, CMS asserts that Petitioner failed to comply with the requirements of 42 C.F.R.
§ 483.13(c). In relevant part this section directs a skilled nursing facility to develop and
implement policies to protect its residents against abuse. CMS claims that Petitioner did
not comply with this regulation in that Petitioner’s Administrator could not recall the
specific requirements of Petitioner’s abuse prevention policy when questioned about
them. CMS argues also that Petitioner violated its abuse prevention policy in that it
failed to provide continuous supervision of Resident # 4 in the period immediately
following her assault on Resident # 5.

Third, CMS asserts an additional immediate jeopardy level violation of 42 C.F.R.

§ 483.13(c) in that Petitioner allegedly failed — in contravention of its own abuse policy —
to notify law enforcement officials immediately of the assault of Resident #5 by Resident
#4,

In my original decision I held and I reaffirm here that the fact that a resident perpetrates
an assault on another resident of a skilled nursing facility is not in and of itself sufficient
to establish that the facility allowed its residents to be abused in violation of regulatory
requirements. In order for a facility to be culpable, the abuse must be foreseeable and
preventable. In other words, a facility has to know in advance or it should know that
there is a risk of resident-against-resident abuse and there must be evidence that the
facility ignored or failed adequately to deal with that risk, in order for it to be held liable
for failure to protect its residents against abuse.

In my original decision I held that Petitioner knew that Resident # 4 posed a potential
threat to other residents because its medical director diagnosed the resident to be
suffering from homicidal ideation shortly after her admission to the facility. On appeal,
Petitioner offered P. Ex. 18, which shows that the medical director did not make a
diagnosis of homicidal ideation until February 23, 2014, after Resident # 4 perpetrated
her assault against Resident #5. That new evidence rebuts the argument that the facility
was put on notice by a medical diagnosis of homicidal ideation made prior to the assault.

But, that evidence aside, there is ample additional evidence showing that Petitioner
should have known that Resident # 4 posed a danger to other residents. I find from that
additional evidence that Petitioner should have been aware of the danger associated with
housing Residents #s 4 and 5 together as roommates. Its failure to provide adequate
protection to Resident # 5 in advance of the February 23 assault is proof that Petitioner
failed to protect this resident against the likelihood of abuse.

Petitioner’s staff knew that Resident # 4 manifested severe behavioral problems almost
from the inception of her stay at Petitioner’s facility on January 8, 2014. CMS Ex. 14 at
1, 2, and 5. She had been diagnosed to have very poor judgment as a consequence of her
dementia. P. Ex. 2 at 11. On January 11, 2014, her physician noted that the resident’s
confusion was worsening and that she manifested anxiety, depression, and behavioral
problems. CMS Ex. 14 at 2.

Petitioner’s staff assessed the resident during the first week of her stay and found that her
behavioral issues included threatening, screaming, and cursing at other individuals.

P. Ex. 4 at 10-11. A dementia care plan for the resident developed by Petitioner’s staff
found that her poor judgment could pose a risk to herself and to others. P Ex. 6 at 4.

This evidence establishes that well before February 23, 2014, Petitioner’s staff knew that
Resident # 4 was a confused and demented individual whose dementia triggered angry
outbursts that included threatening, screaming, and cursing at other individuals. That
behavior was a warning to Petitioner’s staff that the resident was at least potentially
dangerous, particularly in light of the fact that she was housed with other individuals who

were similarly demented and who were enfeebled by physical impairments and the
vicissitudes of age.' But, more than that, Petitioner’s staff knew not only that the resident
was potentially dangerous, but that by mid-February 2014, she was engaging in behavior
suggesting that she was dangerous to others.

Petitioner’s staff documented several incidents of escalating anger and verbal aggression
by Resident # 4 between her admission and her February 23, 2014 attack on Resident # 5.
From January 10 through February 18, 2014, Resident # 4 engaged in several incidents of
severe verbal aggression directed towards other individuals. P. Ex. 5. On January 16,
2014, the resident engaged in severe verbal aggression directed against her roommate at
the time. P. Ex. 5 at 1. On February 12, 2014, the resident approached Petitioner’s
nurse’s station and complained about her roommate, asserting that her roommate was
talking and disturbing her. CMS Ex. 14 at 13. Within minutes Resident # 4 returned to
the nurse’s station, asserting in a raised voice that she could not take her roommate
talking and that she did not have to put up with it. Jd.

Resident # 4 manifested not only verbally aggressive behavior but behavior that
evidenced a severe or at least heightened level of confusion. On February 21, 2014, a
nurse found the resident in her room, crawling on her hands and knees. CMS Ex. 14

at 15. On the following day a nurse found the resident in her room squatting over the
side of her bed and urinating. /d. The resident was found on that same day yelling at a
nonexistent person (“Angie”) and telling her to put away her clothing. CMS Ex. 20 at 7.
On that same date, Resident # 4 was found to be in her roommate’s (Resident # 5’s) bed
on two occasions. CMS Ex. 18 at 11, 14.

Petitioner’s staff also knew that Resident # 4 manifested severe problems getting along
with other individuals, especially her roommates. In the few weeks between the
resident’s admission and her attack on Resident # 5, Resident # 4 had been housed with
three roommates other than Resident #5. P. Ex. 15 at 3-4. Petitioner’s decision to house
Resident # 4 with Resident #5 may have been a last resort on Petitioner’s part in that it
had run out of other candidates to serve as roommates for Resident # 4.

But, Resident # 5 — the victim of Resident # 4’s attack — was an individual whose
behaviors might be interpreted as provocative by an individual as demented and hostile as

' In my original decision I held that the resident’s verbal aggressiveness, standing alone,
was insufficient to put Petitioner on notice that she was capable of assaulting others. I do
not alter that finding. But, that is not to suggest that this verbal aggression was
meaningless. I find that the resident’s verbal aggressiveness — coupled with her other
documented behaviors and her advanced dementia — create a picture of an unstable
individual who was capable of physically abusive behavior.
was Resident # 4. Resident #5 suffered from severe dementia and psychosis. P. Ex. 9
at 1; P. Ex. 10 at 2; P. Ex. 12 at 5; see P. Ex. 16 at 3-4. She was severely impaired
physically and incapable of caring for herself. CMS Ex. 1 at 21. However, she was also
combative and was physically and verbally aggressive at times. Within the nine months
prior to being attacked on February 23, 2014, Resident # 5 had injured herself on three
occasions during which she was physically aggressive towards Petitioner’s staff. P. Ex.
12 at 12, 27, and 31.

The evidence thus establishes that Petitioner housed Resident # 4 — an individual who the
staff knew was a confused, combative, and at times irrationally angry person who often
made her roommates the targets of her aggression — with Resident # 5, another highly
confused and combative individual. I find that was a recipe for an explosion. The attack
that occurred on February 23, 2014, was both foreseeable and preventable. Petitioner is
liable for the physical abuse that occurred on that date.

Respondent argues that the evidence shows neither a foreseeable nor a preventable
likelihood of abuse. Essentially, it contends that it could not have known that Resident
# 4 presented a threat towards other individuals prior to February 23, 2014. It centers its
case on the fact that Resident # 4 was not physically aggressive towards her roommates
prior to February 23. Petitioner contends also that there is no evidence that Resident # 4
manifested hostility towards Resident # 5 prior to the February 23, 2014 attack. Indeed,
Petitioner contends that Resident # 4 did not manifest hostility towards any of her
roommates prior to February 23.

I do not find credible Petitioner’s assertion that Resident # 4 was not hostile towards her
roommates. In the six weeks prior to February 23, Resident # 4 was housed with four
different roommates due to the resident’s hostility and anger. On February 12, 2014,
Resident # 4 was openly hostile towards her roommate, albeit outside of her presence,
and she stated in a raised voice that she did not have to put up with her roommate’s
behavior. Moreover, even if the resident was not hostile towards specific individuals,
Petitioner’s staff remarked on her general level of hostility on numerous occasions. That

ostility and verbal aggression easily could morph into physical aggression given the
resident’s level of confusion and her at times bizarre behavior.

Petitioner asserts that prior to February 23, 2014, Resident # 4 never experienced an
episode consisting of a hallucination or one that involved confusing the identity of her
roommate with another person. I do not find that assertion to be persuasive: the
resident’s berating of “Angie” on the 22" of February appears to have been a
allucination and she may indeed have confused her roommate with “Angie” on the day
of her attack. Apparently, Resident # 4 thought that Resident # 5 was “Angie.” CMS Ex.
14 at 16. But, whether or not the resident was experiencing hallucinations does not
gainsay the fact that she clearly was a highly confused and aggressive individual and that
the staff knew that well before February 23.

In my original decision I found that the facts strongly supported CMS’s finding that
Petitioner’s noncompliance with 42 C.F.R. § 483.13 posed immediate jeopardy to
Petitioner’s residents. I find no reason to change that conclusion. The evidence
overwhelmingly supports the conclusion that Resident # 4 was capable of perpetrating
great harm to other individuals. On February 23, she assaulted Resident # 5 by covering
the resident’s nose and mouth with her hands while lying on top of her. She easily could
have suffocated the resident, a physically helpless person. I find that Petitioner’s failure
to perceive the likelihood that Resident # 4 could cause harm to other individuals created
a high probability of harm, injury, or death to others.

In my original decision I found no basis to conclude that Petitioner violated its abuse
prevention policy in contravention of 42 C.F.R. § 483.13(c) by failing to place Resident
# 4 under continuous supervision after she assaulted Resident # 5. I found that it was
true, as CMS contended, that the facility did not place the resident under continuous
supervision. Rather, Petitioner’s staff moved the resident to a vacant resident room on a
different hallway in Petitioner’s facility from the hallway containing the room in which
Resident # 4 had committed the assault. I found this action to be consistent with
Petitioner’s abuse policy which offered the staff the option of segregating a suspected
assailant from other residents or imposing continuous supervision. CMS Ex. 22 at 14.

I found also that Petitioner’s staff had placed Resident # 4 under a regime of bed checks
every 15 minutes and had placed the resident under continuous supervision after Resident
# 4 returned from the hospital where she had been sent for psychiatric evaluation shortly
after the assault.

Neither CMS nor Petitioner offered new evidence that would alter my original finding.

P. Ex. 18 is irrelevant to that finding. I find again that Petitioner’s actions concerning
supervision of Resident # 4 after the February 23 assault were consistent with Petitioner’s
own policy and regulatory requirements and I find no violation.

CMS now argues that there is another section of Petitioner’s anti-abuse policy — one not
addressed by me in my original decision — that Petitioner contravened. The relevant
language, according to CMS, states:

If the incident involves alleged abuse and substantiated evidence indicates
that another resident of the facility is the perpetrator of the abuse, then the
Administrator shall take all steps necessary to protect all residents in the
facility from abuse until the alleged perpetrator can be evaluated.

CMS Ex. 22 at 13; CMS Final Brief at 20. CMS argues that the “reasonable” step that
Petitioner should have taken in the immediate wake of Resident # 4’s assault on Resident
#5 was round-the-clock supervision of the resident.
lam not persuaded that this step was necessary in light of the precautionary action
actually taken by Petitioner. Its staff removed Resident # 4 from her room, segregated
her in another part of the facility, and observed her at 15-minute intervals until she was
sent to a hospital for psychiatric evaluation about 10 hours after she perpetrated the
attack. I find these actions to be sufficient to protect other residents from Resident # 4.
There is nothing in the record to suggest that during the 10-hour period Resident # 4
would have been in a position to assault additional residents.

In my original decision I found that Petitioner contravened its abuse policies and the
requirements of 42 C.F.R. § 483.13(c) by failing to notify law enforcement authorities of
Resident # 4’s attack on Resident # 5 immediately after the attack occurred. I found there
that Petitioner’s administrator admitted the error but that Petitioner contended that the
error was minimally harmful. I disagreed, finding that there was not only a potential for
more than minimal harm in that failure but that there was a likelihood of serious harm,
injury, or death to residents resulting from Petitioner’s failure to comply with its policy
on future occasions. I thus sustained an immediate jeopardy level finding of
noncompliance.

The parties offered nothing to change my analysis. | reaffirm the findings that I made in
my original decision.

Petitioner continues to characterize its failure to notify authorities immediately after the
February 23 assault as being, at worst, a “minor delay” that did not cause any actual harm
to residents. I find that the delay was anything but minor for the reasons that I stated in
my original decision. Moreover, the issue here is not whether that delay caused actual
harm but whether it created a likelihood of serious injury, harm, or death to a resident.
As I found in my original decision, Petitioner’s unawareness of its obligation to notify
law enforcement officials immediately after the February 23 assault supported a finding
that it would be unaware of its mandate in other cases involving other residents. And, as
I found there, and reiterate here, the requirement for immediate notification of law
enforcement authorities after an assault serves multiple important purposes. It protects
residents against the possibility of additional assaults, particularly in the case where the
assailant is unknown. It facilitates investigation of the event while the evidence is fresh.
And, it enables law enforcement authorities to preserve evidence that might otherwise be
destroyed.

In my original decision I found that CMS’s proposed civil money penalties of $10,000
per day for the period from February 23 through 25, 2014, were unreasonable because
they were predicated on CMS’s findings of three immediate jeopardy level deficiencies.
I reiterate that finding here. I again impose civil money penalties of $7000 per day for
the February 23-25 period based on the presence of two immediate jeopardy level
deficiencies during that period.
In my original decision I sustained penalties of $200 per day for the period running from
February 26 through March 6, 2014, predicated on my conclusion that Petitioner did not
establish that it had completely rectified the two immediate jeopardy level deficiencies
(continuing at a non-immediate jeopardy level of scope and severity after February 25)
that I had found. Nothing offered by the parties in their most recent arguments is a basis
for me to change that conclusion. I again conclude that it is unnecessary that I address
the additional non-immediate jeopardy level deficiencies found by CMS because the
$200 per day penalties are amply supported by Petitioner’s non-immediate jeopardy level
noncompliance with the two regulatory requirements that I discuss in this decision.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

Diabetes & Endocrine Associates, P.C.
(PTAN: 099726),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-836
Decision No. CR4748
Date: November 30, 2016
DECISION

Petitioner’s Medicare billing privileges were deactivated as a result of its failure to fully
respond to a revalidation request, and its billing privileges were subsequently reactivated
effective July 1, 2016, the date it submitted its enrollment application and supporting
documentation to reactivate its billing privileges. Petitioner has appealed the
determination that the effective date of its reactivation is July 1, 2016. For the reasons
discussed below, I conclude that the effective date of Petitioner’s reactivated Medicare
billing privileges remains July 1, 2016.

I. Background and Procedural History

Petitioner, Diabetes & Endocrine Associates, P.C., is a medical practice that is enrolled in
the Medicare program. Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.)
4.

On March 16, 2016, Wisconsin Physicians Service Insurance Corporation (WPS), a
Medicare administrative contractor, mailed a letter to Petitioner directing that it revalidate
its Medicare enrollment record. The letter explained that Petitioner needed to update or
confirm its enrollment record, to include its practice locations and reassignments. WPS
informed Petitioner that it must submit this information by May 31, 2016, and that failure
to respond to the notice could result in a hold on Petitioner’s payments, and possible
“possible deactivation of [its] Medicare enrollment.” WPS explained that deactivation
would cause a “gap in reimbursement.” CMS Ex. | at 1.
On May 24, 2016, WPS received a Form CMS-855B revalidation application from
Petitioner. Several days later, on May 27, 2016, WPS sent an email to Petitioner in
which it requested that Petitioner make corrections to and submit documentation in
support of its enrollment application, and informed Petitioner that “failure to submit a
complete revalidation enrollment application(s) and all supporting documents within 30
days will result in the deactivation of [its] Medicare billing privileges.” CMS Ex. 2 at 1-
2. WPS did not receive the required documentation; specifically, it did not receive the
requested Internal Revenue Service generated form providing the legal business name
and employer identification number or tax identification number. CMS Ex. 3 at 1. Ina
letter dated June 29, 2016, WPS rejected Petitioner’s revalidation application and
informed Petitioner it would need to file a new enrollment application with all required
documentation. CMS Ex. 3.

On July, 1, 2016, Petitioner submitted a new enrollment application to WPS.' CMS Ex.
6. On July 15, 2016, Petitioner received a letter from WPS informing it that its Medicare
enrollment revalidation had been approved, effective July 1, 2016, which is the date that
Petitioner submitted a complete enrollment application. CMS Ex. 4. WPS informed
Petitioner that it had been assigned a new Provider Transaction Access Number (PTAN),
effective July 1, 2016.

Petitioner requested reconsideration of the July 15, 2016 determination in a letter dated
July 21, 2016. Petitioner requested a date of reactivation of its billing privileges of June
27, 2016, so that there would be no gap in reimbursement from June 27 through 30, 2016.
CMS Ex. 5. In support of its request for reconsideration, Petitioner explained the
following:

The initial revalidation enrollment was submitted by our administrative
assistant, [L.I.], who left her employment with DEA abruptly. It is
unfortunate that we were left unaware of the status of the reapplication
caused by this circumstance. However, once we were made aware that
additional information was required by your office, we responded
promptly to your request and provided the necessary information and
documentation.

CMS Ex. 5 at 1. An August 9, 2016 reconsidered determination by WPS determined that
the effective date for billing privileges of July 1, 2016 was correct. In support of its
determination, WPS explained:

According to our records the revalidation letter for Diabetes & Endocrine
Associates, P.C. was mailed to 7831 Chicago CT Omaha, NE 68114-
3654 on March 16,2016, indicating that we need this form by May 31,
2016. On May 24, 2016, WPS Provider Enrollment (PE) received a

' Neither party has submitted a copy of the July 1, 2016 enrollment application.
CMS-855B revalidation application and PE sent a development email on
May 27, 2016, stating "Failure to submit a complete revalidation
enrollment application(s) and all supporting documents within 30 days
will result in the deactivation of your Medicare billing privileges." The
development information was not received and therefore the application
was rejected on June 29, 2016, and the Medicare billing number was
deactivated. The new enrollment application was received on July 1,
2016, and an effective date of July 1, 2016, was issued correctly which
has caused a gap in your reimbursement.

CMS Ex. 6 at 2.

Petitioner submitted a timely request for hearing by an administrative law judge that was
dated August 15, 2016, and received on August 22, 2016. I issued an Acknowledgment
and Pre-Hearing Order on August 26, 2016, in which I directed the parties to submit pre-
hearing briefs addressing all issues of law and fact, including any motions for summary
judgment, along with any proposed exhibits, including written direct testimony in the
form of an affidavit or declaration, of any proposed witness. Acknowledgment and Pre-
Hearing Order, §§ 4-8. The order advised the parties that a hearing for the purpose of
cross-examining witnesses “will be necessary only if a party files admissible, written
direct testimony, and the opposing party asks to cross-examine.” Acknowledgment and
Pre-Hearing Order, § 10.

CMS submitted a brief and motion for summary judgment (CMS Br.), along with seven
proposed exhibits. Petitioner submitted its brief in the form of a letter (P. Br.), and five
proposed exhibits. In the absence of any objections, I admit into evidence CMS Exs. 1-7
and Petitioner Exhibits (P. Exs.) 1-5.

Neither party has submitted witness testimony, and there is therefore no need to convene
a hearing for purposes of cross-examination of any witnesses. I consider the record in
this case to be closed, and the matter is ready for a decision on the merits.”

IL. Jurisdiction
I have jurisdiction to decide this case. See 42 C.F.R. §§ 498.3(b)(15), 498.5(/)(2).
II. Discussion

A. Issue

The issue in this case is:

> Tt is unnecessary in this instance to address the issue of summary disposition, as neither
party has requested an in-person hearing.
Whether CMS had a legitimate basis for establishing July 1, 2016, as the
effective date of Petitioner’s reactivated billing privileges.

B. Background law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. Payment under the program for services rendered to Medicare-eligible
beneficiaries may only be made to eligible providers of services and suppliers. Act

§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)). Petitioner is
a “supplier” of services under the Act and the regulations. A “supplier” furnishes
services under Medicare, and the term “supplier” applies to physicians or other
practitioners and facilities that are not included within the definition of the phrase
“provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). Pursuant to 42 C.F.R.

§ 424.505, a provider or supplier must be enrolled in the Medicare program and be issued
a billing number to have billing privileges and to be eligible to receive payment for
services rendered to a Medicare-eligible beneficiary.

To maintain Medicare billing privileges, a supplier such as Petitioner must revalidate its
enrollment information at least every 5 years. 42 C.F.R. § 424.515. When CMS notifies
a supplier that it is time to revalidate, the supplier must provide the requested information
and documentation within 60 calendar days of CMS’s notification. 42 C.F.R.

§ 424.515(a)(2).

CMS is authorized to deactivate an enrolled supplier’s Medicare billing privileges if the
enrollee fails to comply with revalidation requirements within 90 days of CMS’s notice
to revalidate. 42 C.F.R. § 424.540(a)(3). Particularly, CMS may deactivate billing
privileges if a supplier “does not furnish complete and accurate information and all
supporting documentation within 90 calendar days of receipt of notification from CMS to
submit an enrollment application and supporting documentation ...” /d. If CMS
deactivates a supplier’s Medicare billing privileges “[n]o payment may be made for
otherwise Medicare covered items or services furnished to a Medicare beneficiary.” 42
C.F.R. § 424.555(b). The regulation authorizing deactivation explains that
“{djeactivation of Medicare billing privileges is considered an action to protect the
provider or supplier from misuse of its billing number and to protect the Medicare Trust
Funds from unnecessary overpayments.” 42 C.F.R. § 424.540(c).

The reactivation of an enrolled provider or supplier’s billing privileges is governed by 42
C.F.R. § 424.540(b), and the process for reactivation is contingent on the reason for
deactivation. If CMS deactivates a provider or supplier’s billing privileges due its failure
to submit a complete and accurate application, to include all supporting documentation,
the enrolled provider or supplier may apply for CMS to reactivate its Medicare billing
privileges by completing the appropriate enrollment application or recertifying its
enrollment information, if deemed appropriate. 42 C.F.R. § 424.540(a)(3), (b)(1).
The effective date of billing privileges for a physician, nonphysician practitioner, and
physician and nonphysician practitioner organizations is governed by 42 C.F.R.

§ 424.520(d) and may be only be the later of two dates: the date when the practitioner
filed an application for enrollment that was subsequently approved by a Medicare
contractor charged with reviewing the application on behalf of CMS; or, the date when
the practitioner first began providing services at a new practice location. 42 C.F.R.

§ 424.520(d).

C. Findings of Fact, Conclusions of Law, and Analysis 3

I. On March 16, 2016, WPS requested that Petitioner revalidate its
Medicare enrollment record.

2. Petitioner submitted an enrollment application on May 24, 2016.

3. On May 27, 2016, WPS informed Petitioner that it must submit
additional documentation within 30 days to complete its revalidation
application; the requested documentation was not submitted to WPS
within 30 days.

4. On June 29, 2016, WPS informed Petitioner that it had rejected its
enrollment application.

5. Petitioner filed a new enrollment application on July 1, 2016.

6. Pursuant to 42 C.F.R. § 424.520(d), the effective date of Petitioner’s
reactivated billing privileges is July 1, 2016, the date of filing of the
Medicare enrollment application that WPS was able to process to
approval.

Petitioner is seeking an effective date of reactivated billing privileges dating back to June
27, 2016, the date on which Petitioner’s Medicare billing privileges were deactivated. P.
Br. Petitioner states that it failed to timely submit the requested documentation because it
was unaware of the ongoing revalidation process. Petitioner contends that an
administrative assistant, L.L., received the revalidation request and began the revalidation
process, but left employment “without notice” on April 27, 2016 without informing
Petitioner that it was undergoing revalidation. In fact, Petitioner states: “[t]hrough no
fault of our own, we were completely unaware that this process of revalidation had been
started and was due on May 31, 2016.” P. Br. at 1. However, evidence submitted by
Petitioner contradicts its arguments and demonstrates that Petitioner was unquestionably

> Findings of fact and conclusions of law are set forth in bold and italics.
aware that additional documentation needed to be submitted by the May 31, 2016
deadline; in fact, the evidence submitted by Petitioner demonstrates that a current
employee received the email request for additional documentation and forwarded this
request for action by another employee on the same day as the May 27, 2016 request. P.
Ex. 3 (May 27, 2016 email from J.R. to T.D. forwarding the May 27, 2016 email from
CMS entitled “Request for Corrections for Medicare Enrollment Application . . .”).
Additionally, while Petitioner asserts that L.L. left employment without notice on April
27, 2016, Petitioner did not submit its revalidation application until nearly a month /ater
on May 24, 2016, demonstrating that it was fully aware that it was required to revalidate
its enrollment record despite L.I.’s departure from employment. Petitioner’s arguments
are internally inconsistent and are belied by Petitioner’s own supporting evidence. It is
clear that Petitioner knew of the requirement to revalidate, as evidenced by its submission
of an enrollment application on May 24, 2016, and its confirmed receipt of the May 27,
2016 request for additional documentation. Petitioner failed to timely submit a complete
revalidation application, and WPS appropriately deactivated its billing privileges. 42
C.F.R. §§ 424.525(a)(2) and 424.540(a)(3).

Petitioner submitted a new and complete enrollment application on July 1, 2016, and
WPS processed that application to approval. WPS assigned an effective date for billing
privileges of July 1, 2016, which is the date Petitioner filed the latter enrollment
application. CMS Ex. 4. Petitioner is seeking an effective date of billing privileges
dating back to its deactivation date, but does not identify any authority supporting this
retroactive effective date for the reactivation of billing privileges. Rather, Petitioner’s
sole basis for contesting the effective date of its reactivated billing privileges is its
incredulous allegation that it was unaware of the pending request for additional
documentation in support of its revalidation enrollment application. The effective date of
the reactivation of billing privileges is governed by 42 C.F.R. § 424.520, “Effective date
of Medicare billing privileges,” which states, in pertinent part, that the effective date for
billing privileges, as applicable to this case, is “[t]he date of filing of a Medicare
enrollment application that was subsequently approved by a Medicare contractor.” 42
C.F.R. § 424.520(d)(1). The August 9, 2016 reconsidered determination explicitly relied
on 42 C.F.R. § 424.520(d) in determining that the effective date of Petitioner’s
reactivated billing privileges was correctly determined to be July 1, 2016. CMS Ex. 6 at
1. As previously discussed, WPS correctly deactivated Petitioner’s billing privileges
because it failed to complete its revalidation in accordance with the time periods
prescribed in 42 C.F.R. §§ 424.525(a)(2) and 424.540(a)(3), and the effective date
assigned for Petitioner’s reactivated billing privileges, July 1, 2016, is mandated by 42
C.F.R. § 424.520(d).
IV. Conclusion

For the foregoing reasons, I uphold the July 1, 2016 effective date assigned for
Petitioner’s reactivated Medicare billing privileges.

/s/

Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Rufus Edgar Sadler
(OI File No. 2-13-40288-2),
Petitioner,

v.

The Inspector General.

Docket No. C-16-669
Decision No. CR4747
Date: November 30, 2016
DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Rufus
Edgar Sadler, M.D., from participating in Medicare, Medicaid, and other federally funded
health care programs for a period of at least three years.

I. Background

Petitioner requested a hearing from the I.G.’s determination to exclude him. The I.G.
filed a brief in support of his determination, eight proposed exhibits (I.G. Ex. 1-L.G.

Ex. 8), and a reply brief. Petitioner filed a brief plus two proposed exhibits (P. Ex. A and
P. Ex. B). I receive the parties’ exhibits into the record.

Petitioner moved that I convene an in-person hearing in order that I may receive his
testimony. I deny that motion for two reasons. First, Petitioner failed to comply with my
July 26, 2016 pre-hearing order directing the parties to reduce any proposed testimony to
writing made under oath. Petitioner offered no such written direct testimony. Second,
the proposed testimony — as described by Petitioner — is inadmissible because it
constitutes a collateral challenge to the basis for his conviction. 42 C.F.R. §
1001.2007(d).

IL. Issues, Findings of Fact and Conclusions of Law
A. Issues

The issues are whether a basis exists to exclude Petitioner and whether exclusion for a
minimum of three years is reasonable.

B. Findings of Fact and Conclusions of Law

The I.G. excluded Petitioner on the asserted authority of section 1128(b)(1) of the Social
Security Act (Act). In relevant part this section authorizes the exclusion of any
individual convicted of a criminal offense, under federal or State law, relating to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct
with respect to any act or omission in a program (other than a health care program)
operated by or financed in whole or in part by any federal, State, or local government
agency. Act § 1 128(b)(1)(B).'

Petitioner does not deny that he was convicted of a misdemeanor consisting of theft (petit
larceny). He asserts that his conviction did not relate to theft from a program — a Head
Start program — operated by a government agency and he contends that he was not
convicted of a section 1128(b)(1) crime. The record belies those arguments.

Evidence offered by the I.G. proves unequivocally that Petitioner was convicted of a
misdemeanor consisting of theft of Head Start funds. He was charged with stealing
property from a program known as Sharon Baptist Headstart. 1.G. Ex. 5 at 1. Petitioner
pled guilty to a charge of petit larceny, and his sentence included restitution for the
benefit of the Sharon Baptist Board of Directors. 1.G. Ex. 7 at 3-4. I take notice that the
financing for Head Start Programs comes from federal funds.

Petitioner asserts that he didn’t steal Head Start funds but that he took money from
another entity known as S.B. Kids, Inc., which, he contends, does not receive federal
funds. Thus, according to Petitioner, section 1128(b)(1) is inapplicable. That argument
finds no support in the record of Petitioner’s conviction. He was convicted of stealing
from a Head Start program. The I.G.’s authority to exclude Petitioner derives

+ This section applies to crimes occurring after the enactment of the Health Insurance
Portability and Accountability Act of 1996, on August 21, 1996. The parties do not
dispute that Petitioner’s crimes transpired after that date.

from that conviction and not from what Petitioner now contends are the true facts of his
case. Moreover, Petitioner’s argument is, effectively, a collateral attack on the basis for
his conviction. He asserts that the documents that define the criminal charge, his
conviction, and his sentence to pay restitution all misstate the true nature of his crimes.
That is not an allowable argument. As a matter of law he may not attack the basis of his
conviction in this forum. 42 C.F.R. § 1001.2007(d).

An exclusion imposed pursuant to section 1128(b)(1) of the Act will be for a period of at
least three years in the absence of aggravating or mitigating evidence that justifies
lengthening or shortening the exclusion period. 42 C.F.R. § 1001.201(b)(1). The I.G.
imposed an exclusion of three years in this case predicated in part on the absence of
either aggravating or mitigating evidence. Petitioner does not contest the absence of such
evidence. Therefore, I find the three-year minimum exclusion to be reasonable.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Huron Valley Physicians PLLC,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-635
Decision No. CR4746
Date: November 29, 2016
DECISION

The Centers for Medicare & Medicaid Services (CMS) determined that the effective date
for the reactivation of the Medicare billing privileges for Huron Valley Physicians PLLC
(Huron Valley or Petitioner) was January 19, 2016. Huron Valley requested a hearing
before an administrative law judge to dispute this effective date. For the reasons stated
below, I affirm CMS’s determination.

I. Background and Procedural History

Huron Valley is an enrolled clinical or group practice in the Medicare program. See
CMS Exhibits (Exs.) 1, 5. On March 9, 2015, a CMS administrative contractor sent a
notice to Huron Valley to revalidate its Medicare enrollment information by submitting a
completed CMS-855 enrollment application or reviewing, updating, and certifying its
enrollment information through CMS’s internet-based system, called the Provider
Enrollment, Chain and Ownership System (PECOS). CMS Ex. | at 1-2. The notice
stated that if Huron Valley used PECOS, it could either electronically sign the
revalidation application or mail a signed certificate statement separately to the CMS
administrative contractor. CMS Ex. 1 at 1-2. Further, the notice informed Huron Valley
that if it failed to revalidate its enrollment information within 60 days, the CMS
administrative contractor might deactivate Huron Valley’s Medicare billing privileges.
CMS Ex. | at 3.

When Huron Valley did not respond to the revalidation notice, the CMS administrative
contractor contacted Huron Valley by telephone in June 2015, and again by mail in July
2015. CMS Exs. 2, 3. In its July 8, 2015 notice, the CMS administrative contractor
stated that it was terminating Medicare payments to Huron Valley and that Huron Valley
needed to immediately revalidate its enrollment or face possible deactivation. CMS Ex.
3. Huron Valley did not revalidate its enrollment and, in a September 1, 2015 notice, the
CMS administrative contractor deactivated Huron Valley’s billing privileges. CMS Ex.
4.

On January 8, 2016, the CMS administrative contractor received, via PECOS, a

revalidation enrollment application from Huron Valley. CMS Ex. 5 at 5. The CMS
administrative contractor later received a signed certification statement for the enrollment
application on January 19, 2016. CMS Ex. 5 at 1-4. On March 29, 2016, the CMS

administrative contractor issued an initial determination that provided Huron Valley wit
a February 6, 2016 effective date for Medicare billing privileges. CMS Ex. 6. Huron
Valley requested reconsideration of the effective date due to “unforeseen circumstances’
that caused a delay in revalidating; Huron Valley sought a September 1, 2015 effective
date for billing privileges. CMS Ex. 7. Ina May 19, 2016 reconsidered determination,
the CMS administrative contractor upheld the initial determination. CMS Ex. 8. On July
27, 2016, a CMS hearing officer revised the reconsidered determination and gave Huron
Valley an earlier effective date of January 19, 2016. CMS Exs. 8, 9.

Huron Valley requested a hearing to dispute the effective date of its billing privileges.
issued an Acknowledgment and Pre-Hearing Order (Order), which established a
submission schedule for pre-hearing exchanges. In response, CMS filed a motion for
summary judgment and prehearing brief (CMS Br.) along with nine exhibits Petitioner
submitted a brief (P. Br.).

II. Decision on the Written Record

I admit all of the proposed exhibits into the record because neither party objected to any
of them. Order 7; Civil Remedies Division Procedures (CRDP) § 14(e).

My Order advised the parties to submit written direct testimony for each witness and that
I would only hold an in-person hearing if a party requested to cross-examine a witness.
Order {J 8-10; CRDP §§ 16(b), 19(b). Neither party offered any written direct testimony.
Therefore, I issue this decision based on the written record. Order 4 11; CRDP § 19(d).
III. Issue

Whether CMS had a legitimate basis to assign January 19, 2016, as the effective date for
reactivation of Huron Valley’s Medicare billing privileges.

IV. Jurisdiction

I have jurisdiction to hear and decide this case. 42 U.S.C. § 1395cc(j)(8); 42 C.F.R.
§§ 424.545(a), 498.3(b)(15), (17), 498.5()(2).

V. Findings of Fact, Conclusions of Law, and Analysis
My findings of fact and conclusions of law are set forth in italics and bold font.

The Social Security Act authorizes the Secretary of Health and Human Services to
promulgate regulations governing the enrollment process for providers and suppliers.

42 U.S.C. §§ 1302, 1395cc(j). Providers and suppliers must enroll in the Medicare
program to receive payment for covered Medicare items or services. 42 C.F.R.

§ 424.505. The terms “Enroll/Enrollment means the process that Medicare uses to
establish eligibility to submit claims for Medicare covered services and supplies.”

42 C.F.R. § 424.502. A provider or supplier seeking billing privileges under the
Medicare program must “submit enrollment information on the applicable enrollment
application. Once the provider or supplier successfully completes the enrollment process
... CMS enrolls the provider or supplier into the Medicare program.” 42 C.F.R.

§ 424.510(a). CMS then establishes an effective date for billing privileges under the
requirements stated in 42 C.F.R. § 424.520(d) and may permit limited retrospective
billing under 42 C.F.R. § 424.521.

To maintain Medicare billing privileges, providers and suppliers must revalidate their
enrollment information at least every five years. CMS reserves the right to perform
revalidations at any time. 42 C.F.R. § 424.515. When CMS notifies providers and
suppliers that it is time to revalidate, they must submit the appropriate enrollment
application, accurate information, and supporting documentation within 60 calendar days
of CMS’s notification. 42 C.F.R. § 424.515(a)(2).

CMS can deactivate an enrolled provider or supplier’s Medicare billing privileges if the
provider or supplier fails to comply with revalidation requirements. 42 C.F.R.

§ 424.540(a)(3). A provider or supplier that is deactivated may file a rebuttal with CMS;
however, CMS’s decision to deactivate a provider or supplier is not an “initial
determination” subject to greater review. 42 C.F.R. §§ 424.545(b); 498.3(b). When
CMS deactivates a provider or supplier’s Medicare billing privileges “[n]o payment may
be made for otherwise Medicare covered items or services furnished to a Medicare
beneficiary.” 42 C.F.R. § 424.555(b). If CMS deactivates a provider or supplier’s billing
privileges due to an untimely response to a revalidation request, the provider or supplier
may apply for CMS to reactivate its Medicare billing privileges by completing a new
enrollment application or, if deemed appropriate, recertifying its enrollment information
that is on file. 42 C.F.R. § 424.540(b)(1).

1. A CMS administrative contractor received Petitioner’s revalidation enrollment
application on January 8, 2016, and Petitioner’s signed certification statement
for the application on January 19, 2016, and the CMS administrative contractor
ultimately approved that application.

Huron Valley submitted an enrollment application to revalidate its enrollment
information using PECOS on January 8, 2016. CMS Ex. 5 at 5-9. Huron Valley
submitted a signed certification statement for the enrollment application that CMS
received on January 19, 2016. CMS Ex. 5 at 1-4. The CMS administrative contractor
approved Huron Valley’s enrollment application and reactivated its Medicare billing
privileges effective February 6, 2016. CMS Ex. 6 at 1. On July 27, 2016, a CMS hearing
officer revised the effective date for Huron Valley’s Medicare billing privileges to
January 19, 2016. CMS Ex. 9 at 2.

2. The effective date for Petitioner’s Medicare billing privileges is January 19,
2016.

The effective date for Medicare billing privileges for physicians, non-physician
practitioners, and physician or non-physician practitioner organizations is the later of the
“date of filing” or the date the supplier first began furnishing services at a new practice
location. 42 C.F.R. § 424.520(d). The “date of filing” is the date that the Medicare
contractor “receives” a signed enrollment application that the Medicare contractor is able
to process to approval. 73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); Donald Dolce,
M.D., DAB No. 2685 at 8 (2016). CMS’s published guidance for its administrative
contractors states that the effective date for the reactivation of Medicare billing privileges
is the date on which the contractor received the enrollment application. Medicare
Program Integrity Manual (MPIM) § 15.27.1.2. Further, when a provider or supplier files
an enrollment application through PECOS, but separately provides a signed certification
statement, then the effective date for Medicare billing privileges is the date of the
signature. MPIM § 15.5.15.2(5).

In the present case, the CMS hearing officer properly determined that Huron Valley’s
effective date for reactivation of Huron Valley’s Medicare billing privileges is January
19, 2016, because that is the date that Huron Valley’s authorized official signed the
certification statement for the enrollment application that Huron Valley filed via PECOS.
Huron Valley has consistently stated that a number of problems arose before deactivation
occurred that precluded it from timely revalidating its Medicare enrollment. CMS Ex. 7;
Hearing Request, Additional Information at 1-4; P. Br. at 2-5. However, as stated above,
the issue in this case is whether CMS had a legitimate basis to assign Huron Valley a
reactivation effective date of January 19, 2016. Further, as mentioned above, CMS’s
decision to deactivate a provider or supplier’s Medicare billing privileges is not an
“initial determination” subject to administrative law judge review. See 42 C.F.R.

§§ 424.545(b); 498.3(b). Therefore, I am unable to modify the effective date CMS
provided for Huron Valley because it is the correct effective date based on Huron
Valley’s enrollment application filed in January 2016.

V. Conclusion

1 affirm CMS’s determination that Petitioner’s effective date for Medicare billing
privileges is January 19, 2016.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

Anchor Home Healthcare Services, Inc.,
(NPI: 1164460846 / PTAN: 457846)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-630
Decision No. CR4744
Date: November 28, 2016
DECISION

The enrollment and billing privileges of Petitioner, Anchor Home Healthcare Services,
Inc., are revoked pursuant to 42 C.F.R. § 424.535(a)(5)(i), ' effective June 13, 2014, for
failure to comply with the enrollment requirement established by 42 C.F.R.
§ 424.516(d)(2).
I. Background
Palmetto GBA (Palmetto), a Centers for Medicare & Medicaid Services (CMS) Medicare
Administrative Contractor, notified Petitioner by letter dated July 25, 2014, that its
Medicare billing number and privileges were revoked effective June 13, 2014. CMS
Exhibit (Ex.) 1 at 4-5. Palmetto cited 42 C.F.R. § 424.535(a)(5) as the basis for
revocation. Palmetto alleged that Petitioner was no longer operational to furnish

Medicare items or services and that Petitioner was not meeting Medicare enrollment
requirements. Palmetto alleged that a site visit was attempted on June 13, 2014, and it

' Citations are to the 2014 revision of the Code of Federal Regulations (C.F.R.), unless
otherwise stated.
found Petitioner was no longer operating at 8035 East R.L. Thornton Freeway, Suite 320,
Dallas, Texas (Thornton location). CMS Ex. | at 4. Palmetto also imposed a two-year
re-enrollment bar. CMS Ex. | at 5.

On September 9, 2014, Petitioner requested reconsideration. CMS Ex. 3. On October
28, 2014, CMS issued a reconsidered determination upholding the revocation pursuant to
42 C.F.R. § 424.535(a)(5)(i). CMS Ex. | at 1-3. The hearing officer found, based on the
site visit attempted on June 13, 2014, that Petitioner was no longer operational at the
Thornton location and Petitioner failed to present evidence that CMS was notified of a
change in practice location. CMS Ex. | at 2.

Petitioner requested a hearing before an administrative law judge (ALJ) on December 4,
2014. On December 11, 2014, the case was assigned to me to hear and decide, and an
Acknowledgement and Prehearing Order (Prehearing Order) was issued at my direction.

On January 22, 2015, CMS filed a combined prehearing brief and motion for summary
judgment with CMS Exs. | through 4. On February 23, 2015, Petitioner filed its
combined prehearing brief and opposition to CMS’s motion for summary judgment.
Petitioner filed its corrected P. Exs. 1 and 2 on March 2, 2015. On March 23, 2015, I
denied CMS’s motion for summary judgment. CMS filed CMS Exs. 5 through 11 on
April 30, 2015. Petitioner filed P. Exs. 3 through 9 on May 1, 2015. On September 4,
2015, the parties filed a joint motion to waive an oral hearing, which I granted by order
dated September 8, 2015. Therefore, this decision is based upon the documentary
evidence and the briefs of the parties.

On October 8, 2015, CMS filed its opening brief (CMS Br.) and proposed findings of fact
and conclusions of law. Also on October 8, 2015, Petitioner filed its opening brief (P.
Br.) and proposed findings of fact and conclusions of law. CMS waived its reply brief on
November 9, 2015. Petitioner failed to file a reply brief and, thereby, waived the right to
do so. Petitioner did not object to my consideration of CMS Exs. 1 through 11 and all are
admitted as evidence. Petitioner filed Petitioner’s exhibits 1 through 9. CMS did not
object to P. Exs. 3 through 9 and they are admitted and considered as evidence.

CMS objected to my consideration of P. Exs. | and 2 on grounds that Petitioner failed to
show good cause for the documents to be submitted for the first time in this proceeding.
CMS cited 42 C.F.R. § 498.56(e). CMS Prehearing Reply Brief at 1-2; CMS Br. at 4.
The regulation provides that in a provider or supplier case such as this, the ALJ must
“examine any new documentary evidence submitted to the ALJ by a provider or supplier
to determine whether the provider or supplier has good cause for submitting the evidence
for the first time at the ALJ level.” 42 C.F.R. § 498.56(e)(1). If good cause is found, the
evidence must be admitted and may be considered. 42 C.F.R. § 498.56(e)(2)(i). If good
cause is not found, the evidence must be excluded and may not be considered. 42 C.F.R.
§ 498.56(e)(2)(ii). Good cause is not defined in the CMS regulations that are applicable.
The Departmental Appeals Board (the Board) has never definitively defined “good
cause” in cases subject to 42 C.F.R. pt. 498, but has accepted ALJ rulings that cause
beyond the control of a party may be good cause, without ruling out the possibility that
other causes may also amount to “good cause.” See e.g., Hillcrest Healthcare, LLC,
DAB No. 1879 at 5 (2003); cf: SSA Inspector General v. Karen Kay Parham, DAB
No.1600 at 3 (2007). It is not necessary to attempt to define “good cause” in this case.

P. Ex. 1 is a form CMS-855A, a Medicare Enrollment Application. The form includes
entries showing that Petitioner is a home health agency (HHA) reporting practice location
information, payment address, and medical record storage information. P. Ex. 1 at 4-5.
Petitioner completed section 4 of the form to show a “change” effective August 17, 2013,
for Anchor Home Health Services at 310 Crooked Creek, Garland, Texas (Crooked Creek
location). CMS does not challenge the authenticity or relevance of P. Ex. 1. Whether or
not CMS objects, I may only admit and consider relevant and material evidence. 42
C.F.R. § 498.60(b). Evidence is relevant if it has any tendency to make a fact of
consequence to my decision, more or less probable than it would be without the evidence.
Fed. R. Evid. 401. Petitioner did not indicate by checking the available boxes on the
form whether it was adding or deleting the location. P. Ex. 1 at 9. P. Ex. 1 does not bear
the required signature or date and it is not possible to determine that the exhibit is
relevant to any issue I may decide. Petitioner did not file an affidavit or declaration that
explains the relevance of P. Ex. | and Petitioner waived the right to present testimony by
waiving an oral hearing. I conclude that the relevancy of P. Ex. 1 has not been
established and that document must be excluded for that reason.

P. Ex. 2 is a Texas Department of Aging and Disability Services Form 2021, License
Application. The form is signed by Petitioner’s purported Administrator and CFO and
dated July 22, 2013. CMS does not challenge the authenticity or the relevance of the
document. The document purports to report that Petitioner moved its operations to 310
Crooked Creek, Garland, Texas effective August 23, 2013. The fact that Petitioner
moved and sent the state notice of a change of address does not have any tendency to
show that it is more or less probable that Palmetto received a CMS-855A from Petitioner
that advised Palmetto of Petitioner’s change in practice location. I conclude that P. Ex. 2
is not relevant to prove or disprove any disputed issue of fact I must decide.
Accordingly, P. Ex. 2 is not admitted.

Furthermore, the fact that Petitioner moved its operations to the Crooked Creek location
on or about August 23, 2013, is not disputed. Therefore, P. Exs. 1 and 2 are not relevant
to aid my finding of any facts of consequence. The issue of consequence in this case is
not whether Petitioner moved; it is undisputed that it did. The issue of consequence is
whether CMS or Palmetto received proper notice of the move.
II. Discussion
A. Applicable Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known
as Medicare Part B. Administration of the Part B program is through contractors, such
as Palmetto. Act § 1842(a) (42 U.S.C. § 1395u(a)). Payment under the program for
services rendered to Medicare-eligible beneficiaries may only be made to eligible
providers of services and suppliers.” Act §§ 1834(j)(1) (42 U.S.C. § 1395m(j)(1));
1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395u(h)(1)). Petitioner, a
home health agency, is a provider. Act § 1866(u).

The Act requires the Secretary of Health and Human Services (Secretary) to issue
regulations that establish a process for the enrollment in Medicare of providers and
suppliers, including the right to a hearing and judicial review of certain enrollment
determinations, such as denial or revocation of enrollment and billing privileges. Act
§ 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to 42 C.F.R. § 424.505, a provider such as
Petitioner must be enrolled in the Medicare program and be issued a billing number to
have billing privileges and to be eligible to receive payment for services rendered to a
Medicare-eligible beneficiary.

Providers must submit complete, accurate, and truthful responses to all information
requested in the enrollment application. 42 C.F.R. § 424.510(d)(2). Pursuant to 42
C.F.R. §§ 424.502 and 424.510(d)(3), a provider’s application to enroll in Medicare must
be signed by an authorized official, i.e., one with authority to bind the provider or
supplier both legally and financially. Subsection 424.510(d)(3) provides that the
signature attests to the accuracy of information provided in the application. The signature
also attests to the fact that the provider or supplier is aware of and abides by all

> A “supplier” furnishes services under Medicare and includes physicians or other
practitioners and facilities that are not included within the definition of the phrase
“provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider of services,”
commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled
nursing facilities, comprehensive outpatient rehabilitation facilities, home health
agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C.

§ 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act. Act § 1861(u) (42 U.S.C.

§ 1395x(u)). The distinction between providers and suppliers is important because they
are treated differently under the Act for some purposes.

applicable statutes, regulations, and program instructions. 42 C.F.R. § 424.510(d)(3).
Providers must meet basic requirements depending on their type of service. 42 C.F.R.
§§ 424.505, 424.516, 424.517. Providers are also subject to additional screening
requirements depending upon the type of service they provide. 42 C.F.R. § 424.518.

The Secretary has delegated authority to CMS or its Medicare contractor to revoke an
enrolled provider’s Medicare enrollment and billing privileges and any provider
agreement for any of the reasons listed in 42 C.F.R. § 424.535(a). Revocation becomes
effective 30 days after CMS or one of its contractors mails the revocation notice to the
provider, subject to some exceptions not applicable in this case. 42 C.F.R. § 424.535(g).
A revoked provider is barred from re-enrollment for a minimum of one year, but no more
than three years, depending on the basis for revocation. 42 C.F.R. § 424.535(c)(1).

A provider whose enrollment and billing privileges have been revoked may request
reconsideration and review as provided by 42 C.F.R. pt. 498. 42 C.F.R. § 424.545(a). A
provider submits a written request for reconsideration to CMS or its contractor. 42
C.F.R. § 498.22(a). CMS or its contractor must give notice of its reconsidered
determination to the provider, giving the reasons for its determination and specifying the
conditions or requirements the provider failed to meet, and advising the provider of its
right to an ALJ hearing. 42 C.F.R. § 498.25. If the decision on reconsideration is
unfavorable to the provider, the provider has the right to request a hearing by an ALJ and
further review by the Departmental Appeals Board (the Board). CMS may also request a
hearing by an ALJ if it disagrees with the reconsidered determination. Act § 1866(j)(8)
(42 US.C. § 1395ce(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5()(2). A hearing
on the record, also known as an oral hearing, is required under the Act. Crestview Parke
Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004). The provider bears the
burden to demonstrate that it meets enrollment requirements with documents and records.
42 CFR. § 424.545(c).

B. Issue

Whether there was a basis for the revocation of Petitioner’s billing privileges and
Medicare enrollment.

C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold text followed by my findings of fact and
analysis.

1. There is a basis for revocation of Petitioner’s Medicare enrollment
and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i) because
Petitioner failed to satisfy the requirement of 42 C.F.R. § 424.516(d)(2)
to give CMS or its contractor notice within 90 days of Petitioner’s
deletion of an old practice location and the addition of a new practice
location.

2. Revocation is effective June 13, 2014, pursuant to 42 C.F.R.
§ 424.535(g).

a. Facts

There is no dispute that Petitioner was enrolled in the Medicare program as a home health
agency in June 2005. CMS Ex. 10 at 1. In February 2006, Petitioner was at the Crooked
Creek location. Petitioner notified CMS in February and March 2006 that it was
changing its location to 8035 East R.L. Thornton Freeway, Suite 320, Dallas, Texas. P.
Exs. 3, 5; CMS Ex. 10 at 2. In June 2012, Petitioner notified CMS that it was moving to
the Thornton location, 8035 East R.L. Thornton Freeway, Suite 520. CMS Exs. 9; 10 at
3; 11 at 2; P. Ex. 5.

It is not disputed that on or about August 23, 2013, Petitioner moved back to the Crooked
Creek location. CMS Ex. 3 at 2; P. Exs. 4, 6, 8, 9. By letter dated January 27, 2014, and
addressed to Petitioner at the Crooked Creek location, Palmetto acknowledged that it
received a notification from Petitioner that Petitioner had changed its address to the
Crooked Creek location. However, Palmetto advised Petitioner that “(i)n order to update
your information, you will need to submit the CMS Form 855A enrollment application.”
P. Ex. 6. Petitioner asserts that the CMS-855A was mailed to Palmetto. CMS Ex. 3 at 2.
Petitioner has provided no registered or certified mail receipt or evidence to show that
Palmetto received the CMS-855A documenting the move from the Thornton location to
the Crooked Creek location.

On June 6, 2014, at about 1:50 p.m. and again on June 13, 2014, at about 11:30 a.m., a
Palmetto inspector attempted to inspect Petitioner’s facility at the Thornton location. The
inspector found that Petitioner was no longer operating at the Thornton location. CMS
Exs. 2, 5. CMS does not dispute that Petitioner was operating at the Crooked Creek
location at the time of the attempted site inspections.

b. Analysis

The hearing officer on reconsideration upheld the revocation in this case pursuant to 42
C.F.R. § 424.535(a)(5)(i). CMS Ex. | at 1. The hearing officer stated that Petitioner was
found to be “nonoperational” at the Thornton location, Petitioner presented no evidence
that it was operational at the Thornton location, and Petitioner did not provide evidence
that the required form showing a change of practice location was sent to CMS or
Palmetto. CMS Ex. | at 2. The hearing officer did not determine that Petitioner was not
operational at some other location; however, that determination was not necessary to
support her decision to uphold revocation.

CMS reserves the right to perform onsite reviews to determine whether or not providers
and suppliers are complying with Medicare enrollment requirements. 42 C.F.R.

§ 424.517. If an onsite review determines a provider or supplier is not complying with
Medicare enrollment requirements, revocation of enrollment is authorized by 42 C.F.R.
§ 424.535(a)(5). The regulation in effect at the time of the reconsidered determination
provided:

(a) Reasons for revocation. CMS may revoke a currently
enrolled provider or supplier's Medicare billing privileges and
any corresponding provider agreement or supplier agreement
for the following reasons:

2 OR

(5) On-site review. CMS determines, upon on-site review,
that the provider or supplier is no longer operational to
furnish Medicare covered items or services, or is not meeting
Medicare enrollment requirements under statute or regulation
to supervise treatment of, or to provide Medicare covered
items or services for, Medicare patients. Upon on-site review,
CMS determines that—

(i) A Medicare Part A provider is no longer operational
to furnish Medicare covered items or services, or the
provider fails to satisfy any of the Medicare enrollment
requirements.

(ii) A Medicare Part B supplier is no longer operational
to furnish Medicare covered items or services, or the
supplier has failed to satisfy any or all of the Medicare
enrollment requirements, or has failed to furnish
Medicare covered items or services as required by the
statute or regulations.
42 C.F.R. § 424.535(a)(5). The hearing officer determined that Petitioner, a provider, is
subject to 42 C.F.R. § 424.535(a)(5)(i).°. The subsection has two prongs. Revocation is
authorized if: (1) the provider is no longer operational to furnish Medicare covered items
or services; or (2) the provider fails to satisfy any of the Medicare enrollment
requirements. In this case, the site inspector found that Petitioner was no longer
operating at the Thornton location but his findings did not rule out the possibility that
Petitioner was operating elsewhere. The reconsideration hearing officer found based on
the attempted inspection that Petitioner was not operating at the Thornton location but did
not make a finding that Petitioner was not operational at some other location. In fact,
CMS does not dispute that Petitioner was operating at the Crooked Creek location at the
time of the attempted inspections. Accordingly, I conclude that the first prong of 42
C.F.R. § 424.535(a)(5)(i) is not satisfied, and it is undisputed Petitioner was operational,
albeit not at the Thornton location.

It is the second prong of 42 C.F.R. § 424.535(a)(5)(i) that is the basis for revocation in
this case. One of the requirements for maintaining enrollment in Medicare is the
requirement to give CMS or its contractor notice of certain changes involving an enrolled
provider or supplier. Pursuant to 42 C.F.R. § 424.516(e)(2), Petitioner had 90 days to
report its change of practice location from the Thornton location to the Crooked Creek
location. Reporting must be done using the appropriate CMS enrollment application. 42
C.F.R. § 424.515. The provider or supplier is required to be able to demonstrate that it
meets enrollment requirements and to produce the documents necessary to show it is in
compliance with enrollment requirements. 42 C.F.R. § 424.545(c). Petitioner asserts it
did mail a CMS Form 855A to Palmetto within 90 days to report the change from the
Thornton location to the Crooked Creek location. However, Palmetto denies receiving
the required CMS-855A from Petitioner until September 2, 2014, far more than 90 days
after Petitioner’s change in location and after the site inspections. CMS Ex. 11.

> In the case of Medicare-eligible beneficiaries not enrolled in Medicare Part B, home
health services are paid under Part A subject to the limitations specified in section
1812(a)(3) of the Act. Home health services are also covered under Medicare Part B for
those enrolled. Act § 1832(a)(2)(A). Thus, home health agencies, which are defined as
providers by section 1861(u) of the Act, may be reimbursed under Part A or Part B
depending upon the facts of the particular case. In this case, the result would be no
different if 42 C.F.R. § 424.535(a)(5)(ii) was applied. Under that subsection there are
three prongs; neither the first nor third prong is factually present in this case; and the
second prong is the same under both 42 C.F.R. § 424.535(a)(5)(i) and (ii).
The Board has made clear that under the regulations, the relevant issue is whether or not
the Medicare contractor received the application, not whether the provider or supplier

mailed the application. Alexander C. Gatzimos, MD, JD, LL’
(2016). The Secretary has not provided in 42 C.F.R. pt. 498 fo:
burden of persuasion or the quantum of evidence required to sat

C, DAB No. 2730
r the allocation of the
isfy the burden.

However, the Board has provided some persuasive analysis regarding the allocation of
the burden of persuasion in cases subject to 42 C.F.R. pt. 498. Batavia Nursing &
Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr. v.

Thompson, 129 Fed. App’x 181 (6th Cir. 2005). Therefore, the

burden is upon Petitioner

to establish by a preponderance of the evidence that Palmetto actually received the CMS-
855A advising of the change of location from the Thornton location to the Crooked Creek

location within 90 days of that relocation. The evidence shows
January 27, 2014, addressed to Petitioner at the Crooked Creek

that by letter dated
location, Palmetto

acknowledged that it received a notification from Petitioner that Petitioner had changed
its address to the Crooked Creek location, roughly five months before the site inspection.
But, Palmetto advised Petitioner that “(i)n order to update your information, you will
need to submit the CMS Form 855A enrollment application.” P. Ex. 6. Petitioner has not

offered evidence to show that Palmetto actually received the req
90 days of the relocation as required by 42 C.F.R. § 424.516(e)(
conclude that Petitioner has failed to show compliance with the
established by 42 C.F.R. § 424.516(e)(2), and that is a basis for
second prong of 42 C.F.R. § 424.535(a)(5)(i).

Palmetto revoked Petitioner’s Medicare billing number and priv

uired CMS-855A within
2). Accordingly, I
enrollment requirement
revocation pursuant to the

ileges effective June 13,

2014, the date of the second failed attempt to do a site inspection of Petitioner’s facility.
CMS Ex. | at 4. The hearing officer that issued the reconsidered determination did not

specifically address the issue of the effective date of the revocat

ion. CMS Ex. | at 1-3.

The determination of the effective date of revocation is controlled by 42 C.F.R.

§ 424.535(g), which provides:

(g) Effective date of revocation. Revocation becomes
effective 30 days after CMS or the CMS contractor mails

notice of its determination to the provider or supplier, except
if the revocation is based on Federal exclusion or debarment,
felony conviction, license suspension or revocation, or the
practice location is determined by CMS or its contractor
not to be operational. When a revocation is based on a
Federal exclusion or debarment, felony conviction, license
suspension or revocation, or the practice location is
determined by CMS or its contractor not to be
operational, the revocation is effective with the date of
exclusion or debarment, felony conviction, license suspension
10

or revocation or the date that CMS or its contractor
determined that the provider or supplier was no longer
operational.

(Emphasis added.) There is no dispute that Petitioner was no longer operating at the
Thornton location when the site inspections occurred. The second attempted inspection
occurred on June 13, 2014, and the initial determination reflects that is the date that
Palmetto determined Petitioner was no longer operational at the Thornton practice
location. Accordingly, I conclude that Petitioner’s Medicare enrollment and billing
privileges are revoked effective June 13, 2014.

III. Conclusion

For the foregoing reasons, I conclude that there is a basis for revocation of Petitioner’s
Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i),
effective June 13, 2014.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Peter A. Lodewick, M.D.
(OI File No. H-16-40153-9),

Petitioner,
v.

The Inspector General.

Docket No. C-16-664
Decision No.CR4743
Date: November 28, 2016
DECISION

The Inspector General (IG) of the United States Department of Health and Human
Services excluded Petitioner, Peter A. Lodewick, M.D., for five years from participation
in Medicare, Medicaid, and all other federal health care programs based on Petitioner’s
conviction of a felony related to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance. Petitioner sought review of the exclusion. Based
on the record in this case, I conclude that Dr. Lodewick was convicted of a federal felony
offense related to illegally prescribing controlled substances. Consequently, I affirm the
1G’s determination to exclude Dr. Lodewick for five years because federal law mandates
that exclusion and requires the exclusion to no less than five years in length. 42 U.S.C.

§ 1320a-7(a)(4), (c)(3)(B).

I. Background

By letter dated May 31, 2016, the IG notified Dr. Lodewick that he was being excluded,
effective 20 days from the date on the letter, from Medicare, Medicaid, and all federal
health care programs under 42 U.S.C. § 1320a-7(a)(4) for the minimum statutory period
of five years because of his felony conviction in the United States District Court,
Northern District of Alabama, Southern Division, of a criminal offense related to the
unlawful manufacture, distribution, prescription, or dispensing of a controlled substance
as defined under federal or state law. IG Ex. 1 at 1. On June 24, 2016, Dr. Lodewick,
through counsel, requested a hearing before an administrative law judge. In the hearing
request, Dr. Lodewick requested that I stay the exclusion until after I completed this
proceeding. The case was assigned to me for a hearing and decision.

On August 17, 2016, I held a pre-hearing telephone conference with counsel for the
parties. At the conference, I denied Dr. Lodewick’s request that I stay the exclusion
pending the outcome of this case because the regulations require an exclusion to take
effect 20 days after the date on an exclusion notice and I do not have any authority to
disregard the regulations. 42 C.F.R. §§ 1001.2002(b), 1005.4(c)(1), (4); see also 42
U.S.C. § 1320a-7(c)(1). I also set a prehearing exchange schedule, which I included in
my August 18, 2016 Order and Schedule for Filing Briefs and Documentary Evidence
(Order). See 42 C.F.R. § 1005.8.

In response to the Order, the IG submitted a brief (IG Br.) and four exhibits. Petitioner
then submitted a response brief (P. Br.) with six exhibits. The IG declined to file a reply
brief.

II. Decision on the Record

Neither party objected to any of the proposed exhibits; therefore, I admit them all into the
record. Order § 6, 7, 9; 42 C.F.R. § 1005.8(c); Civil Remedies Division Procedures

§ 14(e).

In the briefs submitted by the parties, both parties indicated that neither had any witness
testimony to offer and both thought that an in-person hearing was unnecessary to decide
this case. IG Br. at 8; P. Br. at 2. Therefore, I issue this decision based on the written
record. Civil Remedies Division Procedures § 19(d).

III. Issue

Whether the IG had a basis to exclude Petitioner for five years from participation in
Medicare, Medicaid, and all other healthcare programs. 42 C.F.R. § 1001.2007(a)(1)-(2).

IV. Jurisdiction
I have jurisdiction to adjudicate this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.
V. Findings of Fact, Conclusions of Law, and Analysis

My findings of fact and conclusions of law are set forth in italics and bold font.
The Secretary of Health and Human Services must exclude an individual from
participation in Medicare, Medicaid, and all other federally-funded health care programs
if that individual:

has been convicted for an offense which occurred after
[August 21, 1996], under Federal or State law, of a criminal
offense consisting of a felony relating to the unlawful
manufacture, distribution, prescription, or dispensing of a
controlled substance.

42 U.S.C. § 1320a-7(a)(4).

Further, the regulations implementing this statute state that this exclusion provision
applies to, among others, health care practitioners. 42 C.F.R. § 1001.101(d)(1).

Therefore, the five essential elements necessary to support the IG’s exclusion are: (1) the
individual to be excluded must have been convicted of a criminal offense; (2) the
criminal offense must have been a felony; (3) the felony conviction must have been for
conduct relating to the unlawful manufacture, distribution, prescription, or dispensing of
a controlled substance; (4) the felonious conduct must have occurred after August 21,
1996; and (5) the individual to be excluded is or was a health care practitioner. 42 U.S.C.
§ 1320a-7(a)(4); 42 C.F.R. § 1001.101(d)(1).

1. Petitioner pled guilty in the U.S. District Court, Northern District of Alabama
(District Court), to knowingly, intentionally, and unlawfully aiding and abetting
others to aquire oxycodone, a Schedule II controlled substance, through
misrepresentation, fraud, forgery, deception, and subterfuge in violation of 21
U.S.C. § 843(a)(3), and the District Court entered a Judgment in a Criminal
Case adjudging Petitioner guilty and sentencing him to 48 months of probation.

On May 20, 2015, the United States Attorney for the Northern District of Alabama filed a
one-count Information with the District Court charging Petitioner with violating 21
U.S.C. § 843(a)(3) by aiding and abetting others to illegally aquire oxycodone, a
Schedule II controlled substance. IG Ex. 2. On that same date, Petitioner and the United
States Attorney filed a Plea Agreement in which Petitioner agreed to plead guilty to the
charge in the Information. IG Ex. 3. Petitioner stipulated to the following facts:

Between January 2013 and December 2014, [Dr. Lodewick],
an “Internal Medicine and Diabetes” doctor, issued
approximately three hundred ninety (390) prescriptions for
controlled substances to a group of pill-seekers led by his
housekeeper . . . .” The group included [seven other
individuals]. Dr Lodewick wrote prescriptions for Schedule
II controlled substances, including Oxycodone (two forms),
Morphine Sulfate, Adderall, and Norco. Over this two year
period, Dr. Lodewick prescribed approximately 22,796
dosage units of prescription opiates.

Beginning in May 2013, the patient files kept in Dr.
Lodewick’s office clearly state that he discovered that three
individuals within this pill-seeking group were pharmacy-
shopping. In letters to these patients, Dr. Lodewick
terminates the physician-patient relationship because of their
behavior. In these three cases, the patient files and
prescription histories show that Dr. Lodewick accompanied
each termination letter with a prescription for a large amount
of opiates. Following the termination letters, Dr. Lodewick
continued writing prescriptions for opiates to this group at his
usual rate. Dr. Lodewick wrote these patients a new
prescription generally every month, except in some cases he
wrote multiple prescriptions in one month. On November 6,
16, and 26, 2014, Dr. Lodewick wrote [a member of the
group] prescriptions for what constitutes a roughly three
month’s supply of oxycodone.

IG Ex. 3 at 2-3.

On October 28, 2015, the District Court entered a Judgment in a Criminal Case in which
it acknowledged Petitioner pled guilty to the charge in the Information, adjudged
Petitioner guilty of that charge, and sentenced Petitioner to 48 months probation. IG Ex.
4.

2. Petitioner was convicted of a criminal offense under 42 U.S.C. § 1320a-7(a)(4)
because he pled guilty to violating 21 U.S.C. § 843(a)(3), and the District Court
accepted that plea, and entered judgment of conviction adjudging him guilty of
that crime.

For exclusion purposes, an individual is “convicted” of a criminal offense “when a
judgment of conviction has been entered against the individual . . . by a Federal, State, or
local court... .” 42 U.S.C. § 1320a-7(i)(1). Further, an individual is also “convicted” of
a criminal offense when “a plea of guilty . . . by the individual . . . has been accepted by a
Federal, State, or local court.” Jd. § 1320a-7(i)(3). As previously discussed, Petitioner
pled guilty to violating 21 U.S.C. § 843(a)(3), and the District Court accepted his plea
and issued a judgment of conviction. IG Exs. 2-4. Petitioner concedes that he was
convicted of a criminal offense. P. Br. at 1. Accordingly, for purposes of exclusion,
Petitioner was “convicted” of a criminal offense.
3. Petitioner was convicted of a felony.

Petitioner was convicted of violating 21 U.S.C. § 843(a)(3), punishable pursuant to

21 U.S.C. § 843(d)(1) up to four years imprisonment. Therefore, Petitioner was
convicted of a class E felony because the maximum term of imprisonment for his offense
was less than five years, but more than 1 year. 18 U.S.C. § 3559(a)(5). Further,
Petitioner concedes that he was convicted of a felony. P. Br. at 1.

4. Petitioner was convicted of a felony criminal offense relating to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance.

Petitioner was convicted of violating a law making it illegal to knowingly or
intentionally, “acquire or obtain possession of a controlled substance by
misrepresentation, fraud, forgery, deception, or subterfuge.” 21 U.S.C. § 843(a)(3); IG
Ex. 2-4. Petitioner admitted that he illegally wrote 390 prescriptions for 22,796 units of
controlled substances to a group of pill-seeking individuals. IG Ex. 3 at 2. Petitioner
concedes that his conviction related to the unlawful distribution and prescription of
controlled substances. P. Br. at 2. Therefore, I conclude that this element necessary for
exclusion is met.

5. The conduct for which Petitioner was convicted occurred after August 21, 1996.

In the Information that charged Petitioner with violating 21 U.S.C. § 843(a)(3), the
United States Attorney alleged that Petitioner’s conduct occurred on November 11, 2014.
IG Ex. 2. In his plea agreement, Petitioner admits that his criminal conduct occurred
from January 2013 through December 2014. IG Ex. 3 at 2. Petitioner admits that his
criminal conduct ocurred after August 21, 1996. P. Br. at 1. Therefore, I conclude that
this element required for exclusion is met.

6. Petitioner is a health care practitioner.

The state of Alabama licensed Petitioner to practice medicine on April 9, 1990. P. Ex. 4
at 1. Although Petitioner’s medical license was placed on indefinite probation on April 5,
2016, in Alabama, Petitioner can still practice medicine because, as of July 18, 2016, he
met all of the conditions placed on him by the Alabama Medical Licensure Commission.
P. Exs. 5, 6. Therefore, Petitioner is a health care practitioner and meets this element
necessary for exclusion.

7. Under 42 U.S.C. § 1320a-7(a)(4), Petitioner must be excluded from participation
in all federal health care programs and under 42 U.S.C. § 1320a-7(c)(3)(B), the
exclusion must last for a minimum of five years.
As indicated above, the record conclusively shows that Petitioner’s conviction meets all
of the elements under 42 U.S.C. § 1320a-7(a)(4) for exclusion. Because I conclude that a
basis exists to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(4), Petitioner must be
excluded for a minimum period of five years. 42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R.
§§ 1001.102(a), 1001.2007(a)(2).

Petitioner argues that his situation is one that should be resolved in a manner that would
permit him to return to work in the medical field. Petitioner asserts that he immediately
took responsibility for his actions, surrendered his Drug Enforcement Administration
license, and cooperated with law enforcement authorities. Petitioner indicates that he did
not sell prescriptions for profit to his former patients, but rather was manipulated by
them. Petitioner avers that the prosecutor and the District Court thought that probation
was sufficient punishment for they believed that he simply engaged in poor judgment
when committing the crime for which he was convicted. Petitioner points out that even
the Alabama Medical Licensure Commission stayed its revocation of Petitioner’s medical
license and put him on probation. Petitioner asserts that his professional reputation is still
high and has submitted many character reference letters. Finally, Petitioner asserts that
he also complied with all conditions that the Commission placed on him. P. Br. at 3-5; P.
Exs. 1-6.

Despite Petitioner’s arguments, neither the IG nor I have any authority to remove the
exclusion or reduce the length of the exclusion. See 42 C.F.R. § 1001.1(b), 1001.101(d),
1001.102(a). The United States Court of Appeals for the Ninth Circuit explained the
mandatory five-year exclusion in the following manner:

However, the Inspector General was not engaging in a fact-
finding or discretionary function when he excluded Travers.

Conviction of a program-related offense as defined by
§ 1320a-7(i) is the triggering event that mandates the
Secretary to impose a minimum five-year exclusion. The
language—“[t]he Secretary shall exclude”—is mandatory, not
discretionary. 42U.S.C. § 1320a-7(a). To determine
whether Travers was convicted of a program-related offense,
the Inspector General looked to the substance of the state
proceedings and the nature of Travers’ crime as charged by
the State of Utah. As noted by the district court, “[i]t is not
necessary or proper for the Inspector General to delve into the
facts surrounding the conviction.” Travers v. Sullivan, 801
F.Supp. 394, 403 (E.D.Wash.1992). Once he found that the

Utah state court's disposition of the charge amounted to a
conviction of a program-related offense, the Inspector
General had no choice but to impose the mandatory 5-year
exclusion under § 1320a—7(a)( 1).

Travers v. Shalala, 20 F.3d 993, 998 (9th Cir. 1994).
VI. Conclusion

1 affirm the IG’s determination to exclude Petitioner for five years from participating in
Medicare, Medicaid, and all federal health care programs under 42 U.S.C. § 1320a-

T(a)(4).

/s/
Scott Anderson
Administrative Law Judge