Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Bella Vista Healthcare Center
(CCN: 05-5693),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-62
Decision No. CR2451

Date: October 12, 2011

DECISION

Petitioner, Bella Vista Healthcare Center, violated 42 C.F.R. § 483.12(b)(2);' however,
the violation did not pose a risk for more than minimal harm, and Petitioner remained in
substantial compliance with program participation requirements. There is no basis for
imposing an enforcement remedy, and no remedy is reasonable.

I. Background
Petitioner is located in Ontario, California, and participates in Medicare as a skilled

nursing facility (SNF) and the state Medicaid program as a nursing facility (NF). On July
8, 2009, the California Department of Public Health (state agency) completed a complaint

' References are to the revision of the Code of Federal Regulations (C.F.R.) in effect at
the time of survey, unless otherwise indicated.
investigation and abbreviated survey of Petitioner, finding that Petitioner was not in
substantial compliance with program participation requirements. The Centers for
Medicare and Medicaid Services (CMS) notified Petitioner by letter, dated August 17,
2009, that it was imposing the following enforcement remedies: a per-instance civil
money penalty (PICMP) in the amount of $2,500 for an alleged violation of 42 C.F.R.

§ 483.12(b)(2) (Tag F205); a denial of payment for new admissions (DPNA) effective
September 1, 2009; and termination of Petitioner’s provider agreement and participation
in Medicare, if Petitioner did not return to substantial compliance before January 8, 2010.
CMS Exhibit (CMS Ex.) 4. CMS notified Petitioner by letter, dated October 5, 2009, that
a revisit survey concluded that Petitioner returned to substantial compliance effective
August 24, 2009, and that the DPNA and termination would not be effectuated. CMS Ex.
5.

Petitioner requested a hearing before an administrative law judge (ALJ) on October 15,
2009. The case was assigned to me for hearing and decision on October 26, 2009, and an
Acknowledgement and Prehearing Order was issued at my direction. On June 29, 2010,
a hearing was convened in San Bernardino, California, and a transcript (Tr.) of the
proceedings was prepared. CMS offered CMS exhibits 1 through 17 that were admitted
as evidence. Tr. at 29. Petitioner offered Petitioner exhibits (P. Exs.) | through 19, and
they were admitted as evidence. Tr. at 32. Petitioner subsequently requested leave to
withdraw P. Ex. 15, the curriculum vitae of a witness, and that motion was granted. Tr.
at 49-50. CMS called one witness, Surveyor Janine Nichols, RN (Registered Nurse).
Petitioner called the following witnesses: Lucieanne Hawley, Licensed Vocational Nurse
(LVN); Ivan Gonzalez; Gloria Miranda, RN; Nathan Ure, Director of Operations for
California Healthcare Management Services; and Tyrus Lefler, Petitioner’s
Administrator. The parties filed post-hearing briefs (CMS Br. and P. Br., respectively).
Petitioner filed a post-hearing reply brief (P. Reply), but CMS waived filing a reply.

IL. Discussion
A. Issues

Whether there is a basis for the imposition of an enforcement
remedy; and

Whether the remedy imposed is reasonable.
B. Applicable Law
The statutory and regulatory requirements for participation of a SNF in Medicare are
found at section 1819 of the Social Security Act (Act) and at 42 C.F.R. Part 483. Section

1819(h)(2) of the Act authorizes the Secretary of Health and Human Services (Secretary)
to impose enforcement remedies against a SNF for failure to comply substantially with
the federal participation requirements established by sections 1819(b), (c), and (d) of the
Act. The Act requires that the Secretary terminate the Medicare participation of any
SNF that does not return to substantial compliance with participation requirements within
six months of being found not to be in substantial compliance. Act § 1819(h)(2)(C). The
Act also requires that the Secretary deny payment of Medicare benefits for any
beneficiary admitted to a SNF, if the SNF fails to return to substantial compliance with
program participation requirements within three months of being found not to be in
substantial compliance — commonly referred to as the mandatory or statutory DPNA. Act
§ 1819(h)(2)(D). The Act grants the Secretary discretionary authority to terminate a
noncompliant SNF’s participation in Medicare, even if there has been less than 180 days
of noncompliance. The Act also grants the Secretary authority to impose other
enforcement remedies, including a discretionary DPNA, civil money penalties (CMPs),
appointment of temporary management, and other remedies, such as a directed plan of
correction. Act § 1819(h)(2)(B).

The Secretary has delegated to CMS and the states the authority to impose remedies
against a long-term care facility that is not complying substantially with federal
participation requirements. “Substantial compliance means a level of compliance with
the requirements of participation such that any identified deficiencies pose no greater risk
to resident health or safety than the potential for causing minimal harm.” 42 C.F.R.

§ 488.301 (emphasis in original). A deficiency is a violation of a participation
requirement established by sections 1819(b), (c), and (d) of the Act or the Secretary’s
regulations at 42 C.F.R. Part 483, subpart B. Noncompliance refers to any deficiency
that causes a facility not to be in substantial compliance. 42 C.F.R. § 488.301. State
survey agencies survey facilities that participate in Medicare on behalf of CMS to
determine whether the facilities are complying with federal participation requirements.
42 C.F.R. §§ 488.10-.28, 488.300-.335. The regulations specify the enforcement
remedies that CMS may impose if a facility is not in substantial compliance with
Medicare requirements. 42 C.F.R. § 488.406. CMS is authorized to impose a PICMP
from $1,000 to $10,000. 42 C.F.R. § 488.438(a)(2).

The Act and regulations make a hearing before an ALJ available to a long-term care
facility against which CMS has determined to impose an enforcement remedy. Act

§§ 1128A(c)(2), 1866(h); 42 C.F.R. §§ 488.408(g), 498.3(b)(13). The hearing before an
ALJ is a de novo proceeding. The Residence at Salem Woods, DAB No. 2052 (2006);

> Participation of a NF in Medicaid is governed by section 1919 of the Act. Section
1919(h)(2) of the Act gives enforcement authority to the states to ensure that NFs comply
with their participation requirements established by sections 1919(b), (c), and (d) of the
Act.
Cal Turner Extended Care, DAB No. 2030 (2006); Beechwood Sanitarium, DAB No.
1906 (2004); Emerald Oaks, DAB No. 1800, at 11 (2001); Anesthesiologists Affiliated,
DAB CR65 (1990), aff'd, 941 F.2d 678 (8th Cir. 1991). A facility has a right to appeal a
“certification of noncompliance leading to an enforcement remedy.” 42 C.F.R.

§ 488.408(g)(1); 42 C.F.R. §§ 488.330(e), 498.3. However, the choice of remedies, or
the factors CMS considered when choosing remedies, are not subject to review. 42
C.F.R. § 488.408(g)(2). A facility may only challenge the scope and severity level of
noncompliance determined by CMS, if a successful challenge would affect the range of
the CMP that may be imposed or impact the facility’s authority to conduct a nurse aide
training and competency evaluation program. 42 C.F.R. § 498.3(b)(14), (d)(10)(i). The
CMS determination as to the level of noncompliance, including the finding of immediate
jeopardy, “must be upheld unless it is clearly erroneous.” 42 C.F.R. § 498.60(c)(2).
Woodstock Care Ctr., DAB No. 1726, at 9, 38 (2000), aff'd, 363 F.3d 583 (6th Cir.
2003). The Departmental Appeals Board (the Board) has long held that the net effect of
the regulations is that a provider has no right to challenge the scope and severity level
assigned to a noncompliance finding, except in the situation where that finding was the
basis for an immediate jeopardy determination. See, e.g., Ridge Terrace, DAB No. 1834
(2002); Koester Pavilion, DAB No. 1750 (2000). ALJ review of a CMP is subject to 42
CFR. § 488.438(e).

The standard of proof, or quantum of evidence required, is a preponderance of the
evidence. CMS has the burden of coming forward with the evidence and making a prima
facie showing of a basis for imposition of an enforcement remedy. Petitioner bears the
burden of persuasion to show by a preponderance of the evidence that it was in
substantial compliance with participation requirements or any affirmative defense.
Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing &
Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr. v.
Thompson, 129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800; Cross
Creek Health Care Ctr., DAB No. 1665 (1998); see Hillman Rehab. Ctr., DAB No. 1611
(1997), aff'd, Hillman Rehab. Ctr. v. U.S., No. 98-3789 (GEB), 1999 WL 34813783
(D.N.J. May 13, 1999).

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. CMS alleges, based upon the survey that ended July 8, 2009, that Petitioner
was not in substantial compliance with program participation requirements due to an
alleged violation of 42 C.F.R. § 483.12(b)(2) (Tag F205) that caused actual harm to a
resident. CMS Ex. 1; CMS Br. at 1. CMS proposes to impose a $2,500 PICMP based
upon the alleged violation.

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 violated 42 C.F.R. § 483.12(b)(2).

2. CMS has not made a prima facie showing of noncompliance under Tag
F205, because CMS did not show there is a risk for more than minimal
harm due to the regulatory violation.

3. Even if CMS made a prima facie showing of noncompliance, the CMS
showing has been rebutted by Petitioner by a preponderance of the
evidence.

4. There is no basis for the imposition of an enforcement remedy
because Petitioner remained in substantial compliance.

The Secretary has established admission, discharge, and transfer rights for residents of
long-term care facilities with which facilities participating in Medicare agree to comply.
42 C.F.R. § 483.13. The regulation requires that a long-term care facility give its
residents two written notices regarding bed-hold policy. The first notice must be given in
writing sometime before a resident is transferring to a hospital or going on therapeutic
leave. The first notice is given to the resident, the resident’s family member, or the
resident’s legal representative. The first notice must advise the resident or representative
of the duration of the bed-hold policy under the state plan, if any. The bed-hold policy
specifies the period during which a resident is permitted to return to the facility following
hospitalization or therapeutic leave. The first notice must also advise the resident or
representative of the facility’s policy regarding bed-hold periods. 42 C.F.R.

§ 483.12(b)(1). The second notice is given to the resident or representative at the time of
transfer to the hospital or for therapeutic leave. The regulation specifies that the second
notice must also be in writing. The second notice specifies the duration of the bed-hold
policy, i.e., the period during which the facility will ensure it has a bed to which the
resident may return and resume residence at the facility. 42 C.F.R. § 483.12(b)(2). The

> “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. Id. at 1625.
parties agreed at hearing that the regulation applied to Residents 1, 2, 3, and 4, the
residents who were the focus of the July 8, 2009 survey. Tr. at 69.

The duration of the bed hold in California is seven days. Ifa resident of a SNF in
California transfers to an acute care hospital, the SNF is required to hold a bed open for
the resident for seven days, if requested by the resident or the resident’s representative
within 24 hours of being informed of the right to have a bed held. Like the federal
regulation at issue before me, the California regulation requires that residents of a SNF,
or their representatives, be notified of the right to exercise a bed hold in writing when
admitted to the SNF and at the time of transfer to an acute hospital. CAL. CODE REGS. tit.
22, § 72520(a) (2009); CMS Ex. 16.

Petitioner’s Bed Hold Notification policy, dated January 2004, specifies that a resident or
representative is to be given written notice of the right to exercise a bed hold at the time
of admission and at the time of transfer for hospitalization or for therapeutic leave. The
policy specifies that: the resident or representative must be advised of the right to
exercise a seven-day bed hold; a non-Medicaid eligible resident will be liable for the cost
of the bed-hold days up to the resident’s daily rate and that insurance may not cover the
cost; that the resident or representative must notify Petitioner if the right to a bed hold is
being exercised within 24 hours of being advised of the right; and Petitioner need not
maintain the bed hold if the resident’s physician advises Petitioner that the resident’s
acute care hospital stay is expected to be more than seven days. CMS Ex. 11.

The federal regulation, the California regulation, and Petitioner’s bed-hold policy each
requires that the second bed-hold notice be given at the time of transfer for
hospitalization or for therapeutic leave and that the notice be in writing.

A complaint was filed against Petitioner by Resident 1, which triggered the complaint
investigation and abbreviated survey by the state agency that was completed on July 8,
2009. Surveyor Janine Nichols conducted the investigation and abbreviated survey. Tr.
at 52-55, 104-05. The Statement of Deficiencies (SOD) for the survey alleges that
Petitioner violated 42 C.F.R. § 483.12(b)(1) and (2), related to Petitioner’s giving of
notice of the bed-hold policy to Residents 1, 2, 3, and 4. However, Surveyor Nichols
testified at hearing that she did not conclude that Petitioner violated 42 C.F.R.

§ 483.12(b)(1) and that the citation is included in the SOD only because she could not
alter the computer-generated text to remove the reference to 42 C.F.R. § 483.12(b)(1).
Tr. at 110-11. The parties stipulated prior to hearing that all four residents received the
first written notice of bed-hold policy required by 42 C.F.R. § 483.12(b)(1). Joint
Stipulation of Facts (Jt. Stip.) § 1. Surveyor Nichols also testified that the evidence
shows that all four residents received the first notice. Tr. at 57, 110. The stipulation is
consistent with, and supported by, the allegations of the surveyor in the SOD and her
testimony that all four residents did receive the first notice. CMS Ex. 1, at 4, 7, 8, 9.
Accordingly, the evidence shows that there was no violation of 42 C.F.R. § 483.12(b)(1)
in the case of the four residents cited in the survey. Furthermore, CMS does not allege
before me that there was a violation of 42 C.F.R. § 483.12(b)(1). CMS Br. at 1-3, 25-26.
I conclude that there was no violation of 42 C.F.R. § 483.12(b)(1).

Surveyor Nichols concluded that: there was a violation of 42 C.F.R. § 483.12(b)(2)
based on the examples of Residents 1, 2, 3, and 4; the violation resulted in actual harm to
Resident 1; and, as a result, Petitioner was not in substantial compliance and subject to an
enforcement remedy. CMS Ex. 1, at 1-2. Surveyor Nichols did not specifically allege in
the SOD that Residents 2, 3, and 4 suffered harm or that they were at risk for any harm.
CMS Ex. 1, at 7-10.

The parties stipulated prior to hearing that, when Residents 1, 2, 3, and 4 were transferred
to an acute care hospital, they were orally advised of the seven-day bed hold but they
were not given a writing at that time. Jt. Stip. § 2; Tr. at 38-41. The evidence shows that
Resident | received his second bed-hold notice in person on June 26, 2009. CMS Ex. 6,
at 5, 13, 19, 20. A physician’s order on June 26, 2009, directed that Resident 1 be
discharged from Petitioner to the hospital for surgery and that his bed be held by
Petitioner for seven days. CMS Ex. 6, at 6. Resident 2’s representative was given the
second bed-hold notice on July 5, 2009, by telephone. CMS Ex. 7, at9, 11. A
physician’s order on July 5, 2009, directed that Resident 2 be transferred to the hospital
by emergency services and that his bed at Petitioner was to be held for seven days. CMS
Ex. 7, at 10. Resident 3’s representative was given a second bed-hold notice on June 30,
2009, by telephone. CMS Ex. 8, at 6, 7. A physician’s order directed her admission to
the hospital on June 30, 2009 and ordered a seven-day hold on her bed at Petitioner.
CMS Ex. 8, at 8. Resident 4’s representative was given the second notice of bed hold on
May 13, 2009, by telephone. CMS Ex. 9, at 6, 18-19. A physician’s order on May 14,
2009, directed that the resident be transferred to the emergency room and that her bed be
held by Petitioner for seven days. CMS Ex. 9, at 8. There is no dispute that none of the
residents or their representatives received a writing specifying the duration of the bed
hold at the time of their transfers to the hospital. Accordingly, I conclude that Petitioner
violated the requirement of 42 C.F.R. § 483.12(b)(2) that the second notice be given to
the resident, or his or her representative, in writing.

Although I conclude that Petitioner violated 42 C.F.R. § 483.12(b)(2), I conclude that the
violation did not amount to noncompliance. Noncompliance is any deficiency that causes
a facility not to be in substantial compliance. 42 C.F.R. § 488.301. A facility remains in
substantial compliance so long as no identified deficiency poses a “greater risk to resident
health or safety than the potential for causing minimal harm.” 42 C.F.R. § 488.301.
Therefore, a violation of a condition for participation in Medicare does not amount to
noncompliance unless it poses “a greater risk to resident health or safety than the
potential for causing minimal harm.” 42 C.F.R. § 488.301. An enforcement remedy is
authorized only for noncompliance. 42 C.F.R. § 488.402(b). CMS must show as part of
its prima facie case not only a violation of a statutory or regulatory condition of

participation, but must also show that the violation posed a risk for more than minimal
arm to one or more residents. The Board has been consistent in its view that CMS has
the burden of coming forward with evidence to establish a prima facie case that Petitioner
was not in substantial compliance with federal participation requirements to justify the
imposition of an enforcement remedy. The Board has stated that CMS must come
forward with “evidence related to disputed findings that is sufficient (together with any
undisputed findings and relevant legal authority) to establish a prima facie case of
noncompliance with a regulatory requirement.” Evergreene Nursing Care Ctr., DAB No.
2069, at 4 (2007); Batavia Nursing and Convalescent Ctr., DAB No 1904. Only when
CMS makes a prima facie* showing of noncompliance, is the facility burdened to show,
by a preponderance of the evidence on the record as a whole, that it was in substantial
compliance or had an affirmative defense. Evergreene Nursing Care Ctr., DAB No.
2069, at 4. The fact that the residents were not given the second bed-hold notice in
writing is not disputed, and the CMS burden to show a deficiency, i.e., a violation of a
participation requirement, is satisfied. The dispute in this case is whether or not the facts
show that the violation posed a risk for more than minimal harm to any resident. I
conclude that the CMS evidence is not sufficient to establish as fact, to trigger a
presumption, or to support an inference that there was a risk for more than minimal

arm.° I conclude that CMS has not met its burden to show that there was a potential for
more than minimal harm resulting from Petitioner’s failure to give residents written
notice of the duration of the bed hold at the time of transfer. Accordingly, Petitioner
remained in substantial compliance, and there is no basis for the imposition of an
enforcement remedy.

* Prima facie” means generally that the evidence is “[s]ufficient to establish a fact or
raise a presumption unless disproved or rebutted.” Black’s Law Dictionary 1228 (8th ed.
2004).

> One of CMS’s arguments could be understood to be that the mere violation of a
regulation that is a condition for participation permits an inference or triggers a
presumption that there is a risk for more than minimal harm. CMS Br. at 6, 7 n.1. CMS
cites no decision of the Board that has gone so far. The interpretation suggested by CMS
would also be inconsistent with, and render meaningless, the regulatory scheme that
recognizes the distinction between deficiencies that do not pose a risk for more than
minimal harm and do not amount to noncompliance and deficiencies that do pose a risk
for more than minimal harm and are noncompliance for which CMS is authorized to
impose an enforcement remedy. 42 C.F.R. Part 488, subpts E & F. Ifa mere violation
triggered a presumption of more than minimal harm, CMS and the state agencies could
impose a remedy for every deficiency without the need to consider whether the
deficiency posed a risk for more than minimal harm, placing the burden on facilities to
rebut the presumption in every case.

The evidence that CMS presented shows that each resident, or the resident’s
representative, was orally advised about the right to have his or her bed held during his or
her hospitalization. The CMS evidence also demonstrates that each resident or
representative exercised the right to have a bed held, and there is a physician’s order to
hold each bed for seven days. Therefore, when the residents were transferred, there was
no longer any need for them to exercise the right to have their bed held, and there is no
evidence they had any cause for concern that Petitioner would not honor the obligation to
hold a bed for them. CMS has not presented any evidence to support a finding that any
of the residents were at risk for suffering any harm, physical or psychological, due to the
process Petitioner followed for giving the second bed-hold notice and obtaining the
resident’s election.

Surveyor Nichols testified that she concluded that there was a potential for more than
minimal harm from providing only oral advice with no writing because a resident may
not be able to understand or recall the oral advice, and the resident could suffer
psychological harm if they lost their bed as a result. Tr. at 78-80. CMS argues that
residents who miss the opportunity to exercise their right to a bed hold are potentially at
risk for more than minimal “psychosocial harm.” CMS Br. at 1, 3-6. The concern of
CMS and Surveyor Nichols is not supported by the evidence that the surveyor collected
during her investigation and that was presented in support of the CMS prima facie case,
as that evidence shows that all four of the residents or their representatives were orally
advised and exercised the right to have a bed held at the time of transfer.° CMS has
presented no evidence of: a resident transferred without receiving oral notice of the right
to a bed hold; oral notice being given to a resident or representative unable to
comprehend the notice or to knowingly exercise the right; or a resident or representative
who failed to exercise the right after receiving oral notice — evidence from which one
might reasonably infer that there was a risk for potential harm.

Surveyor Nichols testified that Petitioner violated Resident 1’s right to a bed hold
because Petitioner did not hold a bed for him for the entire seven-day bed-hold period
when the hospital advised Petitioner that Resident 1 was being discharged to a different
SNF. She testified that Resident 1 suffered actual psychological harm based upon his
statements to a social worker reflected in the evidence. Tr. at 83-84, 122-26, 139, 141.
She also alleged in the SOD that Petitioner’s failure to allow Resident | to return to
Petitioner caused actual harm in the form of depression with suicidal thoughts that

® The parties stipulated that, when Residents 2, 3, and 4 were at the acute care hospital,
they requested that a bed be held, and they subsequently returned to Petitioner. Jt. Stip. §
3. Petitioner advised me at hearing that Resident 4 actually returned home from the
hospital rather than returning to Petitioner. Tr. at 98; P. Br. at 5, 7.
10

required admission to a psychiatric hospital. CMS does not advance this argument in its
post-hearing brief or address it in its proposed findings of fact and conclusions of law for
good reasons. The charge in the SOD and the charge that CMS has pursued in the case
before me is that Petitioner violated 42 C.F.R. § 483.12(b)(2) by failing to give the
second bed-hold notice in writing. There is no alleged violation of a regulatory or
statutory provision based on a violation of Resident 1’s right to a bed hold. The CMS
evidence shows that, on June 26, 2009, Resident 1 was orally advised of the right to a
seven-day bed hold, he exercised the right to a bed hold, and a physician’s order was
obtained. On June 29, 2009, while at the hospital, Resident 1 decided to go to Upland
Rehabilitation, consistent with his physician’s preference. On June 30, 2009, Resident 1
was accepted as a resident by Heritage Park, and he agreed to go there. On June 30,
2009, the fourth day of the bed hold at Petitioner, Petitioner was notified by the hospital
that Resident 1 was going to a different long-term care facility and would not be
returning to Petitioner. Resident 1 was discharged from the hospital to Heritage Park on
June 30, 2009. The CMS evidence shows that, on July 1, 2009, Resident 1 was returned
to the hospital for pain management, and his physician was contacted and approved
transfer to any SNF that could administer narcotics intravenously during the day and by
mouth at night. Resident | refused to go to any facility until he was assured he could
receive his pain medication. On July 2, 2009, Heritage Park denied that Resident 1 was
ever admitted to that facility. On July 2, 2009, which would have been the sixth day of
the bed hold at Petitioner, Resident 1’s hospital case manager called Petitioner but was
told that there was no bed available for Resident 1 because the resident’s bed was taken
off hold when Petitioner was notified that Resident 1 was going to a different facility.
CMS Ex. 6, at 5-6, 13, 19, 20, 26-27, 32-34; Jt. Stip. § 4-10. Surveyor Nichols agreed at
hearing that there is no federal regulation that required Petitioner to hold a bed for
Resident | after Petitioner was advised by the hospital on June 30, 2009, that Resident 1
was being discharged to another facility. Tr. at 136-37. Accordingly, Petitioner’s release
of the bed hold did not violate a condition of participation, and any distress Resident 1
suffered as a result of that action is not properly before me.

Surveyor Nichols also agreed on cross-examination that Resident 1’s complaints of
mental distress were inconsistent. Tr. at 129-30. The CMS evidence shows that, on July
7, 2009, five days after Resident 1 learned that Petitioner had no bed for him, Resident 1
met with a social worker for discharge planning. Resident | advised the social worker
that he had called the state to investigate Petitioner because he was denied a bed. The
social worker opined that Resident 1 was manipulative with paranoid tendencies.
Resident | told the social worker he saw a psychiatrist for anxiety and admitted to
depression. Resident | told the social worker that he needed a facility where he could
have physical therapy but did not mention his prior concern about going somewhere that
could administer his narcotics. Resident 1 denied any suicidal ideation, stating that he
would not hurt himself but joked he might hurt someone else. The social worker noted
that Resident 1 was alert and oriented at the time and does not report that the resident was
currently suffering any signs or symptoms of either depression or anxiety. CMS Ex. 6, at

11

39-40. Two days later on July 9, 2009, the CMS evidence shows that Resident 1 saw
another social worker and complained he was feeling very depressed due to his medical
issues and problems with the SNF. He was tearful and stated he felt suicidal for about
two weeks. He felt he should shoot himself in the head with a gun. The social worker
requested suicide precautions and referred Resident 1 for a psychiatric evaluation. CMS
Ex. 6, at 42. Without assessing Resident 1’s credibility or weighing this evidence, it is
clear that it is inconsistent. Given the inconsistencies of Resident 1’s reports to social
workers, those reports standing alone are insufficient to show that the resident suffered
any harm, either on account of Petitioner’s failure to give him the second bed-hold notice
in writing or releasing the bed hold prior to the expiration of seven days.

If it is concluded on further review that CMS made a prima facie showing based either
upon a presumption of more than minimal harm triggered by the violation of 42 C.F.R.
§ 483.12(b) or the inconsistent evidence of Resident 1’s condition, I conclude that
Petitioner rebutted CMS’s prima facie showing with evidence that there was no risk for
more than minimal harm. My conclusion is supported by the unrebutted testimony of
Petitioner’s witnesses and Petitioner’s documents.

Lucieanne Hawley, LVN, Petitioner’s Minimum Data Set (MDS) coordinator, testified
that, when Resident | transferred to the acute care hospital on June 30, 2009, he did so

for an elective surgery. He indicated that he was considering other options to coming
back to Petitioner, and he was in the care planning process for a lower level of care. Tr.
at 151-54. She explained that the procedure followed at Petitioner at the time was to
discuss the bed hold with the resident, and, if they requested that their bed be held,
Petitioner obtained a physician’s order. Tr. at 157-58. LVN Hawley’s credible testimony
is consistent with Resident | having been advised of, and understanding his right to, a

bed hold while in the hospital for surgery.

Ivan Gonzalez, who was Petitioner’s admissions coordinator in June 2009, testified that
residents, including the four in question, were given the written bed-hold notice at the
time of admission. He testified that, when residents transferred to an acute care facility, it
was explained to them, or their representative, that they could have their bed held for
seven days. He testified that he met with Resident 1 frequently, and Resident 1 was
considering transfer to a lower level of care. Mr. Gonzalez testified that he took Resident
1 to visit a couple places. On June 26, 2009, he discussed with Resident | his right to a
bed hold, and Resident 1 was considering transferring to another facility or level of care
after his hospitalization. Mr. Gonzalez opined that Resident | understood his right to a
bed hold. Mr. Gonzalez testified he received a telephone call from the case manager at
San Antonio Community Hospital who advised him that Resident | was to be discharged
to another facility. Resident 1’s bed was being held, but, when the case worker advised
he was being discharged to another facility, his bed hold was terminated. Mr. Gonzalez
explained that, if Resident 1 was being admitted to another facility, Petitioner could no
longer bill for the held bed. He testified that the bed was committed to a new resident the
12

same day he was advised that Resident | was not returning. Tr. at 161-70. Mr. Gonzalez
testified that a couple days later he received word that Resident 1 wanted to return to
Petitioner, but there was no bed available. Tr. at 170-71. Mr. Gonzalez’s testimony is
credible.

Gloria Miranda, RN, testified that she was employed by California Healthcare
Management Services, which provided clinical services at Petitioner’s facility. Tr. at
176. She was assigned to Petitioner in June 2009 and knew all four residents mentioned
in the SOD. Tr. at 177-78. RN Miranda testified that, when residents transferred, their
bed-hold right was explained until the resident or representative understood, and, if they
exercised the right, a physician’s order was obtained and sent to the hospital with them to
ensure discharge planners at the hospital knew that a bed was being held for the resident.
The transferring residents were not just given a piece of paper. Tr. at 181, 184, 191, 196.
She opined that residents did not suffer harm by not receiving a piece of paper because it
was assured that they knew about the bed hold and could exercise the right immediately.
Tr. at 182. She opined that Resident 1’s suicidal ideations were not caused by failure to
receive a piece of paper but were due to a long history of depression with a history of
suicidal ideations. Tr. at 184-87. RN Miranda’s testimony is credible, and her opinion
regarding Resident 1’s suicidal ideations is entitled to weight based on her knowledge of
the resident.

Nathan Ure, Director of Operations for California Healthcare Management Services,
which provided support services for Petitioner, testified credibly that each of the four
residents knew about and exercised their bed-hold rights, which shows that Petitioner
substantially complied with the regulation. He testified that advising the resident or
representative of the right to a bed hold, having them execute that right, and obtaining a
physician’s order avoids the need for the resident or representative to do so within 24
ours after transfer and ensures that the hospital knows a bed is being held for the
resident. Tr. at 202, 204-12. He opined that there was no risk for more than minimal
arm because the right to a bed hold was explained carefully, and it was ensured the
resident or representative could exercise the right. Tr. at 213. He also testified credibly
that the state agency had previously considered Petitioner’s procedure and opined it met
the regulatory requirement. Tr. at 214-19. Petitioner does not urge an estoppel defense
but, rather, argues that the state agency’s opinion is consistent with and evidence in
support of Petitioner’s position that its procedure posed no risk for more than minimal
arm. P. Reply at 11.

Tyrus Lefler, Petitioner’s Administrator, testified that the facility gave written notice of
the bed-hold policy at the time of admission and that Residents 1, 2, 3, and 4 all received
the written notice. He testified that, upon transfer, a resident had to exercise the right to a
bed hold within 24 hours of the notice. He testified that he personally spent an hour and
a half discussing the bed-hold right with Resident 1 on June 30, 2009, and the resident
requested that his bed be held even though he was not certain he was coming back to

13

Petitioner. He testified that Residents 2, 3, and 4 also requested that their beds be held at
the time of transfer. Administrator Lefler testified that Resident 1’s bed hold was
terminated because Petitioner was advised Resident 1 was being discharged to another
facility, and the bed was committed to a new resident the same day. He testified that,
even if Resident 1 had been given a written second bed-hold notice, once he decided to
go to another facility, the bed hold would have been released. He testified that, when
Resident | went to another facility, Petitioner could no longer bill for a held bed. He also
testified that it is not permissible to commit a single bed to two residents or more
residents than the number for which Petitioner is licensed. Tr. at 224-47, 261. He opined
that the residents exercised their bed holds, and the outcome would not have been
different if they had received a piece of paper. Therefore, he did not see any potential for
more than minimal harm. Tr. at 253-54. Mr. Lefler’s testimony was not rebutted, and it
is credible.

Resident 1’s physician, Michael Chai, MD, provided Petitioner a statement in which he
states he recommended that Resident 1 choose another facility due to his expressed
dissatisfaction with Petitioner. Dr. Chai states that Resident 1 was able to make his own
decisions about health care, and he did so when he decided to go to Heritage Park. P. Ex.
8; Tr. at 241-42. CMS did not object to my consideration of this statement or request
cross-examination. I find the statement credible and entitled to weight as Dr. Chai was
Resident 1’s treating physician. Petitioner’s documents also show that Resident 1 elected
to go to a different facility after exercising his right to a bed hold at Petitioner. P. Ex. 12,
at 12-14 (physician ordered discharge to Heritage Park not Petitioner); Tr. at 198.
Further, Resident 1’s complaints of depression and suicidal ideation on July 9, 2009 are
simply not credible as they are inconsistent with his denial of suicidal thoughts on July 7,
2009 (CMS Exs. 39-40, 42), and no such complaints are reflected in other records from
his hospitalization between July 1 and 7, 2009 (P. Ex. 12, at 15-19).

Petitioner takes the position that, although it was not in literal compliance with 42 C.F.R.
§ 483.12(b)(2), it fulfilled the intent of the regulation and “went above and beyond” to
ensure that its residents were aware of, and understood, the bed-hold policy and
duration.” In Petitioner’s view, its procedure of orally going over the bed-hold policy
with residents at the time of transfer, and having residents actually exercise their right to
the seven-day bed hold before they left the facility, benefitted the residents because it
eliminated the risk that they would forget to exercise their right to a bed hold within the

7 Petitioner’s position is that its practice exceeds the requirements of CMS’ policy that it
is sufficient to simply put a copy of a written notice in the packet of paperwork that
accompanies a resident to the hospital with no requirement for an oral explanation of the
bed-hold policy or duration to the resident or representative at the time of transfer. State
Operations Manual, app. PP, Tag F205.
14

24-hour period that the California regulation required. Petitioner contends that its system
protected its residents’ rights and eliminated any potential for harm that could result from
the failure to exercise the right to a bed hold since the residents had already exercised
such right. I conclude this argument has merit. Petitioner contends further that, since
Residents 1, 2, 3, and 4 had already exercised their bed-hold rights prior to transfer, it
would have been redundant to give them a written notice explaining their right to exercise
the bed hold. While I agree that it is redundant to give a written notice after exercise of
the right, written notice is what the law required. Petitioner could have avoided the cost
of this enforcement action had it simply complied strictly with the regulation. Finally,
with respect to Resident 1, Petitioner argues that CMS has failed to establish a nexus or
connection between Petitioner’s failure to give him a written notice at the time of transfer
and any alleged harm suffered by Resident 1. I agree for the reasons already discussed.

Petitioner’s violation of 42 C.F.R. § 483.12(b)(2) did not pose a risk for more than
minimal harm and, therefore, did not amount to noncompliance. Accordingly, I conclude
that Petitioner remained in substantial compliance, and no enforcement remedy is
authorized or reasonable in this case.

III. Conclusion

For the foregoing reasons, I conclude that Petitioner remained in substantial compliance,
and there is no basis for the imposition of an enforcement remedy.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Arlene Gibbs,
Petitioner
v.
The Inspector General.
Docket No. C-11-453
Decision No. CR2450

Date: October 12, 2011

DECISION

This matter is before me in review of the Inspector General’s (I.G.’s) determination to
exclude Petitioner pro se Arlene Gibbs from participation in Medicare, Medicaid, and all
other federal health care programs for a period of five years. The I.G.’s determination to
exclude Petitioner is based on the terms of section 1128(a)(3) of the Social Security Act
(Act), 42 U.S.C. § 1320a-7(a)(3). The facts of this case mandate the imposition of a five-
year exclusion, and so I grant the I.G.’s Motion for Summary Disposition.

I. Procedural Background

Petitioner was employed as a certified medication assistant in the assisted living facility
section of Fellowship Village, a continuing care retirement community, located in
Bernards Township, New Jersey. As part of her job, Petitioner was provided access to
the living quarters of the residents, many of whom retained checkbooks for their personal
bank accounts in their quarters. Beginning in or about July 2002 and continuing until
about December 2002 Petitioner and three co-defendants conspired to and did steal from
residents of the facility and defraud a number of banks. Specifically, Petitioner stole
blank checks from residents of the assisted living facility where she worked. She and
three co-conspirators then forged the residents’ signatures and deposited the fraudulent
checks into various bank accounts. Petitioner and her co-conspirators fraudulently
negotiated or attempted to negotiate approximately $98,575 in checks that Petitioner stole
from Fellowship Village residents.

On September 22, 2003, the Federal Grand Jury in and for the United States District
Court for the District of New Jersey handed up an Indictment charging Petitioner and
three others with six criminal counts. On October 23, 2003, Petitioner appeared with
counsel in the United States District Court and pleaded guilty to Conspiracy to Commit
Bank Fraud and Bank Fraud, in violation of 18 U.S.C. §§ 2, 371, and 1344. She was
sentenced on August 5, 2004, to a six-month term of house arrest, was assessed $200, and
was ordered to pay restitution to the banks in the sum of $25,703.15.

As required by the terms of section 1128(a) of the Act, 42 U.S.C. § 1320a-7(a), the I.G.
began the process of excluding Petitioner from participation in Medicare, Medicaid, and
all other federal health care programs. On April 30, 2007, the LG. issued Petitioner
notice that she was being excluded pursuant to the terms of section 1128(a)(3) of the Act
for the mandatory minimum period of five years. The notice stated that the exclusion
was effective beginning May 20, 2007. Therefore, Petitioner’s exclusion is scheduled to
expire on May 20, 2012.'

Acting pro se, Petitioner sought review of the I.G.’s action by letter dated May 6, 2011
and mailed May 9, 2011, pursuant to 42 C.F.R. § 1005.2. Although the date of
Petitioner’s letter raises the issue of its timeliness within the limits set out at 42 C.F.R.
§ 1005.2(c), the I.G. determined not to raise the issue of timeliness. I convened a
telephonic prehearing conference on June 9, 2011, pursuant to 42 C.F.R. § 1005.6, in
order to discuss the issues presented by the case and procedures for addressing those
issues. By Order of June 10, 2011, I established a schedule for the submission of
documents and briefs.

On July 11, 2011, the .G. filed its Motion for Summary Disposition. Petitioner
submitted an Answer Brief (P. Ans. Br.) in letter form received in this office on August
10, 2011. On August 31, 2011, the I.G. filed its Reply and on September 19, 2011
Petitioner filed her Response Brief. There are six exhibits in this case. The LG.
proffered three exhibits marked I.G. Exhibits 1 through 3 (LG. Exs. 1-3), and Petitioner
proffered three exhibits which I have marked Petitioner’s Exhibits | through 3 (P. Exs. 1-
3). All proffered exhibits are admitted without objection. Briefing is now complete, and
the record in this case closed on September 19, 2011.

' Tremind Petitioner, however, that once her exclusion expires her reinstatement is not
automatic. She will not be reinstated at the conclusion of her exclusion unless she applies
to the I.G. and is granted reinstatement. See I.G. Ex. 1, at 3.
IL. Issues

The issues before me are limited to those listed at 42 C.F.R. § 1001.2007(a)(1). In the
specific context of this record, they are:

1. Whether the I.G. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to section
1128(a)(3) of the Act; and

2. Whether the length of the proposed period of exclusion is unreasonable.

Both issues must be resolved in favor of the I.G.’s position. Because her predicate
conviction has been established, there is a basis for Petitioner’s exclusion pursuant to
section 1128(a)(3) of the Act. A five-year term of exclusion is the minimum established
by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B) and is therefore not
unreasonable.

III. Controlling Statutes and Regulations

Section 1128(a)(3) of the Act, 42 U.S.C. § 1320a-7(a)(3), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of “[a]ny individual or entity that has been convicted for an offense which
occurred after [August 21, 1996,] under Federal or State law, in connection with the
delivery of a health care item or service or with respect to any act or omission in a health
care program (other than those specifically described in [section 1128(a)](1)) operated by
or financed in whole or in part by any Federal, State, or local government agency, of a
criminal offense consisting of a felony related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct.” The terms of section 1128(a)(3)
are restated in similar language at 42 C.F.R. § 1001.101(c).

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual . . . by a Federal . . . court,” Act

§ 1128(4)(1); “when there has been a finding of guilt against the individual ... by a
Federal . . . court,” Act § 1128(i)(2); or “when a plea of guilty . . . by the individual . . .
has been accepted by a Federal . . . court,” Act § 1128(i)(3). These definitions are
repeated at 42 C.F.R. § 1001.2.

An exclusion based on section 1128(a)(3) is mandatory and the I.G. must impose it for a
minimum period of five years. Act § 1128(c)(3)(B); 42 U.S.C. § 1320a-7(c)(3)(B). The
regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory provision.
IV. Findings and Conclusions

Based on the undisputed material facts in the record before me, I find and conclude as

follows:

. On her accepted pleas of guilty on October 23, 2003, in the United States

District Court for the District of New Jersey, Petitioner Arlene Gibbs was
found guilty of one count of Conspiracy to Commit Bank Fraud in violation
of 18 U.S.C. § 371, and one count of Bank Fraud, in violation of 18 U.S.C.
§§ 1344 and 2. I.G. Ex. 3.

. Final judgment of conviction was entered against Petitioner and she was

sentenced on her guilty pleas in the United States District Court for the
District of New Jersey on August 4, 2004. I.G. Ex. 3.

. Petitioner’s convictions described above in Findings 1 and 2 constitute

convictions of felonies. 18 U.S.C. § 3559(a)(2); I.G. Ex. 3.

. The judgment of conviction, finding of guilt, and accepted pleas of guilty

described above in Findings 1, 2, and 3 constitute a “conviction” within the
meaning of sections 1128(a)(3) and 1128(i)(1), (2), and (3) of the Act, and
42 C.F.R. § 1001.2.

. There is a nexus and a common-sense relationship between the felony

offenses of which Petitioner was convicted, as noted above in Findings 1, 2,
and 3 above, and fraud in connection with the delivery of a health care item
or service. I.G. Exs. 2, 3.

. Petitioner’s convictions as noted above in Findings 1, 2, 3, and 4 constitute

a basis for the I.G.’s exclusion of Petitioner from participation in Medicare,
Medicaid, and all other federal health care programs. Act § 1128(a)(3); 42
U.S.C. § 1320a-7(a)(3).

. The five-year period of Petitioner’s exclusion is the mandatory minimum

period provided by law, and is therefore not unreasonable. Act
1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).

an

. There are no disputed issues of material fact and summary disposition is

therefore appropriate in this matter. Michael J. Rosen, M.D., DAB No.
2096 (2007); Thelma Walley, DAB No. 1367 (1992); 42 C.F.R.
§ 1005.4(b)(12).
V. Discussion

Petitioner first asserts that the I.G.’s exclusion is not valid because the I.G. failed to send
its April 30, 2007 notice of exclusion to her proper address. The I.G. acknowledged that
it posted the notice to an incorrect address and therefore determined not to raise the issue
of timeliness. Petitioner acknowledges that she subsequently received a copy of the
1.G.’s notice.” Petitioner’s appeal rights have not been hindered by her delayed receipt of
the I.G.’s notice nor has it impaired Petitioner’s opportunity to present her case before
me.

The four essential elements necessary to support an exclusion based on section
1128(a)(3) of the Act are: (1) the individual to be excluded must have been convicted of
a felony offense; (2) the felony offense must have been based on conduct relating to
fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial
misconduct; (3) the felony offense must have been for conduct in connection with the
delivery of a health care item or service, or the felony offense must have been with
respect to any act or omission in a health care program operated by or financed in whole
or in part by any federal, state, or local government agency; and (4) the felonious conduct
must have occurred after August 21, 1996. Andrew D. Goddard, DAB No. 2032 (2006);
Kenneth M. Behr, DAB No. 1997 (2005); Erik D. DeSimone, R.Ph., DAB No. 1932
(2004); Jeremy Robinson, DAB No. 1905 (2004); Breton Lee Morgan, M.D., DAB
CR1913 (2009); Morganna Elizabeth Allen, DAB CR1479 (2006); Theresa A. Bass,
DAB CR1397 (2006); Michael Patrick Fryman, DAB CR1261 (2004); Golden G.
Higgwe, D.P.M., DAB CR1229 (2004); Thomas A. Oswald, R.Ph., DAB CR1216 (2004);
Katherine Marie Nielsen, DAB CR1181 (2004).

Petitioner does not deny that she was convicted of felony offenses, that her conduct
occurred after August 21, 1996, or that her criminal activity occurred while she was
working in a health care facility. Hearing Request (H.R.) at 1; P. Br. at 2. She does not
explicitly dispute the relation of the conduct underlying her convictions to fraud or theft,
There appears to be no challenge to the I.G.’s proof of any of the essential elements set
out above.

In this case, it is uncontested that Petitioner’s felony offenses of bank fraud and
conspiracy were based on conduct related to fraud, theft, breach of fiduciary
responsibility and other financial misconduct. Petitioner’s employer, Fellowship Village,
was and is a continuing care retirement community providing skilled nursing and assisted
living facility services. I.G. Ex. 2; H.R. Petitioner and three others formed a plan to steal
checks from Fellowship Village residents, to fraudulently write the checks, forge the

> | further note that on May 31, 2011, this office provided Petitioner a copy of the
exclusion notice.
signatures of the Fellowship Village residents on the checks, and then negotiate the
fraudulent and forged checks at various banks. LG. Ex. 2, at 1-3.

It was a necessary part of the plan that Petitioner used her official position with
Fellowship Village to obtain access to the residents’ living quarters, where Petitioner
alone then stole personal checks from a number of the residents. I.G. Ex. 2. One or more
members of the conspiracy, including Petitioner, then forged the signatures of the victim
Fellowship Village residents on the checks and made them payable to certain designees.
The checks ranged in amounts from $2,000 to $48,525. I.G. Ex. 2, at 3. Petitioner’s co-
conspirators then caused various individuals to deposit the stolen, forged and
unauthorized checks into the personal bank accounts of others and then withdrew or
attempted to withdraw the proceeds from those checks. I.G. Ex. 2, at 4. Before
authorities discovered and stopped the conspiracy and felonious acts, Petitioner and her
co-conspirators fraudulently negotiated or attempted to negotiate approximately $98,575
in checks that Petitioner stole from the Fellowship Village residents. 1G. Ex. 2, at 4.

Petitioner was convicted of Conspiracy to Commit Bank Fraud and Bank Fraud, Class B
felonies. 18 U.S.C. § 3559(a)(2); I.G. Ex. 3. It is evident that Petitioner’s felonious
conduct was not only related to fraud: it is a purely crimen falsi offense, and the obvious
product of an organized, sustained, and carefully-planned criminal enterprise rooted in
deception and betrayal. I.G. Ex. 3; see 18 U.S.C. § 371.

There is an obvious “common sense connection” between Petitioner’s criminal activity
and the delivery of health care services at Fellowship Village. Petitioner’s employment
and therefore her access as a care provider were essential to the conspiracy’s very
existence. As a certified medication assistant, Petitioner was placed in a position of trust,
to aid in the care of vulnerable residents. Petitioner used her position to steal blank
checks from the residents which were then fraudulently written, signed, and presented for
deposit at a number of financial institutions. Petitioner conspired to and in fact did use
her position of trust to exploit, betray, and victimize the very individuals that she was
tasked to care for. On these facts, the nexus between Petitioner’s crime and health care is
flagrant.

I find that the I.G. has proven the essential elements none of which are disputed.

Petitioner argues that she should not be excluded under the mandatory provision of
1128(a) of the Act. P. Br. at 1. The Act expressly provides for mandatory five-year
minimum periods of exclusion whenever an individual has been convicted of a felony
related to health care fraud. Act § 1128(a)(3). Neither the LG. nor I have been granted
the discretion or authority to reduce the exclusion period below the statutory minimum
once the LG. has established the required elements of a mandatory exclusion. If the
mandatory 1128(a) exclusion terms fit, as they do in this case, then the I.G. has no
discretion to invoke the permissive 1128(b) exclusion. Craig Richard Wilder, DAB No.
2416, at 7 (2011); Tanya A. Chuoke, DAB No. 1721, at 14 (2000); Lorna Fay Gardner,
DAB No. 1733, at 6 (2000).

Petitioner requests that the I.G. not impose the exclusion. Petitioner states: “I accepted
responsibility for my actions and suffered emotionally and financially because no
employer would hire me because I have a felony.” “During my hardship I was forced to
get on Welfare to put food on the table for my 2 boys... .” After obtaining employment
her son was diagnosed with cancer, so she “ask[ed her] employer to lay [her] off so [she]
could be with her child.” H.R. After two years at home, Petitioner obtained employment
as a driver for a facility that received federal funding. After three months, her employer
discovered that Petitioner was excluded from participating in the program, and therefore
terminated her employment. H.R. Petitioner submits bills or collection notices as
evidence of her financial hardship. P. Ex. 1-3.

Iam unable, however, to consider Petitioner’s arguments. The five-year period of
exclusion proposed in this case is the minimum required by section 1128(c)(3)(B) of the
Act. As a matter of law it is not unreasonable, and neither the Board nor I can reduce it.
42 C.F.R. § 1001.2007(a)(2); Mark K. Mileski, DAB No. 1945 (2004); Salvacion Lee,
M.D., DAB No. 1850 (2002).

I note once more that Petitioner appears here pro se. Because of that I have been guided
by the Board’s reminders that pro se litigants should be offered “some extra measure of
consideration” in developing their records and their cases. Louis Mathews, DAB No.
1574 (1996); Edward J. Petrus, Jr., M.D., et al., DAB No. 1264 (1991). I have searched
all of Petitioner’s pleadings for any arguments or contentions that might raise a valid,
relevant defense to the I.G.’s Motion, but have found nothing that could be so construed.
Resolution of a case by summary disposition is particularly fitting when settled law can
be applied to undisputed material facts. Michael J. Rosen, M.D., DAB No. 2096; Thelma
Walley, DAB No. 1367. Summary disposition is authorized by the terms of 42 C.F.R.

§ 1005.4(b)(12). This forum looks to FED. R. CIV. P. 56 for guidance in applying that
regulation. Robert C. Greenwood, DAB No. 1423 (1993). The material facts in this case
are undisputed and unambiguous. They support summary disposition as a matter of
settled law. The Decision issues accordingly.

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Arlene Gibbs from participation
in Medicare, Medicaid, and all other federal health care programs for a period of five
years, pursuant to the terms of section 1128(a)(3) of the Act, is sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Charles W. Parrish, M.D.,
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-661
Decision No. CR2449

Date: October 12, 2011

DECISION

I grant summary judgment to the Centers for Medicare and Medicaid Services
(CMS), sustaining its determination to revoke the Medicare enrollment and billing
privileges of Petitioner, Charles W. Parrish, M.D.

I. Background

Petitioner is a physician who has participated in the Medicare program.
Wisconsin Physicians Service (WPS), a Medicare contractor acting on behalf of
CMS, determined to revoke Petitioner’s Medicare enrollment and billing
privileges, effective January 28, 2010. This determination was affirmed on
reconsideration, and Petitioner requested a hearing. The case was assigned to me
for a hearing and a decision.

CMS filed a pre-hearing brief that contains a motion for summary judgment and
nine proposed exhibits that are identified as CMS Exhibit (Ex.) 1 - CMS Ex. 9.
Petitioner filed a brief and four proposed exhibits that are identified as P. Ex. 1 —
P. Ex. 4. I receive the parties’ exhibits into the record of this decision.
II. Issue, Findings of Fact, and Conclusions of Law
A. Issue

The issue is whether CMS is authorized to revoke Petitioner’s participation in
Medicare and his Medicare billing privileges.

B. Findings of Fact and Conclusions of Law

The following material facts are undisputed. On January 28, 2010, the Illinois
Department of Healthcare and Family Services (HFS) terminated Petitioner’s
eligibility to participate in the Illinois Medicaid program. CMS Ex. 1. HFS based
this termination decision on findings that Petitioner had no medical documentation
for more than 700 Medicaid reimbursement claims that he had submitted during a
two-year period from October 1, 2005 through September 30, 2007, and on a
recommended decision by a State administrative law judge. CMS Ex. 2 at 1-2;
CMS Ex. 3 at 3.

On June 2, 2010, WPS received an updated enrollment application (Form CMS-
8551) from Petitioner, seeking to add a new practice location to his service. CMS
Ex. 4 at 1-3, 14-19. The cover letter to this document is dated March 29, 2010.
Id. at 3. However, the FedEx air bill for the document shows that it was sent on
June 1, 2010, and delivered on June 2. Jd. at 1. Both the cover letter and the
enrollment application are date stamped June 2, 2010. The cover letter and the
application itself report that Petitioner was excluded from the Illinois Medicaid
program on January 28, 2010. Jd. at 3, 13-14.

Regulations governing participation in the Medicare program require a physician
to report to CMS any adverse legal action, a change in practice location, or a
change of ownership, within 30 days of the event. 42 C.F.R. § 424.516(d)(1). An
adverse legal action is defined to mean an exclusion or debarment from a federal
or State health care program (a State Medicaid program). 42 C.F.R. § 424.502.
CMS is authorized to revoke the Medicare participation and billing privileges of
any physician who fails to comply with this reporting requirement. 42 C.F.R. §
424.535(a)(9).

The undisputed facts plainly establish that Petitioner failed to comply with this
reporting requirement. He was excluded from participating in the Illinois
Medicaid program on January 28, 2010. He did not report that adverse action until
June 1, 2010, more than four months after it occurred. That failure is sufficient
basis for CMS or its contractor, WPS, to revoke Petitioner’s participation in
Medicare and his Medicare billing privileges.

Petitioner asserts that he did not receive notice of the adverse State action against
him and first learned of it on March 4, 2010. P. Ex. | at 1. For purposes of this
decision, I am accepting Petitioner’s assertion as true. But, even assuming that to
be true, Petitioner nevertheless failed to report the adverse State action until June
2010, approximately three months after he learned about it. Thus, by Petitioner’s
own admission, he reported the adverse action untimely.'

Petitioner argues also that he did not receive notice of the HFS proceeding that
resulted in his State exclusion from the Illinois Medicaid program. Apparently, by
making this assertion, Petitioner challenges HFS’s authority to sanction him.
However, CMS’s authority to revoke Petitioner’s Medicare participation and his
billing privileges does not derive from the State proceeding against Petitioner, nor
does it derive from the merits of that case. It derives from the fact that Petitioner
failed to report timely the State’s adverse action against him. Petitioner’s duty in
this case was to report, even if he questioned the validity of the action and even if
ultimately he succeeds in overturning the State’s action on due process or
substantive grounds. He failed to comply with that duty here, and that is enough
to authorize CMS or its contractor to revoke Petitioner’s Medicare participation.

Additionally, Petitioner argues that, on the merits, CMS should not have revoked
his Medicare participation, asserting that he has no prior history of noncompliance
with Medicare participation requirements and characterizing his failure to notify as
being an isolated incident. However, I have no authority to second-guess CMS’s
action or to substitute my judgment for that of CMS. CMS’s determination to
revoke Petitioner’s Medicare participation and his billing privileges is an act of
discretion. My authority is limited to deciding whether CMS has the discretion to
act. It does not extend to questioning CMS’s judgment.

CMS argues, as an alternative basis for its action, that it was required to revoke
Petitioner’s Medicare participation because Petitioner had been “excluded” from
participating in the Illinois Medicaid program. CMS cites section 1862(e)(1) of
the Social Security Act (Act), and implementing regulations at 42 C.F.R. §
424.535(a)(2)(i), as support for its argument. These sections, in pertinent part,
require that the Secretary or CMS revoke the Medicare participation and billing
privileges of any individual who has been excluded from participating in Medicare,
pursuant to certain enumerated sections of the Act. I find it unnecessary to decide
here whether this alternative basis supports CMS’s action. I note, however, that

all of statutory exclusion sections cited in section 1862 of the Act, and in the

' Petitioner does not contend that the anomalous March 29, 2010 date on the cover
letter to his June 2010 application means that he actually notified WPS or CMS on
March 29, 2010 of the adverse State action against him. See CMS Ex. 4 at 3; P.
Ex. 1.
implementing regulation, are sections that authorize the Inspector General (1.G.)
of this Department to exclude an individual on a variety of grounds. Neither the
Act nor regulations refer to exclusion actions taken by State authorities, as was the
case with Petitioner. Consequently, I am uncertain whether I would find CMS’s
alternate theory to be valid were I to address it.

Finally, CMS revoked Petitioner’s participation and billing privileges retroactive
to January 28, 2010. Petitioner made no argument as to the propriety of that
action, assuming that CMS had the authority to act against Petitioner. Therefore, I
do not address it here.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Bibb Medical Center Nursing Home
(CCN: 01-5215),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-248
Decision No. CR2448
Date: October 11, 2011
DECISION
I sustain the determination of the Centers for Medicare and Medicaid Services
(CMS) to impose civil money penalties against Petitioner, Bibb Medical Center
Nursing Home, of: $3,550 for each day of a period that began on October 7 and
that ran through November 13, 2010; and $100 for each day of a period that began
on November 14, 2010 and that ran through December 9, 2010.
I. Background
Petitioner is a skilled nursing facility that is located in Centreville, Alabama. It
participates in the Medicare program. Its participation is governed by sections
1819 and 1866 of the Social Security Act (Act), and by implementing regulations
at 42 C.F.R. Parts 483 and 488.
CMS determined to impose against Petitioner the remedies that I describe above,
based on findings of noncompliance with Medicare participation requirements that
were made at a survey of Petitioner’s facility that was completed on November 14,

2010 (November Survey). The noncompliance findings included four findings of
immediate jeopardy level deficiencies. The term “immediate jeopardy” is defined
at 42 C.F.R. § 488.301 to mean noncompliance that is so egregious as to cause, or
to be likely to cause, serious injury, harm, impairment, or death to one or more
residents of a facility.

Petitioner requested a hearing, and the case was assigned to me for a hearing and a
decision. The parties exchanged pre-hearing briefs and proposed exhibits and,
then, agreed that the case could be heard and decided based on their written
submissions. | allowed the parties a final round of briefs.

CMS filed 24 proposed exhibits that it identified as CMS Exhibit (Ex.) 1 - CMS
Ex. 24. Petitioner filed 15 proposed exhibits that it identified as P. Ex. 1 — P. Ex.
15. Ireceive all of these exhibits into the record.

II. Issue, Findings of Fact, and Conclusions of Law
A. Issue

Petitioner does not contest any of the deficiencies that were identified at the
November Survey, nor does it dispute the duration of its noncompliance. It
argues, however, that CMS’s determination of immediate jeopardy level
noncompliance is incorrect. Consequently, the only issues that I must hear and
decide are whether:

1. CMS’s determination of immediate jeopardy level
noncompliance is clearly erroneous; and

2. Assuming that CMS’s determination of immediate jeopardy level
noncompliance is not clearly erroneous, civil money penalties of
$3,550 per day are reasonable.

B. Findings of Fact and Conclusions of Law
I make the following findings of fact and conclusions of law (Findings).

1. Petitioner did not prove that CMS’s determination of immediate
Jeopardy level noncompliance is clearly erroneous.

CMS’s allegations of immediate jeopardy level noncompliance all relate to a
resident who is identified in the report of the November Survey as RI #1. CMS
Ex. 1. The resident was described by Petitioner’s staff as being an individual who:
has severely impaired cognitive abilities; requires extensive assistance from the
staff for bed mobility; and is totally dependent on Petitioner’s staff for all
activities of daily living. /d. at 4. In other words, RI # 1 is a gravely impaired
individual who is completely dependent on the assistance of care givers.

The resident had a history of pressure sores. CMS Ex. | at 4; CMS Ex. 4 at 9, 11.
Thus, Petitioner’s staff knew that this resident was at risk for development of
pressure sores and was on notice that special care needed to be given to her to
protect her against the development of sores.

In October 2010, the resident developed pressure sores on both of her heels. The
resident’s deterioration became evident to Petitioner’s staff on or about October 7,
2010. CMS Ex. 14 at § 12; CMS Ex. 6 at 29. Despite this knowledge, Petitioner
failed in important respects to provide necessary care for RI # 1. Petitioner
concedes the following deficiencies:

e The staff failed to comply with their duty under 42 C.F.R. § 483.10(b)(11)
to consult immediately with the resident’s treating physician about the
significant change in the resident’s condition brought on by the
development of pressure sores. CMS Ex. | at 2-7. The staff waited 12
days, until October 19, 2010, before advising the resident’s physician
about the resident’s pressure sores.

e Petitioner’s staff failed to comply with professional standards of quality in
providing care to RI # 1, as 42 C.F.R. § 483.20(k)(3)(i) requires. The staff
allowed a nonprofessional employee of Petitioner to apply wound
treatments to the resident. They failed in several respects to provide
wound treatment to the resident as the resident’s physician had ordered.

These deficiencies included failures to apply wound dressings as ordered

y the resident’s physician, failures to administer a medication that the

ysician had ordered, and failure to float the resident’s heels pursuant to

ie physician’s order. CMS Ex. | at 11-23.

aeUuS

e The staff failed to provide RI # 1 with the necessary treatment and services
to promote healing of her pressure sores and to protect against the
development of additional sores as 42 C.F.R. § 483.25(c) requires. These
deficiencies include the failures to consult with the resident’s treating
physician and to follow the physician’s orders that I have discussed. They
also include failures to ensure that professional staff knew how to measure
accurately the size of a resident’s pressure ulcers, and a failure to
determine why RI # 1’s sponsor refused to allow the resident to be sent to a
local hospital for evaluation of her pressure sores. CMS Ex. | at 23-52.

e Petitioner’s management failed, in contravention of the requirements of 42
C.F.R. § 483.75, to ensure that the facility was administered in a manner
that enabled it to use its resources effectively and efficiently to attain or
maintain the highest practicable physical, mental, and psychosocial well-
being of each resident, as is evidenced by the deficient care that
Petitioner’s staff gave to RI #1. CMS Ex. | at 61-66.

There is abundant evidence that these admitted deficiencies put RI # | at grave
risk for serious injury, or worse. Pressure sores are a serious problem for gravely
ill and dependent individuals such as RI # 1. Among the common complications
of pressure sores is infection. CMS Ex. 24 at 3. Complications of pressure sores
may include sepsis, chronic infection, cellulitis, and osteomyelitis. Pressure sores
increase the likelihood of death in elderly patients. CMS Ex. 23 at 1, 4; CMS Ex.
24 at 4.

RI # 1 not only developed pressure sores that Petitioner was deficient in caring for,
but she developed pressure sores that were quite serious. The pressure sore that
the resident developed on her right heel measured 7.5 x 6 cm. The pressure sore
on her left heel measured 3 x 2 cm. CMS Ex. 4 at 13. The sore on the resident’s
right heel had developed a necrotic area (eschar), and the resident’s physician
described the resident’s wounds as being unstageable. CMS Ex. 6 at 66; CMS Ex.
14 at 931; CMS Ex. 4 at 85.

The evidence establishes a pattern of mistreatment of RI # 1’s condition, and it
evidences something more. The slipshod care that Petitioner’s staff gave to the
resident shows a fundamental misunderstanding by Petitioner and its staff of
Petitioner’s obligations to protect highly vulnerable residents, such as RI # 1, from
the development and complications of pressure sores. The evidence leads to the
inescapable conclusion that the staff was simply not prepared to handle its
obligations to: assess residents for their vulnerabilities; stay vigilant to protect
residents against developing pressure sores; and be aggressive and diligent in
following prescribed protocol and physicians’ orders in treating pressure sores.

I do not view the deficiencies at Petitioner’s facility as being an isolated event.
There was, as I have described, a whole series of failures to provide care to RI # 1.
This series of failures establishes a pattern of noncompliance, and it leads me to
find that Petitioner’s management and staff were generally deficient in their
treatment of residents who were vulnerable to the development of pressure sores,
or who had developed sores. That the evidence that CMS offered focuses on RI

# 1 does not mean that she was the only resident who was at risk at Petitioner’s
facility. The pattern of noncompliance is so egregious here that I infer that any
resident of the facility who was at risk for developing pressure sores was equally
at risk for being cared for deficiently.
Petitioner’s argument that CMS’s determination of immediate jeopardy is
incorrect is mainly that RI # 1’s sores eventually healed without the resident
encountering any of the complications that a resident who has pressure sores might
experience. Thus, according to Petitioner, there could not be a likelihood of
serious injury, harm, impairment, or death, because none of these outcomes
occurred.

I find this argument to be unpersuasive. Petitioner simply has not shown that
CMS’s determination of immediate jeopardy is clearly erroneous. The fact that RI
# 1’s pressure sores ultimately healed does not derogate from the risks that she
faced while she had those sores. Nor does it suggest that Petitioner’s overall
competence at caring for residents who were at risk for developing, or who had,
pressure sores was any better than I have found it to be. As I have discussed,
Petitioner and its staff's deficient treatment of RI # 1 demonstrated an overall
misunderstanding of their roles and responsibilities for dealing with vulnerable
residents. That clearly demonstrated incompetence put more than RI # | at risk.

Boiled down to its essence, Petitioner’s argument reduces to the kind of “no harm,
no foul” contention that facilities sometimes make when found to be deficient.
Essentially, Petitioner is saying that there was no likelihood of a bad outcome here
because the resident eventually got better. But, that analysis fails to address the
very real risks — of infection, of osteomyelitis, of increased chances of mortality —
that RI # 1 faced while she suffered from pressure sores.

Petitioner also argues that its staff did many of the things for RI # 1 that were
ordered for her by her physician. For example, Petitioner acknowledges that the
staff failed to administer all of the medications that were prescribed but asserts
that, at least, the staff administered some of them. That is no basis for me to find
CMS’s determination of immediate jeopardy to be clearly erroneous. Even a few
omissions to provide care would have caused a likelihood of serious injury or
worse, given RI # 1’s vulnerable condition.

However, this is not a case of one or two missed administrations of medication or
one or two missed treatments. To the contrary, the record establishes egregious
failures by Petitioner’s staff to provide care. The staff waited 12 days to consult
with the resident’s physician about her development of pressure sores in October
2010, even though the governing regulation calls for immediate consultation.
They failed for more than two months to administer a Hypercolloid dressing to the
resident’s right heel, despite a prescription for that dressing by the resident’s
physician. CMS Ex. | at 11. They failed for four consecutive days to float the
resident’s heels, even though the resident’s physician had ordered that care. Id. at
12.

2. Civil money penalties of $3,550 per day are reasonable.

Daily civil money penalties for immediate jeopardy level noncompliance must fall
within a range of from $3,050 to $10,000 per day. 42 C.F.R. § 488.438(a)(1)(i).
Deciding where within that range an immediate jeopardy level penalty should fall
depends on the presence of evidence that addresses the following regulatory
factors: the seriousness of a facility’s noncompliance; its compliance history; its
culpability; and its financial condition. 42 C.F.R. §§ 488.438(f)(1) — (4), 488.404
(incorporated by reference into 42 C.F.R. § 488.438(f)(3)).

Here, the immediate jeopardy level penalties of $3,550 per day that CMS
determined to impose fall near the bottom of the immediate jeopardy level range.

I find them to be justified because Petitioner’s noncompliance was very serious.
As I have discussed, RI # 1 was an extremely vulnerable individual, and
Petitioner’s failure to identify and treat her pressure sores put her at great risk.
Furthermore, and as I have also discussed, the level of incompetence demonstrated
by the evidence put more than just RI # | at risk.

Petitioner did not challenge the $100 per day civil money penalties that CMS
imposed for the period of non-immediate jeopardy level noncompliance that was
manifested by Petitioner, and, so, I do not address them here.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Leonardo Torres Rodriguez, M.D.,
Petitioner
v.

Centers for Medicare and Medicaid Services.
Docket No. C-11-572
Decision No. CR2446

Date: October 11, 2011

DECISION

The Centers for Medicare and Medicaid Services (CMS) is entitled to summary
judgment, as I conclude that the undisputed evidence establishes that CMS properly
revoked Petitioner’s enrollment in the Medicare program for failure to timely submit
required information necessary for Petitioner’s continued participation in the Medicare
program.

I. Background

Petitioner is a physician in the Commonwealth of Puerto Rico. On July 28, 2011, First
Coast Service Options, Inc. (First Coast), a Medicare contractor acting on behalf of CMS,
revoked Petitioner’s participation in Medicare. Petitioner requested a hearing, and the
case was assigned to me for a hearing and a decision.

CMS filed a Motion for Summary Judgment. With its motion, CMS filed 19 proposed
exhibits that it designated as CMS Exhibit (Ex.) 1 - CMS Ex. 19. Petitioner opposed the
motion. With his opposition, Petitioner filed 28 proposed exhibits that he designated as
P. Ex. 1 —P. Ex. 28. I receive all of the parties’ proposed exhibits into the record.
Neither party requested that I convene an in-person hearing.
IL. Issue, Findings of Fact, and Conclusions of Law
A. Issue

The issue in this case is whether CMS was authorized to revoke Petitioner’s Medicare
enrollment and billing privileges on July 28, 2010 for failure to comply with the
revalidation requirements of 42 C.F.R. § 424.515.

B. Findings of Fact and Conclusions of Law

The undisputed facts of this case are as follows. On December 2, 2009, First Coast sent
Petitioner a letter informing him that, in accordance with 42 C.F.R. § 424.515(d)(1),
Petitioner was required to provide certain documentation to revalidate his Medicare
billing privileges. CMS Ex. 1. The letter informed Petitioner that the requirement for
resubmission, recertification, and reverification of enrollment information included
submission of all applicable enrollment applications and supporting documentation
within 60 days of the date of the request. /d. The letter stated in bold that “[y]our
continued billing privileges are dependent upon receiving the requested information
within 60 calendar days. If you fail to provide the requested information, your billing
privileges will be revoked.” Jd. at 2. Petitioner did not respond to this letter and did not
provide the requested information. Petitioner claims he did not receive the letter;
however, he does not claim that the letter was sent to an incorrect address.

On June 28, 2010, First Coast sent a letter on behalf of CMS informing Petitioner that his
Medicare billing number and billing privileges would be revoked as of July 28, 2010
because CMS did not receive the requested information. CMS Ex. 2 at 1. The contractor
also advised Petitioner that, as a consequence of the revocation of his billing privileges,
he would be ineligible to reapply for enrollment in the Medicare program for a period of
one year. Jd.

The letter stated that Petitioner could take certain steps to correct the deficiencies and
reapply to establish Medicare eligibility by submitting a corrective action plan (CAP)
within 30 calendar days after the postmark date of the letter. /d. In addition, if Petitioner
disagreed with the determination, he could request reconsideration of the revocation
decision. Jd. at 2.

On July 6, 2010, Petitioner submitted a request for reconsideration via facsimile. CMS
Ex. 3. Petitioner checked the box for “Request for Reconsideration” and did not check
the box for “CAP” on the form submitted. /d. The request did not contain any
documentation other than an unsupported statement that Petitioner had not received the
December 2, 2009 letter. Jd. Petitioner submitted another request on August 26, 2010
containing copies of forms CMS 8551, CMS 588, and various supporting documentation,

including copies of Petitioner’s medical degrees, resume, and license to practice
medicine. CMS Ex. 5 at 27-41. However, many of the pages of the form CMS 8551
were incomplete or missing. Jd. at 18.

Although Petitioner requested reconsideration rather than a CAP, First Coast apparently
treated the request for reconsideration as a CAP and made several attempts to obtain the
missing information from the Petitioner. CMS Ex. 7. On January 4, 2011, First Coast
attempted to call Petitioner and request the missing information; however, there was no
answer at Petitioner’s place of business, and Petitioner apparently did not have a
voicemail system. CMS Ex. 7 at 3. Also, First Coast sent Petitioner a fax advising that
some information was missing, and certain documentation needed to be supplied by
January 7, 2011. CMS Ex. 8. On January 6, 2011, First Coast again attempted to contact
Petitioner but was unable to leave a message. CMS Ex. 7 at 2.

On January 18, 2011, First Coast received a fax from Petitioner stating that Petitioner’s
office had been closed and requesting that fax be resent. CMS Ex. 9. First Coast then
resent the fax and advised Petitioner that the requested information was needed by
January 20, 2011. CMS Ex. 10. Petitioner submitted several documents via fax on
January 20, 2011 and January 21, 2011. These transmittals contained various documents,
including partially completed sections of form CMS 8551, a copy of a page of form CMS
588 without financial institution information listed, and a dark form in the shape of a
driver’s license. CMS Ex. 11 and CMS Ex. 12. Another transmittal on January 24, 2011
contained a partially-readable copy of Petitioner’s degree from La Universidad de Madrid
and a document that appears to be a degree or diploma. CMS Ex. 13. Petitioner then
submitted additional information, including an amended section 3 of form CMS 855] and
a slightly clearer copy of a driver’s license. CMS Ex. 14 at 5, 9.

On January 25, 2011, First Coast sent Petitioner two letters advising that Petitioner’s
request for Corrective Action Plan was denied because Petitioner had not supplied a
complete form CMS 855], and certain supporting documentation was missing. CMS Ex.
15 and CMS Ex. 16. The letters stated that, although Petitioner could submit a request
for reconsideration of the decision, no further action would be taken to process the
application. /d. Petitioner then submitted additional faxes and a request for
reconsideration in late January and early February of 2011. CMS Ex. 17 and CMS Ex.
18. The additional information contained in these faxes was not considered because it
was submitted after the January 25, 2011 decision. On June 8, 2011, First Coast denied
the request for reconsideration, noting the multiple attempts the contractor had made to
obtain the required information from Petitioner and that complete information had not
been timely provided. CMS Ex. 19.

The issue that I must decide is whether Petitioner’s reenrollment application satisfied
regulatory requirements, not whether CMS unfairly denied Petitioner’s CAP. Petitioner
may not now attack First Coast's review of his CAP. However, even assuming that the
CAP is reviewable, the evidence in this case shows that First Coast went to extraordinary
lengths -- more than is required by law -- to assist Petitioner. See CMS Exs. 7, 8, and 14.
Notwithstanding, Petitioner never timely submitted to First Coast all of the necessary
information, and the “CAP” that Petitioner filed is incomplete in several respects. CMS
Ex. 11, CMS Ex. 12. For example, Petitioner continued to leave the financial institution
information and the contact person information on the form CMS-588 incomplete. CMS
Ex. 11 at 4.

Petitioner plainly did not comply with the relevant regulatory requirements because
Petitioner did not complete a reenrollment application within 60 calendar days in
response to First Coast’s notification sent on December 2, 2009. Petitioner’s assertion
that he never received this notification is unsupported. Thus, Petitioner clearly failed to
timely submit the information requested by CMS, and, from that point on, CMS had non-
reviewable discretion to accept or reject any documentation submitted by Petitioner.

Furthermore, the burden rests entirely on Petitioner to provide complete information to
the Medicare contractor concerning his enrollment status. 42 C.F.R. § 515(a)(2). Thus,
Petitioner's assertions that First Coast was nonresponsive or noncooperative are to no
avail. Petitioner points to no source of authority for me to grant him an exemption from
regulatory compliance. Moreover, I have no authority to declare statutes or regulations
invalid or ultra vires. 1866/CPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (“An ALJ
is bound by applicable laws and regulations and may not invalidate either a law or
regulation on any ground.”). Thus, I have no authority to overturn CMS’s decision to
revoke Petitioner Medicare billing privileges for failure to comply with revalidation
requirements based upon equitable considerations. Nor do I have authority to consider a
challenge to the way in which this Department implements regulations.

CMS clearly had the right to revoke Petitioner’s Medicare participation based upon the
fact that Petitioner failed to comply with CMS's original request for revalidation of

enrollment information. The fact that Petitioner failed to provide requisite information
via a corrective action plan is an additional ground for sustaining CMS’s determination.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Frank E. Reyes, M.D.,
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-594
Decision No. CR2445

Date: October 6, 2011

DECISION

I sustain the determination of the Centers for Medicare and Medicaid Services
(CMS) to enroll Petitioner, Frank E. Reyes, M.D., as a Medicare provider with an
effective participation date of January 24, 2011.

I. Background

Petitioner is a physician. He filed a hearing request in this case because he was
dissatisfied with the effective date of participation in Medicare that was assigned
to him by National Government Service (NGS), a Medicare contractor. The case
was assigned to me for a hearing and a decision.

CMS filed a pre-hearing exchange that included a brief, a motion for summary
judgment, and eleven proposed exhibits that it identified as CMS Exhibit (Ex.) 1 —
CMS Ex. 11. On September 12, 2011, Petitioner responded to the CMS motion
with a letter. I am accepting that letter as Petitioner’s pre-hearing exchange.

I receive into the record of this case CMS Ex. 1 — CMS Ex. 11.
II. Issue, Findings of Fact, and Conclusions of Law
A. Issue

The issue in this case is whether NGS, acting on CMS’s behalf, correctly assigned
Petitioner an effective Medicare participation date of January 24, 2011.

B. Findings of Fact and Conclusions of Law

There are no disputed facts in this case. On October 22, 2010, Petitioner filed an
application with NGS to participate in Medicare. CMS Ex. 1. Petitioner filed the
application on a form known as a “Form CMS-855I.” However, and as Petitioner
concedes, his staff prepared the application on a form that was obsolete and that
CMS and its contractors no longer accepted. Consequently, on December 20,
2010, NGS returned the application to Petitioner and requested that he file one on
a current form. CMS Ex. 2.

On January 24, 2011, Petitioner resubmitted his application on a current Form
CMS-855I. CMS Ex. 3. NGS accepted this application and assigned Petitioner an
effective date of January 24, 2011. Medicare regulations allow a newly enrolled
provider to file claims for services provided up to 30 days prior to the effective
enrollment date. Thus, Petitioner was enabled to file Medicare reimbursement
claims for services that he performed on December 26, 2010, and thereafter.

CMS is authorized by regulation to develop and promulgate applicable enrollment
applications. A prospective provider or supplier in Medicare must submit an
application on the approved CMS form. 42 C.F.R. § 424.510(a). CMS, or its
contractors, are not required to accept applications that are not made on the
approved form.

In this case, Petitioner originally submitted his application as a provider on a form
that was obsolete. In September 2009, CMS released a revised Form CMS-855I.
CMS Ex. 8. Contractors, including NGS, were instructed not to accept provider
applications made on obsolete forms and submitted beginning December 1, 2009.
CMS notified the provider community of the changed form and of its policy not to
accept applications made on obsolete forms. CMS Ex. 9.

NGS thus had no choice but to return Petitioner’s October 22, 2010 application to
him inasmuch as he filed it on an obsolete form. The application that Petitioner
submitted on January 24, 2011 was the first application that Petitioner submitted
to NGS that was made on a current Form CMS-855I. NGS accepted that
application and assigned Petitioner an effective participation date that is
concurrent with the date that it received Petitioner’s application. That date is the
earliest date that NGS and CMS could assign to Petitioner as an effective date of
participation. 42 C.F.R. § 424.520(d).

As I have discussed, Petitioner acknowledges that he filed his October 22, 2010
application on an obsolete form. He does not assert that NGS or CMS were
obligated to accept that form. Rather, Petitioner complains about the length of
time — several weeks — that it took before NGS returned the October application to
him. He also protests that the contractor should have acted more expeditiously to
log his January 2011 application into its system. Petitioner contends that he filed
his January application on January 3, 2011. However, NGS did not receive it until
January 24, 2011. CMS Ex. 3 at 1. There is no evidence to show that NGS
received the January application on an earlier date.

These are equitable and not legal arguments. I am without authority to order
either NGS or CMS to act more expeditiously, even though I sympathize to some
extent with Petitioner’s complaint that the contractor acted very slowly in advising
Petitioner that he had filed his October 22, 2010 application on an obsolete form.
On the other hand, Petitioner would have avoided all of the problems that he
encountered had he used the correct form initially.

/s/
Steven T. Kessel
Administrative Law Judge