Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Orthopedics Unlimited, LLC,
(NPI: 1649444589),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-17-610
Decision No. CR5010

Date: January 23, 2018

DECISION

Novitas Solutions (Novitas or “the contractor”), an administrative contractor acting on
behalf of the Centers for Medicare & Medicaid Services (CMS), revoked the Medicare
enrollment and billing privileges of Petitioner, Orthopedics Unlimited, LLC, effective
September 19, 2016. CMS upheld that determination in a reconsidered determination.
CMS and Novitas determined that, pursuant to Medicare program regulations,
Petitioner’s sole owner and managing employee had a felony conviction that was
detrimental to the Medicare program and its beneficiaries, and that Petitioner had failed
to timely provide notice of this conviction by updating its Medicare enrollment record.
For the reasons stated below, I affirm the revocation of Petitioner’s Medicare enrollment
and billing privileges.

I. Background and Procedural History
Petitioner is a medical practice in Livingston, New Jersey, that was enrolled as a supplier

in the Medicare program. Michael Rieber, M.D. (herein “Dr. Rieber’) is Petitioner’s sole
owner and managing employee. CMS Exhibit (Ex.) 16 at 9-10. On May 23, 2016, a state
grand jury returned a true bill of indictment charging that Dr. Rieber filed false or
fraudulent New Jersey gross income tax returns, in violation of N.J.S.A. § 54:52-10
(Counts One, Two and Three), and that he failed to pay state gross income tax with the
intent to evade, avoid, or otherwise not make timely payment, in violation of N.J.S.A.
§ 54:52-9A (Count Four')? CMS Exs. 9, 11.

Dr. Rieber entered a pre-trial intervention (PTI) program in September 2016. CMS Ex.
11. Conditions of his participation in the PTI program included that he pay full
restitution in the amount of $250,000 to the victim, the Treasury of the State of New
Jersey. CMS Ex. 11 at 2. That same month, a superior court judge granted the Attorney
General’s motion for dismissal of Counts One through Three of the indictment, which
was based on Dr. Rieber’s “agreement” regarding PTI and that Dr. Rieber “had been
admitted to PTI under Count 4.” CMS Ex. 12. On May 1, 2017, a New Jersey superior
court judge dismissed the remaining count, Count Four, based on Dr. Rieber’s
participation in the PTI program.* P. Ex. 1.

By letter dated October 28, 2016, Novitas notified Petitioner that it had revoked its
Medicare enrollment and billing privileges, effective September 19, 2016, based on
noncompliance with 42 C.F.R. § 424.535(a)(3) and (9). CMS Ex. 4. Novitas provided
the following explanation in its letter:

' Count Four of the Indictment charged that, between on or about January 15, 2012 to on
or about April 15, 2012, Dr. Rieber failed to pay or turn over New Jersey gross income
tax for the calendar year 2011 “with the intent to evade, avoid, or otherwise not make
timely payment or deposit of said taxes.” CMS Ex. 9 at 5.

> Each of the four counts in the indictment is a third degree offense. CMS Exs. 9, 11.
The term of imprisonment for a third degree offense “shall be between three years and
five years. ...” N.J.S.A. § 2C-43-6.a(3). Therefore, the indictment charged four felony
offenses. See 18 U.S.C. § 3559 (classifying an offense punishable by less than five years
but more than one year of incarceration as a Class E felony); see also U.S. v. Brown, 937
F.2d 68 (2d Cir. 1991) (third degree offense is properly classified as a felony).

> Petitioner’s submission of this document did not comply with the requirements of the
Civil Remedies Division Procedures (CRDP) and my Acknowledgment and Pre-Hearing
Order (Pre-Hearing Order). Petitioner did not identify its exhibit with a “separate unique,
and whole identifying number,” did not mark the document with the case docket number
and pagination, and did not submit an exhibit list. See CRDP, § 14; Pre-Hearing Order,
§§ 4(c)(ii), 5(a)-(d). In lieu of rejecting this exhibit, I have re-designated the exhibit as
Petitioner Exhibit (P. Ex.) 1.
42 CFR $424.535(a)(3) - Felonies

The Centers for Medicare & Medicaid Services has been made aware that
on September 19, 2016, Michael Rieber agreed to, by order of the Superior
Court of New Jersey, Mercer County, a Pretrial Intervention. Michael
Rieber is a Sole Owner, Managing Employee, Authorized Official, and a
5% or more ownership interest in Orthopaedics Unlimited LLC.* A pretrial
intervention is considered a conviction, as defined by 42 C.F.R. § 1001.2.

42 CFR §424.535(a)(9) — Failure to Report

Michael Rieber agreed to, by order of the Superior Court of New Jersey,
Mercer County, a Pretrial Intervention on September 19, 2016. Michael
Rieber is a Sole Owner Managing Employee, Authorized Official, and a
5% or more ownership interest in Orthopaedics Unlimited LLC. You did
not notify CMS of this adverse legal action, as required by 42 C.F.R.

§ 424.516.

CMS Ex. 4 at 1 (emphasis omitted). Novitas informed Petitioner that it had established a
re-enrollment bar for a period of three years, effective 30 days from the postmark date of
the letter. CMS Ex. 4 at 2.

On or about November 28, 2016, Petitioner submitted a request for reconsideration, along
with thirteen exhibits and a signed statement of Dr. Rieber. CMS Exs. 2, 3. Dr. Rieber
explained that his participation in the PTI program was not based on any of the financial
crimes specifically enumerated in 42 C.F.R. § 424.535(a)(3), and that he had not been
convicted of an offense that is similar to the examples listed in the regulation. CMS Ex.
2 at 7-13. Dr. Rieber argued, on behalf of Petitioner, that he was not the subject of an
adverse legal action that necessitated reporting pursuant to 42 C.F.R. § 424.535(a)(9).
CMS Ex. 2 at 13-15.

On February 24, 2017, CMS’s Provider Enrollment & Oversight Group issued a
reconsidered determination in which it upheld the revocation of Petitioner’s Medicare
enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(3) and (9). CMS
Ex. 1. CMS determined that, for purposes of revocation, Dr. Rieber had been convicted
of the felony offense of failing to pay state income tax with the intent to evade payment.
CMS Ex. | at 7. CMS explained that, pursuant to 42 C.F.R. § 1001.2, which is
referenced by section 424.535(a)(3), a person has been “convicted” if he or she “has
entered into participation in a first offender, deferred adjudication or other program or
arrangement where judgment of conviction has been withheld.” CMS Ex. | at 3. CMS

* Petitioner refers to itself as both “Orthopaedics Unlimited” and “Orthopedics
Unlimited.” See CMS Ex. 2 at 1.
also determined that Petitioner “failed to report this adverse legal action as required under
42 C.F.R. § 424.516(d).” CMS Ex. 1 at 7-8.

Petitioner filed a timely request for hearing (RFH) on April 21, 2017. On May 3, 2017, I
issued a Pre-Hearing Order directing the parties to file pre-hearing exchanges, consisting
of a brief by CMS and a response brief by Petitioner, along with supporting evidence, in

accordance with specific requirements and deadlines.

CMS filed a pre-hearing brief and motion for summary judgment, along with 16 exhibits
(CMS Exs. 1-16). Petitioner submitted a pre-hearing brief and opposition to CMS’s
motion for summary judgment (P. Br.), along with P. Ex. 1. As neither party has
objected to any of the proposed exhibits, I admit all submitted exhibits.

Neither party has submitted the written direct testimony of any witnesses, and a hearing
is therefore unnecessary for the purpose of cross-examination of witnesses. Pre-Hearing
Order, §§ 8-10. The record is closed, and the case is ready for a decision on the merits.”

IL. Issues

Whether CMS has a legal basis to revoke Petitioner’s Medicare enrollment and billing
privileges pursuant to 42 C.F.R. § 424.535(a)(3) and (9) because its owner and managing
employee has a felony conviction within the preceding 10 years and it failed to report the
final adverse action within 30 days.

Il. Jurisdiction

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

IV. Findings of Fact, Conclusions of Law, and Analysis°

Petitioner is a “supplier” for purposes of the Medicare program. See 42 U.S.C.

§ 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(1). In order to
participate in the Medicare program, a supplier must meet certain criteria to enroll and
receive billing privileges. 42 C.F.R. §§ 424.505, 424.510. CMS may revoke a supplier’s
enrollment and billing privileges for any reason stated in 42 C.F.R. § 424.535(a).

As an in-person hearing to cross-examine witnesses is not necessary, it is unnecessary
to further address CMS’s motion for summary disposition.

° My numbered findings of fact and conclusions of law are set forth in italics and bold
font.
CMS may revoke a supplier’s enrollment based on the existence of a felony conviction,
as set forth in 42 C.F.R. § 424.535(a)(3), which currently provides:

(3) Felonies. (i) The provider, supplier, or any owner or managing
employee of the provider or supplier was, within the preceding 10 years,
convicted (as that term is defined in 42 C.F.R. [§] 1001.2) of a Federal or
State felony offense that CMS determines is detrimental to the best interests
of the Medicare program and its beneficiaries.

(ii) Offenses include, but are not limited in scope or severity to—

oe OR

(B) Financial crimes, such as extortion, embezzlement,

income tax evasion, insurance fraud and other similar

crimes for which the individual was convicted, including guilty pleas
and adjudicated pretrial diversions.

42 CFR. § 424.535(a)(3)(ii)(B).

CMS also may revoke a supplier’s Medicare enrollment and billing privileges based on
the supplier’s failure to timely report a final adverse legal action, as is set forth in
42 CFR. § 424.535(a)(9):

(9) Failure to report. The provider or supplier did not comply with the
reporting requirements specified in §424.516(d)(1)(ii) and (iii) of this
subpart.

Pursuant to 42 C.F.R. § 424.516(d)(1)(ii), physicians and their practice organizations
must report “[a]ny adverse legal action” within 30 days of the reportable event, and

42 C.F.R. § 424.502 (Definitions) lists a conviction of a felony offense, as defined in
section 424.535(a)(3)(i), within the last 10 years preceding enrollment, revalidation, or
re-enrollment as a final adverse action.

I. Dr. Rieber was the sole owner and managing employee of Petitioner
on September 19, 2016.

2. On May 23, 2016, a grand jury returned a true bill of indictment
charging that Dr. Rieber committed four felony offenses.
3. Dr. Rieber entered a PTI program in September 2016, and paid
$250,000 in restitution to the State of New Jersey, at which time
Counts One through Three of the Indictment were dismissed.

4. In May 2017, the State of New Jersey dismissed Count Four of the
indictment, charging that Dr. Rieber failed to pay state tax with the
intent to evade payment, in violation of N.J.S.A. § 54:52-9, based on
Petitioner’s participation in the PTI program.

5. Petitioner concedes that Dr. Rieber has a conviction for purposes of
the Medicare program.

6. Dr. Rieber’s conviction is for a felony offense that was a financial
crime pursuant to 42 C.F.R. § 424.535(a)(3).

7. An offense listed in 42 C.F.R. § 424.535(a)(3) has been determined by
the Secretary to be per se detrimental to the best interests of the
Medicare program and its beneficiaries.

8. CMS and Novitas had a legal basis to revoke Petitioner’s Medicare
enrollment and billing privileges.

While Petitioner argues that Dr. Rieber “has not been convicted of any criminal offense
under New Jersey law,” he concedes that “[fJor the purposes of Medicare

participation . . . participation in a diversionary program such as the PTI program is
tantamount to a conviction under 42 C.F.R. § 1001.2 and 42 C.F.R.

§ 424.535(a)(3)(ii)(B).” P. Br. at 3. Therefore, based on Petitioner’s concession, Dr.
Rieber has a conviction for Medicare enrollment purposes. Further, as previously
discussed, the conviction is for a felony because the offense was punishable by up to five
years of incarceration. N.J.S.A. § 2C-43-6.a(3)

Petitioner disputes that Dr. Rieber’s conviction is for an offense enumerated in 42 C.F.R.
§ 424.535(a)(3)(ii) or that it is a final adverse action. Petitioner argues that Dr. Rieber
was not convicted of a financial crime that is contemplated by section 424.535(a)(3)(ii)
because the particular facts underlying Dr. Rieber’s conviction do not support that he was
culpable of “income tax evasion” or a similar offense and that he did not engage in
“evasive conduct.” P. Br. at 3-4. Petitioner further asserts that the plain language

demonstrates that “‘an individual may be charged under N.J.S.A. § 54:52-9 by ‘otherwise
not mak[ing] timely payment . . . of any tax,’ absent any evasive conduct.”’ P. Br. at 3.

Petitioner’s arguments are unpersuasive. CMS has determined that financial crimes,
“such as extortion, embezzlement, income tax evasion, insurance fraud and other similar
crimes” warrant the revocation of enrollment. 42 C.F.R. § 424.535(a)(3)(ii)(B)
(emphasis added). The words “such as” imply that the subsequent list of illustrative
crimes, including crimes similar to those named in the list, are not the only set of crimes
that may be considered “financial.” Likewise, the Departmental Appeals Board (DAB)
addressed a similar issue in Stanley Beekman, D.P.M., stating that “CMS may revoke
Medicare billing privileges under the authority of section 424.535(a)(3) based on any
financial crime, regardless of whether the supplier’s particular financial crime is specified
in the regulation’s illustrative list of financial crimes.”” DAB No. 2650 at 7 (2015)
(emphasis in original). Petitioner’s crime need not be the crime of tax evasion, but rather,
need only be a “financial crime” to render the regulation applicable. Dr. Rieber was
convicted of a financial crime because he “did fail to pay, or turn over when due, any tax,
fee, penalty or interest or any part thereof . . . with the intent to evade, avoid or otherwise
not make timely payment or deposit of any tax, fee, penalty or interest... .” CMS Ex. 9
at 5-6, citing N.J.S.A. § 54:52-9. Petitioner failed to pay tax, fees, penalties or interest,
with the intent to evade, avoid or otherwise make timely payments; Petitioner’s felony
conviction is based on his intentional failure to make tax payments and to comply with

is financial obligations to the State of New Jersey, totaling $250,000. N.J.S.A.

§ 54:52-9. Therefore, Petitioner’s offense is certainly a “financial crime” because
intentionally failing to meet one’s tax obligations is a financial crime.

Petitioner asserts that CMS erred in not “weigh[ing] all facts and circumstances related to
the underlying offense” in its revocation decision. P. Br. at 6. Petitioner asserts that
“CMS is required to act ‘judiciously and with reasonableness’ based upon ‘specific facts
of each individual situation,’ taking into account the severity of the offenses, mitigating
circumstances, risk to program and beneficiaries if enrollment were to continue,
corrective action plans, beneficiary access to care, and any other pertinent factors.” P.
Br. at 7, citing 71 Fed. Reg. 20,761; 79 Fed. Reg. 72,510. However, as noted above, the
regulation explicitly lists four categories of felony offenses that warrant revocation of
enrollment, and specifically states that offenses “include, but are not limited in scope and
severity” to those specified offenses. 42 C.F.R. § 424.535(a)(3). The DAB has held that

7 Petitioner is correct that the statute does not require “evasive conduct,” but Petitioner
otherwise understates that there is an intent element of this offense. See P. Br. at 3
(“Such conduct is distinguishable from, and certainly not tantamount to, a person merely
failing to “make timely” payment of “any tax.”). Dr. Rieber paid $250,000 in restitution
to the victim, the State of New Jersey, more than four years after the date of the offense
conduct charged in Count Four. P. Ex. 11 at 2. This is not a situation in which a
taxpayer simply failed to make a timely tax payment.
CMS “may revoke . . . a supplier’s billing privileges based solely on a qualifying felony
conviction without regard to equitable or other factors.” Beekman, DAB No. 2650 at 3.
The DAB has also explained that CMS may revoke billing privileges “based solely on a
qualifying felony conviction” it has determined in a regulation to be detrimental to the
best interests of the Medicare program and its beneficiaries.” See Fady Fayad, M_D.,
DAB No. 2266 at 15 (2009). Because Dr. Rieber committed a felony financial crime, it
was unnecessary for CMS to address the specific facts and circumstances of the financial
crime.

Petitioner contends that because all charges of the indictment were ultimately dismissed
and Dr. Rieber maintained his medical license, the offense that was the basis for his
conviction was not detrimental to the Medicare program or its beneficiaries. However,
section 424.535(a)(3)(ii)(B) does not create a rebuttable presumption that an enumerated
offense is detrimental to the best interest of the Medicare program and its beneficiaries.
Rather, CMS’s regulations permit a revocation of enrollment in such an instance and do
not require CMS to exercise discretion. 42 C.F.R. §§ 424.535(a)(3)(ii)(B) and 1001.2.
CMS has determined that certain offenses, even if given lenient treatment by the criminal
justice system, are nonetheless per se detrimental to the Medicare program and its
beneficiaries.

Petitioner argues that the present case is “similarly unique” to the case of Barry Ray,
M.D., DAB CR3655 (2015), in which an ALJ reversed a revocation that was based on a
felony conviction. RFH at 9-10. First, the Barry Ray decision is a non-precedential
decision by a single administrative law judge and has no binding effect on the instant
case. See, e.g., Vamet Consulting & Medical Servs., DAB No. 2778 at (2017) (discussing
that an ALJ decision is “not binding precedent on another ALJ or on the [DAB]”).
Second, unlike the felony conviction in the Barry Ray case, Dr. Rieber’s felony offense
falls squarely within section 424.535(a)(3)(ii)(B) because it involved a financial crime.*
The Barry Ray decision is not a relevant authority.

For the aforementioned reasons, CMS and Novitas had a reasonable basis to revoke
Petitioner’s Medicare enrollment and billing.

® Tn the Barry Ray case, the petitioner’s offense, which involved the possession of
hollow point ammunition, did not fall within any of the offenses specifically enumerated
in section 424.535(a)(3)(ii), and CMS had not otherwise determined the offense was
detrimental to the Medicare program. Barry Ray, DAB CR3655 at 20-22.
9. Petitioner did not timely inform CMS of an adverse legal action, as required
by 42 C.F.R. §§ 424.516(d)(I)(ii) and 424.535(a)(9).”

The regulations at 42 C.F.R. § 424.516(d)(1)(ii) require that physicians and their practice
organizations report, within 30 days, any adverse legal action. The failure to timely
report an adverse legal action subjects a physician and/or a practice organization to
revocation of Medicare enrollment and billing privileges. 42 C.F.R. § 424.535(a)(9).
Petitioner conceded that Dr. Rieber has a conviction “for purposes of Petitioner
participation” (P. Br. at 3), yet it did not report Dr. Rieber’s conviction within 30 days of
September 19, 2016, the date Dr. Rieber entered the PTI program.

Petitioner unpersuasively argues that because “PTI does not constitute a conviction under
New Jersey law” and section 424.516(d) is ambiguous, “it was reasonable for Dr. Rieber
to believe he did not have to report the event to CMS.” P. Br. at 9-10. However, CMS
clearly instructs suppliers to report final adverse actions, to include felony crimes
“including guilty pleas and adjudicated pre-trial versions; financial crimes, such as
extortion, embezzlement, income tax evasion, insurance crimes and other similar crimes
for which the individual was convicted... .”” Form CMS-855I,

https://www.cms. gov/Medicare/CMS-Forms/CMS-Forms/downloads/cms855i.pdf (last
visited January 8, 2018); see 42 C.F.R. § 424.502 (defining a final adverse action for
Medicare purposes). Petitioner’s ignorance of the reporting requirement does not relieve
it of the obligation to report an adverse legal action as required by 42 C.F.R.

§§ 424.516(d)(1)(ii) and 424.535(a)(9), and revocation is therefore warranted.

10. The effective date of the revocation is appropriate.

The regulation at 42 C.F.R. § 424.535(g) states that when a revocation is based on a
felony conviction, the revocation of the supplier’s billing privileges is effective as of the
date of the felony conviction. Petitioner’s revocation therefore became effective on
September 19, 2016, the date of Dr. Rieber’s conviction.

11. The three-year enrollment bar is not reviewable.

Petitioner argues that CMS improperly established a three-year re-enrollment bar. P. Br.
at 10-11. Petitioner argues that “[a] three-year ban is clearly a draconian application of
42 CFR § 424.516(d) and is egregiously disproportional and incommensurate to an
eleven-day failure to report.” P. Br. at 10.

° Trecognize that Dr. Rieber’s felony conviction in the preceding 10 years, alone, is a
sufficient basis for CMS to have revoked Petitioner’s Medicare enrollment and billing
privileges. Nonetheless, I will address the second basis for revocation relied upon by
CMS and Novitas.
10

The DAB has explained that “CMS’s determination regarding the duration of the
re-enrollment bar is not reviewable.” Vijendra Dave, M.D., DAB No. 2672 at 11 (2016).
The DAB explained that “the only CMS actions subject to appeal under Part 498 are the
types of initial determinations specified in section 498.3(b).” Jd. The DAB further
explained that “[t]he determinations specified in section 498.3(b) do not, under any
reasonable interpretation of the regulation’s text, include CMS decisions regarding the
severity of the basis for revocation or the duration of a revoked supplier’s re-enrollment
bar.” Id. The DAB discussed that a review of the rulemaking history showed that CMS
did not intend to “permit administrative appeals of the length of a re-enrollment bar.” Id.
Therefore, I do not disturb the three-year re-enrollment bar.

V. Conclusion

For the reasons explained above, I affirm the revocation of Petitioner’s Medicare
enrollment and billing privileges.

/s/
Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Devinderjit S. Bhangu, MD, PLLC
(PTAN: MI4462001),
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-17-679
Decision No. CR5009

Date: January 19, 2018

DECISION

Petitioner’s Medicare billing privileges were deactivated on November 23, 2016, as a
result of its failure to timely comply with a request that it revalidate its Medicare
enrollment. For the reasons discussed below, I conclude that the effective date of
Petitioner’s reactivated Medicare billing privileges remains January 10, 2017, which is
the date that the Medicare administrative contractor received a revalidation application
that it processed to approval.

I. Background and Procedural History

On June 14, 2016, Wisconsin Physicians Service Insurance Corporation (WPS), a
Medicare administrative contractor, sent Petitioner two letters requesting that both
Petitioner, Devinderjit S. Bhangu, MD, PLLC, a medical practice, and Devinderjit S.
Bhangu, MD (Dr. Bhangu), an individual physician who owns the practice, revalidate
their Medicare enrollment no later than August 31, 2016. See Centers for Medicare &
Medicaid Services (CMS) Exhibit (Ex.) | at 2;! see also Petitioner Exhibit (P. Ex.) 4 at
30 (Petitioner’s enrollment application identifying Dr. Bhangu as its owner). Each letter
cautioned that “the failure to respond to the revalidation request will result in a hold of
your payments, possible deactivation, and/or cause a gap in your reimbursement.” See
CMS Ex. | at 2.

On September 13, 2016, WPS sent Petitioner a “Payment Hold Letter” that provided
notice that WPS was “holding all payments on Medicare claims” because Petitioner had
not responded to the revalidation request.? CMS Ex. 2 at 1; see CMS Ex. | at 2. WPS
specifically instructed Petitioner that it must revalidate its enrollment by either using the
Provider, Enrollment, Chain, and Ownership System (PECOS) website or by completing
and mailing the appropriate Form CMS-855 enrollment application. CMS Ex. 2 at 1.

Petitioner submitted a Form CMS-855] application on October 20, 2016, and WPS, on
October 24, 2016, sent Petitioner a development letter because Petitioner did not submit a
complete application. P. Ex 4; see CMS Ex. | at 2. The following day, WPS received
additional information from Petitioner via facsimile; however, the information was
incomplete.* See CMS Ex. | at 2.

On November 28, 2016, WPS notified Petitioner that it had deactivated Petitioner’s
billing privileges, effective November 23, 2016. CMS Ex. 4 at 1. WPS explained to
Petitioner that it had deactivated Petitioner’s billing privileges because “you haven’t
reactivated your enrollment record with us, or you didn’t respond to our requests for
more information.” CMS Ex. 4 at 1. WPS again explained that Petitioner needed to
revalidate its enrollment record. CMS Ex. 4 at 1.

' On a number of occasions, CMS did not cite to source documents in its presentation of
“undisputed facts.” For instance, the evidence submitted to support this statement is not
the June 16, 2016 correspondence, but rather, a summary of evidence contained in a letter
issued on March 14, 2017. CMS Ex. 1. Such a practice by CMS does not fully inform
the administrative law judge (ALJ) or the petitioner of the evidentiary basis for its
arguments. However, Petitioner, who is represented by counsel, has not disputed the
material facts presented by CMS, and I will not further address this issue.

> Dr. Bhangu revalidated his individual enrollment record on September 1, 2016, which
WPS approved on September 9, 2016. See CMS Ex. | at 2.

> Neither party has submitted a copy of Petitioner’s response to the October 24, 2016
request for additional information.
Petitioner submitted another enrollment application on January 10, 2017. See CMS Ex. 1
at 2. After receiving additional development, WPS approved the application on February
15, 2017, and assigned a January 10, 2017 effective date of reactivated billing privileges.
CMS Ex. 5 at 1; see CMS Ex. | at 2.

On February 23, 2017, Petitioner submitted a request for reconsideration, dated February
22, 2017, disputing the effective date assigned for its reactivated billing privileges. CMS
Ex. 6. Petitioner alleged that on October 25, 2016, it submitted information in response
to WPS’s October 24, 2016 request for additional information, specifically Sections 1A,
AC, 4E, 4G, 8, and 15 of the enrollment application.* CMS Ex. 6 at 1, 3. However, WPS
ad determined that the information Petitioner submitted was once again incomplete, and
it rejected the application. CMS Ex. 3; see CMS Ex. | at 2. In its reconsideration
request, Petitioner contended that it first became aware of its deactivation on December
12, 2016, because it did not receive the November 28, 2016 letter notifying it of its
deactivation,° and that it mailed a revalidation application on January 9, 2017. CMS

Ex. 6 at 3.

WPS issued a reconsidered determination on March 14, 2017, in which it determined
that, pursuant to 42 C.F.R. §§ 424.520 and 424.521, it had “correctly deactivated...
Petitioner’s] billing privileges due to not receiving the requested information to
revalidate [Petitioner’s] Medicare enrollment.” CMS Ex. | at 1. WPS further determined
that, with respect to Petitioner’s reactivated billing privileges, “the effective date was
issued correctly, which has caused a gap in your reimbursement from November 23,
2016, to January 9, 2017.” CMS Ex. | at 2.

Petitioner submitted a request for hearing via DAB E-File on May 11, 2017. CMS filed a
Pre-Hearing Brief and Motion for Summary Judgment (CMS Br.), along with six exhibits
(CMS Exs. 1-6). Petitioner filed a Pre-Hearing Brief, Response to Respondent’s Motion
for Summary Judgment and a Motion for Summary Judgment (P. Br.), along with five
exhibits (P. Exs. 1-5). In the absence of any objections, I admit CMS Exs. | to 6 and

P. Exs. | to 5 into the record.

Petitioner submitted the written direct testimony of two witnesses (P. Exs. 2, 5), and
CMS has not requested an opportunity to cross-examine these witnesses. Therefore, a

* Petitioner submitted a copy of its October 20, 2016 enrollment application with its pre-
earing exchange. P. Ex. 4. I observe that there are omissions in Sections 1A, 4C, 4E,
4G, and 8. See CMS Ex. 6 at 1, 3 (Petitioner’s statement that WPS directed it to re-
submit, inter alia, sections 1A, 4C, 4E, 4G, and 8 of its application).

> Even if I accept as true that Petitioner first learned of its deactivation on December 12,
2016, Petitioner waited until January 10, 2017, to submit an enrollment application for
purposes of revalidation and reactivation.
hearing for the purpose of cross-examination is not necessary. See Acknowledgement
and Prehearing Order §§ 8, 9, and 10. I consider the record in this case to be closed, and
the matter is ready for a decision on the merits.°

II. Issue

Whether CMS had a legitimate basis to assign Petitioner a January 10, 2017 effective
date for its reactivated billing privileges.

Il. Jurisdiction
I have jurisdiction to decide this case. 42 C.F.R. §§ 498.3(b)(15), 498.5(/)(2).
IV. Findings of Fact, Conclusions of Law, and Analysis

I. On June 14, 2016, WPS requested that Petitioner revalidate its
Medicare enrollment no later than August 31, 2016.

2. After Petitioner did not revalidate its Medicare enrollment in
accordance with the revalidation request, WPS provided notice
that it had stopped payments and again directed Petitioner to
revalidate its enrollment by either using PECOS or submitting
the appropriate Form CMS-855 application.

3. On October 20, 2016, Petitioner submitted an incomplete
revalidation application, and on October 24, 2016, WPS
instructed Petitioner to submit additional information.

4. Petitioner did not submit a complete response to WPS’s
development request, and WPS rejected the revalidation
application.

5. On November 28, 2016, WPS deactivated Petitioner’s billing
privileges, effective November 23, 2016.

6. WPS received Petitioner’s enrollment application for purposes
of revalidation of enrollment and reactivation of billing
privileges on January 10, 2017, and it ultimately processed that
application to approval.

° CMS and Petitioner have argued that summary disposition is appropriate. It is
unnecessary in this instance to address the issue of summary disposition, as neither party
has requested an in-person hearing.
7. On February 15, 2017, WPS notified Petitioner that it had
approved Petitioner’s revalidation application, and that it had
assigned an effective date of reactivated billing privileges of
January 10, 2017.

8. An effective date earlier than January 10, 2017, the date WPS
received Petitioner’s enrollment application, is not warranted
for the reactivation of Petitioner’s Medicare enrollment and
billing privileges.

Petitioner is a “supplier” for purposes of the Medicare program. See 42 U.S.C.

§ 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(1); see also

42 C.F.R. § 498.2. A “supplier” furnishes services under Medicare and the term applies
to physicians or other practitioners that are not included within the definition of the
phrase “provider of services.” 42 U.S.C. § 1395x(d). A supplier must enroll in the
Medicare program to receive payment for covered Medicare items or services. 42 C.F.R.
§ 424.505. The regulations at 42 C.F.R. Part 424, subpart P, establish the requirements
for a supplier to enroll in the Medicare program. 42 C.F.R. §§ 424.510 - 424.516; see
also 42 U.S.C. § 1395cc(j)(1)(A) (authorizing the Secretary of the U.S. Department of
Health and Human Services to establish regulations addressing the enrollment of
providers and suppliers in the Medicare program). A supplier that seeks billing
privileges under Medicare “must submit enrollment information on the applicable
enrollment application.” 42 C.F.R. § 424.510(a)(1). “Once the provider or supplier
successfully completes the enrollment process ... CMS enrolls the provider or supplier
into the Medicare program.” 42 C.F.R. § 424.510(a)(1); see also 42 C.F.R. § 424.510(d)
(listing enrollment requirements). Thereafter, “[t]o maintain Medicare billing privileges,
a... supplier... must resubmit and recertify the accuracy of its enrollment information
every 5 years.” 42 C.F.R. § 424.515.

CMS is authorized to deactivate an enrolled supplier’s Medicare billing privileges if the
enrollee does not provide complete and accurate information within 90 days of a request
for such information. 42 C.F.R. § 424.540(a)(3). If CMS deactivates a supplier’s
Medicare billing privileges, “[n]o payment may be made for otherwise Medicare covered
items or services furnished to a Medicare beneficiary.” 42 C.F.R. § 424.555(b). Further,
and quite significantly, the DAB has unambiguously stated that “[i]t is certainly true that
[the petitioner] may not receive payment for claims for services during any period when
his billing privileges were deactivated.” Willie Goffney, Jr., M.D., DAB No. 2763 at 6
(2017). The regulation authorizing deactivation explains that “[d]eactivation of Medicare
billing privileges is considered an action to protect the provider or supplier from misuse
of its billing number and to protect the Medicare Trust Funds from unnecessary
overpayments.” 42 C.F.R. § 424.540(c).

On June 14, 2016, WPS mailed a letter to Petitioner directing it to revalidate its Medicare
enrollment record no later than August 31, 2016, and WPS warned that the failure to
revalidate could result in deactivation of its Medicare enrollment and billing privileges,
with a resulting gap in reimbursement. See CMS Ex. | at 2. After Petitioner did not
revalidate its Medicare enrollment by the August 31, 2016 deadline, WPS informed
Petitioner, in a letter dated September 13, 2016, that it would be holding all payments for
Petitioner’s Medicare claims. CMS Ex. 2 at 1. WPS again directed Petitioner to
revalidate its enrollment and instructed that Petitioner needed to revalidate its Medicare
enrollment record to resume payments. CMS Ex. 2 at 1. WPS explained that Petitioner
could revalidate through PECOS, or it could complete and mail the appropriate Form
CMS-855 enrollment application. CMS Ex. 2 at 1-2. Petitioner submitted an enrollment
application on October 20, 2016 (P. Ex. 4), and when asked to submit additional
information on October 24, 2016, it did not provide all of the requested information. See
CMS Ex. | at 2 (“The development information was incomplete and therefore, the
application was rejected... .”). WPS notified Petitioner of its deactivation by letter
dated November 28, 2016 (CMS Ex. 4), and while Petitioner contends it did not receive
this letter, it nonetheless concedes it became aware of its deactivation on December 12,
2016. CMS Ex. 6 at 1. Petitioner submitted a revalidation application by mail that was
received on January 10, 2017, and the effective date of its reactivated billing privileges is
January 10, 2017, the date of receipt of the application. See CMS Ex. | at 2; see also
CMS Ex. 6 at 3 (timeline provided by Petitioner in its request for reconsideration).

The pertinent regulation with respect to the effective date of reactivation is 42 C.F.R.

§ 424.520(d). Arkady B. Stern, M.D., DAB No. 2329 at 4 (2010). Section 424.520(d)
states that “[t]he effective date for billing privileges for physicians . . . is the later of — (1)
[t]he date of filing of a Medicare enrollment application that was subsequently approved
by a Medicare contractor; or (2) [t]he date that the supplier first began furnishing services
at a new practice location.” The Departmental Appeals Board (DAB) has explained that
the “date of filing” is the date “that an application, however sent to a contractor, is
actually received.” Alexander C. Gatzimos, MD, JD, LLC, DAB No. 2730 at 5 (2016)
(emphasis omitted). WPS deactivated Petitioner’s billing privileges because Petitioner
“didn’t respond to [its] requests for more information” (CMS Ex. 4 at 1). Petitioner filed
the application for purposes of revalidation and reactivation that was processed to
approval was January 10, 2017, which is the date that WPS received the application. See
CMS Exs. | at 2; 6 at 3. Based on the January 10, 2017 receipt date of the enrollment
application that was processed to approval, WPS correctly assigned a January 10, 2017
effective date for reactivated billing privileges. See Goffney, DAB No. 2763 at 6 (“It is
certainly true that [the petitioner] may not receive payment for claims for services during
any period when his billing privileges were deactivated.”); 42 C.F.R. § 424.520(d).

Petitioner is challenging the assignment of a January 10, 2017 effective date of its
reactivated billing privileges, which resulted in a gap in reimbursement from November
23, 2016 through January 9, 2017. P. Br. at 2; see CMS Ex. 5 at 2. Petitioner was
required to timely respond to the revalidation request to a

void the prospect of

deactivation pursuant to 42 C.F.R. § 424.540(a)(3), and WPS deactivated its billing
privileges after WPS rejected Petitioner’s revalidation application due to its failure to
submit a complete application and to provide the additional information required in the

development request. See CMS Ex. 1 at 2; see also 42 C.
reject... an enrollment application” if the supplier “fails

F.R. § 424.525(d) (CMS “may
to furnish complete information

. .. within 30 calendar days from the date of the contractor request for missing
information.”). The DAB has explained that a deactivation action is not reviewable, and

“Tt]he only action in the reconsidered determination whic
determination of the effective date of the enrollment appl
petitioner].”’ Goffney, DAB Ni

h is appealable is . . . the initial
ication reinstating [the

0. 2763 at 3-5. WPS correctly deactivated Petitioner’s

billing privileges because it rejected, pursuant to 42 C.F.R. § 424.525(d), Petitioner’s

incomplete enrollment informa

tion that it provided in response to the revalidation

request. As such, Petitioner did not comply with the revalidation request in accordance

with the time period prescribed
assigned an effective date of Jai
privileges based on a correct application of 42 C.F.R. § 4

by 42 C.F.R. § 424.540(a

Petitioner argues t
privileges do not apply to suppliers “seeking to ‘recertify
Petitioner argues both that “42 C.F.R. § 424.502(d)” and
apply in the instant case.* P. Br. at 6. Petitioner’s argum
unsupported, but is also based on a misunderstanding of

attempt to “recertify” its information when it submitted t
application; it provided new information at that time, and
provide new enrollment information is to submit an enrol
42 CFR. § 424.5

)(3). WPS appropriately

nuary 10, 2017, for Petitioner’s reactivated billing

24.520(d).

at the regulations controlling the effective date of reactivated billing

’ information.” P. Br. at 5-6.
“42 C.F.R. § 424.501(d)” do not
ent is not only legally

act. First, Petitioner did not

e October 2016 enrollment

the only appropriate means to
Iment application. P. Ex. 4;

0(a)(1) (directing that a supplier “must submit enrollment information

on the applicable enrollment application”). If Petitioner was simply “recertifying” its

information, it would have “recertif[ied] the accuracy of
42 C.F.R. § 424.5
which necessitates the filing of an enrollment application

7 The DAB explained: “Moreover, neither [42 C.F.R. §

its] enrollment information.”

5. However, Petitioner provided updated enrollment information,

. See P. Ex. 4 (Petitioner’s

424.545(b) nor any other

regulation provides appeal rights from the contractor’s deactivation determination or any

rebuttal determination.” Goffney, DAB No. 2763 at 5; se
DAB No. 2417 at 3 n.4 (2011) (Petitioner argues on appe:
improper, but the DAB “does not have the authority to re
circumstances of this case, (citing 42 C.F.R. §§ 424.545(

e also Arkady B. Stern, M.D.,
al that deactivation was
view” deactivation under

b) and 498.3(b)); Andrew J.

Elliott, M.D., DAB No. 2334 at 4 n.4 (2010) (DAB “does not have authority to review” a

deactivation).

8 Neither 42 C.F.R. 424.502(d) nor 42 C.F.R. § 424.501(

d) is a valid regulation.

Petitioner elsewhere references 42 C.F.R. § 424.520(d), which is a valid regulation.
October 2016 enrollment application that lists a new records storage location, a new
managing employee, and a new billing agency). Thus, in revalidating its enrollment,
Petitioner was not merely “recertifying” the information that was already of record since
April 2011. See P. Exs. 1, 4.

Further, with respect to Petitioner’s arguments that it did not need to submit a new
enrollment application, I point out that WPS specifically directed Petitioner that it could
revalidate its enrollment in one of two ways: It could use the PECOS website, or it could
mail the appropriate Form CMS-855 enrollment application to WPS. CMS Exs. 2 at 1; 4
at 1. While Dr. Bhangu, Petitioner’s owner, states that he “determined that only a
recertification of prior information was required and no supplemental information was
needed,” he is mistaken; Dr. Bhangu failed to follow WPS’s clear instructions. P. Ex. 5
at 2.

Petitioner argues that “CMS improperly deactivated [its] billing privileges” and that “the
‘effective date’ provision” should not apply to it.” P. Br. at 6-7. Even though I need not
address Petitioner’s arguments regarding its deactivation because, as previously
discussed, a deactivation action is not reviewable in this forum, I nonetheless observe that
Petitioner’s argument is unsupported by any authority or evidence. Petitioner relies, in
part, on “42 C.F.R. 424.502(d).” However, no such provision of law exists. Petitioner
also relies on John Heverin, Ph.D, ALJ Ruling No. 2013-06 (2013), which is irrelevant to
this case. I first note that I am not bound by the decisions or rulings of other ALJs. See,
e.g., Vamet Consulting & Medical Servs., DAB No. 2778 at (2017) (discussing that an
ALJ decision is “not binding precedent on another ALJ or on the [DAB]”). Further, and
more importantly, the Heverin decision is inapplicable to this case. In the Heverin case,
the supplier’s billing privileges had been deactivated based on 42 C.F.R.

§ 424.540(a)(1) because the supplier had not submitted any claims for 12 consecutive
months; the deactivation of Dr. Heverin’s billing privileges was not based on the failure
to respond to a revalidation request. Heverin, ALJ Ruling 2013-06 at 4. Because Dr.
Heverin’s billing privileges were deactivated based on the non-submission of claims, and
not a failure to comply with a revalidation request, the ALJ explained that “[t]he
reactivation provision applicable to a supplier deactivated for the non-submission of
claims does not require that the supplier submit a ‘Medicare enrollment application’ to
recertify his or her information ... .” /d. at 6 (citing 42 C.F.R. § 424.540(b)(2)
(“Providers and suppliers deactivated for nonsubmission of a claim are required to
recertify that the enrollment information currently on file with Medicare is correct and
furnish any missing information as appropriate.”)). Petitioner’s situation is unlike that of
Dr. Heverin; Petitioner’s deactivation was not due to the nonsubmission of a claim, but
rather, its deactivation was a result of its failure to timely comply with a revalidation
request. Therefore, pursuant to 42 C.F.R. § 424.540(b)(1), in order to reactivate it “must

° T reiterate that I do not have authority to review the deactivation of Petitioner’s billing
privileges. See, e.g., Goffney, DAB No. 2763 at 5.
complete and submit a new enrollment application to reactivate its Medicare billing
privileges, or when deemed appropriate, at a minimum, recertify that the enrollment
information currently on file with Medicare is correct.” As previously discussed,
Petitioner updated its enrollment information when it revalidated, and therefore, it was
not recertifying its existing information. P. Ex. 4. Further, WPS did not inform
Petitioner that certification was “deemed appropriate,” and specifically directed Petitioner
to revalidate by using the PECOS website or by mailing the appropriate enrollment
application. CMS Exs. 2 at 1; 4 at 1. Therefore, Petitioner’s situation is unlike the
situation presented in the Heverin case. Petitioner has not demonstrated error in the
effective date assigned for the reactivation of its billing privileges, January 10, 2017,
which is based on the date of receipt of the revalidation application that was processed to
approval. 42 C.F.R. § 424.520(d) (effective date of billing privileges is the date of filing
of the enrollment application that was approved by the contractor).

To the extent that Petitioner is requesting equitable relief in the form of an earlier
effective date of reactivated billing privileges, I am unable to grant equitable relief. US
Ultrasound, DAB No. 2302 at 8 (2010) (“Neither the ALJ nor the [DAB] is authorized to
provide equitable relief by reimbursing or enrolling a supplier who does not meet
statutory or regulatory requirements.”); see P. Br. at 8 (arguing that “this Tribunal is
authorized to grant equitable relief’). I cannot grant Petitioner relief on this basis
because I do not have the authority to “[f]ind invalid or refuse to follow Federal statutes
or regulations or secretarial delegations of authority.” See, e.g., 18661CPayday.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, even a
constitutional one.”).

Likewise, to the extent that Petitioner feels that deactivation of its enrollment does not
further the goals of the Medicare program (P. Br. at 7), it is mistaken. First, Petitioner’s
argument that “[i]f the supplier is reactivating his or her billing privileges, then there is
no need to verify the veracity of anything provided on the CMS-855 . . .” is based on a
misunderstanding of the facts of this case. P. Br. at 8. As previously discussed,
Petitioner did update its enrollment information when it revalidated its enrollment. P. Ex.
4 (updating records storage location, managing employee, and billing agency). Further,
CMS has recognized that revalidation is a tool “to prevent or combat fraudulent activity
in our programs,” and that providers and suppliers are “subject to adverse consequences,
including . . . the deactivation of their Medicare billing privileges” when they fail to
respond to a revalidation request.” 77 Fed. Reg. 29,013 (May 16, 2012).

In the absence of any basis to grant an earlier date for the reactivation of billing
privileges, the January 10, 2017 effective date for the reactivation of Petitioner’s billing
privileges must stand.
10

V. Conclusion

For the foregoing reasons, I uphold the January 10, 2017, effective date of Petitioner’s
reactivated billing privileges.

/s/
Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Office of Research Integrity,

U.S. Department of Health and Human Services,
Petitioner,

v.

Dr. H.M. Krishna Murthy,
Respondent.

Docket No. C-17-412
Decision No. CR5007

Date: January 19, 2018

AMENDED RECOMMENDED DECISION

I grant summary judgment in favor of the Office of Research Integrity (ORI) and sustain
its determination to impose a ten-year debarment and a ten-year ban on Public Health
Service advisory services against Respondent, Dr. H.M. Krishna Murthy. I also sustain
as an additional administrative action the correction of Respondent’s research record.

I. Background

ORI moved for summary judgment against Respondent and Respondent opposed the
motion. With its motion and supporting brief (ORI Br.), ORI filed exhibits that are
identified as ORI Ex. 1-ORI Ex. 73. Respondent filed a brief in opposition (Resp. Opp.
Br.) and 63 proposed exhibits. I have identified these exhibits as R. Ex. 1-R. Ex. 63.

I find it to be unnecessary that I receive into evidence the parties’ exhibits inasmuch as I
decide this case solely on undisputed material facts. I cite to the parties’ exhibits only as
illustrations of facts that are not in dispute.

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

The issues are whether undisputed material facts establish that Respondent engaged in
research misconduct as that term is defined by applicable regulations, and whether ORI’s
remedy determinations are reasonable.

B. Findings of Fact and Conclusions of Law

I issue summary judgment pursuant to 42 C.F.R. § 93.506(b)(15), which allows for
summary judgment in cases involving ORI where there are no disputed issues of material
fact. I base my decision solely on undisputed material facts. A material fact is any fact
the existence of which would potentially affect the outcome of a case. I have considered
whether a dispute as to any material fact exists by deciding whether any reasonable
inference may be drawn from that fact that would be favorable to Respondent. Scott J.
Brodie, DAB CR2056, at 5 (2010), aff’d, Brodie v. U.S. Dep ’t. of Health & Human
Servs.,796 F. Supp. 2d 145 (D.D.C. 2011). In granting summary judgment I distinguish
material facts that are supported by evidence that would be admissible at a hearing from
unsupported fact allegations. Unsupported allegations do not establish disputed issues of
fact, nor do allegations that are fanciful or that are supported by such minimal evidence
as to be beyond any reasonable probability of existence. Id.

ORI supports its motion in part on technical facts about biochemistry and laboratory
processes and procedures. But, ORI’s allegations based on these facts are not at all
difficult to comprehend. ORI alleges that in a period that began in 1998 and that
continued through 2007, Respondent, then employed as an associate professor at the
University of Alabama at Birmingham (UAB), intentionally, recklessly, or knowingly
falsified and/or fabricated 11 protein structures and reported them in nine publications
and in 12 entries to an entity known as the Protein Data Bank (PDB).

I find ORI’s allegations to be supported overwhelmingly by the undisputed material facts.
Respondent admits that the 11 protein structures in question contained material errors
(errors that invalidated Respondent’s research findings) and that he published these
incorrect findings as is alleged by ORI. His defenses are that he made honest mistakes
that do not amount to fraud or reckless indifference to the truth, that his errors are
commonplace in the research community — that everybody makes and publishes errors
like the ones that he made and published — and that, furthermore, he is the victim of a
vendetta conducted against him by individuals at UAB and by ORI.

As I discuss below, the conclusion that I draw from the undisputed facts is that the errors
contained in the 11 protein structures were not honest mistakes but rather, were the
product of either fraud or reckless indifference by Respondent to the truth or falseness of
his publications. That is the only reasonable conclusion that one could draw. There is a
pattern to Respondent’s publications that leads inescapably to a finding of research

misconduct. That pattern is evident from both the number of Respondent’s false
submissions and their character. Respondent published the same types of false and/or
fabricated findings over and over under circumstances where such errors cannot be
explained by honest mistakes.

Ihave carefully evaluated the facts offered by ORI that support its allegations in the
context of Respondent’s assertions. I find that nothing that Respondent asserts rebuts the
undisputed facts of this case. Many of Respondent’s fact contentions are fanciful and are
not evidence-based. I find no support in the record for Respondent’s contention that his
false research findings are typical of errors that are commonplace. I find Respondent’s
assertion that he is the victim of a vendetta to be both fanciful and irrelevant as a matter
of law.

Finally, I have evaluated ORI’s proposed remedies in light of the undisputed material
facts and my conclusion is that Respondent committed research misconduct. Those
remedies are strongly supported by the egregiousness of Respondent’s misconduct.

What is research misconduct? It is defined by 42 C.F.R. § 93.103 to be “fabrication,
falsification, or plagiarism in proposing, performing, or reviewing research, or in
reporting research results.” The regulation defines “fabrication” as “making up data or
results and recording or reporting them.” Id. § 93.103(a). It defines “falsification” as
“manipulating research materials, equipment, or processes, or changing or omitting data
or results such that the research is not accurately represented in the research record.” Id.
§ 93.103(b).

In order to find by a preponderance of the evidence that Respondent committed research
misconduct I must find that Respondent’s research and/or publications significantly
departed from accepted practices in his research community and that Respondent
intentionally, knowingly, or recklessly fabricated or falsified his research or his
publications. 42 C.F.R. § 93.104.

A party accused of research misconduct may defend himself or herself by arguing that he
or she conducted his or her research in accord with accepted practices and/or that his or
her findings and publications are accurate. Additionally, a party may contend that his or
her errors are honest mistakes and not fraud or made in reckless indifference to the truth.
42 CFR. § 93.103(d).

This case is about proteins and scientists’ descriptions of proteins’ structures via a
technique known as X-ray crystallography.

Proteins are biological molecules composed of amino acids that are linked together in a
chain. A protein has a three-dimensional structure. ORI Ex. | at JJ 14-15. A protein’s
structure indicates how a protein functions. Understanding a protein’s structure may
enable scientists to formulate drugs that can treat diseases that are caused by certain
proteins. Id.

X-ray crystallography is a process that assists scientists in describing a protein’s
structure. It consists of directing X-ray beams at a protein crystal. That will produce a
diffraction pattern that is unique to each protein. Scientists use a diffraction pattern to
map the distribution of electrons within a protein. ORI Ex. | at §§ 16-20. From sucha
map scientists can deduce a protein’s molecular structure and can construct a three-
dimensional model of the protein. Such a model is rendered as a computer-generated
graphic that may be examined by scientists just like a three-dimensional physical model
could be examined. ORI Ex. | at § 20, 21, and 26.

There is a process known as validation — validation tools existed at the time that
Respondent published his research — by which a researcher may verify the accuracy of his
or her protein model. One of the purposes of validation is to identify atoms that are
incorrectly placed in a protein model. Researchers validate their models by comparing
the location of atoms in the model with the electron density map of that protein derived
by X-ray crystallography. If electron density in a particular location precludes the
presence of an atom at that location, then one may conclude that the atom cannot possibly
be present at that location. And, if the model shows the presence of an atom at an
impossible location, then the model is incorrect. ORI Ex. | at §§ 22-23, 38; ORI Ex. 2 at
99.

Researchers deposit their models of proteins’ structures into the PDB after they have
validated them. ORI Ex. 2 at § 2. The PDB is an open depository, accepting models
from anyone who offers them. That effectively creates an honor system in which the
PDB’s value to researchers depends on the honesty, integrity, and the accuracy of those
who deposit protein models there. ORI Ex. 2 at Jf 5-6. Deposits consist of coordinate
files containing the atomic coordinates of a protein’s model and structure factor files
containing the raw experimental data derived from X-ray diffraction. Id. at § 8; ORI Ex.
1 at $§ 19, 24, 25, and 28.

Many of the protein structures that Respondent published and/or deposited in the PDB
contained gross errors; errors that I find could not possibly have been the consequence of
honest error. These errors became apparent upon review by several individuals and
entities.

First, there are interatomic clashes in several models that Respondent deposited and/or
published. In layman’s terms, Respondent’s models had atoms located in positions that
were not physically possible. In numerous instances Respondent submitted protein
models that described more than one atom located in the same location. ORI Ex. | at 9§
22-23, 30, 36-39, 40-49, 88-91, 95-98, 102-105, 109-112. Such “clashes” (more than one
atom allegedly located in the same position) will be detected through validation and
should have been obvious to Respondent prior to his depositing and/or publishing his
models. Id. at §§ 22-23, 38-39. Eight of the 11 models at issue in this case contain such
clashes. Respondent deposited five of them in the PDB without correcting their obvious
errors before depositing them. The proteins for which Respondent deposited models with
clashes are identified as PDB entries: 2HRO, 1BEF, 1RID, 1Y8E, and 2A01. Id. at 9§
40-49, 88-91, 95-98, 102-105, 109-112.

Second, on six separate occasions, Respondent deposited structure factor files in the PDB
that were missing an important component, the diffraction measurements from the
contribution of bulk solvent (“structure factor files” are data containing the measurements
obtained from X-ray diffraction experiments). The six proteins in question are PDB
entries 2HRO, IBEF, IRID, 1 Y8E, 2A01, and 1CMW. ORI Ex. 1 at §§ 70, 92, 99, 106,
113, 116.

The absence of bulk solvent contributions in the structure factor files is important
because solvent, often water, is necessary for proteins to maintain their three-dimensional
structure. Structure factor files, in order to be meaningful, must contain bulk solvent
contributions because correctly performed X-ray diffraction experiments always will
have measurements relating to the bulk solvent contribution. ORI Ex. | at §§ 68-69.

Third, three of the protein models that Respondent deposited in the PDB, contained
crystal lattice gaps that are physically impossible. These PDB entries are 2HRO, 1G40,
and 1L6K. ORI Ex. | at §§ 62, 122, 126, 137-38.

In order to form a protein crystal, protein molecules must form a lattice that is created by
interactions between adjacent molecules. Crystals cannot form without such stabilizing
interactions. ORI Ex. | at Jf 10, 60-61. But, models deposited by Respondent contained
large gaps that would be impossible in a protein crystal because the distances between the
molecules in Respondent’s models rendered stabilizing interactions impossible. Id. at JJ
62, 122, 126, 137-38.

The undisputed facts establish that Respondent could not have derived the physically
impossible features of Respondent’s models and alleged supporting data — the numerous
atomic clashes, the absence of bulk solvent contributions, and the large crystal lattice
gaps — from legitimately performed X-ray diffraction experiments. I conclude that no
honest scientific researcher could have produced these errors had he or she conducted
legitimate experiments.

The atomic clashes that Respondent’s models contained would have been evident to any
competent researcher through the use of validation tools. That is because it is physically
impossible for more than one atom to occupy the same space. The X-ray diffraction data
that Respondent produced for those of his models with clashes unambiguously matched
up with the clashes. ORI Ex. | at §§ 40-49, 90,97, 104, 111. Thus, the models that
Respondent submitted containing clashes could not possibly have been derived from
actual X-ray diffraction experiments as Respondent asserted. The only possible
explanations for these models containing gross clashes are either that Respondent
intentionally fabricated these models (as well as the underlying data) or was indifferent to
whether X-ray diffraction sustained his models.

I find also that no honest researcher would deposit structure factor files into the PDB
without including values relating to bulk solvent contributions. The only possible
explanations for Respondent’s failure to do so were that he fabricated his models without
regard for underlying diffraction data and/or that he didn’t care what that data contained.
As I have explained, legitimately derived X-ray diffraction maps always contain bulk
solvent contributions because bulk solvent must be present in order for crystals to form
and also to diffract X-rays in an X-ray diffraction experiment. It should be evident to any
competent researcher that deposited experimental data that are missing bulk solvent
contributions are invalid. ORI Ex. | at JJ 68-71, 92, 99, 106, 113, 116. Yet, Respondent
admittedly deposited such invalid data on multiple occasions.

It is also out of the question that an honest researcher would deposit protein models in the
PDB that contain lattice gaps that render physically impossible those proteins’ crystalline
structures. Real experimental data would not correspond to the models that Petitioner
deposited. The only inferences that I can draw from these patently incorrect models are
either that Petitioner intentionally fabricated them or that he created them indifferent to
what his experimental data actually showed. ORI Ex. | at §§ 60-62, 122, 126, 137-38.

Not only did Respondent’s models contain gross errors, as I have described, but
Respondent repeatedly published or deposited data containing the same type of errors.
There is a pattern to Respondent’s conduct. On multiple occasions he deposited protein
models in the PDB that contained obvious clashes. On multiple occasions he submitted
underlying data that were missing obvious and integral components. On multiple
occasions Respondent submitted models with lattice structures that could not possibly
have existed in the real world.

Everyone makes mistakes from time to time and perfection is not a standard for judging
any researcher’s work pursuant to the regulations governing misconduct in science. A
scientist might deposit a protein model in the PDB that contains innocent or trivial errors
without intending to defraud and without indifference to the truth of his or her
submission. But, no honest researcher would deposit or publish so many false models or
so much false data as Respondent published or deposited. The sheer number of false
submissions by Respondent over the course of nearly a decade is as damning as is the
character of what he deposited and published.

What is evident, then, is that Respondent published or deposited protein models in the
PDB that contained numerous gross errors that no honest or minimally competent
researcher would have tolerated and did so repeatedly. The only inference that I can
draw from the undisputed facts regarding these publications and deposits is that
Respondent intentionally fabricated them or didn’t care whether what he published or
deposited was accurate.

This inescapable inference is corroborated by additional undisputed facts, facts that
demonstrate that Respondent attempted to obfuscate his false deposits and publications
when he was confronted with them. That was made evident by Respondent’s attempts to
deflect scrutiny of his false submission of PDB entries identified as 1G40 and 1L6K.

When confronted with the impossible lattice gaps in these protein structures, Respondent
asserted at first that he had made honest errors by inadvertently depositing the parameters
of another structure for 1G40 and by also inadvertently submitting the wrong data to
substantiate 1L6K. ORI Ex. 53 at 3-4. Respondent submitted new information, replacing
the parameters in his PDB entry for 1G40, and replacing his entry of 1L6K with an entry
for a different protein, 20U1. These new submissions by Respondent eliminated the
gross lattice gaps in the models that Respondent had originally deposited. ORI Ex. 13;
ORI Ex. 17 at 2; ORI Ex. | at §§ 126, 138.

However, these new submissions by Respondent also contained gross misstatements that
plainly were false. The data that Respondent submitted to eliminate the lattice gap in
1G40 contained several physically impossible clashes. ORI Ex. | at J§ 124, 126. Thus,
Respondent replaced patently false or fabricated scientific data with other data that was
also patently false or fabricated.

Respondent’s replacement of 1L6K with 20U1 also is an evident fabrication.
Respondent’s “new” protein model is almost identical to the original (1L6K) except that
he shifted some of the atomic coordinates in the model, thus eliminating the lattice gaps
that existed in that protein. But, Respondent provided no comprehensible explanation for

how he derived this allegedly new data. ORI Ex. | at § 139.

Respondent’s indifference to the truth of his submissions is evident also from his failure
to respond to concerns expressed by the PDB about the accuracy of his models. On more
than one occasion, the PDB flagged issues with Respondent’s deposits — issues such as
atomic clashes — and invited Respondent to file corrections. However, Respondent
ignored the concerns expressed by the PDB and went ahead and deposited his models
without corrections. ORI Exs. 12, 14-16, 18, 19.

The investigation into Respondent’s submissions conducted first by UAB and then, by
ORI, lasted several years, during which Respondent produced a blizzard of assertions and
arguments in his defense. I have considered these along with the arguments that
Respondent makes in opposition to ORI’s motion for summary judgment. None of them
is supported by objective fact. In the end, Respondent offers no reasonable excuse for his
misconduct.

Respondent’s arguments fall into broad categories. See Resp. Opp. Br. First, although
Respondent concedes that his PDB deposits and publications contained errors, he
contends that these were honest mistakes and not the product of fraud or reckless
indifference to the truth. Second, Respondent argues that, inasmuch as ORI is charging
him with fraud, it has a duty to establish the methodology by which he allegedly
committed that fraud. Third, Respondent asserts that everybody does what he did — that
although his deposits and publications contained errors, they were no different in that
respect from deposits and publications made by other researchers. Finally, Respondent
argues that he is the victim of a years-long vendetta conducted by UAB and then by ORI.
He depicts himself as an innocent victim, the target of sinister forces within the research
community.

I see nothing that supports Respondent’s contention that his errors were honest mistakes.
He has offered no evidence to explain, for example, how so many of his PDB deposits
contained clashes that rendered his models to be physically impossible. Nor has he
explained in legitimate scientific terms the absence of bulk solvent contribution or lattice
gaps in his models. I have looked closely at the justifications he gave for these errors at
the time he was confronted with them. His justifications neither make sense nor are they
supported by facts. His contention reduces to an assertion that is without support.

Respondent did not offer his testimony to support his contention that he made only honest
errors. I afforded him the opportunity to testify. In my initial pre-hearing order I directed
him to offer his testimony as either a sworn affidavit or a declaration made under penalty
of perjury. Respondent did not avail himself of that opportunity. That is his right, of
course. His testimony is not compulsory. But, having declined to testify, Respondent
cannot now make unsworn assertions of his honesty and lack of culpability and expect
me to accept them as facts in dispute.

When Respondent was confronted with the absence of bulk solvent contribution in the
structure factor files for six of his PDB deposits, he contended that on six separate
occasions he had accidentally deposited the wrong values, thereby accidentally removing
the bulk solvent contributions. ORI Ex. 53 at 2. I find that explanation to be
inconceivable. The structure factor files — containing the X-ray diffraction data — that
Respondent deposited were critical to validating Respondent’s models. X-ray diffraction
data from experiments on real proteins will always include, among its measurements, a
bulk solvent contribution. See e.g., ORI Ex. | at § 70. If, in fact, Respondent had
conducted actual experiments, his experimental data would have included bulk solvent
contribution. The only possible explanation for the absence of bulk solvent contribution
in the X-ray diffraction data was that Respondent did not conduct any actual experiments,
but rather, intentionally fabricated his protein structures. ORI Ex. | at § 70,92, 99, 106,
113.

When Respondent was confronted with proof of impossible lattice crystal gaps in his
models, he asserted, variously, that his deposits contained typographical errors or that he
had inadvertently submitted the wrong data. ORI Ex. 53 at 3-4; ORI Ex. 13 at 1; ORI Ex.
17 at 2. However, he changed his story when confronted with the fact that his
explanations didn’t justify the gaps, to assert with respect to a protein identified as 2HRO
that disordered protein fragments effectively filled the gap in his model, thereby
supporting the structure. ORI Ex. 52; ORI Ex. 54 at 2. Respondent’s shifting
explanations do not support his contention that he made honest mistakes. Rather, they
suggest only that he cast about for explanations that would excuse his fraud.

Respondent argues that two anonymous referees determined that the models that he
deposited in the PDB are not fabricated. See R. Ex. 21. However, close examination of
these referees’ comments provides Respondent with no support. The referees looked
only at one of the eleven structures that are at issue here. The referees’ analysis would
provide Respondent with no basis for asserting that his errors were all innocent even if
they concluded that Respondent did not fabricate this structure, identified as 2HRO.
Moreover, they did not conclude that Respondent’s submission was honest but only that
finding fraud as opposed to incompetence at the then-early stage of the review of
Respondent’s work was premature. See Id. at 6.

Respondent also contends that his laboratory notebooks support his experimental
findings. He also relies on statements by colleagues that he was performing research
while employed by the University of Alabama at Birmingham. See R. Exs. 38, 39.
However, Respondent has pointed to nothing in his notebooks or in colleagues’
statements that explain the gross errors in the materials that he deposited in the PDB or
that explain how he could honestly have come up with so many scientifically impossible
findings.

Respondent argues that ORI hasn’t shown that it actually searched his notebooks and
attempted to correlate the notebooks’ experimental findings with Respondent’s deposits
at the PDB. Resp. Opp. Br. at 18. But, that isn’t ORI’s responsibility. It is Respondent —
not ORI — who claims that the notebooks vindicate him. Respondent has the burden of
showing how the notebooks support him and he has failed to accomplish that.

There is no basis in law for Respondent’s argument that ORI’s claims of fraud or reckless
indifference are unsupported absent proof of Respondent’s methodology in committing
misconduct. In this case the facts speak for themselves: as I find, the pattern and
character of Respondent’s false deposits and publications inescapably leads to the
conclusion that he either deliberately falsified research results or made deposits

10

indifferent to the truth of his submissions. It is unnecessary that ORI prove how
Respondent falsified his research. It suffices that ORI proved that Respondent did it.
Respondent contends that “physically impossible features’ occur in all [protein]
structures, and . . . are a consequence of unavoidable errors in the measured data used to
determine structures ....” Resp. Opp. Br. at 1. With this argument Respondent appears
to contend that his deposits in the PDB, albeit flawed, were of a character with all
deposits at the PDB.

That argument finds no support in Respondent’s submission. There is nothing in his
proposed exhibits that justifies so sweeping an assertion. It is true that deposits in the
PDB may contain errors such as atomic clashes. And, as I have stated, honest science is
not error free. Even the most diligent researcher may make mistakes from time to time.
However, nothing offered by Respondent — and certainly, not the facts relied on by ORI —
leads to an inference that the pattern of errors in Respondent’s deposits and the frequency
of those errors is remotely typical of the research results submitted by others. See R. Ex.
1; R. Ex. 21.

Respondent’s “everybody does it” argument rests on fanciful assertions not supported by
facts. For example, Respondent makes “the reasonable assumption that an average
structure sports . . . 46 ‘physically impossible features’... .” Resp. Opp. Br. at 5. As
support for this contention he cites R. Ex. 1. But, Respondent offers no explanation how
this exhibit leads to that conclusion. Nor does he explain what he means by “physically
impossible features.”

Respondent argues that ORI’s allegations have no validity in the absence of proof that his
deposits in the PDB are distinguishable from other researchers’ deposits. Indeed,
according to Respondent, ORI’s allegations cannot be validated unless ORI compares
Respondent’s deposits with the 132,000 structures (Respondent’s estimate) on deposit at
the PDB. He reasons that there is no way of knowing whether his deposits are atypical,
much less fraudulent, absent such a comparison.

I find this argument to be without merit. ORI rests its case on the gross and evident
errors in Respondent’s deposits. The patent falseness of the models submitted by
Respondent is enough for me to conclude that these deposits are fabricated or made with
reckless indifference to the underlying data. It is not necessary that ORI prove that other
researchers’ deposits are free from fraud or that they do not contain the gross errors
evident in Respondent’s deposits.

Respondent argues that even the individuals who reviewed his work product have
committed errors. See R. Ex. 1. Accepting that assertion as true, it doesn’t provide
Respondent with a defense. At best, Respondent might show that others have made
11

mistakes here or there. That is a far cry from the pattern of misconduct that the facts of
this case establish.

Respondent also contends that one of ORI’s experts who scrutinized Respondent’s work
product supports Respondent’s contention that his errors were, at worst, innocent. He
relies heavily on the expert’s comment that poor quality data does not necessarily imply
the presence of fraud. See R. Ex. 60 at 1-2; R. Ex. 26. But, that statement does not
undercut the expert’s conclusion that Respondent committed inexplicable errors. ORI’s
expert noted that the clashes in Respondent’s structures corresponded with the
experimental data. The expert stated that what this showed was that Respondent’s
structures could not have come from actual experiments since data from actual
experiments would not match up or correspond with physically impossible features in a
model. ORI Ex. | at §§ 40-49, 88-91, 95-98, 102-05, 109-12.

Much of Respondent’s argument consists of his claim that is that he is the victim of a
vendetta. He calls ORI’s experts liars. He asserts that ORI’s researchers are biased,
prejudiced, and xenophobic. He characterizes these researchers as “lynch mobs.” Resp.
Opp. Br. at 21. These allegations are irrelevant. It is irrelevant at this juncture how ORI
adduced the facts on which it relies. If those facts establish that Respondent committed
research misconduct — as they do in this case — then it does not matter that the individuals
who produced those facts may have displayed animus toward Respondent.

Moreover, Respondent has produced nothing to establish that he is the victim of a
vendetta. His assertions that he has been victimized appear to flow entirely from the fact
that reviewers concluded that he committed research misconduct. Respondent seems to
reason that any conclusion adverse to him inevitably was the product of animus and bias.
But, that conclusion does not follow from Respondent’s allegations. I repeat:
Respondent has offered no facts from which I could infer that he has been victimized.

Finally, Respondent contends that he has been denied the opportunity to conduct
discovery, asserting that ORI did not provide copies of electronic data that he had
requested that ORI produce. I find this argument to be without merit for two reasons.
First, I offered Respondent the opportunity to object to ORI’s discovery production.
Respondent did not do so timely and made his complaint months after the period for
conducting discovery elapsed. Second, Respondent made no showing that ORI actually
withheld discoverable documents.

The undisputed facts of this case resoundingly support ORI’s proposed remedies and I
sustain them for that reason. The remedies sought by ORI are: a ten-year debarment; a
ten-year prohibition against Respondent providing advisory services to the Public Health
Service; and correction of the research record. All of these remedies are permissible
under governing regulations. 42 C.F.R. §§ 93.407(a)(1),(9), (11). The undisputed
material facts establish the presence of multiple aggravating factors that amply justify the
12

length of the debarment and prohibition. The facts clearly establish that Respondent
engaged in intentional misconduct or misconduct committed in reckless disregard of the
truth. Moreover, Respondent’s false deposits into the PDB and publications comprise a
pattern of misconduct that extended over a period of nearly a decade.

But, the most damning aspect of Respondent’s misconduct is that it corrupted the PDB, a
data depository that is widely used by researchers to advance their research and for
product development. This misconduct had, or potentially had, a profound impact on
Respondent’s field of research and the scientific community. Researchers,
pharmaceutical companies, and others rely on the PDB, as an honest information source.
ORI Ex. | at § 151; see id. at § 15. As I discussed at the beginning of this decision, the
PDB operates on the honor system. Its scientific utility depends on researchers
submitting information that is honestly attained and that is not falsified. If even one
researcher contaminates the PDB with false information, that calls into question the
credibility of the entire database. It jeopardizes the applications of data filed in the PDB
by those who rely on the PDB to supply honest information. And, it is reasonably
possible that the effectiveness of products developed by those who rely on the PDB could
be jeopardized. Id. at § 151; ORI Ex. 2 at § 5; see ORI Ex. 20 at 14; ORI Ex. 66 at 1.!

Indeed, the vulnerability of the system to fraud is underscored by the fact that many
relied on Respondent’s research to their possible detriment. Respondent’s falsified
publications were cited at least 622 times by other researchers. ORI Ex. 3 at § 29; ORI
Ex. 68. Respondent asserts that all of these citations are proof of the value of his
research. To the contrary, those citations show just how easily fabricated results can
corrupt others’ honest research.

Respondent evinces neither remorse for nor understanding of his misconduct. He
continues to assert that he committed no misconduct in the face of a mountain of
undisputed facts that prove otherwise. I can only infer from Respondent’s continued
defiance that he is manifestly untrustworthy and that his untrustworthiness justifies a
lengthy debarment and prohibition.

/s/
Steven Kessel
Administrative Law Judge

' An editorial in the journal Acta Crystallographica Section D (D66: 115 (2010)),
illustrates the magnitude of Respondent’s fraud. It characterizes it as a “scientific scandal
of epic proportions [that] shook macromolecular crystallography to its core.” ORI Ex.
66. Another journal, Nature (462 (24): 970 (2009)) described Respondent’s fraud as “the
largest ever in protein crystallography.” ORI Ex. 65.