Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Ridgeview Hospital
(CCN: 36-4047)
Petitioner,

v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-142
Decision No. CR3183

Date: March 31, 2014

DECISION

Petitioner, Ridgeview Hospital, is challenging the effective date of its participation in the
Medicare program. Initially and on reconsideration, the Centers for Medicare &
Medicaid Services (CMS) determined that the hospital first met all the requirements for
enrollment as a provider of services in the Medicare program on September 21, 2012 and
approved the hospital’s program participation effective from that date, the same date on
which the hospital became accredited. Petitioner appealed and claimed that it is entitled
to an effective date starting on the date of its exit survey, which was 64 days earlier. The
parties have filed cross-motions for summary judgment.

For the reasons set forth below, I grant CMS’s motion and affirm its determination of
Petitioner’s effective date, deny Petitioner’s motion, and find that Petitioner would not be
entitled to an effective enrollment date prior to its accreditation.

Background
Petitioner is a psychiatric hospital located in Middle Point, Ohio. On July 19, 2012, The

Joint Commission (TJC), an accrediting organization that CMS approved, completed an
initial accreditation survey and cited Petitioner with standard-level deficiencies in several
areas. None of these deficiencies rose to the level of a violation of a condition of
participation. Petitioner submitted a plan of correction, also known as “evidence of
standards compliance.” On September 21, 2012, TJC received Petitioner’s plan of
correction, determined it was acceptable, and issued a positive accreditation decision. On
October 16, 2012, CMS issued its notice granting Petitioner’s request to enroll in the
Medicare program as a psychiatric hospital effective September 21, 2012. CMS Exs. 2-3;
P. Ex. 8. Petitioner appealed, requesting an effective date of July 19, 2012, the date that
TJC completed its accreditation survey and found no violations of conditions of
participation. CMS Ex. 4. On October 25, 2012, CMS issued an unfavorable
determination upholding the September 21, 2012 effective date of enrollment. CMS Ex.
1.

On November 16, 2012, Petitioner requested a hearing before an administrative law judge
(ALJ). The case was assigned to me for hearing and decision. The parties submitted
memoranda in support of their respective motions for summary judgment (CMS Br.; P.
Br.). CMS submitted a reply (CMS Reply). CMS submitted seven exhibits (CMS Exs.
1-7) and Petitioner submitted 10 exhibits (P. Ex. 1-10).

Petitioner also filed a motion for oral argument on the cross-motions for summary
judgment, a prehearing conference, and other relief. CMS filed an opposition. Petitioner
is not entitled to oral argument on the summary judgment motions here. Instead, I am
authorized to grant summary judgment without holding an in-person hearing to resolve
these matters without undue expenditures. As detailed in this decision, I find that a full
evidentiary hearing in this matter is not needed, and this case is appropriate for summary
judgment. Accordingly, I deny Petitioner’s motions.

Findings of Fact and Conclusions of Law
I. Summary judgment in favor of CMS is appropriate.

Summary judgment is appropriate when a case presents no issue of material fact, and its
resolution turns on questions of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-
48 (1986); Livingston Care Ctr. v. U.S. Dep’t of Health & Human Servs., 388 F.3d 168,
173 (6th Cir. 2004); see also Ill. Knights Templar Home, DAB No. 2274, at 3-4 (2009)
(citing Kingsville Nursing Ctr., DAB No. 2234, at 3-4 (2009)). The moving party may
show the absence of a genuine factual dispute by presenting evidence so one-sided that it
must prevail as a matter of law, or by showing that the non-moving party has presented
no evidence “sufficient to establish the existence of an element essential to [that party’s]
case, and on which [that party] will bear the burden of proof at trial.” Livingston Care
Ctr., 388 F.3d at 173 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)).
To avoid summary judgment, the non-moving party must then act affirmatively by
tendering evidence of specific facts showing that a dispute exists. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see also Vandalia Park,
DAB No. 1939 (2004); Lebanon Nursing & Rehab. Ctr., DAB No. 1918 (2004).

To defeat an adequately supported summary judgment motion, the non-moving party may
not rely on the denials in its pleadings or briefs but must furnish evidence of a dispute
concerning a material fact. J/l. Knights Templar, DAB No. 2274, at 4; Livingston Care
Ctr., DAB No. 1871, at 5 (2003). In examining the evidence to determine the
appropriateness of summary judgment, I must draw all reasonable inferences in the light
most favorable to the non-moving party. See Brightview Care Ctr., DAB No. 2132, at 2,
9 (2007); Livingston Care Ctr., 388 F.3d at 168, 172; Guardian Health Care Ctr., DAB
No. 1943, at 8 (2004); but see Cedar Lake Nursing Home, DAB No. 2344, at 7 (2010);
Brightview, DAB No. 2132, at 10 (noting entry of summary judgment upheld where
inferences and views of non-moving party are not reasonable). Also, the role of an ALJ
in deciding a summary judgment motion differs from the ALJ’s role in resolving a case
after a hearing. On summary judgment, an ALJ should not assess credibility or evaluate
the weight of conflicting evidence. Holy Cross Vill. at Notre Dame, DAB No. 2291, at 4-
5 (2009).

Here, there is no dispute as to the material facts. CMS and Petitioner agree that on the
date of its exit survey, July 19, 2012, Petitioner had no condition-level deficiencies, but it
did have several standard-level deficiencies. Further, they agree that TJC did not accept
the resolution of those standard-level deficiencies until it received a plan of correction
from Petitioner on September 21, 2012. The parties’ contentions relate to a matter of law
regarding whether CMS properly denied the date of July 19, 2012, versus September 21,
2012, as Petitioner’s effective date for Medicare enrollment and billing privileges.

Petitioner, however, does contend there is a disputed fact about whether CMS has
previously granted an accredited provider an initial Medicare enrollment date that was
effective before the effective date of the provider’s accreditation. P. Br. at 4-5, 20-21.
Nonetheless, as detailed subsequently in my findings, whether CMS may have
improperly granted other providers enrollment dates prior to accreditation is not material
and will not defeat CMS’s motion.

2. The undisputed evidence establishes TJC found Petitioner had
several lower-level standard deficiencies as of the completion of
its survey on July 19, 2012.

Upon completion of its survey of Petitioner on July 19, 2012, TJC, the CMS-approved
accreditation organization, determined that the hospital had seven lower-level
deficiencies:
1. Compliance with Federal, State, and local laws (42 C.F.R.
§ 482.11);

2. Governing Body (42 C.F.R. § 482.12);

3. Patient’s Rights (42 C.F.R. § 482.13);

4. Medical Record Services (42 C.F.R. § 482.24);
5. Food and Dietetic Services (42 C.F.R. § 482.28);
6. Physical Environment (42 C.F.R. § 482.41); and

7. Special Medical Record Requirements for Psychiatric Hospitals
(42 C.F.R. § 482.61).

P. Ex. 7. Petitioner does not contest the existence of these standard-level deficiencies and
did not come forward with any affidavits of its own employees or experts to dispute
them. P. Br. 5, 12.

3. The undisputed evidence establishes that Petitioner did not
submit an acceptable plan of correction to remedy its lower-
level standard deficiencies prior to September 21, 2012.

Petitioner submitted a plan of correction (termed “evidence of standards compliance” by
the accreditation organization) for its lower-level deficiencies that TJC received on
September 21, 2012. TJC thereafter accepted Petitioner’s plan.

Petitioner’s plan of correction was essential to TJC’s determination to grant the hospital
accreditation and to their determination to recommend the facility for Medicare
certification. TJC’s letter explains:

Based upon the submission of your evidence of standards compliance on
September 21, 2012, the areas of deficiency listed below have been
removed. [TJC] is granting your organization an accreditation decision of
Accredited with an effective date of September 21, 2012....

* * *

[TJC] is also recommending your organization for Medicare certification
effective September 21, 2012.
P. Ex. 7. Based upon Petitioner’s plan of correction, the accreditation organization found
Petitioner no longer deficient in those seven areas. TJC then approved Petitioner for
accreditation and recommended CMS’s certification for Medicare enrollment. P. Ex. 7 at
1; CMS Br. at 2-3.

4. The receipt of Petitioner’s acceptable plan of correction, which
effectively addressed its standard-level deficiencies, necessarily
determines the earliest date that CMS can enroll Petitioner as a
provider in Medicare.

The Social Security Act (Act) defines a psychiatric hospital as an institution that “is
primarily engaged in providing, by or under the supervision of a physician, psychiatric
services for the diagnosis and treatment of mentally ill persons.” Act § 1861(f)

(42 U.S.C. § 1395x(f)). It must also meet criteria for general hospitals (section
1861(e)(3)-(9) (42 U.S.C. § 1395x(e)(3)-(9))), maintain clinical records on all its patients,
and meet staffing requirements set by the Secretary. Act § 1861(f)(2)-(4) (42 U.S.C. §
1395x(f)(2)-(4). It may participate in the Medicare program as a provider of services, if
it meets this statutory definition and complies with regulatory requirements of applicable
conditions. Act §§ 1861(f), 1871 (42 U.S.C. §§ 1395x(f), 1395hh); 42 C.F.R. §§ 482.60 -
.62, 488.3.

To determine whether certain prospective providers (such as psychiatric hospitals)
qualify for Medicare certification, CMS authorizes certain accreditation organizations to
survey and accredit the applicants and recommend Medicare certification. Institutions
accredited by approved accreditation bodies are generally “deemed” to meet Medicare
conditions of participation. Act § 1865 (42 U.S.C. § 1395bb); 42 C.F.R. § 488.5.
However, if CMS finds that the prospective provider has significant deficiencies, it will
not deem it to meet the conditions of participation. Act § 1865(c) (42 U.S.C. §
1395bb(c)). CMS may “refuse to enter into an agreement” with a provider that fails to
meet even one condition of participation. Act §§ 1866(b)(2)(B), 1861(f) (42 U.S.C. §§
1395ce(b)(2)(B), 1395x(f)); see 42 C.F.R. § 488.3(a).

A “condition of participation” represents a broad category of services. Each condition is
contained in a single regulation, which is divided into subparts called standards.

42 C.F.R. Part 482. Compliance with a condition of participation is determined by the
manner and degree to which the provider satisfies the standards within the condition.

42 C.F.R. § 488.26(b). The provider may meet all conditions of participation but still be
cited with lower standard-level deficiencies that do not rise to a violation of a condition
of participation. In those circumstances, CMS may approve the enrollment application,
however, the effective date of that agreement is not until the accrediting organization
receives an acceptable plan of correction for the lower-level deficiencies and issues a
positive accreditation decision. 42 C.F.R. §§ 488.28(a), 489.13(c)(2)(ii)(A); Apollo
Behavioral Health Hosp., L.L.C., DAB No. 2561, at 9-10 (2014); Cmty. Hosp. of Long
Beach, DAB No. 1938 (2004) (sustaining an ALJ’s conclusion that CMS lacked authority
to give a hospital a Medicare provider effective date before determining from a plan of
correction whether it met applicable federal requirements, which included standard-level
deficiencies). Accordingly, the earliest date here that Petitioner could enroll as a
Medicare provider was September 21, 2012, the date TJC received Petitioner’s plan of
correction that effectively addressed its standard-level deficiencies.

5. Petitioner’s proposed interpretation of the applicable effective date
regulation is unreasonable because it would grant Medicare enrollment
before Petitioner met all federal requirements including applicable health
and safety standards.

It is undisputed that TJC cited Petitioner with a number of deficiencies. Petitioner argues
that its deficiencies were standard-level deficiencies that do not qualify as condition-level
deficiencies, which undisputedly Petitioner had complied with by the time of its exit
survey. Petitioner argues therefore these types of deficiencies would not affect its
effective date when applying the language of 42 C.F.R. § 489.13(c)(2) and that CMS’s
reliance on the language of 42 C.F.R. § 489.13(c)(2)(ii) is incorrect. P. Br. at 12-19. I
find unreasonable, however, Petitioner’s argument that the facility’s lower-level
deficiencies were irrelevant to determining its effective date.

Specifically, Petitioner argues that the regulation is ambiguous. P. Br. at 12-14, 17-19.
The subsection states, in pertinent part:

(c) All health and safety standards are not met on the date of survey. If,
on the date the survey is completed, the provider or supplier has failed
to meet any one of the applicable health and safety standards, the
following rules apply for determining the effective date of the provider
agreement or supplier approval, assuming that no other Federal
requirements remain to be satisfied. However, if other Federal
requirements remain to be satisfied, notwithstanding the provisions of
paragraphs (c)(1) through (c)(3) of this section, the effective date of
the agreement or approval may not be earlier than the latest of the
dates on which CMS determines that each applicable Federal
requirement is met.

(2) For an agreement with, or an approval of, any other provider or
supplier, (except in a situation that does not apply here), the
effective date is the earlier of the following:
(i) The date on which the provider or supplier meets all

applicable conditions of participation, conditions for
coverage, or conditions for certification; or, if applicable,
the date of a CMS-approved accreditation organization
program’s positive accreditation decision, issued after the
accreditation organization has determined that the provider
or supplier meets all applicable conditions.

(ii) The date on which a provider or supplier is found to meet

all conditions of participation, conditions for coverage, or
conditions for certification, but has lower-level
deficiencies, and —

(A) CMS or the State survey agency receives an
acceptable plan of correction for the lower-level
deficiencies (the date of receipt is the effective date
regardless of when the plan of correction is
approved); or, if applicable, a CMS-approved
accreditation organization program issues a positive
accreditation decision after it receives an acceptable
plan of correction for the lower-level deficiencies; or

(B) CMS receives an approvable waiver request... .

42 C.F.R. § 489.13 (c) (emphasis added). The regulation provides for the situation
where, if the prospective provider meets all applicable conditions but has lower-level
deficiencies, its effective date for participation is the date that “a CMS-approved
accreditation organization program issues a positive accreditation decision after it
receives an acceptable plan of correction for the lower-level deficiencies.” 42 C.F.R.
§ 489.13(c)(2)(ii)(A). To find a provider eligible with existing standard-level

deficiencies woul
it met all applicab
intended and whic!

allow a provider to bill Medicare before it was accredited and before
e health and safety standards, a result that I do not believe was
would be simply irresponsible.

6. I cannot estop CMS from following the effective date regulation even if it
may have incorrectly granted an earlier effective date in another situation.

Petitioner argues t

at the only material fact in dispute is whether CMS, in other cases,

issued a provider an effective date of enrollment that pre-dated the provider’s

accreditation. To

elp provide support for its assertion, Petitioner requests that I order
CMS to produce documents and declarations, or that I issue subpoenas to compel
testimony and documentation from each Associate Regional Administrator for Survey
and Certification located at the CMS regional offices. P. Br. at 4-5, 10-11; see P. Ex. 2. I
deny these requests.

Whether CMS improperly issued other facilities effective dates prior to their
accreditation is collateral and irrelevant to this proceeding. Even assuming that CMS
may have enrolled another institution prior to the institution’s compliance with all
requirements, the Secretary is not estopped from changing a position based upon a
mistaken legal interpretation. Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 517-18
(1994); cf; also United Hosp. v. Thompson, 383 F.3d 728, 733 (8" Cir. 2004) (holding
that erroneous overpayments to other hospitals do not entitle plaintiff to the same
overpayments: “The Secretary’s refusal to compound the error was not irrational or
discriminatory.”). Therefore, I also deny Petitioner’s motion for summary judgment
finding no issue of material fact.

Compliance with the federal requirement of accreditation is required prior to the time that
the entity may bill for services. 75 Fed. Reg. 50042, 50400 (Aug. 16, 2010) (final rule
amending 42 C.F.R. § 489.13 and clarifying that prospective providers must comply with
all federal requirements including all applicable health and safety standards). In Mission
Hospital Reg’! Med. Ctr., DAB No. 2459 (2012), the Board rejected pre-accreditation
enrollment because it could endanger the health and safety of patients if a hospital or
other provider were to be paid for services provided at a time when there was no
assurance that it met Medicare participation requirements. Mission Hospital Reg’! Med.
Ctr., DAB No. 2459, at 9. Although Petitioner attempts to distinguish Mission Hospital
because the Board examined subsection (d) of 42 C.F.R. § 489.13 rather than subsection
(c), the broader intention to protect patient safety still remains applicable and analogous
here.

Conclusion

I grant summary judgment in favor of CMS because the undisputed evidence establishes
that Petitioner still had lower-level standard deficiencies at the time of its accreditation
survey. It was not until September 21, 2012, that the CMS-approved accreditation
organization program, TJC, received a plan of correction from Petitioner to remedy its
standard-level deficiencies, which TJC accepted. Accordingly, CMS was authorized to
grant Petitioner a Medicare enrollment effective date of September 21, 2012, the date that
TJC received Petitioner’s acceptable plan of correction, which is also the date TJC first
accredited Petitioner.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

G and L Foodmart, Inc.
d/b/a Food Mart,

Respondent.

Docket No. C-14-595
FDA Docket No. FDA-2014-H-0128

Decision No. CR3182

Date: March 31, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against G and L Foodmart, Inc. d/b/a Food Mart (Respondent), which
alleges facts and legal authority sufficient to justify imposing a $500 civil money
penalty. Respondent did not timely answer the Complaint, nor did Respondent
request an extension of time within which to file an Answer. Therefore, I enter a
default judgment against Respondent and assess a civil money penalty of $500.

CTP initiated this case by serving a Complaint on Respondent and filing a copy of
the Complaint with the Civil Remedies Division (CRD) and the Food and Drug
Administration’s (FDA) Division of Dockets Management. The Complaint
alleges that Respondent utilized self-service displays to sell regulated tobacco
products in a non-exempt facility, Respondent’s staff unlawfully sold cigarettes to
minors on two occasions, and Respondent’s staff failed to verify that the cigarette
purchasers were of a sufficient age, thereby violating the Federal Food, Drug, and
Cosmetic Act (Act), codified at 21 U.S.C. §§ 301 — 399d, and its implementing
regulations, found at 21 C.F.R. Part 1140.

In compliance with 21 C.F.R. §§ 17.5 and 17.7, CTP served Respondent with the
Complaint on February 11, 2014, via United Parcel Service. The Complaint and
accompanying cover letter stated that within 30 days, Respondent must take one of
the following three actions: pay the penalty, file an answer, or request an extension
of time within which to file an answer. CTP further explained that if Respondent
did not comply with one of the actions within 30 days, an Administrative Law
Judge could issue an initial decision ordering Respondent to pay the full amount of
the proposed penalty. 21 C.F.R. § 17.11.

Respondent has neither filed an Answer within the time provided by regulation,
nor timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), I am required
to “assume the facts alleged in the complaint to be true, and, if such facts establish
liability under [the Act],” issue an initial decision and impose a civil money
penalty. Accordingly, I must determine whether the allegations in the Complaint
establish violations of the Act.

Specifically, CTP alleges that:

e Respondent owns Food Mart, an establishment that sells tobacco products
and is located at 3308 East 32nd Street, Joplin, Missouri 64804. Complaint

q3.

e On May 10, 2013, an FDA-commissioned inspector observed that “a person
younger than 18 years of age was able to purchase a package of Red Seal
Long Cut Wintergreen smokeless tobacco . . . at approximately 5:23 PM[.]”
The inspector also observed that “the minor’s identification was not
verified before the sale... on May 10, 2013....”' Complaint § 10.

' The complaint alleges that Respondent first violated the Act on May 10, 2013, at
approximately 5:23 PM, when Respondent’s staff “[sold] tobacco products to a
minor,” and that Respondent violated the Act a second time on May 10, 2013, at
approximately 4:21 PM, when “the minor’s identification was not verified before
the sale, as detailed above ....” (emphasis added). That the second violation
occurred nearly one hour prior to the first seems highly unlikely. Therefore, I
infer that this is a typographical error. I am satisfied that these two violations
occurred and that CTP’s allegations satisfy the requirements for imposing a $500
penalty.
e On May 30, 2013, CTP issued a Warning Letter to Food Mart regarding the
inspector’s observation from May 10, 2013. The letter explained that the
named violations were not necessarily intended to be an exhaustive list of
all violations at the establishment. The Warning Letter also stated that if
Respondent failed to correct the violations, regulatory action by the FDA or
a civil money penalty action could occur and that Respondent is responsible
for complying with the law. Complaint § 10.

e Although United Parcel Service records indicate that an individual named
“Mitchell” received the warning letter on May 31, 2013, the FDA did not
receive a response to the warning letter. Complaint § 11.

e During a subsequent inspection conducted on October 18, 2013, FDA-
commissioned inspectors documented additional violations of 21 C.F.R.
Part 1140 at Respondent’s establishment. Specifically, “a person younger
than 18 years of age was able to purchase a package of Pall Mall Red
cigarettes on October 18, 2013, at approximately 4:21 PM[.] The
inspectors also observed Respondent “[u]sing a self-service display in a
non-exempt facility, in violation of 21 C.F.R. § 1140.16(c).” Particularly,
the facility had “multiple brands of smokeless tobacco and packages of
Bugler Turkish cigarette tobacco located on shelves directly in front of the
sales counter. Additionally, there were two displays containing various
brands of smokeless tobacco located on the sales counter [which were]
directly accessible to customers.” During the inspection, “Daniel Graves
. .. Respondent’s owner, told the inspector that the establishment [was]
open to the public[,] [therefore,] the displays were located in a customer-
accessible area of the establishment, in which “minors [were] permitted to
enter at any time.” Complaint § 1.

I find that these facts, which I must assume are true, establish that Respondent is
liable under the Act. See 21 C.F.R. § 17.11(a). The Act prohibits misbranding of
a tobacco product. 21 U.S.C. § 331(k). A tobacco product is misbranded if sold
or distributed in violation of regulations issued under section 906(d) of the Act,
codified at 21 U.S.C. § 387f(d). See 21 U.S.C. § 387(a)(7)(B); 21 C.F.R.

§ 1140.1(b). The regulations prohibit the sale of cigarettes or smokeless tobacco
to any person younger than 18 years of age. 21 C.F.R. § 1140.14(a). Retailers are
required to verify, by means of photo identification containing the purchaser’s date
of birth, that no purchaser of cigarettes or smokeless tobacco is younger than 18
years of age. 21 C.F.R. § 1140.14(b)(1). Pursuant to 21 C.F.R. § 1140.16(c)(1), a
retailer may sell cigarettes and smokeless tobacco only in a direct, face-to-face
exchange between the retailer and the consumer. Self-service displays are a
method of sale that is not permitted under the regulations, 21 C.F.R.

§ 1140.16(c)(1), except when located in facilities where the retailer ensures that no
person younger than 18 years of age is present, or permitted to enter, at any time.
21 C.F.R. § 1140.16(c)(2)(ii).

In the present case, on May 10, 2013, Respondent sold a regulated tobacco product
to a person younger than 18 years of age, and failed to verify, by means of photo
identification, that the purchaser was 18 years of age or older in violation of 21
C.F.R. § 1140.14(a) and (b)(1). On October 18, 2013, Respondent utilized self-
service displays in violation of 21 C.F.R. § 1140.16(c), and sold a regulated
tobacco product to a person younger than 18 years of age. Therefore,
Respondent’s actions and omissions constitute violations of law that warrant a
civil money penalty. Accordingly, I find that a civil money penalty in the amount
of $500 is permissible under 21 C.F.R. § 17.2.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Corkscrew Wines, Inc.
d/b/a Monroe Bar and Liquors,

Respondent.

Docket No. C-14-478
FDA Docket No. FDA-2013-H-1702

Decision No. CR3179

Date: March 28, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Corkscrew Wines, Inc. d/b/a Monroe Bar and Liquors
(Respondent), which alleges facts and legal authority sufficient to justify imposing
a $500 civil money penalty. Respondent did not timely answer the Complaint, nor
did Respondent request an extension of time within which to file an Answer.
Therefore, I enter a default judgment against Respondent and assess a civil money
penalty of $500.

CTP initiated this case by serving a Complaint on Respondent and filing a copy of
the Complaint with the Civil Remedies Division (CRD) and the Food and Drug
Administration’s (FDA) Division of Dockets Management. The Complaint
alleges that Respondent utilized a self-service display to sale smokeless tobacco
products in a non-exempt facility, sold a regulated tobacco product to a minor, and
failed to verify that a purchaser of a tobacco product was of sufficient age, thereby
violating the Federal Food, Drug, and Cosmetic Act (Act), codified at 21 U.S.C.
§§ 301 — 399d, and its implementing regulations, found at 21 C.F.R. Part 1140.

In compliance with 21 C.F.R. §§ 17.5 and 17.7, CTP served Respondent with the
Complaint on January 27, 2014, via United Parcel Service (UPS). The Complaint
and accompanying cover letter stated that within 30 days, Respondent must take
one of the following three actions: pay the penalty, file an answer, or request an
extension of time within which to file an answer. CTP further explained that if
Respondent did not comply with one of the actions within 30 days, an
Administrative Law Judge could issue an initial decision ordering Respondent to
pay the full amount of the proposed penalty. 21 C.F.R. § 17.11.

Respondent has neither filed an Answer within the time provided by regulation,
nor timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), Iam required
to “assume the facts alleged in the complaint to be true, and, if such facts establish
liability under [the Act],” issue an initial decision and impose a civil money
penalty. Accordingly, I must determine whether the allegations in the Complaint
establish violations of the Act.

Specifically, CTP alleges that:

e Respondent owns Monroe Bar and Liquors, an establishment that sells
tobacco products and is located at 475 Spotswood Englishtown Road,
Monroe Township, New Jersey 08831. Complaint § 3.

e On January 26, 2013, an FDA-commissioned inspector observed
Respondent “using a self-service display in a non-exempt facility, in
violation of 21 C.F.R. § 1140.16(c).” Specifically, the facility, “had a self-
service display of smokeless tobacco for sale on the customer side of the
checkout counter, [which was] open to persons of all ages... .”. Complaint
q 10.

e¢ On February 14, 2013, CTP issued a Warning Letter to Respondent
regarding the inspector’s observation from January 26, 2013. The letter
explained that the observation constituted a violation of a regulation found
at 21 C.F.R. § 1140.16(c), and that the named violation was not necessarily
intended to be an exhaustive list of all violations at the establishment. The
Warning Letter also stated that if Respondent failed to correct the violation,
regulatory action by the FDA or a civil money penalty action could occur
and that Respondent is responsible for complying with the law. Complaint
q 10.
e Initially, Respondent did not respond to the Warning Letter. UPS records
indicate that an individual named “Patel” received the Warning Letter on
February 15, 2013. However, in response to another letter from CTP, on
April 16, 2013, an individual named “Jesse” replied by e-mail. “Jesse
stated that the establishment . . . removed the self-service display.”
Complaint § 11.

e During a subsequent inspection conducted on July 14, 2013, FDA-
commissioned inspectors documented additional violations of the
regulations found at 21 C.F.R. Part 1140 at Respondent’s establishment.
Specifically, ““a person younger than 18 years of age was able to purchase a
package of Marlboro cigarettes on July 14, 2013, at approximately 1:52
PM[.]” The inspectors also documented that “the minor’s identification
was not verified before the sale . . . on July 14, 2013... .” Complaint § 1.

I find that these facts, which I must assume are true, establish that Respondent is
liable under the Act. See 21 C.F.R. § 17.11(a). The Act prohibits misbranding of
a tobacco product. 21 U.S.C. § 331(k). A tobacco product is misbranded if sold
or distributed in violation of regulations issued under section 906(d) of the Act,
codified at 21 U.S.C. § 387f(d). See 21 U.S.C. § 387(a)(7)(B); 21 C.F.R.

§ 1140.1(b). The regulations prohibit the sale of cigarettes or smokeless tobacco
to any person younger than 18 years of age. 21 C.F.R. § 1140.14(a). Retailers are
required to verify, by means of photo identification containing the purchaser’s date
of birth, that no purchaser of cigarettes or smokeless tobacco is younger than 18
years of age. 21 C.F.R. § 1140.14(b)(1). Pursuant to 21 C.F.R. § 1140.16(c)(1), a
retailer may sell cigarettes and smokeless tobacco only in a direct, face-to-face
exchange between the retailer and the consumer. Self-service displays are a
method of sale that is not permitted under the regulations, 21 C.F.R.

§ 1140.16(c)(1), except when located in facilities where the retailer ensures that no
person younger than 18 years of age is present, or permitted to enter, at any time.
21 C.F.R. § 1140.16(c)(2)(ii).
In the present case, on January 26, 2013, Respondent utilized a self-service display
in violation of 21 C.F.R.§1140.16(c). On July 14, 2013, Respondent sold a
regulated tobacco product to a person younger than 18 years of age, in violation of
21 C.F.R. § 1140.14(a), and failed to verify by means of photographic
identification that the purchaser of the tobacco product was of sufficient age, in
violation of 21 C.F.R. § 1140.14(b)(1). Therefore, Respondent’s actions and
omissions constitute violations of law that merit a civil money penalty.

Accordingly, I find that a civil money penalty in the amount of $500 is permissible
and order it imposed. 21 C.F.R. § 17.2.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Sana’a Abubaker, M.D.,
(NPI: 1093977456)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-1096
Decision No. CR3176
Date: March 27, 2014
DECISION

Palmetto GBA (Palmetto), an administrative contractor for the Centers for Medicare

& Medicaid Services (CMS), determined that the effective date of enrollment in the
Medicare program for Petitioner, Sana’a Abubaker, M.D., was March 19, 2013, witha
retrospective billing date of February 17, 2013. Petitioner challenges the determination.
For the reasons stated below, I affirm Palmetto’s determination.

I. Background and Procedural History

Petitioner, a physician practicing in Nevada, applied to enroll as a supplier’ in the
Medicare program in October 2012. In a letter dated December 11, 2012, Palmetto
notified Petitioner that it rejected her enrollment application because she was non-
responsive to Palmetto’s request for additional information. CMS Ex. 3. Petitioner
electronically reapplied on March 19, 2013, Palmetto processed that application to
approval, and Palmetto advised Petitioner that her effective date of enrollment in
Medicare was March 19, 2013, with eligibility to bill for services she provided to
Medicare beneficiaries as of February 17, 2013.

' A “supplier” is “a physician or other practitioner, or an entity other than a provider, that
furnishes health care services under Medicare.” 42 C.F.R. § 400.202.
By letter dated April 4, 2013, Petitioner requested that Palmetto reconsider her effective
date of enrollment. CMS Ex. 6. In a reconsidered determination, Palmetto upheld its
initial determination. CMS Ex. 7. On July 30, 2013, Petitioner timely requested a
hearing (RFH) with the Civil Remedies Division of the Departmental Appeals Board. I
issued an Acknowledgment and Pre-Hearing Order (Order) on August 8, 2013. On
September 11, 2013, CMS filed its brief and a motion for summary judgment (CMS Br.),
along with seven exhibits marked as CMS Ex. | through CMS Ex. 7. On October 11,
2013, Petitioner filed her brief and response (P. Br.), along with one exhibit marked as

P. Ex. 1. There being no objection, I admit all proffered exhibits into the record.

My Order advised the parties that they must submit written direct testimony for each
proposed witness and that an in-person hearing would only be necessary if the opposing
party affirmatively requested an opportunity to cross-examine a witness. Order {ff 8-10;
see Vandalia Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB No. 1823, at 8
(2002) (holding that the use of written direct testimony for witnesses is permissible so
long as the opposing party has the opportunity to cross-examine those witnesses).
Neither party offered the written direct testimony of any witnesses for a hearing. I find,
therefore, that an in-person hearing in this case is unnecessary and base my decision on
the full merits of the written record.

II. Discussion
A. Issue

The issue in this case is whether Palmetto had a legitimate basis to determine Petitioner’s
effective date was March 19, 2013 for Medicare enrollment and billing privileges.

B. Applicable Law

Suppliers such as Petitioner must enroll in the Medicare program to receive payment for
covered Medicare items or services from either Medicare (in the case of an assigned
claim) or a Medicare beneficiary (in the case of an unassigned claim) ....” 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. See Social Security Act § 1866(j)(1)(A)
(authorizing the Secretary of the U.S. Department of Health and Human Services to
establish by regulation the process for enrolling providers and suppliers in the Medicare
program). Under the Secretary’s regulations, a provider or supplier that seeks billing
privileges under Medicare must “submit enrollment information on the applicable
enrollment application.” 42 C.F.R. § 424.510(a). A “provider or supplier must submit a
complete enrollment application and supporting documentation to the designated
Medicare fee-for-service contractor,” and the application should include “complete . . .
responses to all information requested within each section as applicable to the provider or

supplier type.” 42 C.F.R. § 424.510(d)(1)-(2). “Once the provider or supplier
successfully completes the enrollment process . .. CMS enrolls the provider or supplier
into the Medicare program.” 42 C.F.R. § 424.510(a). CMS then establishes an effective
date for billing privileges under the requirements stated in 42 C.F.R. § 424.520(d) and
may permit limited retroactive billing as outlined in 42 C.F.R. § 424.521.

C. Findings of Fact and Conclusions of Law

1. Palmetto properly established the effective date of Petitioner’s
Medicare enrollment and retrospective billing privileges based upon
the receipt date of the enrollment application that Palmetto was able
to subsequently process to approval.

Petitioner states that she submitted an initial enrollment application to Palmetto in
October 2012. RFH at 1. Petitioner does not dispute that Palmetto rejected her initial
application in December 2012 because she failed to submit a response to Palmetto’s
request for complete information. Petitioner maintains, however, that Palmetto mailed a
letter requesting additional information to a Desert Inn address and not directly to her or
her management company. RFH at 1; P. Br. at 1. Petitioner further maintains that
neither she nor her management company received Palmetto’s letter, and therefore they
were unaware at the time that Palmetto needed additional information to process her
October 2012 application. RFH at 1; P. Br. at 1. Petitioner also maintains that she did
not find out until March 18, 2013 that Palmetto had rejected her October 2012
application.

Once informed of her rejected application, Petitioner electronically submitted, and
Palmetto received transmission of, a second enrollment application on March 19, 2013.
Palmetto processed the March 2013 application to approval and assigned Petitioner an
effective enrollment date of March 19, 2013, with a retrospective billing date of February
17, 2013.2 CMS Ex. 5, at 1. Petitioner was dissatisfied with this determination because
she was unable to bill for services she provided to Medicare beneficiaries prior to her
assigned February 17, 2013 retrospective billing date. RFH at 1.

> Palmetto used the term “effective date” to refer to the date when Petitioner may
retrospectively bill for Medicare services. CMS Exs. 5, at 1; 7, at 1. By regulation, the
“effective date” would ordinarily be the date Palmetto received Petitioner’s enrollment
application that it eventually approved. See 42 C.F.R. § 424.520(d). CMS may,
however, permit Petitioner to retrospectively bill for services for up to 30 days prior to
that effective date. 42 C.F.R. § 424.521(a). To be consistent with the regulation, this
decision uses “effective date” to refer to the effective date of enrollment that is
established by regulation, not the date when Petitioner’s retrospective billing period
begins.
The effective date of enrollment for physicians, nonphysician practitioners, and physician
and nonphysician practitioner organizations is “the later of the date of filing of a
Medicare enrollment application that was subsequently approved by a Medicare
contractor or the date an enrolled physician or nonphysician practitioner first began
furnishing services at a new practice location.” 42 C.F.R. § 424.520(d). The “date of
filing” is the date that the Medicare contractor “receives” a signed enrollment application
that the Medicare contractor is able to process to approval. 73 Fed. Reg. 69,726, 69,769
(Nov. 19, 2008).

In addition, CMS may permit limited retrospective billing if a practitioner meets all
program requirements.

Physicians, nonphysician practitioners and physician and nonphysician
practitioner organizations may retrospectively bill for services when a
physician or nonphysician practitioner or a physician or a nonphysician
practitioner organization have met all program requirements, including
State licensure requirements, and services were provided at the enrolled
practice location for up to—

(1) 30 days prior to their effective date if circumstances precluded
enrollment in advance of providing services to Medicare
beneficiaries, or

(2) 90 days prior to the effective date [in certain emergencies not
applicable here].

42 CFR. § 424.521 (a).

Here, the earliest date that Petitioner was eligible for retrospective billing privileges was
30 days prior to March 19, 2013, the date Palmetto received an enrollment application
that Palmetto was able to process to approval. Thirty days prior to March 19, 2013 is
February 17, 2013. Thus, Palmetto correctly determined Petitioner’s effective date and
the commencement date of Petitioner’s retrospective billing privileges.

2. Petitioner’s previously filed October 2012 enrollment application does
not provide a basis for altering Petitioner’s effective date of
enrollment because Palmetto rejected it.

Petitioner states that because Palmetto rejected her initial October 2012 application, it
caused a 60-day delay in the effective date she could have been granted. P. Br. at 2.
Petitioner argues that Palmetto erred in its rejection when it sent the letter requesting
additional information to a Desert Inn address rather than her Orchard Course address.
Id. Petitioner asks, therefore, that I remand this case to CMS with instructions for CMS
to consider Petitioner’s October 2012 application in determining her effective date of
enrollment in the Medicare program. In support of her request, Petitioner relies on my
decision in Alexander Eugene Istomin v. CMS, DAB CR2346 (2011).

The record shows that on December 11, 2012, Palmetto did reject Petitioner’s October
2012 application because Petitioner did not respond to Palmetto’s request for additional
information. CMS Ex. 3. However, CMS’s decision to reject an application is not
subject to appeal. 42 C.F.R. § 424.525(d). Therefore, Petitioner’s previously filed
application in October 2012 does not affect the effective date for her subsequently filed
application in March 2013. My jurisdiction in this matter is based on Palmetto’s
unfavorable May 30, 2013 reconsidered determination and the appeal rights afforded
Petitioner under 42 C.F.R. § 498.5(/) with regard to her March 2013 application.

Additionally, Petitioner has not provided me with a reason to remand this case to CMS.
Petitioner’s reliance on my decision in the /stomin case to support her assertions is
misguided because the facts in Petitioner’s case differ from those in the /stomin case. In
Istomin the Medicare contractor inexplicably mailed a letter requesting additional
information to an address listed as one of petitioner’s practice locations in Florida instead
of the New York address listed in his enrollment application as petitioner’s
correspondence address. /stomin, DAB CR2346, at 3. However, the undisputed facts in
Petitioner’s case before me establish a different situation. Although Petitioner here did
list her Orchard Course address under Section 2B, titled “Correspondence Address,” in
her October 2012 CMS Form 855] application, she also listed in the same application the
name of a specific contact person and provided the Desert Inn address under Section 13,
titled “Contact Person.” The instructions to the applicant for completing Section 13
clearly state that:

This section captures information regarding the person you would like for
us to contact regarding this application. If no one is listed below, we will
contact you directly.

CMS Ex. 1, at 23 (emphasis added). Consequently, Petitioner gave Palmetto permission
to contact the designated person at the Desert Inn address that she provided to them if
they needed information regarding her October 2012 application. CMS Ex. 1, at 23. The
record further shows that Palmetto addressed both the November 8, 2012 request letter
and the December 11, 2012 rejection letter to the individual and the Desert Inn address
Petitioner identified under Section 13 of her application. CMS Exs. 2, at 1; 3, at 1.
Petitioner now claims that the Desert Inn address is not one where she regularly receives
mail and that Palmetto erroneously sent the two letters regarding her October 2012
application to the Desert Inn address. P. Br. at 2. However, there is no indication or
allegation that Petitioner notified CMS or its contractor to change the contact information
she provided on that enrollment application.
3. Iam not authorized to grant Petitioner’s request for equitable relief:

Petitioner argues that her effective date should be earlier based on the submission of her
first enrollment application and the fact that she was treating Medicare beneficiaries for
nearly a year without compensation from Medicare. RFH at 1; P. Br. at 2. Petitioner
asks that I “do what is necessary and honorable to complete this process...” RFH.
Petitioner has not shown, however, any basis in fact or in law that would legally support
an earlier effective date of enrollment other than that which Palmetto has established. I
am bound by the applicable statute and regulations and am not authorized to provide
Petitioner with the equitable relief she seeks. See US Ultrasound, DAB No. 2302, at 8
(2010); 1866ICPayday.com, L.L.C., DAB No. 2289, at 14 (2009) (“[a]n ALJ is bound by
applicable laws and regulations and may not invalidate either a law or regulation on any
ground...”).

III. Conclusion

I find that Palmetto first received an enrollment application it could process to approval
from Petitioner on March 19, 2013. I therefore affirm Palmetto’s determination that
Petitioner’s effective date of enrollment is March 19, 2013, and her retrospective billing
date is February 17, 2013.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Lynn Ann Vaughan, M.D.
(PTANs: 110783 & 102093; NPIs: 1316089519 & 1932393360),

Petitioner
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-1397
Decision No. CR3174
Date: March 26, 2014
ORDER REMANDING AND DISMISSING CASE

This case is remanded to the Centers for Medicare & Medicaid Services (CMS) pursuant
to 42 C.F.R. § 498.56(d), for processing of Petitioner’s application for reactivation of her
billing privileges in accordance with 42 C.F.R. § 424.540 and the CMS policies discussed
in the following opinion. This case is dismissed pursuant to 42 C.F.R. § 498.70(b) to
permit action by CMS in accordance with current CMS policy and because Petitioner
does not presently have a right to a hearing. This dismissal is without prejudice to any
right of Petitioner to request a hearing as to a determination by CMS on remand that
triggers such a right.

Either party may request in writing that I vacate, for good cause, the dismissal within 60
days of the date of this Order. 42 C.F.R. § 498.72. Any other objection to this Order
must be filed within ten days of the date of this Order.

I. Procedural History and Findings of Fact

Wisconsin Physicians Service Insurance Corporation (WPS), is a Medicare contractor.
Petitioner is Lynn Vaughan, M.D. WPS notified Petitioner by letter dated January 5,
2012, that it received Petitioner’s CMS-855] application to revalidate her enrollment in
Medicare on November 21, 2011. WPS requested that Petitioner provide certain
requested information within 30 days of January 5, 2012, or Petitioner’s billing privileges
would be deactivated. CMS Exhibit (CMS Ex.) | at 34-35. WPS notified Petitioner by
letter dated February 8, 2012, that her Medicare billing privileges were deactivated
effective February 8, 2012, because Petitioner failed to submit a complete Medicare
enrollment application in response to the WPS request dated September 2, 2011, that she
revalidate her enrollment. The February 8, 2012 WPS notice of deactivation states that
the CMS-855I application was received from Petitioner, but Petitioner failed to respond
to the WPS request for additional information dated January 5, 2012. CMS Ex. | at 36.
The February 8, 2012 WPS deactivation letter states:

The deactivation of Medicare billing privileges is considered
an action to protect from the misuse of your billing number
and to protect the Medicare Trust Funds from unnecessary
overpayments. This deactivation does not have any effect on
your participation agreement and/or any conditions of
participation.

CMS Ex. | at 38.

Petitioner sent WPS a letter dated September 30, 2012, but postmarked October 2, 2012,
advising WPS that the January 5, 2012 WPS letter was not received by Petitioner until
September 29, 2012. Petitioner states in her letter that she was providing the individual
items of information requested by the January 5, 2012 WPS letter. CMS Ex. 2 at 1-2.

A WPS hearing officer notified Petitioner by letter dated August 2, 2013, that her
reconsideration request for an effective date earlier than October 3, 2012 was denied.
The WPS hearing officer states in his letter that the initial determination letter was dated
April 30, 2013, but that letter is not in evidence before me. CMS Ex. | at 1. The hearing
officer cited 42 C.F.R. §§ 424.520-.521 as the basis for his decision and he reasoned that
Petitioner’s effective date of Medicare enrollment could be no earlier than WPS’s receipt
on October 3, 2012, of her application that could be processed to completion. CMS Ex. 1
at 1-2. The hearing officer’s reasoning is fatally flawed. Petitioner submitted the CMS-
855] application received by WPS on October 2, 2012, not for the purpose of enrollment
as she was already enrolled in Medicare and her enrollment was never revoked. Rather,
the CMS-855I was submitted by Petitioner to reactive her billing privileges that had been
deactivated on February 8, 2012.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
September 22, 2013. The case was assigned to me for hearing and decision and on
September 30, 2013, an Acknowledgment and Prehearing Order (Prehearing Order) was
issued at my direction. On November 13, 2013, CMS filed a motion for summary
judgment with CMS Exs. | and 2. On January 16, 2013, Petitioner filed a memorandum
in opposition to the CMS motion for summary judgment with Petitioner’s exhibits (P.
Exs.) 1 through 8. On March 19, 2014, CMS filed its notice of intent not to reply. The
parties have not objected to my consideration of the proffered exhibits and all are
admitted and considered.

IL. Discussion
A. Applicable Law

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

§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)).
Administration of the Part B program is through contractors such as WPS. Act § 1842(a)
(42 U.S.C. § 1395u(a)).

The Act requires the Secretary of Health and Human Services (the Secretary) to issue
regulations that establish a process for the enrollment of providers and suppliers,
including the right to a hearing and judicial review of certain enrollment determinations.
Act § 1866(j) (42 U.S.C. § 1395ce(j)).

Pursuant to 42 C.F.R. § 424.505,’ a provider or supplier must be enrolled in the Medicare
program and be issued a billing number to have billing privileges and to be eligible to
receive payment for services rendered to a Medicare eligible beneficiary. The effective
date of enrollment in Medicare of a physician, nonphysician practitioner, and physician

' Petitioner is a “supplier” under the Act and the regulations. A “supplier” furnishes
services under Medicare and the term supplier applies to physicians or other
practitioners and facilities that are not included within the definition of the phrase
“provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider of services,”
commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled
nursing facilities, comprehensive outpatient rehabilitation facilities, home health
agencies, hospice programs, and a fund as described in sections 1814(g) and 1835(e) of
the Act. Act § 1861(u) (42 U.S.C. § 1395x(u)). The distinction between providers and
suppliers is important because they are treated differently under the Act for some
purposes.

> References are to the revision of the Code of Federal Regulations (C.F.R.) in effect at
the time of agency action, unless otherwise indicated.
and nonphysician practitioner organizations is governed by 42 C.F.R. § 424.520(d). The
effective date of enrollment for a physician or nonphysician practitioner may only be the
later of two dates: the date when the physician filed an application for enrollment that
was subsequently approved by a Medicare contractor charged with reviewing the
application on behalf of CMS; or the date when the physician first began providing
services at a new practice location. Jd. The date of filing of the enrollment application is
the date when a signed enrollment application that is ultimately process to completion is
received by the designated Medicare contractor. 42 C.F.R. § 424.510(d)(1); 73 Fed. Reg.
69,725; 69,769 (Nov. 19, 2008). An enrolled physician or nonphysican practitioner may
retrospectively bill Medicare for services provided Medicare eligible beneficiaries up to
30 days prior to the effective date of enrollment, if circumstances precluded enrollment
before the services were provided. Retrospective billing for up to 90 days prior to the
effective date of enrollment is permitted only in case of a Presidentially-declared disaster
pursuant to 42 U.S.C. §§ 5121-5206. 42 C.F.R. § 424.521.

The Secretary has authorized CMS to deactivate a provider or supplier’s Medicare billing
privileges if the provider or supplier does not submit any Medicare claims for 12
consecutive calendar months. 42 C.F.R. § 424.540(a)(1). CMS may also deactivate a
provider or supplier’s billing privileges if the provider or supplier does not report certain
changes of information, such as a change in practice location or change of any managing
employee, within 90 calendar days of when the change occurred, or does not provide
complete and accurate information within 90 days of CMS’s request for such
information. 42 C.F.R. § 424.540(a)(2), (3). A provider or supplier “deactivated for any
reason other than nonsubmission of a claim” is required to “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.” 42 C.F.R. § 424.540(b)(1). A provider or supplier who is
“deactivated for nonsubmission of a claim” for 12 months is “required to recertify that
the enrollment information currently on file with Medicare is correct and furnish any
missing information as appropriate. The provider or supplier must meet all current
Medicare requirements in place at the time of reactivation, and be prepared to submit a
valid Medicare claim.” 42 C.F.R. § 424.540(b)(2). Deactivation of Medicare billing
privileges is to protect the provider or supplier from misuse of their billing privileges and
the Medicare Trust Funds. Deactivation does not have any effect upon the provider’s or
supplier’s participation in Medicare. 42 C.F.R. § 424.540(c).

B. Analysis

The CMS evidence shows that on about September 2, 2011, WPS requested that the
Petitioner revalidate her Medicare enrollment. On November 21, 2011, WPS received
Petitioner’s CMS-855I that was submitted by Petitioner to revalidate her enrollment.
WPS sent Petitioner a letter dated January 5, 2012, advising Petitioner that WPS required
additional information to revalidate her enrollment. WPS also advised Petitioner that if
she failed to submit the requested information in 30 days, her Medicare billing privileges
would be deactivated. WPS notified Petitioner by letter dated February 8, 2012, that her
billing privileges were deactivated on that date because she had not submitted the
requested information. CMS Ex. | at 34-38. There is no evidence that WPS advised
Petitioner that her enrollment in Medicare would be revoked if she failed to timely submit
the requested information. Petitioner submitted the information requested by WPS and a
new CMS-855I on October 2, 2012. CMS Ex. 2 at 1-2. WPS received the information
and new CMS-855I on October 3, 2012. CMS Ex. 1 at 1-2. The evidence shows that
WPS treated the CMS-855I as an application to enroll in Medicare rather than an
application to reactivate billing privileges and to complete the revalidation initiated by
WPS in September 2011. I infer from the fact that WPS requested Petitioner to revalidate
her Medicare enrollment information in September 2011, that she was enrolled at that
time. There is no evidence that CMS ever revoked Petitioner’s Medicare enrollment or
was authorized to do so by 42 C.F.R. § 424.535 or any other provision of the Act or
regulations. Therefore, WPS erred by attempting to determine a new effective date for
Petitioner’s enrollment in Medicare. The issue that must be decided is the effective date
for the reactivation of Petitioner’s billing privileges. The issue should be resolved
favorably for Petitioner under current CMS policy.

The relevant CMS policy is found in the Medicare Program Integrity Manual (MPIM),
ch. 15, § 15.27 (rev. 474, issued July 5, 2013, effective October 8, 2013.° The substantial
revision to MPIM, ch. 15, § 15.27 significantly clarifies and refines the CMS policy
regarding deactivations and reactivations of provider and supplier billing privileges. On
its face, the new policy seems to be consistent with and supportive of the Secretary’s
regulation which provides that deactivation of Medicare billing privileges is to protect the
provider or supplier from misuse of their billing privileges and the Medicare Trust Funds
and does not have any effect upon the provider’s or supplier’s participation in
Medicare. 42 C.F.R. § 424.540(c). Because the new policy was issued prior to my
decision in this case it is appropriate to remand to ensure that CMS has the opportunity to
apply its interpretation of the applicable regulations and provisions of the Act. I set forth
some important provisions of the revised policy to facilitate prompt action by Petitioner
and CMS or its contractor related to reactivation of Petitioner’s billing privileges.
“Deactivate means that a provider or supplier’s billing privileges were stopped, but can

Although the MPIM is a statement of policy that does not have the force or effect of a

statute or regulation, it is important to ensure that the agency interpretation of its
regulations and enabling statutes is given appropriate weight. Therefore, it is appropriate
to treat CMS and its counsel as being bound by public statements of CMS policy to the
extent the policy is consistent with the law.
be restored upon the submission of updated information.” MPIM, ch. 15, § 15.1.1 (eff.
Jul. 30, 2010). MPIM, ch. 15, § 15.27.1.1 sets forth CMS policy regarding deactivations
and § 15.27.1.2 sets forth policy regarding reactivations. CMS policy states:

If the contractor approves a provider or supplier’s reactivation
application or reactivation certification package (RCP), the
reactivation effective date shall be the provider or
supplier’s date of deactivation.

MPIM, ch. 15 § 15.27.1.2 (emphasis added). According to CMS policy, a provider or
supplier deactivated for not submitting bills for 12 months reactivates its billing
privileges by certifying that enrollment information currently on file with Medicare is
correct. MPIM, ch. 15, § 15.27.1.2.2. The documents that must be submitted for
reactivation following deactivation based on nonsubmission of a claim are specified in
MPIM, ch. 15, § 15.27.1.2.2 A—C and are referred to as the RCP. Pursuant to MPIM,
ch. 15, § 15.27.1.2.3, a provider may elect to reactivate its billing number by submitting a
completed Form CMS-855 enrollment application rather than a RCP. The provider must
also submit a copy of the claim or information for the claim it plans to submit when
billing privileges are reactivated. MPIM, ch. 15, § 15.27.1.2.3C. The Medicare
contractor is required to permit an opportunity for a supplier or provider requesting
reactivation to correct any deficient or incomplete RCP, and I infer, any enrollment
application submitted in lieu of aRCP. MPIM, ch. 15, § 15.27.1.2.2.A.2 and B.2.

Pursuant to 42 C.F.R. § 498.56(d), I may remand a case to CMS for consideration of a
new issue and a new determination. In this case, the new CMS policy must be considered
and effectuated consistent with the dictates of the Act and the Secretary’s regulations.
The new issue that requires determination is the effective date of Petitioner’s reactivation
of her billing privileges. CMS should apply its current policy when making the
letermination.

Accordingly, this case is remanded to CMS for processing in accordance with the Act,
regulations, and the current CMS policy controlling deactivation and reactivation of
Petitioner’s billing privileges. The parties may request that an order dismissing a case be
vacated within 60 days for good cause shown pursuant to 42 C.F.R. § 498.72. If CMS
completes its action on this case more than 60 days from the date of this Order and
Petitioner desires my further review, Petitioner will file a request for hearing referring to
this case with a copy of this Order attached.

III. Conclusion

For the foregoing reasons, this case is remanded to CMS pursuant to 42 C.F.R.
§ 498.56(d), for processing of Petitioner’s application for reactivation of her billing
privileges in accordance with 42 C.F.R. § 424.540 and current CMS policies regarding
deactivation and reactivation of billing privileges. This case is dismissed.

IT IS SO ORDERED.
/s/

Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Yong Xin Lu
d/b/a China Inn Deli,

Respondent.

Docket No. C-14-484
FDA Docket No. FDA-2013-H-1709

Decision No. CR3170
Date: March 20, 2014
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Yong Xin Lu d/b/a China Inn Deli, alleging facts
and legal authority sufficient to justify imposing a civil money penalty of $500.
Respondent did not timely answer the Complaint, nor did Respondent request an
extension of time within which to file an answer. Therefore, I enter a default
judgment against Respondent and order that Respondent pay a civil money penalty
in the amount of $500.

CTP began this case by serving a Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The Complaint alleges that Respondent’s staff unlawfully
sold cigarettes to minors and failed to verify that a cigarette purchaser was of
sufficient age, thereby violating the Federal Food, Drug, and Cosmetic Act (Act)
and its implementing regulations, found at 21 C.F.R. Part 1140. CTP seeks a civil
money penalty of $500.
On January 29, 2014, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days Respondent should
pay the penalty, file an answer, or request an extension of time within which to file
an answer. CTP warned Respondent that if it failed to take one of these actions
within 30 days an Administrative Law Judge could, pursuant to 21 C.F.R.

§ 17.11, issue an initial decision by default ordering Respondent to pay the full
amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor
has it requested an extension. Therefore, pursuant to 21 C.F.R. § 17.11(a), lam
required to issue an initial decision by default if the Complaint is sufficient to
justify a penalty. Accordingly, I must determine whether the allegations in the
Complaint establish violations of the Act.

For purposes of this decision, I assume the facts alleged in the Complaint are true.
21 C.F.R. § 17.11(a). Specifically, CTP alleges the following facts in its
Complaint:

e Respondent owns China Inn Deli, an establishment that sells tobacco
products and is located at 2918 Martin Luther King Jr. Avenue, Southeast,
Washington, DC 20032. Complaint { 3.

e During an inspection of the establishment conducted on March 19, 2013, an
FDA-commissioned inspector observed that “a person younger than 18
years of age was able to purchase a package of Newport Kings cigarettes

... at approximately 4:21 PM ET.” Complaint § 10.

e On April 25, 2013, CTP issued a Warning Letter to China Inn Deli
explaining that the inspector’s March 19, 2013 observation constituted a
violation of a regulation found at 21 C.F.R. § 1140.14(a). In addition to
describing the violation, the letter advised Respondent that the FDA may
initiate a civil money penalty action or take other regulatory action against
Respondent if it failed to correct the violation. The letter also stated that it
was Respondent’s responsibility to comply with the law. Complaint § 10.

e The FDA did not receive a response to the Warning Letter, but United
Parcel Service records show that an individual named “Marghraoui”
received it on April 30, 2013. Complaint § 11.

e On August 5, 2013, during a subsequent inspection of Respondent’s
establishment, FDA-commissioned inspectors documented that “a person
younger than 18 years of age was able to purchase a package of Newport
Box cigarettes .. . at approximately 1:32 PM[.]” The inspectors also noted
that “the minor’s identification was not verified before the sale... .”
Complaint § 1.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if sold or distributed in violation of regulations issued under section
906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R § 1140.1(b). Under

21 C.F.R. § 1140.14(a), no retailer may sell cigarettes to any person younger than
18 years of age. Under 21 C.F.R. § 1140.14(b)(1), a retailer must verify, by means
of photo identification containing the bearer’s date of birth, that no cigarette
purchasers are younger than 18 years of age.

Here, Respondent violated 21 C.F.R. § 1140.14(a) on March 19, 2013, and August
5, 2013, when its staff sold cigarettes to minors. Respondent also violated 21
C.F.R. § 1140.14(b)(1) on August 5, 2013, when its staff did not verify, by
checking a cigarette purchaser’s photographic identification, that a cigarette
purchaser was 18 years of age or older. Therefore, Respondent’s actions and
omissions on two separate occasions at the same retail outlet constitute violations
of law that warrant a civil money penalty. Accordingly, I find that a civil money
penalty of $500 is permissible under 21 C.F.R. § 17.2.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Yamilet Fajardo-Cruz,
Petitioner,
v.
The Inspector General,
Respondent.

Docket No. C-14-181

Decision No: CR3162

Date: March 19, 2014

DECISION

I sustain the determination of the Inspector General (1.G.) to exclude Petitioner, Yamilet
Fajardo-Cruz, from participating in Medicare, state Medicaid programs, and all other
federally funded health care programs for a minimum of five years.
I. Background
The LG. notified Petitioner that she was being excluded from participating in Medicare
and other programs because, according to the I.G., Petitioner was convicted of a felony as
is described at section 1128(a)(3) of the Social Security Act (Act). Petitioner requested a
hearing and the case was assigned to me.
I issued an order directing the parties to file briefs and proposed exhibits. I ordered that
the L.G. file his brief and exhibits first and I gave Petitioner the opportunity to review the
1.G.’s submission before filing her brief and exhibits. However, Petitioner elected to file

a brief and supporting exhibits prior to the date when the I.G. filed his brief. I advised
Petitioner that she could nevertheless file a supplemental brief and exhibits after she had
an opportunity to review the I.G.’s brief and exhibits. Petitioner did not avail herself of
this opportunity.

The LG. filed four exhibits that he identified as LG. Ex. 1 —1.G. Ex. 4. Petitioner filed
three exhibits that she identified as P. Ex. A— P. Ex. C. I receive these exhibits into the
record.

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

The issue is whether Petitioner was convicted of a felony as is described at section
1128(a)(3) of the Act, thereby mandating the I.G. to exclude her for a minimum of five
years.

B. Findings of Fact and Conclusions of Law

Section 1128(a)(3) mandates the exclusion of any individual that is convicted of a State
or federal felony relating to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct in connection with the delivery of a health
care item or service.' The minimum mandatory period of an exclusion imposed under
section 1128(a)(3) is five years. Act, §1128(c)(3)(B).

The undisputed facts of this case are that on October 30, 2012, Petitioner was convicted
of the federal felony offense of Misprision of a Felony. I.G. Ex. 4. There is no dispute
that this felony occurred after the enactment date of HIPAA. The only questions
remaining are whether Petitioner’s crime related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct, and whether it was committed in
connection with the delivery of a health care item or service.

The answer to both questions is clearly yes. First, Petitioner’s conviction related to fraud.
Petitioner was trained as a physician in Cuba and she immigrated to the United States.
She took up residence in Puerto Rico and there she sought to obtain a license to practice
medicine. The undisputed facts establish that she failed a portion of the examination that
was a prerequisite to obtaining a license but that, somehow, she obtained the benefit of a
falsified score, which made it appear as if she had passed. I.G. Ex. 2 at 9. Subsequently,
Petitioner concealed from federal agents information that she had that explained how
others helped her obtain a false passing score on the examination. Jd. Her crime of
misprision of a felony stems from these facts and they amount to an obvious fraud, the
concealment from government agents of a falsified examination score.

' The section additionally requires that the felony be committed after the date of
enactment of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
Second, Petitioner’s crime was committed in connection with the delivery of health care
items or services. Her intent in taking the examination was to obtain a physician’s
license in Puerto Rico. The delivery of health care items or services was the essence of
her intended occupation and her concealment from federal agents of critical facts about
her licensing examination, which was intended to enable her to continue to provide health
care items or services when in fact she should have been barred legally from doing so.

Consequently, Petitioner was convicted of a felony within the meaning of section
1128(a)(3) of the Act. The I.G. was mandated to exclude her. There is no issue as to
whether the five year length of the exclusion is reasonable inasmuch as the five year term
is for the minimum period required by law. Act, § 1128(c)(3)(B).

Petitioner makes several arguments in support of her challenge to the I.G.’s determination
and I find these to be without merit.

First, Petitioner contends that she never worked for a federally funded health care
program. However, section 1128(a)(3) does not require a nexus between a crime and a
federal health care program to put that crime within the category of crimes for which
exclusion is required. The section encompasses any health care item or service, whether
or not it is federally funded.

Second, Petitioner asserts that she worked in Puerto Rico as an intern and that she was
not paid for her services. But, that does not derogate from the fact that she was providing
health care items or services to patients and that she would not have been able to do so
but for the falsified score on her examination.

Finally, Petitioner argues that she did not commit any fraud with respect to a health care
item or service and she questions whether her conviction for misprision of a felony was
based on anything unlawful that she had done. This argument is essentially a claim by
Petitioner that she is not, in fact, guilty of the crime of which she was convicted. That
argument is irrelevant. The requirement for exclusion in this case derives from
Petitioner’s conviction. She may not, in this proceeding, argue that the conviction is
effectively invalid because of her asserted innocence.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Mushtaq A. Sheikh, M.D.
(PTAN: J300085637; NPI: 1356422349),

Petitioner
v.
Centers for Medicare & Medicaid Services.

Docket No. C-13-1329

Decision No. CR3160

Date: March 18, 2014

DECISION

The effective date of Medicare enrollment of Petitioner, Mushtaq A. Sheikh, M.D., was
February 12, 2013, with a 30-day retrospective billing period from January 13, 2013 to
February 12, 2013.
I. Background
National Government Services (NGS), a Medicare contractor, notified Petitioner by letter
dated May 21, 2013, that his Medicare enrollment application had been approved with an

effective date of January 13, 2013.' Centers for Medicare & Medicaid Services (CMS)
Exhibit (Ex.) 12.

' NGS erroneously refers to Petitioner’s “effective date” as January 13, 2013, in both the
initial and the reconsideration determinations. CMS Exs. 1, 12. January 13, 2013, is
actually the retrospective billing date as explained hereafter. CMS Motion for Summary
Judgment (CMS Br.) at 1.
On July 16, 2013, Petitioner requested reconsideration of the initial determination and
requested that his “effective date” be changed to January 2, 2013, the date he first began
treating Medicare beneficiaries at a nursing home. CMS Ex. 13 at 2. NGS notified
Petitioner by letter dated July 27, 2013, that his request for an earlier effective date was
denied on reconsideration. CMS Ex. 1. On September 13, 2013, Petitioner filed a
request for hearing (RFH) before an administrative law judge (ALJ). This case was
assigned to me for hearing and decision, and I issued an Acknowledgment and Prehearing
Order (Prehearing Order) on September 27, 2013.

On October 28, 2013, CMS filed a motion for summary judgment with CMS Exs. 1
through 16. Petitioner failed to file his prehearing exchange as directed by my
Prehearing Order. On December 13, 2013, I issued an order for Petitioner to show cause
why his case should not be dismissed for abandonment. Petitioner responded by email on
December 26, 2013, stating that he wanted his case heard and decided. On December 31,
2013, I issued an order extending the time for Petitioner to respond to the order to show
cause and the CMS motion for summary judgment, advising him that email was not an
acceptable way to respond. On January 14, 2014, Petitioner again responded by email.
Because Petitioner’s email was not responsive to my December 31 Order, the attorney
advisor assisting me with this case contacted Petitioner. Petitioner informed my attorney
advisor that he would not be filing further documents and that he wished for the case to
be decided on the documents he previously submitted. I conclude that Petitioner has not
abandoned his request for hearing and his waiver of further submissions is accepted.
Petitioner has not objected to CMS Exs. | through 16, which are admitted as evidence.
Petitioner’s request for hearing filed on September 13, 2013 and admitted as CMS Ex.
15, is treated as Petitioner’s written argument. The NGS letter dated July 27, 2013 filed
by Petitioner with the request for hearing is in evidence as CMS Ex. 1. The customer
copy of the “Express Mail” receipt addressed to Medicare Division at P.O. Box 5302 in
ZIP Code™ 13902, with a shipping date of January 30, 2013 that was filed with the
request for hearing, is admitted as P. Ex. 1 and is considered so marked.

II. Discussion
A. Applicable Law

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

“ A “supplier” furnishes services under Medicare and the term supplier applies to

physicians or other practitioners and facilities that are not included within the definition
(Continued next page.)
Act §§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)).
Administration of the Part B program is through contractors such as NGS. Act § 1842(a)
(42 U.S.C. § 1395u(a)).

Qualified physician services, subject to some limitations, are covered by Medicare Part B
for those physicians enrolled in Medicare. Act §§ 1832(a) (42 U.S.C. § 1395k(a));
1861(s)(1) (42 U.S.C. § 1395x(s)(1)); 42 C.F.R. § 410.20. “Physician’s services” are
professional services performed by physicians, including surgery, consultation, and
home, office, and institutional calls (with certain exceptions). Act § 1861(q) (42 U.S.C.
§ 1395x(q)); 42 C.F.R. § 410.20.

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

The effective date of a physician’s enrollment in Medicare is governed by 42 C.F.R.

§ 424.520(d). The effective date of enrollment for a physician may only be the later of
two dates: the date when the physician filed an application for enrollment that was
subsequently approved by a Medicare contractor charged with reviewing the application
on behalf of CMS; or the date when the physician first began providing services at a new
practice location. 42 C.F.R. § 424.520(d). The date of filing of the enrollment
application is the date on which the Medicare contractor receives a signed enrollment
application that the contractor is able to process to approval. 42 C.F.R. § 424.510(d)(1);
73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008). The date of filing is not the date on which

(Continued from preceding page.)

of the phrase “provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider
of services,” commonly shortened to “provider,” includes hospitals, critical access
hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities,
home health agencies, hospice programs, and a fund as described in sections 1814(g) and
1835(e) of the Act. Act § 1861(u) (42 U.S.C. § 1395x(u)). The distinction between
providers and suppliers is important because they are treated differently under the Act for
some purposes.

> References are to the 2012 revision of the Code of Federal Regulations (C.F.R.), unless
otherwise indicated.
an enrollment application is mailed or otherwise transmitted. An enrolled physician may
bill Medicare for services provided Medicare-eligible beneficiaries up to 30 days prior to
the effective date of enrollment, if circumstances precluded enrollment before the
services were provided. Retroactive billing for up to 90 days prior to the effective date of
enrollment is permitted only in case of a Presidentially-declared disaster pursuant to 42
US.C. §§ 5121-5206. 42 C.F.R. § 424.521.

B. Issues
The issues in this case are:
Whether summary judgment is appropriate;

Whether CMS properly determined the effective date of Petitioner’s
Medicare enrollment and billing privileges.

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

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

1. Summary judgment is appropriate.

CMS has requested summary judgment. Summary judgment is not automatic upon
request but is limited to certain specific conditions. The Secretary’s regulations that
establish the procedure to be followed in adjudicating Petitioner’s case are at 42 C.F.R.
pt. 498. 42 C.F.R. § 424.545(a)(1). The regulations do not establish a summary
judgment procedure or recognize such a procedure. However, the Departmental Appeals
Board (the Board) has long accepted that summary judgment is an acceptable procedural
device in cases adjudicated pursuant to 42 C.F.R. pt. 498. See, e.g., Ill. Knights Templar
Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001),
Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997). The Board also has recognized
that the Federal Rules of Civil Procedure do not apply in administrative adjudications
such as this, but the Board has accepted that Federal Rule of Civil Procedure 56 and
related cases provide useful guidance for determining whether summary judgment is
appropriate. Furthermore, a summary judgment procedure was adopted as a matter of
judicial economy within my authority to regulate the course of proceedings and made
available to the parties in the litigation of this case by my Prehearing Order dated
September 27, 2013. The parties were given notice by the Prehearing Order that
summary judgment is an available procedural device and that the law as it has developed
related to Fed. R. Civ. Pro. 56 will be applied.

Summary judgment is appropriate when there is no genuine dispute as to any issue of
material fact for adjudication and/or the moving party is entitled to judgment as a matter
of law. In determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-moving party,
rawing all reasonable inferences in that party’s favor. The party requesting summary
judgment bears the burden of showing that there are no genuine issues of material fact for
trial and/or that it is entitled to judgment as a matter of law. Generally, the non-movant
may not defeat an adequately supported summary judgment motion by relying upon the
lenials in its pleadings or briefs but must furnish evidence of a dispute concerning a
material fact, i.e., a fact that would affect the outcome of the case if proven. Senior
Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein). See
also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The standard for
leciding a case on summary judgment and an ALJ’s decision-making in deciding a
summary judgment motion differs from resolving a case after a hearing. On summary
judgment, the ALJ does not make credibility determinations, weigh the evidence, or
lecide which inferences to draw from the evidence, as would be done when finding facts
after a hearing on the record. Rather, on summary judgment the ALJ construes the
evidence in a light most favorable to the non-movant and avoids deciding which version
of the facts is more likely true. Holy Cross Vill. at Notre Dame, Inc., DAB No. 2291 at 5
(2009). The Board also has recognized that on summary judgment it is appropriate for
the ALJ to consider whether a rational trier of fact could find that the party’s evidence
would be sufficient to meet that party’s evidentiary burden. Dumas Nursing and Rehab.,
L.P., DAB No. 2347 at 5 (2010). The Secretary has not provided for the allocation of the
burden of persuasion or the quantum of evidence in 42 C.F.R. pt. 498. However, the
Board has provided some persuasive analysis regarding the allocation of the burden of
persuasion in cases subject to 42 C.F.R. Part 498. Batavia Nursing and Convalescent
Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson,
129 Fed. App’x 181 (6th Cir. 2005).

The material facts in this case are not disputed and there is no genuine dispute as to any
material fact that requires a trial. The issues in this case that require resolution are issues
of law related to the interpretation and application of the regulations that govern
enrollment and billing privileges in the Medicare program to the undisputed facts of this
case. Accordingly, summary judgment is appropriate.

2. Pursuant to 42 C.F.R. § 424.520(d), Petitioner’s effective date of
Medicare enrollment was February 12, 2013, the date on which NGS
received a signed Medicare enrollment application from Petitioner that
could be processed to approval.

3. Pursuant to 42 C.F.R. § 424.521(a)(1), Petitioner was authorized to
bill Medicare for services provided to Medicare-eligible beneficiaries
up to 30 days prior to Petitioner’s effective date of enrollment, i.e.
beginning on January 13, 2013.

The facts are not disputed and all inferences are drawn in favor of Petitioner. Petitioner
is a physician practicing internal medicine and geriatric medicine. CMS Ex. 5 at 11.
Petitioner submitted a Medicare enrollment application to the Medicare contractor, NGS.
CMS Ex. 5. NGS received Petitioner’s application on February 12, 2013. CMS Ex. 5 at
1-2; CMS Ex. 16 at 2. Petitioner does not dispute that NGS received his enrollment
application on February 12, 2013. RFH; CMS Ex. 15 at 1. Although Petitioner has
offered the “Express Mail” receipt dated January 30, 2013, which I treat as P. Ex. 1, that
customer copy does not show receipt by NGS prior to February 12, 2013. On April 18,
2013, NGS requested additional information from Petitioner in order to complete the
processing of his application. CMS Ex. 6; CMS Ex. 16 at 2. Petitioner sent NGS the
requested information on April 25, 29, and 30, 2013, and May | and 16, 2013. CMS Exs.
7-11; CMS Ex. 16 at 2. NGS notified Petitioner by letter dated May 21, 2013, that
Petitioner’s enrollment application was approved with an effective date of January 13,
2013. CMS Ex. 12. The NGS letter was clearly in error to the extent it suggested that the
effective date of Petitioner’s enrollment in Medicare and billing privileges was January
13, 2013. The effective date of enrollment is the later of the date the Medicare contractor
received a signed enrollment application it could process to approval or the date the
enrolled physician began providing services at the new location. 42 C.F.R.

§§ 424.510(d)(1), 424.520(d); 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008). In this case,
there is no dispute that the signed enrollment application that was ultimately processed to
completion was received by NGS on February 12, 2013. Therefore, January 13, 2013, is
actually the beginning of the period for which retrospective billing is permitted, not the
effective date of enrollment. 42 C.F.R. § 424.521(a)(1).

Petitioner contends that he should be permitted to bill for services he began providing on
January 2, 2013, to Medicare beneficiaries in a nursing home. He argues in his request
for hearing that he sent his Medicare enrollment application by Express Mail to an
address for a Medicare office in Binghamton, New York that previously served his area.
Petitioner asserts that a postal clerk gave him the wrong address for the Medicare office.
Petitioner states that the application was returned to him on February 8, 2013, and he sent
it by certified mail the next morning to NGS in Indianapolis, Indiana. Petitioner does not
dispute that NGS actually received his enrollment application on February 12, 2013.
Petitioner contends that the “delay was due to extenuating circumstances beyond [his]
control due to wrong address, provided by the postal clerk.” RFH; CMS Ex. 15 at 1.

There are no material issues of fact in dispute. I accept as true that Petitioner first sent
is application to an incorrect Medicare office based on an erroneous address given him
by a postal clerk. But that fact has no impact on the decision in this case. Petitioner’s
enrollment application was not received by NGS until February 12, 2013, which was
after Petitioner began providing services at his new practice location. The enrollment

application received by NGS on February 12, 2013, was the application that NGS was
able to process to completion. Pursuant to 42 C.F.R. § 424.520(d), the receipt of the
application was after the date Petitioner began delivering services at his new location, and
the earliest possible effective date for Petitioner’s enrollment and billing privileges was
February 12, 2013, the date of receipt of the application. Retrospective billing is only
permitted for 30 days prior to the effective date of enrollment and billing privileges, in
the absence of a Presidentially-declared disaster. 42 C.F.R. § 424.521. Therefore,
Petitioner can bill for qualified services to Medicare-eligible beneficiaries delivered on
and after January 13, 2013.

I have no authority to grant Petitioner equitable relief in the form of an earlier effective
date of enrollment. US Ultrasound, DAB No. 2302 at 8 (2010), (“[nJeither the ALJ nor
the Board is authorized to provide equitable relief by reimbursing or enrolling a supplier
who does not meet statutory or regulatory requirements.”) Petitioner points to no source
of authority for me to grant him an exemption from regulatory compliance. Moreover, I
ave no authority to declare statutes or regulations invalid or ultra vires.
18661CPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (‘“[a]n ALJ is bound by
applicable laws and regulations and may not invalidate either a law or regulation on any
ground.”).

Petitioner’s assertion that he received erroneous information from a postal clerk,
ostensibly a federal employee, may be construed to be an estoppel argument. However, it
is well-established that: (1) estoppel cannot be the basis to require payment of funds

from the federal fisc; (2) estoppel cannot lie against the government, if at all, absent a
showing of affirmative misconduct, such as fraud; and (3) I am not authorized to order
payment contrary to law based on equitable grounds. It is well-settled that those who
deal with the government are expected to know the law and may not rely on the conduct
of government agents contrary to law. See, e.g., Office of Personnel Mgmt. v. Richmond,
496 U.S. 414 (1990); Heckler v. Cmty. Health Servs. of Crawford County, Inc., 467 U.S.
51 (1984); Oklahoma Heart Hosp., DAB No. 2183 at 16 (2008); Wade Pediatrics, DAB
No. 2153 at 22 n.9 (2008), aff'd, 567 F.3d 1202 (10th Cir. 2009); US Ultrasound, DAB
No. 2302 at 8 (2010). Here, Petitioner has not alleged affirmative misconduct on behalf
of CMS’s representatives, and any argument that amounts to a claim of equitable estoppel
must be rejected.

III. Conclusion

For the foregoing reasons, I conclude that the effective date of Petitioner’s Medicare
enrollment and billing privileges was February 12, 2013, with a period for retrospective
billing beginning on January 13, 2013.

/s/
Keith W. Sickendick
Administrative Law Judge