Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:

Lake Charles Care Center
(CCN: 19-5413),

Date: April 13, 2009

Petitioner,

Docket No. C-08-693
Decision No. CR1940

-V.-

Centers for Medicare & Medicaid
Services.

See SS SSS ES SES SS

DECISION

l impose a per-instance civil money penalty of $9,000 against Petitioner Lake
Charles Care Center.

I. Background

Petitioner is a skilled nursing center doing business in the State of Louisiana. It
participates in the Medicare program. Its participation in Medicare is governed by
sections 1819 and 1866 of the Social Security Act and by federal regulations at 42
C.F.R. Parts 483 and 488. Its hearing rights in this case are governed by
regulations at 42 C.F.R. Part 498.

This case is before me as a result of findings of noncompliance with Medicare
participation requirements that were made at a survey of Petitioner’s facility on
June 20, 2008. The surveyors found that Petitioner was not complying with three
Medicare participation requirements stated at 42 C.F.R. §§ 483.20, 483.20(d) and
(k)(1), and 483.25(h)(2). The Centers for Medicare & Medicaid Services (CMS)
concurred with the surveyors’ findings and determined to impose civil money
penalties against Petitioner consisting of three per-instance penalties of $3000.
Petitioner requested a hearing.
CMS moved for summary judgment. Petitioner opposed the motion and filed a
cross motion for summary judgment. On February 23, 2009 I issued rulings in
which I granted CMS’s motion to the extent that I found that Petitioner failed to
comply substantially with the requirements of 42 C.F.R. § 483.25(h)(2). Rulings
on Parties’ Motions for Summary Judgment, February 23, 2009. However, I also
found that, as a matter of law, CMS failed to establish that Petitioner contravened
the requirements of 42 C.F.R. §§ 483.20 and 483.20(d) and (k)(1). Consequently I
granted Petitioner’s cross motion as to these two allegations of noncompliance.

I withheld a finding as to the reasonableness of the $3000 per instance civil money
penalty that CMS determined to impose for Petitioner’s noncompliance with 42
C.F.R. § 483.25(h)(2). I concluded that I could easily sustain a penalty of $3000
based on the undisputed material facts of the case which showed that Petitioner
failed adequately to assess and supervise a resident who was at a high risk for
falling. But, I concluded that the per instance civil money penalty that CMS
determined to impose was arguably too low in view of the seriousness of
Petitioner’s noncompliance. I directed the parties to brief the issue of whether a
per instance civil money penalty of as much as $9000 would be reasonable given
the undisputed facts. The parties briefed that issue.

II. Issues, findings of fact and conclusions of law
A. Issues
The issues in this case are whether:

1. Petitioner failed to comply substantially with Medicare
participation requirements; and

2. A per instance civil money penalty of up to $9000 is reasonable.
B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision
in this case. I set forth each Finding below as a separate heading.

1. Lincorporate into this decision each of my February 23, 2009
rulings.

I incorporate in their entirety the rulings that I made on February 23, 2009.
Rulings on Parties’ Motion for Summary Judgment, February 23, 2009.
2. A per-instance civil money penalty of $9000 is reasonable.

The undisputed material facts of this case prove that Petitioner egregiously
violated its obligation to supervise and assist a resident who Petitioner knew was
at a great risk for falling. Resident # 78 was admitted to Petitioner’s facility from
the hospital after having sustained a serious fall while at home. He was a
demented, elderly individual who was clearly incapable of caring for his needs.

The resident was taking Coumadin, a medication that greatly increased the risk of
serious bleeding from any fall that he might sustain. The resident was exposed to
patently obvious risks of falling and related hazards. Yet, the staff failed to
perform even a minimal assessment of these risks and hazards. Nor did the staff
assess the added risks to the resident posed by his use of Coumadin or by his
physician’s order that the resident’s bed be equipped with side rails. Less than a
day after his admission to the facility the resident fell while unsupervised and
sustained serious injuries.

In deciding what would be an appropriate per-instance civil money penalty it is
unnecessary that I find that the level of Petitioner’s noncompliance posed
immediate jeopardy to Resident # 78. See 42 C.F.R. § 488.438(a)(2). However, it
is apparent from the undisputed facts that Petitioner’s noncompliance is so
egregious that it satisfies all of the elements of immediate jeopardy level
noncompliance. An immediate jeopardy level deficiency is one that creates the
likelihood of serious injury, impairment, harm or death to a resident. 42 C.F.R.

§ 488.301. Here, Petitioner’s noncompliance certainly created a high likelihood of
serious injury, impairment, harm, or death. A principal reason for admitting
Resident # 78 to Petitioner’s facility was that he was at grave risk for injury from
falling. Yet, Petitioner’s staff managed to ignore that risk, failing to assess him for
the hazards he would certainly encounter, failing to plan care to address those
hazards, and failing to supervise the resident adequately.

The risk to Resident #78 caused by the staff's failure to discharge its obligations to
the resident is one facet of the harm caused by Petitioner’s noncompliance but it is
not the only facet. I infer from the staff’s disregard of the needs of this resident
that the staff lacked comprehension of its responsibilities and obligations to all of
its residents. It is reasonable — in the absence of any facts to the contrary — to
generalize from the derelictions present in the care of Resident # 78 and to
conclude that Petitioner’s staff fundamentally lacked an understanding of its
responsibilities. Indeed, that misunderstanding is reflected in Petitioner’s
argument that it was under no obligation to assess Resident # 78 for falls hazards
until the end of the first 14 days of his stay at the facility.
I conclude that a per-instance penalty of $9000 is a reasonable remedy for
Petitioner’s noncompliance with the requirements of 42 C.F.R. § 483.25(h)(2).
The seriousness of the noncompliance in and of itself justifies the remedy. Indeed,
I find it to be quite modest given the nature of Petitioner’s noncompliance.

In now arguing in favor of a per-instance penalty of $9000 CMS relies on the
leclaration of Susan R. LeBlanc, R.N. CMS Ex. A, attached to CMS’s brief on
the reasonableness of the civil money penalty. Ms. LeBlanc, who is a Health
Quality Review Specialist for the CMS Dallas Regional Office, asserts in her
eclaration that a penalty of $3000 — as originally determined by CMS to remedy
Petitioner’s noncompliance with 42 C.F.R. § 483.25(h)(2) — is unreasonably small.
That, according to her, is because CMS intended all along to impose a penalty of
$9000 against Petitioner and simply apportioned it among the three deficiencies
that CMS originally alleged (two of which I have concluded are not sustainable as
a matter of law). Thus, according to her, it was always CMS’s intent to require
Petitioner to pay a total penalty amount of $9000. Moreover, according to Ms.
LeBlanc, the three deficiencies alleged by CMS all are based on identical facts.
Therefore, she avers, a total penalty of $9000 is reasonable even if one or two of
those three deficiencies cannot be sustained as a matter of law.

I do not rely on Ms. LeBlanc’s analysis in deciding that a penalty of $9000 is
reasonable. First, and as I discuss in detail below, my decision is de novo and not
an appellate review of CMS’s determination. For that reason the thought
processes of the CMS employee or employees who were responsible for CMS’s
penalty determination may not be a basis for my decision. More importantly, a
penalty of $9000 stands on its own merits in this case. I stress that I would find
$9000 to be a reasonable penalty amount to remedy Petitioner’s noncompliance
with the requirements of 42 C.F.R. § 483.25(h)(2) even if CMS had never alleged
other deficiencies based on identical facts.

Petitioner makes several arguments to support its contention that the penalty in
this case should not exceed $3000, the amount originally determined by CMS.
First, it asserts that I lack the authority to increase the penalty beyond the $3000
that CMS originally determined to impose. In effect, Petitioner contends that my
authority is limited simply to reviewing the propriety of CMS’s penalty
determination. I disagree with that argument.

There is nothing in either the Act or the regulations which so limits my authority.
The regulations grant CMS the authority to make an initial determination as to
penalty amount. 42 C.F.R. §§ 488.438(a),(f); 488.404. However, a hearing of a
challenge to CMS’s determination is not merely an appellate review of that
determination. Both the Act and regulations provide that the administrative law
judge’s authority in deciding the penalty amount is de novo although there are
some limitations on his or her exercise of discretion. The Secretary’s statutory
authority to impose a civil money penalty against a participating nursing facility,
stated at section 1819(h)(1)(B)(ii) of the Act, is made expressly subject to the
requirements of section 1128A of the Act. Section 1128A contemplates a de novo
hearing in every case where the proposal to impose a civil money penalty is
challenged by the affected party.

Regulations governing imposition of civil money penalties against participating
nursing facilities specify that final authority to decide penalty amounts rests with
the administrative law judge when a party that is dissatisfied with CMS’s
determination requests a hearing. 42 C.F.R. § 488.438(e). The regulations impose
limits on the administrative law judge’s exercise of discretion but he or she is not
prohibited from increasing a penalty amount. The administrative law judge is
prohibited only from: reducing a penalty to zero where CMS has determined to
impose a penalty and where noncompliance authorizing imposition of a penalty is
present; reviewing CMS’s exercise of discretion in deciding whether to impose a
remedy; and considering factors in deciding on the amount of the penalty other
than those set forth at 42 C.F.R. § 488.438(f). 42 C.F.R. § 488.438(e)(1) — (3).
Moreover, the regulations permit an administrative law judge to raise new issues
arising during the course of a case — so long as he or she gives the parties notice
and opportunity to be heard on those issues — and there is nothing in the
regulations suggesting that the new issues that an administrative law judge might
hear would not include the possibility that CMS’s penalty determination is too
low. 42 C.F.R. § 498.56.

Petitioner argues that determination of a penalty amount by CMS is an act of
discretion which is non-reviewable by an administrative law judge. This argument
is based on a misreading of 42 C.F.R. § 483.438(e)( 2). The section expressly
prohibits an administrative law judge from reviewing CMS’s act of discretion “to
impose” a civil money penalty. The regulation thus makes CMS’s determination
whether or not to impose a penalty non-reviewable. But, it does not suggest that
the amount of a civil money penalty determination is off-limits to administrative
law judge decision making.

Petitioner argues also that a penalty amount of $9000 is unreasonable because it is
not so culpable for its noncompliance as CMS contends it to be. Culpability is one
of the regulatory factors which may be considered in deciding on a reasonable
civil money penalty amount. 42 C.F.R. § 488.438(f)(4). I have not relied on
Petitioner’s culpability (or relative non-culpability) as a factor to be used in
deciding the amount of the civil money penalty in this case because, as I have
stated, the seriousness of Petitioner’s noncompliance in and of itself supports a
penalty of $9000. Consequently, disputes as to the extent to which Petitioner’s
staff should be found culpable for Petitioner’s noncompliance are simply not
relevant to my decision.

Having said that, Petitioner’s contentions about its relative lack of culpability raise
no facts which derogate from my conclusion that Petitioner’s noncompliance was
extremely serious. Petitioner asserts that — allegedly contrary to CMS’s
contentions — it checked on Resident # 78 at two hour intervals during the night
when the resident sustained his fall. For purposes of this decision I am assuming it
to be true that the staff checked on the resident every two hours. But, that level of
supervision was woefully inadequate in view of the resident’s risk for falling, his
demented state, his use of Coumadin, and the fact that there were raised side rails
on his bed. Indeed, Petitioner has offered no facts to show that the decision to
check on the resident at two hour intervals was based on an assessment of the
resident’s condition and his actual needs.

Petitioner contends additionally that it should not be penalized for failing to assess
Resident # 78’s risk for falling because, even if its staff did not assess those risks,
the staff demonstrated good faith by assessing the resident for other potential
problems such as his risk for pressure sores. Again, I will assume for purposes of
this decision that Petitioner’s contentions concerning the other assessments that
the staff may have performed are correct. But, the fact that the staff knew to
perform other assessments of Resident # 78 simply underscores the glaring error
committed by the staff in not assessing the resident for falls risks. I stress that a
principal reason for housing this resident at Petitioner’s facility was that he could
no longer live independently due to his risk for falling. In light of that it is
shocking that the staff did not immediately acknowledge that risk, assess the
resident, and provide him with appropriate supervision.

Finally, Petitioner asserts that CMS wrongly seeks to penalize it for putting the
resident in a bed with side rails without first determining the necessity for this
device when, in fact, the side rails were supplied to the resident pursuant to a
physician’s order. I dealt with this argument in my February rulings and I will not
address it again at length here. However, my decision takes into account the fact
that there was a physician’s order to put the resident in a side rail equipped bed.
The issue in this case is not whether the resident should have been supplied with
side rails but whether Petitioner’s staff assessed the resident and planned for the
risks that might have been created as a result of the use of side rails. Petitioner
had the duty to assess, plan, and to implement supervision regardless whether the
physician ordered the use of side rails. The failure to do so was an element of
Petitioner’s serious noncompliance with regulatory requirements because it was
plainly a failure to take into account a potentially very serious risk to Resident #

78.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Steve R. Jean, ) Date: April 7, 2009

)
Petitioner, )
)

-Vv.- ) Docket No. C-09-306

) Decision No. CR1939
Social Security Administration. )
)

DECISION

Petitioner, Steve R. Jean, an employee of the Social Security Administration (SSA), seeks
review of his employer’s determination that, because of a salary overpayment, he owes
SSA $5,034.48. I dismiss as untimely his hearing request.

Federal regulations give government employees the right to a hearing to challenge

the existence or amount of debt purportedly owed to the United States. 45 C.F.R. § 33.6.
But a petition for hearing must be sent within 15 days of the employee’s receipt of the
notice letter. 45 C.F.R. § 33.6(a). If filed after the 15-day period, the petition will be
dismissed unless the employee establishes that the delay was the result of circumstances
beyond his control or that he did not receive actual notice of the filing deadline. 45 C.F.R.
§ 33.6(b).

In an order dated March 18, 2009, I advised the parties that, based on the documents
submitted, I was not able to determine whether the requirements of section 33.6 were met,
and directed the parties to submit additional documentation, including copies of the notice
letter and certificate of Petitioner’s receipt of that letter. In accordance with my order, SSA
has submitted a short response, with four exhibits attached (SSA Exs. 1-4). Petitioner
submitted a letter with unmarked attachments.

SSA has established the following:

The Department of Interior performs payroll services for SSA. SSA Ex. 1. Ina notice
letter dated January 13, 2009, Payroll Supervisor Gloria Roberts advised Petitioner Jean
2

that he had received pay higher than it should have been. SSA Ex. 2, at 1-2. An
attachment to the letter set forth, by pay period, the overpayment amounts, which totaled
$5,034.48. SSA Ex. 2, at 11. Another attachment set forth Petitioner’s appeal rights, and
advised him that his hearing request “must be postmarked no later than 15 days from the
date of this letter.” SSA Ex. 2, at 9. Ms. Roberts sent the notice by certified mail, and SSA
as produced a return receipt showing January 20 as the date of receipt. SSA Ex. 3. SSA
as produced a copy of the Petitioner’s hearing request showing that it was sent by
acsimile on February 10, 2009. SSA Ex. 4.

Petitioner submits no evidence to contradict any of these dates. He says simply that he
completed and filed his request within 15 days, and in accordance with the notice.

The uncontroverted evidence establishes that Petitioner received the notice on January 20,
2009. The notice advised him of his appeal rights, including the 15-day deadline for
requesting a hearing. To be timely, his request should have been filed no later than
February 4, 2009. He plainly missed that deadline. Not only has SSA produced evidence
that he transmitted the request on February 10, but Petitioner attached to that request a
grievance dated February 6, two days after the filing deadline had passed.

Petitioner has not claimed, nor provided any evidence to show, that the delay was caused
by circumstances beyond his control. Nor does he deny receiving notice of the filing
leadline.

Because Petitioner failed to request a hearing timely, and that failure has not been excused,
he waives his right to hearing, and is liable to have his disposable pay offset in accordance
with the offset schedule established by his employer. 45 C.F.R. § 33.6(b)(2)(i).

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

)
In the case of: )
)
Johnnelle Johnson Bing, ) Date: April 3, 2009

)
Petitioner, )
)

-Vv.- ) Docket No. C-09-116

) Decision No. CR1938
The Inspector General. )
)

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Disposition of the I.G.’s determination to exclude Petitioner pro se Johnnelle Johnson
Bing from participation in Medicare, Medicaid, and all other federal health care programs
for a period of five years. The I.G.’s Motion and determination to exclude Petitioner are
based on section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(1).
The facts in this case mandate the five-year exclusion, and for that reason, I grant the
1.G.’s Motion for Summary Disposition.

I. Procedural Background

Petitioner pro se Johnnelle Johnson Bing was a Medicaid provider in the State of
Georgia. From July 2002 through March 2005, Petitioner engaged in a scheme in which
she submitted fraudulent claims to the Georgia Medicaid program, obtaining payments in
the amount of approximately $618,352, for perinatal and pregnancy-related services that
were not provided. To facilitate her scheme, Petitioner also made false entries in the
records of Medicaid recipients to indicate that she had provided such services.

On June 22, 2006, the Grand Jury sitting for the Superior Court, DeKalb County, Georgia
handed up an indictment (DeKalb County Indictment) that charged Petitioner with one
count of felony Medicaid Fraud, in violation of GA. CODE ANN. § 49-4-146.1(b).
On August 9, 2006, the Grand Jury sitting for the Superior Court, Columbia County,
Georgia, handed up an indictment (Columbia County Indictment) that charged Petitioner
with two felony counts of False Writings, in violation of GA. CODE ANN. § 16-20-20.

Petitioner appeared with counsel in the Columbia County Superior Court, Georgia, on
June 11, 2007, and entered what is known colloquially as an “Alford plea” (a guilty plea
tendered under the rubric of North Carolina v. Alford, 400 U.S. 25 (1970)) to the lesser
included offense of count two of the Columbia County Indictment, a misdemeanor
offense of willful destruction, alteration, or falsification of health records, in violation of
GA. CODE ANN. § 16-10-94.1. Petitioner’s guilty plea was accepted, and she was
sentenced on the same day to a 12-month term of probation and required to pay a fine of
$1,000, and a monthly supervision fee. As part of her plea agreement, Petitioner
voluntarily agreed not to participate in the Medicare and Medicaid programs. The first
count of the Columbia County Indictment was dismissed nolle prosequi.

Petitioner appeared with counsel in the DeKalb County Superior Court on July 13, 2007,
and pleaded guilty to the lesser included misdemeanor offense of theft by taking, in
violation of GA. CODE ANN. § 16-8-2.' Petitioner’s plea was accepted, and she was
sentenced to a 12-month term of probation and required to pay a fine of $1,000, and other
fees. The amount of restitution owed by Petitioner remained open until the Superior
Court judge issued a Consent Order on March 7, 2008, stating that Petitioner owed
restitution in the amount of $4,468.40 to the Georgia Department of Community Health’,
and ordering Petitioner to pay that amount.

On September 30, 2008, the I.G. notified Petitioner that she was to be excluded pursuant
to the terms of section 1128(a)(1) of the Act for the mandatory minimum period of five
years. Acting pro se, Petitioner timely sought review of the I.G.’s action by letter dated
November 25, 2008.

I convened a telephonic prehearing conference on December 17, 2008, pursuant to 42
C.F.R. § 1005.6, in order to discuss the issues presented by the case and procedures for
addressing them. By Order of December 18, 2008, I established a schedule for the
submission of documents and briefs. Pursuant to the terms of paragraph 8 of that Order,
the record in this case closed March 5, 2009. Petitioner has continued to act pro se
throughout these proceedings.

' The court’s entry of judgment does not provide the specific statute to which Petitioner
pleaded guilty; however, the I.G., in his brief, indicated that GA. CODE ANN. § 16-8-2 is
the statute pertaining to “Theft by taking.” I.G. Brief at 5 n.7.

> The Georgia Medicaid program is also known as the Georgia Department of
Community Health and the Department of Medical Assistance. See LG. Ex. 3.
The evidentiary record on which I decide the issues before me comprises 11 exhibits.
The I.G. proferred eight exhibits marked I.G. Exhibits 1-8 (1G. Exs 1-8). With her
response, Petitioner attached documents consisting of two letters attesting to her good
character and service to the community, and a copy of the transcript of the sentencing
colloquy before the judge in the Columbia County Superior Court, Georgia. Because
Petitioner failed to mark these three documents properly as exhibits, I have marked them
as Petitioner’s Exhibits 1-3 (P. Exs. 1-3). In the absence of objection, I have admitted
1.G. Exs. 1-8 and P. Exs. 1-3 as designated.

II. Issues

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

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

2. Whether the proposed five-year period of exclusion is unreasonable.

Both issues must be resolved in favor of the I.G.’s position. Because her predicate
conviction has been established, section 1128(a)(1) of the Act mandates Petitioner’s
exclusion. A five-year period of exclusion is reasonable as a matter of law, since it is the
minimum period established by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-
1(c)(3)(B).

III. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the exclusion from
participation in Medicare, Medicaid, and all other federal health care programs of any
“individual or entity that has been convicted of a criminal offense related to the delivery
of an item or service under Title XVIII or under any State health care program.” The
terms of section 1128(a)(1) are restated in regulatory language at 42 C.F.R.

§ 1001.101(a). This statutory provision makes no distinction between felony convictions
and misdemeanor convictions as predicates for mandatory exclusion.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual... by a... State .. . court, regardless
of... whether the judgment of conviction or other record relating to criminal conduct has
been expunged,” section 1128(i)(1) of the Act; “when there has been a finding of guilt
against the individual... bya... State... court,” section 1128(i)(2) of the Act; or
“when a plea of guilty or nolo contendere by the individual . . . has been accepted by
a... State... court,” section 1128(i)(3) of the Act. These definitions are repeated at 42
CFR. § 1001.2.

An exclusion based on section 1128(a)(1) is mandatory, and the I.G. must impose it for a
minimum period of five years. Section 1128(c)(3)(B) of the Act; 42 U.S.C. § 1320a-
7(c)(3)(B). The regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory
provision.

IV. Findings and Conclusions
I find and conclude as follows:

1. On her plea of guilty on June 11, 2007, in the Columbia County Superior Court,
Georgia, Petitioner Johnnelle Johnson Bing was found guilty of the criminal offense of
willful destruction, alteration, or falsification of health records, in violation of GA. CODE
ANN. § 16-10-94.1.

2. The accepted guilty plea, finding of guilt, and judgment of conviction described above
constitute a “conviction” within the meaning of sections 1128(i)(1), 1128(i)(2), and
1128(i)(3) of the Act, and 42 C.F.R. § 1001.2.

3. On her plea of guilty on July 13, 2007, in the DeKalb County Superior Court, Georgia,
Petitioner Johnnelle Johnson Bing was found guilty of the criminal offense of theft by
taking, in violation of GA. CODE ANN. § 16-8-2.

4. The accepted guilty plea, finding of guilt, and judgment of conviction described above
constitute a “conviction” within the meaning of sections 1128(i)(1), 1128(i)(2), and
1128(i)(3) of the Act, and 42 C.F.R. § 1001.2.

5. A nexus and a common-sense connection exist between the criminal offenses to which
Petitioner pleaded guilty and of which she was found guilty, as noted above in Findings 1
through 4, and the delivery of an item or service under a State health care program. LG.
Exs. 3-7. Berton Siegel, D.O., DAB No. 1467 (1994).

6. By reason of Petitioner’s convictions, a basis exists for the 1.G.’s exercise of authority,
pursuant to section 1128(a)(1) of the Act, to exclude Petitioner from participation in
Medicare, Medicaid, and all other federal health care programs.

7. Because the five-year period of Petitioner’s exclusion is the mandatory minimum
period provided by law, it is not unreasonable. Section 1128(c)(3)(B) of the Act; 42
C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).
8. There are no disputed issues of material fact and summary disposition is warranted in
this matter. Michael J. Rosen, M.D., DAB No. 2096 (2007); Thelma Walley, DAB No.
1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under Title XVIII of the Act (Medicare) or any state health care program.
Tamara Brown, DAB No. 2195 (2008); Thelma Walley, DAB No. 1367 (1992); Boris
Lipovsky, M.D., DAB No. 1363 (1992); Lyle Kai, R.Ph., DAB CR1262 (2004), rev'd on
other grounds, DAB No. 1979 (2005); see Russell Mark Posner, DAB No. 2033, at 5-6
(2006).

The first essential element, the fact of Petitioner’s conviction, is conclusively established
by the court records, which include the DeKalb County and Columbia County
Indictments (1.G. Exs. 3, 4), the transcript of the sentencing colloquy before the Columbia
County Superior Court (I.G. Ex. 5), and the courts’ Sentence and Judgment documents,
by which the final disposition and sentence were recorded for each of Petitioner’s
criminal offenses. I.G. Exs. 6, 7.

The acceptance of Petitioner’s guilty pleas by the Columbia County and DeKalb County
Superior Courts satisfies the definition of “conviction” set out at section 1128(i)(3) of the
Act. The Courts’ findings of guilt and their entries of judgment satisfy the definitions of
“conviction” set out at sections 1128(i)(1) and (2) of the Act. The I.G. has proved the
first essential element.

It is true that the statutes that Petitioner pleaded guilty to violating, GA. CODE ANN. § 16-
10-94.1 (“Destruction, alteration, or falsification of health records”) and GA. CODE ANN.
§ 16-8-2 (“Theft by taking”), do not on their face reveal a specific link to the Georgia
Medicaid program. However, the factual recitations in both the DeKalb County and
Columbia County Indictments leave no doubt that Petitioner’s offenses of which she was
convicted arose from conduct that was obviously “related to” the Medicaid program
within the purview of section 1128(a)(1).

The DeKalb County Indictment explicitly describes how Petitioner billed the Georgia
Medicaid program for perinatal and pregnancy-related services that she had not provided
as claimed, and how she made false entries into the records of approximately 99
Medicaid recipients in an attempt to document perinatal and pregnancy-related services
that she had not provided. .G. Ex. 3. That Petitioner’s subsequent conviction of the
misdemeanor offense of theft by taking is based on the criminal conduct outlined in the
DeKalb County Indictment cannot be disputed, and is further evidenced by the court’s
entry of judgment, which lists Petitioner’s offense as “Medicaid Fraud.” I.G. Ex. 7.

Additional details of Petitioner’s scheme are set forth in the Columbia County
Indictment, which outlines how Petitioner fabricated the patient records of 16 Medicaid
recipients to falsely reflect that she had provided perinatal and pregnancy-related services
when in fact, she had not. I.G. Ex. 4. There can be no dispute that Petitioner’s
subsequent conviction for willful destruction, alteration, or falsification of medical
records was based on the criminal acts described in the Columbia County Indictment.

The submission of false claims to the Medicare and Medicaid programs has been
consistently held to be a program-related crime within the reach of section 1128(a)(1).
Jack W. Greene, DAB No. 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp.
835 (E.D. Tenn. 1990); Julius Williams, II, DAB CR1464 (2006); Kennard C. Kobrin,
DAB CR1213 (2004); Norman Imperial, DAB CR833 (2001); Egbert Aung Kyang Tan,
M.D., DAB CR798 (2001); Lorna Fay Gardner, DAB CR648, aff'd, DAB No.
1733(2000); Mark Zweig, M.D., DAB CR563 (1999); Alan J. Chernick, D.D.S., DAB
CR434 (1996). Moreover, there can be little question that falsifying patient records of
Medicaid recipients is an offense related to the delivery of a health care item or service.
See Mary Jo Izzo, DAB CR1136 (2004); Rose Mary Maye, DAB CR1028 (2003). I find
that the factual underpinnings of Petitioner’s offenses demonstrate the required nexus and
common-sense connection between Petitioner’s criminal acts and the Medicaid program.
Berton Siegel, D.O., DAB No. 1467 (1994).

Moreover, the Consent Order Petitioner entered into with the State of Georgia shows that
Petitioner was ordered to pay restitution in the amount of $4,468.40 to the Georgia
Medicaid program. I.G. Ex. 8. As I have written elsewhere, if an individual has been
convicted of a criminal offense, then proof that any sentence based on that conviction
included the payment of restitution to a protected program creates a rebuttable
presumption of a nexus or common-sense connection between the conviction and the
delivery of an item or service under the program. Alexander Nepomuceno Jamias, DAB
CR1480 (2006). Thus, based on the exhibits described above, the second essential
element is likewise established by the record.

Petitioner, in her pro se defense to the proposed exclusion, proclaims that she did not
enter a guilty plea. She asserts:

No guilty plea was made — an Alford plea was made — the judge stated in his
summary that I would be treated as if I was “almost guilty.” Agreement made
with the State of Georgia for restitution and a one year suspension @ time of plea.
Restitution has been paid.

Petitioner’s Brief at 1.
In exclusion proceedings like this one, any form of collateral attack on predicate
convictions is categorically precluded by regulation at 42 C.F.R. § 1001.2007(d), and that
categorical preclusion has been affirmed repeatedly by the Departmental Appeals Board
(Board). Lyle Kai, R.Ph., DAB No. 1979 (2005); Susan Malady, R.N., DAB No. 1816
(2002); Dr. Frank R. Pennington, M.D., DAB No. 1786 (2001); Joann Fletcher Cash,
DAB No. 1725 (2000); Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Chander
Kachoria, R.Ph., DAB No. 1380 (1993).

Moreover, Petitioner’s assertion that her A/ford plea did not equate to a guilty plea is
misguided and must fail. Petitioner’s June 11, 2007 Alford plea was a guilty plea. North
Carolina v. Alford, 400 U.S. 25, 37 (1980). Convictions based on Alford pleas have
without exception been held sufficient predicate convictions in exclusion proceedings
based on section 1128(a) of the Act. Charles W. Wheeler and Joan K. Todd, DAB No.
1123 (1990); Stella Remedies Lively, DAB CR1369 (2005); Charles D. Howard, M.D.,
DAB CR1362 (2005); Charles Philip Colosimo, DAB CR1225 (2004); John Y. Salinas,
M.D., DAB CR1117 (2003); Ethel Ann Arita, DAB CR1052 (2003); Steven Alonzo
Henry, M.D., DAB CR638 (2000). That rule has been in force at least since Kenneth
Krulevitz, M.D., DAB CR24 (1989).

Further, the sentencing colloquy among the Columbia County Superior Court judge,
Petitioner, and Petitioner’s counsel demonstrates that the judge carefully questioned
Petitioner to determine that she understood the potential consequences of her plea. In the
interest of providing context and illumination, I have set out part of the colloquy below:

The Court: You understand that by pleading guilty you’re waiving your right to a
jury trial?

The Defendant [Petitioner]: Yes.

The Court: And even though this is a misdemeanor, it is a negotiated plea, from
what I understand; is that correct?

The Defendant [Petitioner]: Yes, sir.

The Court: Now, by pleading guilty, you’re waiving certain fundamental rights
that you have. That would be a right to a trial by jury. The Clerk of Court would
subpoena jurors to come here today. The State would have a right to challenge
certain jurors. Your lawyer would have a right to challenge certain jurors
according to legal procedure. . . . you understand that?

The Defendant [Petitioner]: Yes, sir.
The Court: But you’re giving up those rights by pleading guilty; do you
understand that?

The Defendant [Petitioner]: Yes.

The Court: Now, has anyone intimidated, threatened or forced you to plead
guilty?

The Defendant [Petitioner]: No, sir.

The Court: Your lawyer has explained to you all your civil rights, constitutional
rights and due process rights, has he not?

The Defendant [Petitioner]: Yes.

The Court: And you’re satisfied with the work your lawyer’s performed?

The Defendant [Petitioner]: Yes, sir.

The Court: Okay. [Petitioner’s counsel], do you understand that she’s entering
this plea — do you think she’s entering it freely and voluntarily?

[Petitioner’s counsel]: Yes, Your Honor, as long as the Court is still aware
pursuant to North Carolina versus Alpha [sic], a Supreme Court decision, we’re
entering an Alpha plea and I’ve explained to her the significance of an Alpha plea.
The Court: Alford plea. She’s not admitting, she’s not denying, but thinking
that —

Petitioner’s counsel]: It’s in the best interest of her to enter into —

[he Court: And you understand I’m going to treat that just almost like a guilty
plea; there’s going to be a fine imposed and there’s going to be the plea agreement
that y’all have worked out, basically is what I’m going to do?

The Defendant [Petitioner]: Yes, sir.

[he Court: All right. Is this the A/ford plea you’re entering into, A-L-F-O-R-D?

[Petitioner’s counsel]: Yes, sir... .
RK

The Court: ... All right, ’m going to accept the plea. And it’s my understanding
that as part of the plea agreement she’ll pay a thousand dollar fine. Do you have a
time limit on when she will pay that?

1G. Ex. 5, at 6-7; P. Ex. 3, at 10-13.

It is evident from the foregoing excerpt that at no time did the Columbia County Superior
Court judge suggest in any way that Petitioner would be found “almost guilty.” Rather,
the colloquy shows that the judge repeatedly made Petitioner aware of the fact that she
would be pleading guilty by entering an Alford plea. Upon concluding that Petitioner’s
plea was voluntary and informed, the judge stated that he would “accept the plea,” and
proceeded to impose a sentence of probation and a fine based on the plea.

The remainder of Petitioner’s defense is found in the two letters she submitted, which I
have marked as P. Exs. 1-2. One letter is from a Georgia state legislator, and the other
letter is from the office manager of a medical practice for whose patients Petitioner had
provided services. Both letters attest to Petitioner’s good character and service to the
community.

I have no wish to minimize the testimonials offered by the authors of the two exhibits,
although it seems somewhat surprising that a state lawmaker would involve himself with
this mandatory federal exclusion process. But nothing in them is sufficient to negate the
mandatory application of section 1128(a)(1). Petitioner must be excluded from
participation in Medicare, Medicaid, and all other federal health care programs. The five-
year period of exclusion proposed in this case is the statutory minimum required by
section 1128(c)(3)(B) of the Act. As a matter of law, it is not unreasonable. 42 C.F.R.

§ 1001.2007(a)(2); Mark K. Mileski, DAB No. 1945 (2004); Salvacion Lee, M.D., DAB
No. 1850 (2002); Krishnaswami Sriram, M.D., DAB CR1463 (2006), aff’d, DAB No.
2038 (2006).

Because Petitioner appears here pro se, I have taken additional care in reading her
submissions, guided by the Board’s reminders that pro se litigants should be offered
“some extra measure of consideration” in developing their records and their cases. Louis
Mathews, DAB No. 1574 (1996); Edward J. Petrus, Jr., M_D., et al., DAB No. 1264
(1991). Ihave searched for arguments or contentions that might raise a valid defense to
the proposed exclusion. I have found nothing that could be so construed.

Resolution of a case by summary disposition is appropriate when there are no disputed
issues of material fact and when the undisputed facts, clear and not subject to conflicting
interpretation, demonstrate that one party is entitled to judgment as a matter of law.
Michael J. Rosen, M.D., DAB No. 2096; Thelma Walley, DAB No. 1367. Summary
10

disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). This forum looks to
FED. R. CIV. P. 56 for guidance in applying that regulation. Robert C. Greenwood,
DAB No. 1423 (1993). The material facts in this case are undisputed, clear, and
unambiguous. They support summary disposition as a matter of law, and this Decision is
issued accordingly.

VI. Conclusion

For the reasons set out above, the I.G.’s Motion for Summary Disposition should be, and
itis, GRANTED. The I.G.’s exclusion of Petitioner Johnnelle Johnson Bing from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years, pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C.

§ 1320a-7(a)(1), is thereby affirmed.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Trans Medical Promotional, ) Date: April 1, 2009
)
Petitioner, )
)

“Vee ) Docket No. C-09-54

) Decision No. CR1937
Centers for Medicare & Medicaid )
Services. )
)
DECISION

I sustain the determination of the National Supplier Clearinghouse (NSC)' and the
Centers for Medicare & Medicaid Services (CMS) to revoke the Medicare supplier
number of Petitioner, Trans Medical Promotional.

I. Procedural Background

Prior to the revocation at issue in this case Petitioner was enrolled in the Medicare
program as a supplier of durable medical equipment, prosthetics, orthotics and
supplies (DMEPOS). Petitioner’s billing number was revoked by NSC because,
on two occasions during Petitioner’s posted business hours, an NSC investigator
went to Petitioner’s business facility and found that Petitioner was not open. CMS
Exhibit (Ex.) 1. The NSC notice gave as grounds for revocation the charge that it
was not possible for the investigator to complete an inspection of Petitioner’s
facility and, therefore, NSC could not verify Petitioner’s compliance with the
standards. Petitioner was told that it was in violation of 42 C.F.R.

§ 424.535(a)(5)(ii) as well as supplier standards 1 through 25 as identified in 42
C.F.R. § 424.57(c) of the regulations. Id.

' NSC is the entity authorized by CMS to issue, revoke, and reinstate DMEPOS
supplier numbers. 42 C.F.R. §§ 405.874(a); 421.210(e)(3); see 57 Fed. Reg.
27,290 (June 18, 1992); 58 Fed Reg. 60,789 (Nov. 18, 1993).
Petitioner requested reconsideration and the Medicare Hearing Officer held a
telephone hearing on September 12, 2008. Petitioner’s owner, Mr. Aglas Inyang,
testified at the telephone hearing before the Medicare Hearing Officer, stating that
the business was open and that he was working at the time of the two site
inspections, May 20, 2008, at 10:10 AM and May 29, 2008, at 10:15 AM. CMS
Ex. 5, at 2. Petitioner also proffered to the Hearing Officer copies of patient
documentation and invoices supporting his assertion that he was open. That
documentation included client invoices and copies of its telephone bills.
Following review of the documentation presented by Petitioner, the Hearing
Officer found that the additional documentation provided did not substantiate Mr.
Inyang’s assertion that Petitioner was operational on May 20 and May 29, 2008:

...the patient information and order documentation are not
signed or dated by any of the beneficiaries. A delivery form is
also filled out, but not signed or dated by the beneficiary. A
phone bill has been included, but no calls were logged on the
days of the site inspection. Also sent for review was an invoice
for product purchase statement with a balance indicating it was
paid on May 31, 2008.

CMS Ex. 5, at 2.

The Hearing Officer concluded that Petitioner had failed to present evidence
verifying the business facility was open and operational during the two site visits
on May 20 and May 29 and failed to substantiate its compliance with supplier
standard 8 at the relevant time. The Hearing Officer therefore determined that the
denial of Petitioner’s Medicare suppler number was appropriate. CMS Ex. 5, at 3.

On September 27, 2008, the Hearing Officer issued her decision. CMS Ex. 5. By
letter dated October 15, 2008, Petitioner timely requested a hearing and perfected
its appeal of the Hearing Officer’s decision. Petitioner’s request was received at
the Civil Remedies Division of the Departmental Appeal Board, docketed as C-09-
54, and assigned to me for hearing and decision.

I convened a telephone prehearing conference on November 6, 2008, in order to
discuss the issues presented by the case and procedures for addressing those
issues. The parties were advised that based upon my review of the file, it appeared
that the issues could be addressed in summary fashion, and I established a
schedule for further development of the evidentiary record and the filing of briefs.
The substance of the prehearing conference is memorialized in my Order of
November 13, 2008.
On November 25, 2008, CMS timely filed its Motion for Summary Disposition
and supporting Brief-in-Chief (CMS Br.) and CMS Exs. 1-8. On December 23,
2008, Petitioner requested an extension of time, until January 8, 2009, to file its
Answer Brief, which had been due by December 19, 2008. Petitioner’s request
was granted by Order of December 29, 2008. On January 13, 2009, Petitioner
filed a motion for leave to file its Answer Brief out-of-time. Petitioner’s motion
was granted on January 14, 2009, and on the last day allowed, January 28, 2009,
the Civil Remedies Division received Petitioner’s Answer Brief (P. Br.) and
Petitioner’s Exhibits (P. Exs.) 2, 3, and 42 CMS filed a Reply Brief, and on
February 20, 2009, after my repeated insistence, the documents comprising P. Exs.
1 and 5 were finally received.

All briefing is now complete, and the record in this case is closed. The evidentiary
record before me on which I decide the issue contains the parties’ pleadings and
admitted exhibits CMS Exs. 1-8 and P. Exs. 1-5.

II. Issue

The issue in this case is whether NSC and CMS had a basis to revoke Petitioner’s
Medicare supplier number.

III. Controlling Statutes and Regulations

Pursuant to section 1834(j)(1)(A) of the Social Security Act (Act), a supplier of
medical equipment and supplies may not be paid for items provided to an eligible
beneficiary unless the supplier has a supplier number issued by the Secretary. In
order to participate in Medicare as a DMEPOS supplier and obtain a supplier
number, an entity must meet the 25 standards specified at 42 C.F.R.§ 424.57(c)(1)
through (25). Ifa supplier is subsequently found not to meet the standards, NSC
must revoke the supplier’s number, effective 15 days’ after NSC mails the notice
of revocation. 42 C.F.R. § 405.874(b). Standard 8 sets the requirements for a
supplier’s location and provides that the location “must be accessible during
reasonable business hours to beneficiaries and to CMS.” 42 C.F.R. § 424.57(c)(8).

> Although Petitioner’s filing included cover pages for P. Exs. 1 and 5, the
submission did not contain any actual documents to make up those exhibits.

> The regulation at 42 C.F.R. § 405.874 was amended in 2008, making the
effective date of a revocation 30 days, rather than 15 days, from the mailing of the
notice. As this change became effective August 26, 2008, it does not apply to the
effective date of Petitioner’s supplier number revocation. 42 C.F.R.

§ 405.874(b)(2); see 73 Fed. Reg. 36,460 (June 27, 2008).
Revocation of a supplier’s billing number is governed by 42 C.F.R. § 424.535.
CMS or its contractor NSC, will revoke a supplier’s billing privileges (i.e. supplier
number) if the suppler does not meet the standards in 42 C.F.R. § 424.57(b) and
(c). 42 C.F.R. § 424.57(d). CMS may use an on-site review to determine whether
a “supplier is no longer operational to furnish Medicare covered items or services,
or is not meeting Medicare enrollment requirements . . . .” 42 C.F.R.

§ 424.535(a)(5). A supplier is operational when “the provider or supplier has a
qualified physical location, is open to the public for the purpose of providing
health care related services, is prepared to submit a valid Medicare claims, and is
properly staffed, equipped, and stocked . . . to furnish these items or services.” 42
C.F.R. § 424.502.

The procedures for hearings and appeal are set out in 42 C.F.R. Part 498. Section
1866(j)(2) of the Act allows providers and suppliers equal appeal rights as
described by section 1866(h)(1)(A) of the Act. The hearing before an
Administrative Law Judge (ALJ) is a de novo proceeding. In cases subject to Part
498, the Departmental Appeals Board (Board) has found that CMS must establish
a prima facie showing of a regulatory violation and the regulated entity then bears
the burden of showing by a preponderance of the evidence that it was compliant
with the Act or regulations, or that it had a defense. Batavia Nursing and
Convalescent Center, DAB No. 1904 (2004); Batavia Nursing and Convalescent
Inn, DAB No. 1911 (2004); Emerald Oaks, DAB No. 1800; Cross Creek Health
Care Center, DAB No. 1665 (1998); Evergreene Nursing Care Center, DAB No.
2069, at 7-8 (2007). The Board has found this allocation of the burden of going
forward with the evidence and the burden of persuasion properly applied in the
DMEPOS supplier cases. MediSource Corporation, DAB No. 2011, at 2-3
(2006). The parties have urged no different allocation in this case.

IV. Findings and Conclusions
I find and conclude as follows:

1. Mark D. Porter, an investigator employed by NSC, attempted to conduct a
site inspection of Petitioner’s business facility, located at 104 Industrial
Boulevard, Suite L, Sugar Land, Texas, on May 20, 2008. CMS Ex. 2;
CMS Ex. 7.

2. Mr. Porter also attempted to conduct a site inspection of Petitioner’s
business facility on May 29, 2008. CMS Ex. 2: CMS Ex. 7.

3. Petitioner’s posted business hours for May 2008 were Monday - Friday,
10:00 AM —5 PM. CMS Ex. 2, at 7.
4. Petitioner’s business facility was not operational, open, and accessible
during its posted business hours to the NSC inspector, to Medicare
beneficiaries, and to the public on May 20, 2008, at 10:10 AM.

5. Petitioner’s business facility was not operational, open, and accessible
during its posted business hours to the NSC inspector, to Medicare
beneficiaries, and to the public on May 29, 2008, at 10:15 AM.

6. Petitioner’s failure to be open during posted business hours on May 20 and
May 29, 2008 was a violation of supplier standard 8. 42 C.F.R.
§ 424.57(c)(8).

7. The inspections conducted on May 20 and May 29, 2008, established a
basis for revocation of Petitioner’s supplier number. 42 C.F.R.
§ 424.515(d).

8. Petitioner’s billing number must be revoked pursuant to 42 C.F.R.
§ 424.57(d).

9. There are no disputed issues of material fact and summary disposition is
therefore appropriate in this matter. Brightview Care Center, DAB No.
2132 (2007); Residence at Kensington Place, DAB No. 1963 (2005);
Community Hospital of Long Beach, DAB No. 1928 (2004); Lebanon
Nursing and Rehabilitation Center, DAB No. 1918 (2004).

V. Discussion

The supplier standard at issue before me is set forth at 42 C.F.R. § 424.57(c)(8),
and requires that the supplier’s physical location be accessible during reasonable
business hours. Standard 8 requires that a supplier:

Permits CMS, or its agents to conduct on-site inspections to
ascertain supplier compliance with the requirements of this section.
The supplier location must be accessible during reasonable business
hours to beneficiaries and to CMS, and must maintain a visible sign
and posted hours of operation.

42 CFR. § 424.57(c)(8).
A. Petitioner has failed to overcome CMS’s prima facie showing
that its business facility was not open and operational on May 20
and May 29, 2009.

CMS has established a prima facie case that Petitioner’s business facility was
closed when visited on May 20 and May 29, 2008. As previously noted,
Petitioner’s posted hours of operation were Monday through Friday, from 10 AM
to 5 PM. When Mr. Porter attempted to inspect the facility at 104 Industrial
Boulevard, Suite L, Sugar Land, Texas, during Petitioner’s posted business hours,
no one answered. Thus, during Petitioner’s posted hours of operation, staff were
not available to beneficiaries and to CMS or, in this case CMS’s contractor NCS,
as required by the standard. This situation was addressed in Medisource Corp.,
DAB No. 2011, at 10, n.12, when the Board wrote “The clear purpose of the
posting requirement is to inform the public of the actual hours of operation, and
the supplier cannot operate during those hours if no staff is available . . . the NSC
website informs suppliers that staff must be available at the facility during posted
business hours.”

CMS relies on the affidavit of the NSC inspector, Mr. Porter. Mr. Porter has an
extensive background in, and is familiar with, the relevant supplier requirements
and regulations. He is a trained and experienced investigator, and has personally
visited the address of Petitioner’s facility. CMS Ex. 7. Mr. Porter stated that he
follows the same procedures for each site visit:

When I receive a request for a site inspection, I drive to the location.
I find the suite/office. I make note on the site visit questionnaire if
there is a sign for the business name and if there are posted hours of
operation. I will turn the doorknob and if the door is unlocked, I will
enter, announce myself and conduct the site inspection. If the door
is locked, I make a note on the site visit questionnaire indicating I
made a first attempt, and I leave the location. I physically turn the
knob each time with force enough to open the door. I do not leave a
note that I was at the location. Site visits are all unannounced. I will
later make a second attempt to conduct an on-site investigation
during the posted hours of operation. I will go through the same
steps. . . lam required to make only two attempts of a suppler site
visit for a particular location before failing the site inspection. I will
also take photographs of the location during a site inspection.

Photos are mandatory for every site inspection. . . . 1 am required to
take photos of the business sign, and hours of operation... .

CMS Ex. 7, at 2.
I find Mr. Porter’s affidavit credible and persuasive, and I cannot find
inconsistencies between his affidavit and the site investigation report. CMS Ex. 2;
CMS Ex. 7. Mr. Porter took multiple photographs to corroborate his investigation
and to confirm that he visited Petitioner’s site the second time on May 29, 2008.
CMS proffered five photographs from the second site visit. The first photograph
shows a sign with Petitioner’s name, and that sign lists its days and hours of
operation and its telephone number. CMS Ex. 2, at 7. The second photograph
shows a sign with Petitioner’s name and the words “Suite L.” The third and fourth
photographs show the exterior of the building. CMS Ex. 2, at 8. The last
photograph shows the number 104 on the exterior of a building. Petitioner does
not dispute that these are photographs of its physical location; rather, Petitioner
questions the day and time the photographs were taken, suggesting that they could
have been taken at virtually any time, and for that reason should be afforded no
evidentiary value at all. But I find fully credible Mr. Porter’s statement that he
would have taken the pictures in CMS Ex. 2 of Petitioner’s physical site location
when he could not complete the on-site visit, that being on the second site
inspection on May 29, 2008. CMS Ex. 7, at 3. Therefore, based on the evidence
before me, I find that Mr. Porter visited Petitioner’s facility on May 20, 2008 at
10:10 AM and observed that facility to be closed. I further find that Mr. Porter
visited Petitioner’s facility on May 29, 2008 at 10:15 AM and observed the facility
to be closed. CMS has shown prima facie that Petitioner’s business facility was
not operational, open, and accessible to the NSC inspector to conduct a site, nor
accessible to Medicare beneficiaries and the public on May 20 and May 29, 2008.

Petitioner asserts that on May 20, 2008 at 10:10 AM and on May 29, 2008 at
10:15 AM it “was open and operational . . . and located in a qualified physical
location.” P. Br. at 3. Petitioner argues that the Hearing Officer based her
decision solely on the statement provided by the NSC inspector, Mr. Porter. P. Br.
at 4. Petitioner avers that Mr. Porter’s statement in and of itself does not meet the
substantial evidence standard. /d. Petitioner complains of the Hearing Officer’s
evaluation of its exhibits, stating that the client invoices it submitted to the
Hearing Officer for the months of May and June were not signed because the
items had not yet been delivered. P. Br. at 4-5. Petitioner avers that the phone
bills showed that it was conducting business telephonically during normal business
hours. Jd. at 4.

In this proceeding, Petitioner has proffered as exhibits a series of documents, and
it may be worthwhile to review them carefully here. Those documents include a
copy of an amendment to the commercial lease of Petitioner’s premises effective
from April 1, 2008 through March 31, 2010 (P. Ex. 2); a copy of the amendment
to the commercial lease effective from October 1, 2008 through September 30,
2011 (P. Ex. 3); and copies of cancelled checks for lease payments dated in
January, March, May and June of 2008 (P. Ex. 4). Petitioner states that since its
inception, it has operated its business from the same location. Additionally,
Petitioner has proffered the affidavit of Mr. Inyang (P. Ex. 1) and a lease
agreement executed on April 2, 2007, for lease of the property located at 104
Industrial Boulevard in Sugar Land, Texas. (P. Ex. 5). I note that the lease
agreement set out in P. Ex. 5 is for the term April 1, 2007 through March 31, 2008,
and does not cover May 2008, the month that is at issue. Moreover, the lease
agreements Petitioner proffered as P. Exs. 2 and 3, and the cancelled checks
proffered as P. Ex. 4, lend no support — even by inference — to Petitioner’s
assertion that it was actually open and operational on the mornings of May 20 and
May 29, 2008, when the NSC inspector attempted to conduct a site inspection.
The exhibits may very well show that Petitioner was entitled to occupy the
premises, but that is hardly the material question in this appeal. The material
question is whether Petitioner’s facility was open, operational, and available for
inspection when visited by Mr. Porter in his official capacity.

In his affidavit Mr. Inyang discusses staffing problems he was having during May
2008 and June 2008, stating that the “day to day functioning of the business fell
solely on me” which included “having the business open, manning the phones,
conducting all clerical and operational duties and at times making deliveries.” P.
Ex. 1. He then states: “It is possible that I may have gotten to work several
minutes late a day or two, but during the days in question, Trans Medical was
open for business.” Jd. Petitioner thus makes a serious admission against his
interest by conceding that he did not have adequate staff during the relevant
periods of May 2008 and June 2008, and by that admission implicitly explains
why it cannot dispute convincingly the Porter affidavit’s assertion that Petitioner’s
business facility was locked and inaccessible on May 20 and May 29, 2008 during
Petitioner’s posted hours of operation. P. Ex. 1; CMS Ex. 7. I find that the
evidence Petitioner presents fails to support its assertions that it was in compliance
with supplier standards | through 25, and that Petitioner’s business facility was
operational on May 20 and May 29, 2008 during its posted hours of operation, as
required by 42 C.F.R. § 424.57(c)(8).

Accordingly, I conclude that there was a basis for the revocation of Petitioner’s
Medicare supplier number.

B. Petitioner’s challenge to CMS’s exhibit 2, at 7-9.
Petitioner also challenges the authenticity of the photos taken by Mr. Porter to
substantiate his visit to Petitioner’s facility. Petitioner argues that the evidence is

“insufficient” and “inadmissible.” P. Br. at 5.

The theory behind Petitioner’s main attack on CMS’s case deserves brief mention,
not because it is sound, but because it is so obtuse as to demand comment.
Although Petitioner’s hearing request makes no mention of this theory — or of any
other matters required by the explicit terms of 42 C.F.R. § 498.40(b) — the heart of
Petitioner’s defense is the notion that the photographs of its premises taken on
May 29, 2008, are inadmissible because:

These pictures have no date stamp, nothing to authenticate the date
in which the visit was made, nor when the pictures were taken.
Therefore, this evidence is insufficient, inadmissible by law and
unlawful, thus it will not pass muster under scrutiny. Further, this
evidence is inadmissible because it does not fall within one of the
exceptions to hearsay; for example, it is not self authenticated nor is
it is a government record.

P. Br. at 4.

It may be best to consider this statement line by line. First, I am unable to discern
any connection between the authentication of the photographs and the last
sentence of Petitioner’s objection quoted above. Next, it is perfectly true that the
photographs in CMS Ex. 2, at 7-9, do not show the now-common feature of a date-
and-time superimposed by the camera itself. Photographs without that feature
have been accepted as evidence long before the advent of the technology that
made such a feature common, well before and ever since the adoption of the
FEDERAL RULES OF EVIDENCE in 1973. Moreover, even if the photographs did
isplay a date-and-time feature, as Petitioner’s counsel demands in such perfervid
terms, that feature would be meaningless unless there were some evidence that the
jate-and-time setting programmed into the camera had been programmed
ccurately and verified accurate when the photographs were taken. But the
principal point to be made is this: when Petitioner’s counsel asserts that this
record contains nothing to authenticate the photographs by date and time, he
eliberately and materially distorts the facts: the Porter affidavit establishes with
specificity that the photographs were taken at 10:15 AM on May 29, 2008. CMS
Ex. 7, at 3. Mr. Porter’s field notes corroborate the factual assertions in his
affidavit. CMS Ex. 2, at 1-6. Thus, the photographs are authenticated by the
Porter affidavit, while the affidavit itself is corroborated by the field notes and the
photographs.

2

In assessing the admissibility of any photographic evidence, the touchstone is the
degree to which the photograph accurately depicts the scene shown at the relevant
time and in relevant detail, in essence, the degree to which the photograph in fact
shows what its proponent claims it shows. See, e.g., FED. R. EVID. 901(a). Few
photographs are completely self-authenticating, and most require some parallel
evidence to establish that the image in the photograph is an accurate representation
of the objects shown by the image at a certain time, and perhaps from a certain

10

perspective. That parallel evidence is usually called a “foundation,” and it is
usually “laid” by a witness who can testify to familiarity with the actual scene
shown in the photograph, and who can go on to say that the photograph is a
substantially true, accurate, and faithful representation of that scene. If the details
and conditions of the photographed scene at a particular time are relevant, then
additional foundation testimony may be required as to the time the photograph was
taken as a measure of insuring that the photograph accurately represents those
details and conditions. It is not necessary that the foundation be laid by the actual
photographer, or even that the photograph be one unique to the case: for example,
a picture postcard of the Washington Monument, if offered to show its height in
comparison to any of the surrounding buildings, would be perfectly admissible if
supported by foundation testimony that the postcard showed the scene truly,
accurately, and faithfully.

In this case, the Porter affidavit supplies a satisfactory foundation for the
admission of the photographs in CMS Ex. 2, at 7-9. The photographs are relevant,
for they are probative of the situation at Petitioner’s facility at 10:15 AM on May
29, 2008, and they are material, because that situation is at issue and is at the heart
of this case. Whether assessed by the standards applicable in this forum, 42
C.F.R. §§ 498.60(b) and 498.61, or by the stricter standards of FED. R. EVID. 901,
the photographs are admissible and entitled to be accorded great evidentiary
weight. Petitioner’s objection is transparently frivolous.

C. Summary Disposition is appropriate.

Petitioner’s hearing rights in this case are governed by 42 C.F.R. Part 498. These
regulations do not address explicitly the circumstances under which an ALJ may
grant summary disposition or judgment. However, the regulations have been
interpreted consistently in this forum and by the Board to allow summary
disposition in those circumstances where summary judgment would be appropriate
under FED. R. CIV. P. 56(c).

Summary disposition is appropriate where there are no disputed issues of material
fact and where the only questions that must be decided involve either questions of
law or the application of the law to the undisputed facts. Livingston Care Center,
DAB No. 1871, at 6 (2003). A party opposing summary disposition must allege
facts that, if true, would refute the facts relied upon by the moving party. See, e..g,
FED. R. CIV. P. 56(c); Garden City Medical Center, DAB No. 1763 (2001);
Everett Rehabilitation and Medical Center, DAB No. 1628, at 3 (1997). A party
may not simply state that it disputes allegations of fact in order to avoid the entry
of summary disposition; it must describe the asserted facts credibly in order to
establish a dispute. In evaluating whether there is a genuine issue as to a material
fact, an administrative law judge must view the facts and the inferences reasonably
11

to be drawn from the facts in the light most favorable to the nonmoving party. See
Pollock v. American Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3rd. Cir. 1986);
Madison Health Care, Inc., DAB No. 1927, at 5-7 (2004). This latter formulation
of the summary-disposition principle has been emphasized by the Board in
Brightview Care Center, DAB No. 2132 (2007), and in Oklahoma Heart Hospital,
DAB No. 2183 (2008), and I have applied that standard here. Having applied it, I
find and conclude that CMS is entitled to summary disposition in its favor.

VI. Conclusion

For the reasons set out above, I find and conclude that Petitioner’s Medicare
billing number was appropriately revoked pursuant to 42 C.F.R. § 424.57(d). The
CMS Motion for Summary Disposition should be, and it is, GRANTED.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

David A. Thomas, M.D., ) Date: March 30, 2009
)

Petitioner, ) Docket No. C-09-114

) Decision No. CR1936
-V.- )
)
)
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, David A.
Thomas, M.D., from participating in Medicare and other federally funded health care
programs for a period of five years.

I. Background

On September 30, 2008 the I.G. notified Petitioner that it had determined to exclude him
from participating in Medicare and other federally funded health care programs for a
period of five years. The exclusion determination was based on Petitioner’s alleged
conviction of a felony as is defined at section 1128(a)(4) of the Social Security Act (Act).

Petitioner requested a hearing and the case was assigned to me for a hearing and a
decision. Neither party requested that I hold an in person hearing. The LG. filed
proposed exhibits which he designated as I.G. Ex. 1- LG. Ex. 8. Petitioner objected to
my receiving into evidence L.G. Ex. 5 and I.G. Ex. 8. Each party submitted briefs and I
permitted the I.G. to file a reply brief addressing Petitioner’s objections to my receiving
I.G. Ex. 5 and 1G. Ex. 8.
II. Issues, findings of fact and conclusions of law
A. Issues
The issues in this case are whether:
1. I should exclude from evidence I.G. Ex. 5 and I.G. Ex. 8;

2. Petitioner was convicted of a felony as is described at section 1128(a)(4)
of the Act; and

3. Petitioner’s five year exclusion is reasonable as a matter of law.
B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision. I set
forth each Finding below as a separate heading.

I. I overrule Petitioner’s objections to I.G. Ex. 5 and LG. Ex. 8.

The gravamen of Petitioner’s objections to these two exhibits is that they are inherently
unreliable. I.G. Ex. 5 consists of a report compiled by the Louisville, Kentucky police
department which contains allegations concerning Petitioner’s allegedly unlawful
prescription of controlled substances. I.G. Ex. 8 is a document prepared in conjunction
with a State disciplinary proceeding involving Petitioner’s license to practice medicine in
Kentucky.

I overrule Petitioner’s objections to these two exhibits. Essentially, Petitioner objects to
them because they contain hearsay allegations about Petitioner. This proceeding is not
governed by formal rules of evidence. Administrative law judges routinely admit hearsay
evidence in cases involving the I.G. For that reason, the fact that these exhibits contain
hearsay is not a sufficient basis to exclude them from the record.

Having said that, I also find that there is in fact, no need to rely on the allegedly defective
contents of these two exhibits in order to sustain the I.G.’s determination in this case. As
I discuss below, at Finding 2, the official records of Petitioner’s criminal case and
conviction, contained in I.G. Ex. 2 —1.G. Ex. 4, suffice to provide a basis for his
exclusion.
2. Petitioner was convicted of a felony that is described at section
1128(a)(4) of the Act.

Section 1128(a)(4) of the Act mandates the exclusion of any person who has been
convicted of a felony occurring after August 21, 1996 that is related to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance. The I.G.
alleges that Petitioner was convicted of such a crime thereby mandating his exclusion.

The evidence offered by the I.G. establishes that, on December 19, 2007, Petitioner pled
guilty in United States District Court, Western District of Kentucky, Louisville Division,
to the crime of misprision of a felony. I.G. Ex. 2; LG. Ex. 3, at 1; LG. Ex. 4, at 1-2. The
crime is a felony under federal law. 18 U.S.C. sections 4; 3559(a). Specifically,
Petitioner pled guilty to:

having knowledge of the actual commission of a felony cognizable by a
court of the United States — namely, the acquiring and obtaining possession
of a controlled substance by misrepresentation, fraud, forgery, deception, or
subterfuge by . . . [another person] in violation of Title 21, United States
Code, Section 843(a)(3) — concealed and did not as soon as possible make
known the same to some judge or some other person in civil or military
authority under the United States.

1.G. Ex. 2, at 2. The conviction was based on a plea agreement in which Petitioner
admitted that he had concealed and/or withheld information concerning commission of
crimes involving the prescription and distribution of controlled substances. Petitioner
admitted that he had written prescriptions to an individual for the controlled substances
Oxycontin and Lortab while deliberately ignoring the high probability that this individual
was in fact obtaining the controlled substances by misrepresentation, deception, and
subterfuge. 1.G. Ex. 2, at 2. Petitioner also admitted that, when contacted by law
enforcement personnel concerning their suspicions, he failed to explain all relevant
information that he was aware of and failed to report his knowledge of crimes to
responsible authorities. Id.

Petitioner’s conviction was related to the prescription of controlled substances because
his prescription of controlled substances was a necessary element of the crime of which
he was convicted. There would have been no crime had Petitioner not prescribed
controlled substances under the circumstances that are described in his plea agreement.

Petitioner contends that there is nothing in the elements of his conviction that suggests
that he was convicted of anything related to the prescription of a controlled substance.
Petitioner’s brief at 3. He argues that his conviction was not based on “his unlawful

prescription of drugs, but rather on his failure to report the unlawful conduct of another.”
Id. The obvious flaw in Petitioner’s logic is that his conviction did not occur in a
vacuum. There could not have been a conviction but for Petitioner’s prescription of
controlled substances in a setting that gave Petitioner knowledge of the likelihood that the
beneficiary of the prescription had no legitimate use for those medications. It was that
knowledge that Petitioner concealed unlawfully.

Petitioner argues also that his “mere silence” regarding the criminal conduct of a third
party is not the situation that section 1128(a)(4) of the Act is intended to remedy.
Petitioner’s brief at 3. I disagree. The Act was intended to encompass all felonies related
to the prescription of controlled substances. It makes no exception for situations where
individuals commit felonies related to the prescription of controlled substances by failing
to inform authorities of crimes of which they are aware.

Petitioner also contends that he was, in effect, caught unfairly between the requirements
of federal criminal law and his obligation as a physician to protect the privacy of his
patient. That is not an argument that I have authority to consider because it is,
essentially, a defense to the charge to which Petitioner pled guilty. The I.G.’s obligation
to exclude derives from Petitioner’s conviction of a felony that falls within the reach of
section 1128(a)(4). I may not consider arguments that constitute legal or equitable
defenses to the crimes which are the basis for the conviction.

3. Petitioner’s five year exclusion is reasonable as a matter of
law.

The I.G. must exclude any individual who is convicted of an offense that falls within the
reach of section 1128(a)(4) for a minimum period of five years. Act, section
1128(c)(3)(B). The LG. imposed the minimum five year exclusion against Petitioner.
Therefore, it is reasonable as a matter of law.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Service
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: } Date: March 30, 2009
Roscoe Community Nursing Home }
(CCN: 33-5316), )

) Docket No. C-08-730

Petitioner, ) Decision No.CR1935
)
Vv. )
)
Centers for Medicare & Medicaid Services. )
)

DECISION

Petitioner’s request for hearing is dismissed pursuant to 42 C.F.R. § 498.70(b) and the
hearing scheduled to begin on March 31, 2009, is cancelled.

I. Background

Petitioner, Roscoe Community Nursing Home, requested a hearing before an
administrative law judge (ALJ) by letter dated September 11, 2008. In its statement in
support of its appeal attached to its September 11, 2008 letter, Petitioner requested review
of the determination made by the Centers for Medicare & Medicaid Services (CMS),
reflected in CMS’s notice letter dated July 14, 2008, to impose a per instance civil money
penalty (PICMP) of $1000. Petitioner asserted that a federal comparative monitoring
survey that ended on June 24, 2008, cited Petitioner for three regulatory violations or
deficiencies that amounted to substantial noncompliance and that a life safety survey
completed on June 17, 2008, also cited Petitioner for three deficiencies. In its statement
in support of its appeal, Petitioner addressed each of the deficiencies from both surveys
arguing that the alleged violations were unfounded and that the $1000 PICMP based
upon the alleged violation of 42 C.F.R. § 483.25 was excessive. Petitioner acknowledged
in its statement in support of its appeal that the July 14, 2008 CMS notice specified that
the PICMP was based upon the alleged violation of 42 C.F.R. § 483.25(h) (Tag F323 of
the State Operations Manual (SOM)).

Petitioner attached as Exhibit B to its request for hearing the July 14, 2008 CMS notice.
The CMS notice referred to both surveys and advised Petitioner that a mandatory denial
of payment for new admissions (MDPNA) would be triggered effective September 24,
2008, if Petitioner did not return to substantial compliance by that date; that Petitioner’s
provider agreement would be terminated effective December 24, 2008, if Petitioner did
not return to substantial compliance before that date; and that a $1000 PICMP was being
imposed based upon Tag F323. On December 1, 2008, the parties filed their Joint
Stipulations and Statement of Issues (Jt. Stip.). The parties stipulated that Petitioner was
subject to a revisit survey on September 23, 2008, and was found to have returned to
substantial compliance effective that date. Jt. Stip. § 6. Because Petitioner returned to
substantial compliance effective September 23, 2008, the MDPNA and termination of
Petitioner’s provider agreement were not triggered. The parties further stipulated that the
PICMP of $1000 was imposed based upon the alleged violation of 42 C.F.R. § 483.25(h)
(Tag F323). Jt. Stip. | 5.

On January 14, 2009, CMS filed its prehearing brief. CMS asserted in its prehearing
brief that only Tag F323 and Tag K043 resulted in imposition of the PICMP and CMS
requested an order limiting the scope of the hearing to those two alleged deficiencies.
CMS Prehearing Brief at 7-9. On February 19, 2009, Petitioner opposed the motion. On
March 10, 2009, I issued a Ruling addressing Jurisdiction and Scope of Review. In my
Ruling, I concluded that only the alleged violation of 42 C.F.R. § 483.25(h) (Tag F323)
from the survey completed on June 24, 2008, and upon which CMS proposed to impose a
$1000 PICMP against Petitioner, was within my authority to review. | also ruled that the
issue of whether or not the $1000 PICMP was reasonable in amount was subject to my
review and decision.

On March 16, 2009, CMS filed a motion to dismiss Petitioner’s request for hearing,
accompanied by an attachment marked “DAB Doc. No. 1.” On March 23, 2009,
Petitioner filed its response in opposition to the CMS motion to dismiss (P. Opp.).
II. Findings of Fact, Conclusions of Law, and Discussion

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

A. CMS rescinded the only enforcement remedy in this case and
thereby eliminated Petitioner’s basis for review by an ALJ.

B. Ihave no jurisdiction or authority to review allegations of
deficiency from a survey in the absence of imposed enforcement
remedies.

C. Dismissal of Petitioner’s request for hearing pursuant to 42 C.F.R.
§ 498.70(b) is appropriate because Petitioner has no right to a hearing.

CMS notified Petitioner by letter dated March 13, 2009, that it had reopened its initial
determination and concluded after administrative review to rescind the $1000 PICMP
previously imposed and that no other remedies were imposed based upon the revised

determination. DAB Doc. No. 1, at

CMS argues in its motion to dismiss that Petitioner is no longer subject to an enforcement
remedy; that Petitioner has no right to a hearing; and that dismissal of the request for
hearing is required. Petitioner argues that the request for hearing should not be dismissed
and Petitioner should be accorded a hearing. Petitioner requests in the alternative that
“CMS’s withdrawal of the CMP should be conditioned upon, or deemed to include, the
removal of the underlying alleged findings of noncompliance.” P. Opp. at 5. Iam aware
of no authority that permits me to order CMS to withdraw the findings of noncompliance
and Petitioner cites none. Because CMS rescinded the only enforcement remedy,
Petitioner has no right to review and I have no authority to render a decision that
addresses the merits of the alleged deficiency upon which the CMP was initially imposed.

I conclude that the theories Petitioner presents in its opposition to the motion to dismiss
are without merit. Petitioner does not dispute that CMS has rescinded the only
enforcement remedy imposed in this case. Petitioner acknowledges that rescission of all
enforcement remedies in prior cases has been found to deprive a petitioner of its right to
ALJ and Board review, requiring that the case be dismissed pursuant to 42 C.F.R. §
498.70(b). P. Opp. at 4, 13. Petitioner asserts, however, that there are “emerging
initiatives” that rely on the results of compliance and enforcement surveys to affect a
nursing home’s ability to admit residents and seek reimbursement from Medicare, such as
the Five-Star system, the Pay for Performance program, the Nursing Home Value-Based
Purchasing Demonstration, and other emerging initiatives. Petitioner asserts that the
“emerging initiatives” warrant re-examination of whether dismissal is appropriate or
required when CMS rescinds all enforcement remedies but does not withdraw the

underlying allegations of deficiencies or reduce their scope and severity to a level that
would not support an enforcement remedy because, even absent enforcement remedies,
adverse survey findings result in prejudice to Petitioner under the “emerging initiatives.”’
While I understand Petitioner’s concerns,” Petitioner’s concerns are not a sufficient basis
for me to depart from the reasoning of various appellate panels of the Departmental
Appeals Board (the Board) and other ALJs in cases prior to the existence of the
“emerging initiatives” that concern Petitioner. P. Opp. at 4, 15-16.

Petitioner argues that nothing in the regulations permits CMS to deprive a facility of the
right to obtain review of alleged deficiencies by an ALJ or the Board by withdrawing the
enforcement remedy while leaving the underlying deficiency in place, particularly where,
as here, jurisdiction has already attached. P. Opp. at 2. A provider does not have a right
to a hearing to challenge every action by CMS with which it disagrees. Only certain

' Petitioner also argues that nursing homes have a constitutionally protected interest in the
benefits flowing from participation in the Medicare and Medicaid programs; that denying
it a hearing in this instance creates significant due process issues; and that it suffers a loss
of a protectable liberty interest in safeguarding its reputation through this forum. P. Opp.
at 2, 17-21. I do not have the authority to address Petitioner’s constitutional challenges to
the Social Security Act (the Act) or the regulations promulgated under the authority of
the Act. Petitioner’s arguments are noted and preserved for judicial review in the
appropriate forum.

> Petitioner also raises a concern that depriving it of the opportunity to challenge the
allegations in the Statement of Deficiencies (DAB Doc. No. 1, at 3-12) in this forum
would frustrate the intent of the Act to have appeals addressed by the agency and may
result in remand from the federal court to the Board for creation of an evidentiary record
resulting in waste of administrative and judicial resources. P. Opp. at 4-5, 22-23. If
Petitioner should prevail on appeal in federal court, a remand may be ordered by the
federal court. However, a possible remand is not grounds for me to depart from well-
reasoned rationales expressed in prior cases or a sufficient basis for me to conclude that
Petitioner has a right to review in the absence of an enforcement remedy. Whether a
federal court may conclude that Petitioner has a right to review not provided or
recognized by the Secretary through regulations, is an issue to be addressed before the
federal court.

* The relief Petitioner seeks may be addressed through regulatory and legislative reform,
such as was done to obtain authority for ALJ and Board review of a facility’s loss of
authority to conduct nurse aide training and competency evaluation programs. See, e.g.,
64 Fed. Reg. 39,934 (Jul. 23, 1999).
actions by CMS or its delegates trigger hearing rights.’ In general, a participating long-
term care facility will have a right to a hearing if CMS makes an initial determination to
impose a remedy against that facility. 42 C.F.R. § 498.3(b)(13). The possible remedies
that CMS might impose against a facility are specified at 42 C.F.R. § 488.406(a). No
right to a hearing exists pursuant to 42 C.F.R. § 498.3(b)(13) unless CMS determines to
impose - and actually imposes - one of the specified remedies. Fountain Lake Health &
Rehabilitation, Inc., DAB No. 1985 (2005); The Lutheran Home - Caledonia, DAB
CR674, aff'd, DAB No. 1753 (2000); Schowalter Villa, DAB CR568 (1999), aff'd, DAB
No. 1688 (1999); Arcadia Acres, Inc., DAB CR424, aff'd, DAB No. 1607 (1997); Twin
Pines Nursing and Rehabilitation Center, DAB CR1601 (2007). The Secretary of Health
and Human Services (the Secretary) specifically rejected a proposal to grant hearing
rights for deficiency findings that were made without the imposition of remedies. 59 Fed.
Reg. 56,116, 56,158 (Nov. 10, 1994) (“if no remedy is imposed, the provider has suffered
no injury calling for an appeal”).

Contrary to Petitioner’s argument that nothing in the regulations permits CMS to deprive
a facility of the right to pursue its appeal by withdrawing the remedy, there is nothing in
the regulations that prohibits CMS from reopening and revising its initial determination
pursuant to 42 C.F.R. § 498.30 within 12 months of the date of notice of the initial
determination. It is specifically the imposition or proposed imposition of an enforcement
remedy and not the citation of a deficiency that triggers the right to a hearing under 42
C.F.R. Part 498. When the enforcement remedy is eliminated so to is Petitioner’s right to
review and my authority to conduct the review. Fountain Lake Health & Rehabilitation,
Inc., DAB No. 1985; Twin Pines Nursing and Rehabilitation Center, DAB CR1601; see
EagleCare, Inc. d/b/a/ Beech Grove Meadows, DAB CR923 (2002); Schowalter Villa,
DAB No. 1688; Arcadia Acres, Inc., DAB No. 1607; see also The Lutheran Home-

* Petitioner analogizes to federal court jurisdiction and argues that my jurisdiction is most
appropriately viewed as attaching at the time a hearing request is made and that CMS
cannot deprive Petitioner of the right to pursue its appeal by unilaterally withdrawing one
of the predicates to its appeal. P. Opp. at 4, 13-17. Petitioner recognizes that its analogy
is not perfect. P. Opp. at 13, n. 3. Petitioner also recognizes that the “mootness doctrine”
may even be applied in the federal courts to deprive the court of jurisdiction. P. Opp. at
14. Petitioner asserts that the “mootness doctrine” has no application here due to the
“collateral consequences” suffered by Petitioner under the “emerging initiatives.” P.
Opp. at 14-17. Petitioner points to no current regulatory provision that grants Petitioner a
right to ALJ or Board review based upon adverse impact upon Petitioner under
“emerging initiatives” and I am aware of no such right. I refer Petitioner to my footnote
3. In the absence of an enforcement remedy, Petitioner’s request for review is arguably
moot but the more appropriate analysis is that absent a specific delegation of authority to
conduct review, I have no authority.
Caledonia, DAB No. 1753; Walker Methodist Health Center, DAB CR869 (2002);
Charlesgate Nursing Center, DAB CR868 (2002); D.C. Association for Retarded
Citizens, DAB CR776 (2001); Alpine Inn Care, Inc., DAB CR728 (2000); Woodland
Care Center, DAB CR659 (2000); Fort Tryon Nursing Home, DAB CR425 (1996). In
each of these cases, the failure or inability of the petitioner to demonstrate that the
appealed survey findings and deficiency determinations had resulted in a remedy was
fatal to its appeal. In each of these cases, the appeal was dismissed. The appellate panels
of the Board and the ALJs who decided these cases have uniformly concluded that a
citation of deficiency that is not the basis for an enforcement remedy, or that results in the
imposition of a remedy that is later rescinded or reduced to zero, does not trigger the right
to a hearing under 42 C.F.R. Part 498.

Petitioner does not have a right to a hearing in this case. The undisputed facts establish
that while CMS initially determined to impose a PICMP against Petitioner, CMS
rescinded the enforcement remedy. Petitioner no longer suffers any injury that I am
authorized to redress and Petitioner no longer has a right to hearing pursuant to 42 C.F.R.
Part 498.

Il. Conclusion

Based upon the foregoing reasons, Petitioner’s request for hearing is dismissed pursuant
to 42 C.F.R. § 498.70(b) and the hearing scheduled for March 31, 2009 is cancelled.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Yuliana Munthe, ) Date: March 25, 2009
)
Petitioner, )
)

-V.- ) Docket No. C-09-84

) Decision No. CR1933
The Inspector General. )
)

DECISION

The request for hearing of Petitioner, Yuliana Munthe, is dismissed pursuant to 42
C.F.R. § 1005.2(e)(1).

I. Background

The Inspector General for the U.S. Department of Health and Human Services (the
1.G.) notified Petitioner by letter dated June 30, 2008, that she was being excluded
from participation in Medicare, Medicaid, and all federal health care programs as
defined in section 1128B(f) of the Social Security Act (Act) (42 U.S.C. § 1320a-
7b(f)). The I.G. advised Petitioner that her exclusion was pursuant to section
28(b)(4) of the Act (42 U.S.C. § 1320a-7(a)(1)) because her license to practice
medicine or provide health care as a nurse assistant in the State of California was
revoked, suspended, or otherwise lost or was surrendered while a formal
disciplinary proceeding was pending before the California Department of Health
Services for reasons bearing on her professional competence, professional
performance, or financial integrity. The I.G. further advised Petitioner that her
exclusion would remain in effect until she is reinstated by the Office of Inspector
General and that to be eligible for reinstatement, she must regain her license as a
nurse assistant in the State of California. I.G. Exhibit (1.G. Ex.) 1.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter
dated October 23, 2008. I.G. Ex. 5. The case was docketed and assigned to me
for hearing and decision on November 14, 2008. On November 26, 2008, I
convened a prehearing conference by telephone, the substance of which is
memorialized in my Order dated November 26, 2008. During the conference, I
explained to Petitioner that she could retain counsel to represent her and I
described how the proceedings before me would progress. The I.G. asserted
during the prehearing conference that I do not have jurisdiction because Petitioner
did not file her hearing request timely. I explained to Petitioner that if the hearing
request was untimely, I must dismiss it. Accordingly, I established a briefing
schedule to permit the L.G. to file a motion to dismiss or an alternative motion for
summary judgment, a response by Petitioner, and a reply, if any, by the LG.

On December 23, 2008, the LG. filed a motion to dismiss the request for hearing
on grounds that the request for hearing was not timely filed and an alternative
motion for summary judgment, with six exhibits (I.G. Exs. 1-6) and Attachment
A. Petitioner’s response to the I.G. motion was due January 31, 2009. No
response was received from Petitioner and on February 11, 2009, I ordered that
Petitioner show cause not later than February 27, 2009, why this case should not
be dismissed for abandonment. On March 3, 2009, my office received a one-page
letter from Petitioner dated January 20, 2009. The envelope with Petitioner’s
letter had no visible postmark. Petitioner’s January 20, 2009 letter was identical to
her October 23, 2008 hearing request, except for the “regarding” line. I have
marked Petitioner’s January 20, 2009 letter ALJ Ex. 1 for ease of reference.
Although Petitioner’s January 20, 2009 letter was not responsive to my Order to
Show cause, I accept it as evidence that Petitioner did not intend to abandon her
appeal. My office provided a copy of ALJ Ex. | to counsel for the LG. as there
was no indication on the face of the letter that Petitioner had done so. The I.G.
advised me by electronic-mail on March 9, 2009, that the LG. waived filing a
reply to Petitioner’s January 20, 2009 letter. I admit as evidence IG. Exs. 1
through 6 and ALJ Ex. 1.

IL. Discussion

A. Findings of Fact
The following findings of fact are based upon the uncontested and undisputed
assertions of fact in the pleadings and the exhibits admitted. Citations may be
found in the analysis section of this decision if not included here.
1. The I.G. notified Petitioner by letter dated June 30, 2008, that she was

being excluded from participation in Medicare, Medicaid, and all federal
health care programs pursuant to section 1128(b)(4) of the Act. I.G. Ex. 1.
2. The June 30, 2008 LG. notice advised Petitioner that she could request a
hearing before an ALJ by submitting a written request within 60 days of her
receipt of the .G.’s notice. I.G. Ex. 1.

3. The presumed date of receipt by Petitioner of the I.G.’s notice of exclusion
dated June 30, 2008 is July 5, 2008, which is five days after the date on the
1.G.’s notice.

4. Petitioner requested a hearing by an ALJ by submission dated October 23,
2008, which is more than 60 days after her presumed receipt of the I.G.’s
notice of exclusion.

B. Conclusions of Law

1. Pursuant to 42 C.F.R. § 1005.2(c), a request for hearing must be filed
within 60 days of the date on which the notice of exclusion is received by
the person to be excluded and there is a rebuttable presumption that the date
of receipt is five days after the date of the notice.

2. Petitioner has not rebutted the presumption that she received the I.G.’s
notice of exclusion on July 5, 2008, five days after the June 30, 2008 date
on the notice.

3. An ALJ is required to dismiss a hearing request that is not timely filed. 42
C.F.R. § 1005.2(e)(1).

4. Petitioner’s request for hearing must be dismissed.
C. Issue

Whether Petitioner’s request for hearing must be dismissed because
it was not filed timely.

D. Analysis

The L.G. notified Petitioner by letter dated June 30, 2008, that she was being
excluded from Medicare, Medicaid, and all federal health care programs pursuant
to section 1128(b)(4) of the Act. The notice was mailed to Petitioner at 1565
Shedden Drive, Loma Linda, California 92354-1732, the same address that was on
the letterhead of Petitioner’s hearing request dated October 23, 2008 and on
Petitioner’s January 20, 2009 letter. 1.G. Ex. 1; ALJ Ex. 1.
The regulations are clear that a request for hearing must be filed in writing within
60 days of receipt of the notice of exclusion. The date of receipt of the notice is
presumed to be five days after the date of the notice, unless there is a reasonable
showing to the contrary. 42 C.F.R. § 1005.2(c). In neither her hearing request of
October 23, 2008 nor her January 20, 2009 letter, does Petitioner dispute that she
received the I.G. notice within five days of the date of the notice. Therefore, the
date of receipt of the I.G.’s June 30, 2008 notice is presumed to be July 5, 2008,
and that is the date on which the 60-day period in which Petitioner could request a
hearing began to run. There is no dispute that the I.G.’s notice letter included an
attachment that advised Petitioner of her right to file a request for hearing within
60 days and the regulatory requirements to accomplish the filing. Because the
1.G.’s notice is presumed to have been received by Petitioner on July 5, 2008,
Petitioner had until September 3, 2008 to file her request for hearing. Petitioner
does not dispute that she received the I.G.’s notice and she offers no explanation
for why she waited until October 23, 2008 to request an ALJ hearing.

The regulations are clear that I “will dismiss” a hearing request where a petitioner’s
hearing request is not timely filed. 42 C.F.R. § 1005.2(e)(1). The regulation at 42
C.F.R. § 1005.2(e)(1) gives me no discretion to waive a late filing or to grant an
extension of time in which to file a request for hearing.

Accordingly, Petitioner’s request for hearing must be dismissed.
IIL. Conclusion
For the foregoing reasons, Petitioner’s request for hearing dated October 23, 2008,

is dismissed.

/s/
Keith W. Sickendick
Administrative Law Judge