Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Glynis A. Feole, a/k/a Glynis A. )
Magee, a/k/a Glynis A. Seole, ) Date: March 20, 2008
)
Petitioner, )
)
“Vee ) Docket No. C-07-665
) Decision No. CR1762
The Inspector General. )
)
DECISION

This matter is before me on the Inspector General’s (I.G.’s) Motion for Summary
Affirmance of the I.G.’s determination to exclude the Petitioner herein, Glynis A. Feole,
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 the terms of 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 imposition of a five-year exclusion, and for
that reason I grant the I.G.’s Motion for Summary A ffirmance.

I. Procedural Background

Petitioner Glynis A. Feole is a Registered Nurse and was licensed to practice in the State
of Rhode Island. In 2006, she was employed at the Morgan Health Center, where an
individual identified as WJC in this discussion was a resident and Medicare beneficiary.

In June 2006, Petitioner became the subject of an investigation undertaken by the Rhode
Island Attorney General. The misconduct alleged against her was the theft of a single 80
mg dose of Oxycontin from WJC’s evening medications and her substitution of another
medication for WJC’s dose of Oxycontin. Eventually she was named in an Information
filed by the Attorney General charging her with one felony count of Larceny of a
Controlled Substance in violation of R.I. GEN. LAWS § 21-28-4.16.1 (2002). On October
18, 2006, as the apparent result of a negotiated plea, Petitioner pleaded nolo contendere to
2

a misdemeanor larceny charge based on the value of the medication Petitioner admitted
stealing. The misdemeanor charge was framed by handwritten interlineation of the
original felony Information, but the interlineation did not explicitly set out the chapter,
article, and section of the statute it purported to invoke. Other court records identify the
statute as R.I. GEN. LAWS § 11-41-1 (2002). Petitioner was sentenced on the same day
to a suspended term of one year’s jail time and one year of probation, and was assessed
$90.00.

As required by the terms of section 1128(a) of the Act, 42 U.S.C. § 1320a-7(a), the LG.
began the process of excluding Petitioner from participation in Medicare, Medicaid, and
all other federal health care programs. On June 29, 2007, the I.G. notified Petitioner that
she was to be excluded pursuant to the terms of section | 128(a)(1) of the Act for the
mandatory minimum period of five years.

Acting through counsel, Petitioner timely sought review of the I.G.’s action by letter
dated August 22, 2007. I convened a telephonic prehearing conference on September 20,
2007, pursuant to 42 C.F.R. § 1005.6, in order to discuss the issues presented by the case
and procedures for addressing those issues. The parties agreed that the case likely could
be decided on written pleadings, and by Order of September 20, 2007, I established a
schedule for the submission of documents and briefs. All briefing is now complete, and
the record in this case closed on February 21, 2008.

The evidentiary record on which I decide the issues before me comprises 13 exhibits.
The I.G. proffered six exhibits marked I.G. Exhibits 1-6 (I.G. Exs. 1-6). Petitioner
proffered seven exhibits marked Petitioner’s Exhibits 1-7 (P. Exs. 1-7). In the absence of
objection, all proffered exhibits are admitted as designated.

II. Issues

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

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

2. Whether the proposed five-year period of exclusion is unreasonable.
The LG.’s position on both issues is correct. Section 1128(a)(1) of the Act mandates

Petitioners exclusion, for her predicate conviction has been established. A five-year
period of exclusion is reasonable ipso jure, for it is the minimum period established by
3
section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(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 mandatory
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.” Title XVIII of the Act is the Medicare 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 crime of Larceny of a Controlled Substance is defined in Rhode Island by a specific
statute, R.I. GEN. LAWS § 21-28-4.16.1 (2002), which provides:

Any person who steals or attempts to steal any controlled substance from a
health care facility, as defined in § 23-17-2, a licensed pharmacy, or any
other lawful place of business, where controlled substances are
compounded, dispensed, administered, stored, or manufactured . . . shall be
punished by a fine of not more than ten thousand dollars ($10,000), or by
imprisonment of not more than ten (10) years, or both.

In Rhode Island, the crime of larceny is in most cases classified and punished according
to the value of the property or money wrongfully obtained. As classified by R.I. GEN.
LAWS § 1 1-41-5 (2002):

If the value of the property or money does not exceed five hundred dollars
($500), the person shall be punished by imprisonment for not more than one
year, or by a fine of not more than five hundred dollars ($500), or both.

Based on that provision of Rhode Island law, the offense of which Petitioner was
convicted is classified as a misdemeanor. R. I. GEN. LAWS § 1 1-1-2 (2002).

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; “when a
plea of guilty or nolo contendere by the individual . . . has been accepted by a... State. .
. court,” section 1 128(i)(3) of the Act; or “when the individual . . . has entered into
4

participation ina... deferred adjudication . . . program where judgment of conviction has
been withheld,” section 1 128(i)(4) of the Act, 42 U.S.C. §§ 1320a-7(i)(1)-(4). These
definitions are repeated at 42 C.F.R. § 1001.2.

An exclusion based in section | 128(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:

|. On her plea of nolo contendere on October 18, 2006, in the Superior Court for the
Counties of Providence and Bristol, Rhode Island, Petitioner Glynis A. Feole was found
guilty of the misdemeanor offense of larceny, in violation of R.I. GEN. LAWS § 11-41-5
(2002). 1.G. Exs. 5, 6; P. Exs. 2, 3, 5.

2. Final judgment of conviction was entered against Petitioner, and sentence was
imposed upon her, in the Superior Court on October 18, 2006. I.G. Exs. 5, 6; P. Exs. 2, 3,
5.

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

4. A nexus and a common-sense connection exist between the criminal offense to which
Petitioner pleaded guilty and of which she was found guilty, as noted above in Findings |
and 2, and on which plea and finding of guilt the final judgment of conviction was
entered and sentence imposed, as noted in Finding 3, and the delivery of an item or
service under the Medicare program. I.G. Exs. 3, 4, 5, 6, 8; P. Exs. 2, 3, 4, 5; Berton
Siegel, D.O., DAB No. 1467 (1994).

5. On June 29, 2007, the I.G. notified Petitioner that she was to be excluded from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years, based on the authority set out in section 1 128(a)(1) of the Act. IG.
Ex. 1; P. Ex. 1.

6. Acting through counsel, Petitioner perfected her appeal from the I.G.'s action by filing
a timely hearing request on August 22, 2007.
5

7. By reason of Petitioner’s conviction, a basis exists for the I.G.’s exercise of authority,
pursuant to section | 128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), to exclude Petitioner
from participation in Medicare, Medicaid, and all other federal health care programs.

8. By reason of her conviction, Petitioner was subject to, and the I.G. was required to
impose, the mandatory minimum five-year period of exclusion from Medicare, Medicaid,
and all other federal health care programs. Section | 128(c)(3)(B) of the Act; 42 C.F.R.

§ 1001.102(a).

9. Because the five-year period of Petitioner’s exclusion is the mandatory minimum
period provided by law, it is therefore not unreasonable. Section | 128(c)(3)(B) of the
Act; 42 C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).

10. There are no disputed issues of material fact and summary disposition is therefore
appropriate in this matter. Michael J. Rosen, M.D., DAB No. 2096 (2007); Thelma
Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The essential elements necessary to support an exclusion based on section | 128(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. Thelma
Walley, DAB No. 1367; Boris Lipovsky, M.D., DAB No. 1363 (1992); Mark D. Perrault,
M.D., DAB CR1471 (2006); Andrew L. Branch, DAB CR1359 (2005); Lyle Kai, R.Ph.,
DAB CR1262 (2004), rev'd on other grounds, DAB No. 1979 (2005). Those two
essential elements are fully established in this record.

Petitioner does not deny that she has been convicted. The evidence of her misdemeanor
conviction is clear and undisputed: I.G. Ex. 6 shows that on October 18, 2006, Petitioner
appeared with counsel in the Superior Court and pleaded nolo contendere to the
misdemeanor crime of larceny. The trial court’s acceptance of that nolo contendere plea
is demonstrated by the fact that the trial court found Petitioner guilty and proceeded
immediately to the imposition of sentence. I.G. Ex. 6; P. Ex. 2. Those events satisfy the
definitions of “conviction” set out at sections 1128(i)(1), 1128(i)(2), and 1128(i)(3) of the
Act. The I.G. has proven the first essential element.

Petitioner’s defense to the exclusion is based on four arguments. It is based partly on her
denial of a nexus or common-sense connection between her crime and the Medicare
program, the second essential element; partly on the fact that she appears here convicted
of a misdemeanor, and not a felony; and partly on her assertion that the I.G. should have
6

reviewed her misdemeanor conviction under the discretionary authority conveyed to him
by section 1128(b)(1)(a) of the Act. Petitioner then synthesizes these first three
arguments into a fourth, by which she asserts that the proposed five-year exclusion is
excessive and therefore unreasonable.

Petitioner’s first argument is that there is no “nexus”or “common sense connection”
between her crime and the Medicare programs. This argument fails. The Departmental
Appeals Board has always interpreted the “related to the delivery item” broadly and there
exists a common sense connection between the criminal act and the program present here
as a matter of fact. Berton Siegel, D.O., DAB No. 1467. The taking of the medication
rom Medicare recipients is enough to establish the common sense connection between
the criminal act and the program since the drug is reimbursed by Medicare and is or was
intended for a Medicare patient. Andrew Goddard, DAB No. 2032 (2006); Thelma
Walley, DAB No. 1367.

Petitioner’s second argument is that misdemeanor convictions should be under 1128(b)(1)
and not 1128(a)(1). This argument also fails. The plain language of section 1128(a)(1)
makes no distinction between criminal convictions based on misdemeanors and
convictions based on felonies, meaning that there need not be a distinction in the
classification (misdemeanor or felony) of criminal cases for exclusion from Medicare and
other federal healthcare programs under section 1128(a)(1). Lorna Fay Gardner, DAB
No. 1733 (2000); Tanya A. Chuoke, DAB No. 1721 (2000); Amable de los Reyes Aguiluz,
DAB CR1417 (2006); Katie Herman, DAB CR1703 (2007).

Petitioner’s third argument is that section 1128(b)(1) is more appropriate for the situation.
Petitioner’s argument again fails. Section | 128(b)(1) provides for permissive rather than
mandatory exclusions from Medicare and other federal healthcare programs as long as the
crime was not related to Medicare or any other federal healthcare programs. But once a
conviction is shown to be within the meaning of 1128(a)(1), “a criminal conviction
relating to Medicare or any other federal healthcare program,” it is mandatory that section
1128(a)(1) be used in that situation and neither the I.G. nor the Administrative Law Judge
may choose to proceed otherwise. Stacy Ann Battle, D.D.S., DAB No. 1843 (2002);
Tarvinder Singh, D.D.S., DAB no. 1752 (2000); Lorna Fay Gardner, DAB 1733;
Douglas Schram, R.PH., DAB No. 1372 (1992); Niranjana B. Parikh, M.D., DAB No.
1334 (1992). The rule is clear: if 1 128(a)(1) is applicable then it must be applied. Katie
Herman, DAB CR1703 (2007).

Petitioner’s forth and final argument is that 1128(a)(1)’s five-year exclusion from
Medicare and other federal healthcare programs is excessive and therefore unreasonable.
Petitioner’s final argument fails as well. Five years is the minimum period allowed as
established by Congress; thus, as a matter of law, it is not unreasonable. 42 C.F.R.
7

§1001.2007(a)(2). Neither the Departmental Appeals Board nor I may reduce it. 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).

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
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 in the L.G.’s favor as a matter of law. This Decision
issues accordingly.

VI. Conclusion

For the reasons set out above, the I.G.’s Motion for Summary A ffirmance should be, and
itis, GRANTED. The I.G.’s exclusion of Petitioner Glynis A.Feole from participation in
Medicare, Medicaid, and all other federal health care programs for a period of five years,
pursuant to the terms of section 1 128(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: )
)
Regency on the Lake (CCN: 23-5621), ) Date: March 20, 2008
)
Petitioner, )
)
-Vv.- ) Docket No. C-07-566
) Decision No. CR1760
Centers for Medicare & Medicaid )
Services. )
)
DECISION

Petitioner, Regency on the Lake (Petitioner or facility), is a long-term care facility,
located in Fort Gratiot, Michigan, that was initially certified to participate in the Medicare
program as a provider of services on the day it passed its federal Life Safety Code (LSC)
survey — January 18, 2007. Petitioner nevertheless challenges the Centers for Medicare &
Medicaid Services’ (CMS’s) determination as to that effective date, and contends that its
participation should have started on December 15, 2006.

CMS asks for summary affirmance, which Petitioner opposes.’ Because I find that the
facility could not participate in the Medicare program until it underwent and passed a
federal LSC survey, I grant CMS’s motion and conclude that the facility’s effective date
of participation in the Medicare program is January 18, 2007.

' CMS has submitted 21 proposed exhibits, identified as CMS Ex. 1 — CMS Ex.
21. Petitioner has submitted 16 proposed exhibits which we have identified as P. Ex. 1 —
P. Ex. 16. Although, in its brief, Petitioner incorrectly refers to its exhibits as “Resp.
Exs.,” the documents themselves are correctly marked.
2

Discussion

CMS is entitled to summary judgment because, as a matter
of law, the facility could not be certified any earlier than the
date it passed the federal LSC survey.”

Summary judgment is appropriate here because this case turns on a question of law and
presents no genuine dispute as to any material fact. Anderson v. Liberty Lobby, 477 U.S.
242, 247-48 (1986); Livingston Care Ctr. v. U.S. Dep’t of Health & Human Servs., 388
F.3d 168, 172-173 (6" Cir. 2004).

To participate in the Medicare program, a facility must enter into an agreement with the
Secretary of Health and Human Services, and must meet certain statutory and regulatory
requirements. Social Security Act (Act) §§ 1864, 1866; 42 C.F.R. § 488.20. As a general
tule, the facility must be surveyed by CMS ora state survey agency to determine its
compliance with program requirements. The survey and certification process and
procedures for facilities seeking to participate in the Medicare program are set out in the
Act at section 1819(g) and are further defined in the regulations at 42 C.F.R. § Part 488,
subparts A and E, as well as the State Operations Manual (SOM) issued by CMS. See
Forest Glen Skilled Nursing & Rehab. Ctr., DAB No. 1887, at 2 (2003).

Among other requirements, the facility must meet the provisions of the Life Safety Code
(LSC) of the National Fire Protection Association applicable to nursing homes. Act §
1819(d)(2)(B); 42 C.F.R. § 483.70(a). There are limited exceptions to this requirement.
The Secretary has the authority to waive specific provisions of the LSC if their rigid
applications “would result in unreasonable hardship upon a facility, but only if such
waiver would not adversely affect the health and safety of residents or personnel,” or, if
the Secretary finds that state codes adequately protect residents and personnel, the
provisions of the federal code shall not apply. Act § 1819(d)(2)(B)(i) and (ii); see also 42
C.F.R. § 483.70(a)(2) and (3). As discussed below, neither exception applies here.

State agencies survey facilities to determine their compliance with federal requirements,
and make recommendations to CMS, which makes the final certification determination.
42 C.F.R. § 488.330; see also 42 C.F.R. § 489.10(d). Where all federal requirements are
met on the date of the survey, the facility’s provider agreement “is effective on the date
the survey (including Life Safety Code survey, if applicable) is completed... .”° 42

> I make this one finding of fact/conclusion of law.

* The separate reference to the LSC reflects the fact that the LSC survey may be
conducted separately from the rest of the survey, as occurred here. Oak Lawn Endoscopy,
(continued...)
3

C.F.R. § 489.13(b). The state survey agency’s decision as to when to conduct an initial
survey of a prospective provider is not subject to appeal. 42 C.F.R. § 498.3(d)(15).

CMS also requires that a facility be

in operation and providing services to patients when
surveyed. This means that at the time of survey, the institution
must have opened its doors to admissions, be furnishing all
services necessary to meet the applicable provider...
definition, and demonstrate the operational capability of all
facets of its operations. To be considered “fully operational,”
initial applicants must be serving a sufficient number of
patients so that compliance with all requirements can be
determined.

CMS Ex. 21, at 20 (SOM § 2008A).

In this case, Petitioner applied to be a provider of services under the Medicare program in
April 2006. On October 24, 2006, the state fire safety inspector visited the facility,
conducted a state fire safety inspection, and found the facility in compliance with state
fire safety code requirements. CMS Ex. 20, at 2 (Connell Decl. § 3). On November 17,
2006, the state agency conducted its initial state licensure survey and found the facility to
be in compliance with the remaining state licensure requirements. After the facility
obtained its state license, the state licensing officer gave it permission to admit five to six
residents so that it could become “fully operational.” CMS Ex. 6; CMS Ex. 18, at 3
(Turner Decl. § 14). CMS has instructed state agencies to conduct the required federal
surveys within 90 calendar days of the date that the facility notifies the agency that it is
fully operational, “if possible.” CMS Ex. 21, at 20 (SOM § 2008A).

Here, the state agency completed the Initial Medicare/Medicaid Certification Survey on
December 15, 2006, well within the 90 days recommended by CMS. It found the facility
in compliance with applicable federal health requirements and forwarded its findings to
CMS for review and final approval. CMS Ex. 1; CMS Ex. 5, at 2; CMS Ex. 7; CMS Ex.
18, at 2 (Turner Decl. §§ 5-6); P. Ex. 5.

Then, on January 18, 2007 (still well within the recommended 90 days), the state fire
inspector returned to conduct the facility’s initial federal LSC survey. After the survey,
the state found the facility in substantial compliance with the applicable federal LSC

4(...continued)
DAB No. 1952, at 4n.1 (2004).
4

requirements and forwarded its recommendation to CMS. CMS Ex. 20, at 2-3 (Connell
Decl. f§ 7-10); CMS Ex. 18, at 2 (Turner Decl. | 7); CMS Ex. 2. By letter dated
February 6, 2007, CMS notified Petitioner that its request to participate in the Medicare
program was accepted and that its effective date of participation was January 18, 2007.
CMS Ex. 9, at 1.

Thus, Petitioner seems to fall easily within the ambit of 42 C.F.R. § 489.13(b) and may
not be certified any earlier than the date of the LSC survey. See Cmty. Hosp. of Long
Beach, CR1118, at 3-4 (2003), aff'd DAB 1938 (2004). The facility does not fall within
any exception to that provision. Petitioner has not argued that the Secretary has allowed
application of the state code in place of the federal LSC. Indeed, it seems that the State of
Michigan has asked for that substitution, but its request is pending. CMS Ex. 20, at 3
(Connell Decl. § 13). With respect to waiving specific provisions of the federal LSC,
CMS was not asked to do so here, and, in any event, that waiver is not a waiver of the
requirement for the survey itself. Forest Glen at 11, 19 (“ [P]ermitting a determination of
‘substantial compliance’ outside the context of completion of on-site surveys to identify
any deficiencies would jeopardize beneficiary health and safety, undercut the survey and
certification process, and place an untenable burden on CMS and the appeals process.”).

Petitioner nevertheless argues that it is entitled to the earlier certification because 1) state
employees misled it into admitting additional residents following the December 18
federal health survey;* and 2) the October 24, 2006 state fire safety inspection satisfied
the requirements of the federal LSC.

First, Petitioner’s purported reliance on the statements of state employees was misplaced.
According to Petitioner, at the time of the October 2006 state fire inspection survey, the
facility administrator asked the fire inspector, Brent Connell, “if we were ‘ready to go’
and he responded in the affirmative.” P. Ex. 10 (Leverenz Decl. ¥ 3). Petitioner also
claims that in a December 18, 2006 conversation, the facility’s licensing officer, Alice
Turner, said “ that the facility was free to admit residents.” P. Ex. 10 (Leverenz Decl. §
9). Finally, Petitioner points to a state document, issued December 19, 2006, by the
Division of Nursing Home Monitoring, titled “Notice of Licensure/Certification Action.”
The document says that the facility’s licensure and certification survey was December 15,
2006, and checks the box that says the “State Survey agency certifies/recertifies
compliance with Medicare/Medicaid program requirements.” P. Ex. 5.

* On December 15, 2006, the facility had admitted six residents, none Medicare
recipients. CMS Ex. 1, at 1. As of January 18, 2007, the facility had admitted 28
residents, although the record is silent as to their Medicare status. CMS Ex. 2; CMS Ex.
20, at 2 (Connell Decl. § 9).
5

I do not see anything particularly misleading about any of these communications. The
alleged conversations were ambiguous, at best. The phrase “good to go,” for example,
has a wide variety of interpretations in this context, and Administrator Leverenz
obviously understood that it did not mean — in October — that the facility was then
qualified for Medicare certification. Permission to admit residents (originally granted in
November) does not mean that the facility was Medicare-eligible. The state’s notice
reflected the state’s findings and recommendations to CMS, not any final agency
determination. In this regard, Petitioner’s reliance on the statements of state employees
seems particularly unreasonable because the facility knew, or should have known, that
neither a state agency nor its employees are empowered to find a facility eligible to
participate in the Medicare program. Only the Secretary (for whom CMS acts) has the
final authority to make that determination. 42 C.F.R. § 488.18(c).

But even if the communications were misleading, that would not justify my ignoring the
regulations. The facility is charged with knowing the Medicare participation
requirements, including the requirement that it pass a federal LSC survey before it can be
certified. Those who seek public funds must

act with scrupulous regard for the requirements of [the] law. .
. . [T]hose who deal with the Government are expected to
know the law and may not rely on the conduct of Government
agents contrary to [the] law.

Heckler v. Cmty. Health Srvs. of Crawford County, 467 U.S. 51, 63 (1984). The
Departmental Appeals Board recently relied on the language of Heckler to reiterate that,
where a party has knowledge of the truth, or

had the means by which with reasonable diligence he could
acquire the knowledge so that it would be negligence on his
part to remain ignorant by not using those means, he cannot
claim to have been misled by relying on the representation or
concealment.

Wade Pediatrics, DAB No. 2153, at 24-25 (2008) (citing 467 U.S. 51 at 61 n.10). Where,
as here, the statute and regulation unambiguously set forth requirements for beginning
Medicare participation, I have no authority to waive those requirements based on any
theory of estoppel. Everett Rehab. & Med. Ctr., DAB No. 1628, at 3 (1997).

* The Supreme Court has expressed particular skepticism at a Medicare
participant’s reliance on oral advice. Heckler v. Cmty. Health Srvs. of Crawford County,
467 U.S. 51 (1984).
6

With respect to Petitioner’s assertion that the state licensure survey may substitute for the
federal survey, Petitioner does not claim that CMS exempted the state from enforcing
federal LSC requirements based on the adequacy of the state requirements. See 42 C.F.R.
§ 483.70(a)(3); CMS Ex. 20, at 3 (Connell Decl. 413). And I have no authority to exempt
Petitioner from those survey requirements based on any state licensure result. While the
content of the surveys undoubtedly overlap somewhat, as a matter of law, they are not
equivalent. See Cmty. Hosp. of Long Beach, CR1118, at 5 (2003), aff'd DAB 1938
(2004) (“[a] state agency’s survey for state licensing is not determinative of, or equal to, a
survey to certify a provider for Medicare participation.”).

Moreover, here the October survey predated admission of any residents. As part of the
federal LSC survey, Inspector Connell reviewed the adequacy of the facility’s fire drill
plans and the actual fire drills conducted. CMS Ex. 20, at 2 (Connell Decl. { 8); see also
CMS Ex. 21, at 20 (SOM § 2008A) (Prior to the federal survey, the facility must be “fully
operational,” i.e., it must be serving a sufficient number of patients so that compliance
with all requirements can be determined.).

Conclusion

For all of the reasons discussed above, I find that CMS correctly certified Petitioner for
Medicare participation on the date its federal LSC survey was completed — January 18,
2007.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Hazel Hawkins Memorial Hospital, D/P) Date: March 18, 2008
SNF (CCN: 05-5462), )
)
Petitioner, )
)
-V.- ) Docket No. C-06-124
) Decision No. CR1753
Centers for Medicare & Medicaid )
Services. )
)
DECISION

Petitioner, Hazel Hawkins Memorial Hospital, D/P SNF (distinct part, skilled nursing
facility), violated 42 C.F.R. § 483.25(m)(2)! (Tag F333’) between July 19 and 26, 2005.
A per-instance civil money penalty (PICMP) of $3000 is a reasonable enforcement
remedy.

' All references to the Code of Federal Regulations (C.F.R.) are to the version in
effect at the time of the surveys in issue unless otherwise specified.

> This is a “Tag” designation as used in the State Operations Manual (SOM),
Appendix PP — Guidance to Surveyors for Long Term Care Facilities. The “Tag” refers
to the regulatory provision allegedly violated and CMS’s guidance to surveyors.
Although the SOM does not have the force and effect of law, the provisions of the Social
Security Act (Act) and the regulations that interpret the Act clearly do have such force
and effect. State of Indiana by the Indiana Department of Public Welfare v. Sullivan, 934
F.2d 853 (7th Cir. 1991); Northwest Tissue Center v. Shalala, | F.3d 522 (7th Cir. 1993).
Thus, while the Secretary of Health and Human Services (Secretary) may not seek to
enforce the provisions of the SOM as law, he may seek to enforce the provisions of the
Act or regulations as interpreted by the SOM.
I. Background

Petitioner, a long-term care facility participating in Medicare as a skilled nursing facility
(SNF) and in the California MediCal program as a nursing facility (NF), was subject to
surveys by the California Department of Health Services (state agency) on July 14, 2005,
July 19, 2005, and September 23, 2005. The state agency alleged that Petitioner did not
comply with program participation requirements during each survey. Request for
Hearing. By letter dated October 5, 2005, the Centers for Medicare & Medicaid Services
(CMS) notified Petitioner that it was imposing the following enforcement remedies:
termination of Petitioner’s provider agreement effective March 23, 2006; a PICMP of
$3000 for an alleged violation of 42 C.F.R. § 483.25(m)(2) (Tag F333) as identified
during the September 23, 2005 survey; and denial of payment for new admissions
(DPNA) effective October 20, 2005. CMS exhibit (CMS Ex.) 6. CMS notified Petitioner
by letter dated October 25, 2005 that, (1) based on an October 20, 2005 survey, Petitioner
returned to substantial compliance effective October 20, 2005, and (2) CMS rescinded the
termination and DPNA remedies. CMS Ex. 7.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
December 2, 2005. In its hearing request, Petitioner challenged the findings of
noncompliance resulting from the surveys conducted on July 14, 2005, July 19, 2005, and
on September 23, 2005, and the remedies CMS proposed to impose. The case was
assigned to me on December 23, 2005 for hearing and decision. A Notice of Case
Assignment and Prehearing Case Development Order was issued at my direction on
December 23, 2005.

On February 13, 2006, CMS filed a motion for partial dismissal of Petitioner’s request for
hearing on the following grounds: (1) with respect to Petitioner’s challenge of all
deficiencies identified by the surveys of July 14 and July 19, 2005, no remedies were
imposed for any deficiencies cited; and (b) with respect to the September 23, 2005
survey, Tag F333 was the only deficiency for which a remedy was imposed and only Tag
F333 is subject to appeal and review. On March 6, 2006, Petitioner opposed CMS’s
motion. On March 29, 2006, I granted the CMS motion and limited the issues for hearing
to (1) whether or not Petitioner violated 42 C.F.R. § 483.25(m)(2) (Tag F333); and (2)
whether or not the remedy proposed by CMS is reasonable.

On June 27, 2006, I convened a hearing in San Francisco, California. CMS offered, and I
admitted, exhibits (CMS Exs.) 1 through 12. Transcript (Tr.) 23-34, 149-52. Petitioner
offered exhibits (P. Exs.) 1 through 32. Petitioner’s exhibits 18 through 29, 30 (pages 9
and 10), 31, and 32 were admitted. Tr. 36-41, 286-90, 294-304. CMS called Brenda B.
Ryan, R.N.C., the state surveyor, to testify in its case-in-chief and in rebuttal. CMS also
called Magda F. Gabali, Pharm.D., a pharmaceutical consultant, and Captain John S.
3

Motter, R.N., M.P.H., a CMS Team Leader and Survey and Certification Review
Specialist, as expert witnesses. Petitioner called as it witnesses Anna M. Valentine,
Petitioner’s Director of Nursing (DON); Rosemary Gonzales-Bustillos, a nurse at
Petitioner’s facility; and Robert S. Hill, Petitioner’s Administrator of Long-Term Care
Facilities. Post-hearing, the parties filed briefs and reply briefs.

On July 18, 2006, Petitioner moved for relief from an order entered at hearing to produce
an incident report purportedly prepared by DON Valentine related to the alleged
medication error. Petitioner argued that the records are quality-assurance records
protected from disclosure by 42 C.F.R. § 483.75(0)(3). Tr. 319-26, 360-69, 377-78, 450-
56. Petitioner submitted with its motion P. Ex. 33 and 34. P. Ex. 33 is composed of
copies of four photographs of an empty medication cassette or pill case allegedly of the
same type Petitioner used to administer medication to Resident B and the declaration of
Petitioner’s counsel. Petitioner also submitted P. Ex. 34, the declaration of Brenda
Gatcomb, Petitioner’s Director of Quality Assurance and Risk Management. Ms.
Gatcomb indicated in her declaration that (1) it was her responsibility to receive incident
reports concerning medication errors committed by Petitioner’s staff; (2) she did not have
a record of receiving an incident report from DON Anna Valentine regarding the alleged
medication error in this case; (3) if she had received such a report, she did not consider
the incident serious enough to refer it to the Medications Continuous Quality
Improvement Committee for review; and (4) if an incident report was received from DON
Valentine, it had been destroyed. P. Ex. 34.

On August 3, 2006, CMS filed a response opposing Petitioner’s motion for relief,
objecting to P. Exs. 33 and 34, and requesting that I sanction Petitioner for failure to
produce the records as ordered. On October 30, 2006, I issued an Order establishing the
post-hearing briefing schedule and instructed Petitioner to respond to CMS’s request for
sanctions in its post-hearing brief. I also advised the parties that I would address
Petitioner’s motion for relief and the CMS motion for sanctions in the decision on the
merits. P. Exs. 33 and 34 are admitted. Admission of P. Exs. 33 and 34 results in no
prejudice to CMS as CMS prevails. I need not address Petitioner’s assertion of
“privilege” and to do so would be nothing but dicta. CMS’s motion for sanctions is
denied as discussed in some detail below.

II. Discussion
A. Findings of Fact
The following findings of fact are based upon the exhibits admitted. Citations to exhibit

numbers related to each finding of fact may be found in the analysis section of this
decision if not indicated here.
4

During the time period relevant to this case, Resident B was an 87 year-old woman
diagnosed with polymyalgia rheumatica, lupus, and a history of chronic pain, for
which she was under palliative care. Joint Stipulation; CMS Ex. 4, at 5, 7; P. Exs.
8, 19, 20, at 1, and 27.

Resident B was to be given prednisone daily to manage the symptoms of
polymyalgia rheumatica. CMS Ex. 4, at 12, 22, 30, 32.

On eight consecutive days beginning July 19, 2005, through July 26, 2005,
Resident B was not administered prednisone. CMS Exs. 4, at 32; P. Ex. 32.

Resident B suffered actual harm due to not receiving doses of prednisone July 19
through 26, 2005, including not feeling well; she suffered increased pain on
movement; and she was emotionally distressed and anxious because she did not
trust Petitioner’s staff to give her medication she needed. CMS Exs. 12, at 13-19.

Failure to administer prednisone for eight consecutive days from July 19, 2005 to
July 26, 2005, was abrupt withdrawal of prednisone contrary to manufacturer’s
prescribing instructions and Resident B’s prescribing physician’s orders; exposed
Resident B to adverse consequences such as exacerbated polymyalgia rheumatica;
and it was a significant medication error considering Resident B’s medical
condition, drug category, and the frequency of the error. CMS Ex. 12, at 8-20.

B. Conclusions of Law

Petitioner timely requested a hearing and I have jurisdiction over this case.
Petitioner violated 42 C.F.R. § 483.25(m)(2).

There is a basis for the imposition of an enforcement remedy.

A PICMP of $3000 is a reasonable enforcement remedy.

C. Issues

The issues in this case are:

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

Whether the remedy imposed is reasonable.
D. Applicable Law

Petitioner is a long-term care facility participating in the federal Medicare program as a
SNF and in the state Medicaid program as a NF. The statutory and regulatory
requirements for participation by a long-term care facility are found at sections 1819 and
1919 of the Act and at 42 C.F.R. Part 483 of the regulations. Sections 1819 and 1919 of
the Act vest the Secretary with authority to impose a civil money penalty (CMP) against a
long-term care facility for failure to comply substantially with federal participation
requirements.

Facilities that participate in Medicare are subject to surveys by state agencies on behalf of
CMS to determine whether the facilities are complying with federal participation
requirements. 42 C.F.R. §§ 488.10-488.28, 488.300-488.335. Pursuant to 42 C.F.R. Part
488, CMS may impose various sanctions for failure to substantially comply with
Medicare program requirements, including a PICMP or per-day CMP against a

long-term care facility. 42 C.F.R. §§ 488.406; 488.408; 488.430.

Per-day CMPs fall into one of two broad ranges of penalties. 42 C.F.R. §§ 488.408,
488.438. The upper range of CMP, from $3050 per day to $10,000 per day, is reserved
for deficiencies that constitute immediate jeopardy to a facility’s residents and, in some
circumstances, for repeated deficiencies. 42 C.F.R. §§ 488.438(a)(1)(i), (d)(2). The
lower range of CMP, from $50 per day to $3000 per day, is reserved for deficiencies that
do not constitute immediate jeopardy, but either cause actual harm to residents, or cause
no actual harm, but have the potential for causing more than minimal harm. 42 C.F.R.

§ 488.438(a)(1)(ii). As for PICMPs, the regulations provide for a single range from
$1000 to $10,000, which could be imposed whether or not immediate jeopardy is found.
42 C.F.R. §§ 488.408(d)(1)(iv); 488.438(a)(2).

A long-term care facility against which CMS has determined to impose an enforcement
remedy is entitled to a hearing by an ALJ. Act, § 1128A(c)(2); 42 C.F.R. §§ 488.408(g);
498.3(b)(13). A hearing before an ALJ is a de novo proceeding. Anesthesiologists
Affiliated, et al., DAB CR65 (1990), aff'd, Anesthesiologists Affiliated, et al. v. Sullivan,
941 F.2d 678 (8th Cir. 1991); Emerald Oaks, DAB No. 1800, at 11 (2001); Beechwood
Sanitarium, DAB No. 1906 (2004); Cal Turner Extended Care Pavilion, DAB No. 2030
(2006); The Residence at Salem Woods, DAB No. 2052 (2006). A facility has a right to
appeal a “certification of noncompliance leading to an enforcement remedy.” 42 C.F.R.
§ 488.408(g)(1); see also 42 C.F.R. §§ 488.330(e) and 498.3. However, the choice of
remedies by CMS or the factors CMS considered when choosing remedies are not subject
to review. 42 C.F.R. § 488.408(g)(2). A facility may only challenge the scope and
severity level of noncompliance found by CMS ifa successful challenge would affect the
amount of the CMP that could be collected by CMS or impact upon the facility’s Nurse
6

Aide Training and Competency Evaluation Program. 42 C.F.R. §§ 498.3(b)(14) and
(d)(10)(i). CMS’s determination as to the level of noncompliance “must be upheld unless
it is clearly erroneous.” 42 C.F.R. § 498.60(c)(2). This includes CMS’s finding of
immediate jeopardy. Woodstock Care Center, DAB No. 1726, at 9, 38 (2000), aff'd,
Woodstock Care Center v. Thompson, 363 F.3d 583 (6th Cir. 2003). The Departmental
Appeals Board has long held that the net effect of the regulations is that a provider has no
right to challenge the scope and severity level assigned to a noncompliance finding,
except in a situation where that finding was the basis for an immediate jeopardy
determination. See, e.g., Ridge Terrace, DAB No. 1834 (2002); Koester Pavilion, DAB
No. 1750 (2000). Review of a CMP by an ALJ is governed by 42 C.F.R. § 488.438(e).

When a penalty is proposed and appealed, CMS must make a prima facie case that the
facility has failed to comply substantially with federal participation requirements. “Prima
facie” means that the evidence is “[s]ufficient to establish a fact or raise a presumption
unless disproved or rebutted.” Black’s Law Dictionary 1228 (8" ed. 2004); see also,
Hillman Rehabilitation Center, DAB No. 1611, at 8 (1997), aff'd, Hillman Rehabilitation
Center v. U.S. Dept. of Health and Human Services, No. 98-3789 (D.N.J. May 13, 1999).
To prevail, a long-term care facility must overcome CMS’s showing by a preponderance
of the evidence. Batavia Nursing and Convalescent Center, DAB No. 1904 (2004);
Batavia Nursing and Convalescent Inn, DAB No. 1911 (2004); Emerald Oaks, DAB No.
1800 (2001); Cross Creek Health Care Center, DAB No. 1665 (1998); Evergreene
Nursing Care Center, DAB No. 2069, at 7-8 (2007).

E. Analysis
1. Petitioner violated 42 C.F.R. § 483.25(m)(2).

A long-term care facility participating in Medicare is obligated and agrees to ensure that
its residents are “free of any significant medication errors.” 42 C.F.R. § 483.25(m)(2).
CMS has instructed its surveyors that a medication error exists when the preparation or
administration of drugs or biologicals is not in accordance with (1) a physician’s orders;
(2) manufacturer’s specifications, as opposed to recommendations, regarding the
preparation and administration of the drug or biological; or (3) accepted professional
standards and principles that apply to professionals providing services. SOM,
Interpretive Guidelines, Tag F333. A “significant medication error” is one that causes a
resident discomfort or jeopardizes his or her health and safety. Jd. Determining the
significance of medication error is a matter of professional judgment that involves three
general factors: resident condition; drug category; and frequency of error. /d. Petitioner
has not disputed that the CMS construction is consistent with applicable industry
standards of practice.
7

CMS alleges that Petitioner committed a significant medication error because it failed to
administer prednisone to Resident B on eight consecutive days, which caused her harm
that included increased pain and mental distress. CMS Ex. 3, at 3. To demonstrate a
prima facie case of this deficiency, CMS must show that there was a medication error and
that it was significant. I conclude that CMS made a prima facie showing of a violation
and that Petitioner has failed to show by a preponderance of the evidence that it was in
substantial compliance or that it had an affirmative defense.

CMS offers the Medication Administration Record (MAR) for Resident B from July
2005, as a key piece of evidence, but not the only evidence as Petitioner would have me
believe, that a significant medication error occurred. Resident B had a physician’s order
to receive prednisone daily, but the MAR, a document that Petitioner uses to record that
medication was administered by its staff, does not show that Petitioner’s staff
administered the prednisone for eight consecutive days from July 19 through 26, 2005.
CMS concluded that the absence of initials of the person or persons who administered the
drug shows the medication was not administered. CMS Ex. 4, at 32; P. Ex. 32. CMS
argues that Petitioner failed to comply with the five “rights” of administration of
medication: “right” dose of the “right” medication, administered by the “right” route, to
the “right” patient, at the “right” time, citing Franklin Care Center, DAB No. 1900, at 11
(2003). CMS’s Post-Hearing Brief (CMS Br.) at 27; CMS Ex. 3, at 4.

Petitioner does not dispute that there are no initials on the MAR for eight consecutive
days from July 19 through July 26, 2005. Petitioner’s Post-Hearing Brief (P. Br.) at 8.
Petitioner argues that this case does not involve a medication error, significant or not, i.e.,
Petitioner gave Resident B prednisone as ordered, but rather, the error involves failure to
document the administration of prednisone. Petitioner asserts that a “documentation
error” does not trigger a presumption that the medication was not administered. P. Br. at
8-9. On this point, Petitioner relies upon the SOM, Interpretive Guidelines, Tag F333,
submitted as Appendix C to its Pre-Hearing Brief, which, in pertinent part, instructs
surveyors:

Do not rely solely on a paper review to determine medication
errors. Detection of blank spaces on a medication
administration record does not constitute the detection of
actual medication errors. Paper review only identifies
possible errors in most cases. In some cases paper review can
help identify actual errors but research has shown that the
procedure is time consuming for the number of actual errors
detected.
8

Petitioner’s position is that Surveyor Ryan failed to conduct even a de minimis
investigation before concluding that a significant medication error occurred, by
improperly relying upon “unexplained” blank spaces in the MAR contrary to SOM
guidelines; and that such reliance resulted from a combination of factors, including,
significantly, Ms. Ryan’s lack of objectivity. Petitioner also asserts that CMS relied upon
uncorroborated hearsay statements made to Surveyor Ryan by DON Valentine and
Rosemary Gonzales-Bustillos, a staff nurse. P. Br. at 1-2.

I conclude that Petitioner violated 42 C.F.R. § 483.25(m)(2). I find Surveyor Ryan
credible. I find no inconsistencies in the records associated with her survey and
investigation of the incident, or in her hearing testimony. Ms. Ryan pursued her duties
aggressively and diligently, which I find commendable, and I conclude that it does not
reflect poorly upon her credibility.

My conclusion that a medication error occurred is consistent with the credible evidence.
The blank spaces on the MAR for eight consecutive days from July 19 through 26, 2005,
certainly give rise to an inference that the medication was not administered. CMS Ex. 4,
at 32; P. Ex. 32; Tr. 321. Petitioner’s DON agreed that it is standard nursing practice and
consistent with Petitioner’s policy or practice to interpret the absence of an entry ona
MAR as evidence that the medication was not administered. Tr. 312. Petitioner’s
Administrator, Robert S. Hill, also testified that the absence of entries on the MAR
created the appearance that the medication was not given and that corrective action was
required. Tr. 385, 402-403. CMS’s expert witness, Captain Motter, also opined that it is
consistent with standards of practice to construe the absence of initials on the MAR for
eight consecutive days from July 19 through July 26, 2005, to reflect failure to administer
prednisone on those days. Tr. 251.

Iam not convinced by arguments that Surveyor Ryan’s survey was incomplete or
insufficient, or otherwise inconsistent with SOM guidelines for determining whether a
medication error occurred. CMS offered evidence in addition to the MAR that I find
credible and that supports the conclusion that a medication error occurred. Surveyor
Ryan recounts in testimony and in her records that on September 22, 2005, DON
Valentine reported that a medication error occurred during an eight-day period in July
2005 consistent with the absence of the initials in the MAR, and that three nurses were
involved in the medication error. CMS Exs. 3, at 3-4; 4, at 1; 33; Tr. 73-77, 87-90, 111,
426-30. I find this hearsay statement credible, particularly because the statement is not
denied by DON Valentine and because it is consistent with other evidence of record.
Nurses’ notes for Resident B from Petitioner’s clinical records created near the time of
the alleged medication error indicate that Resident B’s family was informed that some
doses of prednisone were missed. These records show that Petitioner acknowledged to
the family that a medication error occurred. CMS Ex. 4, at 10, 11. The evidence shows
9

that Resident B’s daughter and son were told about the medication error within days after
July 26, 2005, the last day of the eight-day period of the medication error. CMS Ex. 1, at
1-2, 7-9; and P. Exs. 21; 29, at 2. A “social services notes” dated July 28, 2005 also
reflects that Resident B’s family members were advised by Petitioner’s staff that there
were missed doses of prednisone. CMS Ex. 4, at 48; P. Ex. 20, at 2. Surveyor Ryan
testified that it is standard of practice to notify a resident’s family when a facility
determines that a medication error occurred, but not where the facility is uncertain that
such an error occurred. Tr. 434-35.

DON Valentine’s testimony is that she initially thought that a medication error occurred.
However, her subsequent investigation led her to conclude that there was no error, but
that Resident B was given prednisone as ordered and staff merely failed to document the
doses given. Tr. 283, 291. Multiple inconsistencies between her testimony and other
evidence in the record cause me to conclude that DON Valentine’s testimony is not
credible. Petitioner’s argument that Surveyor Ryan misconstrued DON Valentine’s
statements to her, or that she deliberately construed them against Petitioner based upon a
predisposition for finding a deficiency, are not supported by the record or DON
Valentine’s own testimony. DON Valentine testified that it is standard practice to initiate
an investigation upon learning that a MAR has blank entries. Tr. 268. She also testified
that she herself wrote the words “8 days missing med” and drew circles (for July 19
through 26, 2005) on the MAR, as she began her investigation. Tr. 292-293; CMS Ex. 4,
at 32. She conceded that the event was deemed significant enough to trigger the
preparation of an incident report, but that the “facility” ultimately determined, following
a root-cause analysis, that the error concerned only documentation. Tr. 316-17. At the
hearing, DON Valentine did not deny Surveyor Ryan’s version of their conversation.
Rather, she said that she could not recall what she told Ms. Ryan when they met on
September 22, 2005. Tr. 284, 316-19. DON Valentine also did not recall informing Ms.
Ryan about the conclusion or finding reached in the incident report that she prepared. Tr.
318. She could not recall whether she wrote the first names of the three nurses who might
have been involved in the incident on the document marked CMS Ex. 4, at 33, when she
began her investigation or when she was interviewed by Surveyor Ryan. Tr. 326-327.
She did recall that she told the social worker that Resident B did not receive her
prednisone for eight days. Tr. 327. Surveyor Ryan testified that at no time during her
survey and investigation did DON Valentine ever state that the error merely involved
documentation. CMS Ex. 2, at 1-2; 3, at 3-4; and Tr. 426-28. I find it incredible that a
facility that conducted an investigation, including a root-cause analysis, and concluded
that no medication error occurred, failed to inform a surveyor about potentially
exculpatory findings, even if, for no other reason than that the investigation is evidence of
good remedial action by Petitioner. One nurse involved in the medication error wrote a
note to DON Valentine with the date July 29, 2005. In that note she states that she
recalled administering prednisone for the last two of the eight days in question, but

10

inadvertently failed to note the administration on the MAR. P. Ex. 31; Tr. 284-86; P. Ex.
32. The “PRN Medication Record and Profile” has “stars” - but not a person’s initials -
marked in the boxes for July 25 and July 26, perhaps indicating that prednisone was given
those two days. Even if I find this hearsay entirely credible, the evidence does not
account for the first six days of missed doses. However, the credibility of the note and
DON Valentine’s testimony is negatively impacted as DON Valentine’s explanation for
her failure to inform the surveyor about this potentially exculpatory evidence is not
credible. Tr. 289. Surveyor Ryan’s testimony that she was never given a copy of the note
at P. Ex. 31, is unrebutted. Tr. 430-433.

Although I draw no adverse inference against Petitioner for failure to produce the incident
report as that would be a sanction, I do not have that report before me to help bolster
DON Valentine’s credibility. Brenda Gatcomb, Petitioner’s Director of Quality
Assurance and Risk Management, indicates in her declaration that: (1) it was her
responsibility to receive incident reports concerning medication errors committed by
Petitioner’s staff; (2) she did not have a record of receiving an incident report from DON
Anna Valentine regarding the alleged medication error in this case; (3) if she had received
such a report, she did not consider the incident serious enough to refer to the Medications
Continuous Quality Improvement Committee for review; and (4) if an incident report was
received from DON Valentine, it had been destroyed. P. Ex. 34. Ms. Gatcomb neither
confirms nor denies that an incident report was ever prepared and she gives no insight
regarding its contents.

I find credible Surveyor Ryan’s testimony that Rosemary Gonzales-Bustillos admitted to
her during the survey that she was one of the nurses involved in the medication error. Tr.
87-89. According to Surveyor Ryan, Nurse Gonzales-Bustillos told her that she was
responsible for one of the missed doses of prednisone. Nurse Gonzales-Bustillos told
Surveyor Ryan that she was doing orientation with Nurse Estella Queszada; that the entry
for prednisone on the MAR was highlighted, which caused her to believe it had been
discontinued; that Nurse Queszada agreed with that interpretation; and the prednisone
was not given. Tr. 88-89. In her testimony, Nurse Gonzales-Bustillos stated that she did
not recognize Surveyor Ryan in the courtroom. She did, however, recall certain details
about her meeting with Surveyor Ryan in September 2005, including that she spoke to the
surveyor for approximately five minutes and that she told Surveyor Ryan to see Nurse
Queszada, as Nurse Queszada was actually giving the medication while she merely
observed. Tr. 348-49. Nurse Gonzales-Bustillos denied the statements Surveyor Ryan
attributed to her regarding the prednisone being discontinued. Tr. 347. Nurse
Gonzales-Bustillos testified that she did remember that Nurse Queszada did give Resident
B medication, but she never specifically said that the medication given included the
prednisone. Tr. 344-50.

11

Because I have found that there was a medication error, the question is whether the error

was significant, i.e., whet!
that it failed to administer
Resident B suffered any h
actually was feeling and

(P. Reply), at para. I.B.1.

Resident B told Surveyor
chair to her bed due to an
prednisone. Resident B al
medication. CMS Exs. 2,
argument that Resident B
period at issue. P. Br. at

Resident B was oriented, alert, cooperat

ive, and

er it harmed Resident B. Petitioner argues that even if I find
prednisone, the evidence does not support a conclusion that
arm. Petitioner argues that the clinical records show Resident B
oing better during that time. P. Brief at 13-17; P. Reply Brief
My review of the evidence leads me to a different conclusion.

Ryan on September 22, 2005, that she could not walk from her
increase of severe pain during the period of the missed doses of
so expressed that she no longer trusted facility staff to give her
at 2; 3, at 5; Tr. 90-9
was not a reliable hist
2-13. In particular, records associated with Ms. Ryan’s
investigation and clinical records dated shortly

, 99. Lam not convinced by Petitioner’s
orian of her own condition during the

efore the event in question indicate that
trustworthy, and that her cognitive ability

was intact. CMS Exs. 2, at 2; 3, at 5; 4, at 44-46; Tr. 91, 93. Petitioner’s clinical records

for Resident B do not reflect the level of cogniti
suggests. Her palliative care initial assessment dated June 22, 2005, shows t

not depressed or anxious. P. Ex. 18, at

. Resi

at Petitioner
at she was
uly 23, 2005,

ve impairment or limitation t

ent B was assessed only on J

as making poor decisions and requiring cues and supervision, but her memory was noted

to be “Okay,” she had no indicators of

variation in mental function, altered perception,

was also assessed on July 23, 2005, as b

elirium,

such as easy distractability, lethargy,
disorganized speech, or restlessness. She

eing ab

le to hear adequately and to speak clearly;

she was able to be understood; there were no negative indications related to mood or

ehavior. She was noted to interact wit
activities. A note indicated that she ha

2007, Resident B was consistently alert,

others.
“a few

stool softeners. P. Ex. 22. Petitioner’s records also show that from July 18 t
with no confusion and no depression. P. Ex. 23.
Petitioner provided me with one page of Resident B’s Minimum Data Set (MDS), signed

y DON Valentine on June 28, 2005, w

than fully credible.

ich sho

self-initiated
she refused
rough 31,

She was doing planned and
days of not feeling good” an

ws that during the preceding 90 days

Resident B had a diagnosis of anxiety syndrome, but the page provided does not include
the section of the MDS that shows the assessment of Resident B’s cognitive ability. P.
Ex. 24, at 1. A Nurse’s Note dated June 26, 2005, records that a nurse assistant reported
Resident B was confused and hallucinating two nights, but that is an isolated incident in
the records Petitioner provided and did not occur around the time of the events in issue.
P. Ex. 29, at 1. I find the evidence does not support Petitioner’s characterization of
Resident B’s mental status and I find no reason to consider Resident B’s reports other
12

Resident B suffered polymyalgia rheumatica for which she received palliative care to
manage chronic pain. She was to be administered prednisone daily to manage her
polymyalgia rheumatica. CMS Ex. 4, at 12, 22, 30, 32. Dr. Gabali noted in her
declaration that Resident B had been on long-term prednisone therapy. CMS Ex. 12, at 6,
10, 11.4 She stated that the lowest possible doses of a corticosteroid like prednisone are
administered to control a condition but, even at a low dose reduction in dosage should be
gradual and tapered, not abrupt, consistent with manufacturer’s prescribing information.
CMS Ex. 12, at 8, 10, 12, 15. Dr. Gabali further stated that rapid dose reduction could
result in recurrence or exacerbation of the symptoms of the underlying disorder for which
the prednisone was ordered or other physiologic effects, including anorexia, nausea or
vomiting, weight loss, lethargy, headache, fever, joint or muscle pain, and postural
hypotension. CMS Ex. 12, at 11, 12. I note that beginning July 6, 2005, Resident B’s
prednisone dose was to be increased to 20 mg for a day and then gradually decreased to
15 mga day. CMS Ex. 4, at 32. Dr. Gabali observed that the adjustment in dosage did
make Resident B more comfortable and improved the quality of her life. CMS Ex. 12, at
9-10. She also opined that, in light of Resident B’s medication condition, omission of
eight doses of prednisone caused Resident B “significant harm” in the form of
“deleterious effects” on her condition manifested by “increased discomfort and pain” and
“decreased mobility and activity.” CMS Ex. 12, at 11-19. Resident B’s clinical signs
were consistent with abrupt withdrawal of prednisone during the time period in question.
These clinical signs included gastrointestinal discomfort, lethargy, disrupted sleep, and
increased generalized discomfort and pain as apparent based on an increased frequency of
dosage of Tylenol 650 mg during the time period when prednisone was not administered.
CMS Ex. 12, at 11-19. Captain John Motter concurred with Dr. Gabali’s opinion. Tr.
214-217, 235-241. The failure to administer prednisone for eight consecutive days was a
significant medication error considering Resident B’s medical condition, the drug
category, and frequency of error. CMS Ex. 12, at 19-20; Tr. 95-99, 212-215, 223-224.

Based on the foregoing, I conclude that a significant medication error occurred based on
the failure to give Resident B prednisone for eight consecutive days from July 19, 2005
through July 26, 2005. Furthermore, the error resulted in actual harm to B as described
above. Thus, there is a basis for the imposition of an enforcement remedy.

* Dr. Gabali was subject to cross-examination by Petitioner and further
examination by CMS at hearing. Her testimony at hearing is consistent with her
declaration.
13

The CMS request that I sanction Petitioner for failure to produce the incident report by
striking DON Valentine’s testimony or by dismissing Petitioner’s hearing request is
denied. Given the result in this case, the imposition of the sanctions requested by CMS
would have little impact. Furthermore, the evidence does not support the imposition of
sanctions.

2. A PICMP of $3000 is reasonable.

Because Petitioner violated 42 C.F.R. § 483.25(m)(2), there is a basis for the imposition
of an enforcement remedy. The remaining issue is whether a PICMP of $3000 is
reasonable.

If a facility is not in substantial compliance with program requirements, CMS has the
authority to impose one or more of the enforcement remedies listed in 42 C.F.R.

§ 488.406, including a CMP. CMS may impose a CMP for the number of days that the
facility is not in compliance or for each instance that a facility is not in substantial
compliance. 42 C.F.R. § 488.430(a). In this case, CMS imposed a PICMP of $3000. To
determine whether the CMP is reasonable, the following factors in 42 C.F.R.

§ 488.438(f) must be considered: (1) the facility’s history of non-compliance, including
repeated deficiencies; (2) the facility’s financial condition; (3) the seriousness of the
deficiencies as set forth in 42 C.F.R. § 488.404; and (4) the degree of culpability.

I have no evidence of a history of non-compliance by Petitioner and CMS does not argue
that there is a history of non-compliance for me to consider. CMS Brief at 24-28; CMS
Post Hearing Response Brief at 20-24.‘ Petitioner has not alleged that it is unable to pay
the PICMP. There is credible evidence of actual harm to Resident B. Petitioner is
culpable for the failure to ensure that prednisone was administered as ordered and there is
evidence of the potential for serious adverse consequences of sudden withdrawal of
prednisone. Based on these considerations, and particularly, the degree of seriousness of
the noncompliance in light of circumstances specific to Resident B, I conclude that the
PICMP of $3000 is a reasonable remedy.

* Petitioner reveals in its request for hearing that deficiencies were cited by
surveys completed on July 14 and 19, 2005. However, CMS did not impose any
enforcement remedies based upon those surveys and none of the specific findings from
those surveys are disclosed. Thus, I do not consider the surveys completed on July 14
and 19 as indicative of a history of noncompliance.
Ill. Conclusion

For the foregoing reasons, I conclude that (1) Petitioner violated 42 C.F.R.
§ 483.25(m)(2); and (2) a PICMP of $3000 is a reasonable enforcement remedy.

/s/
Keith W. Sickendick
Administrative Law Judge


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

)
In the Case of: )
) Date: March 14, 2008
Stacy Lyn Archibald, )
)
Petitioner, ) Docket No. C-07-764
) Decision No. CR1751
-v.- )
)
The Inspector General. )
oe )
DECISION

Petitioner is excluded from participation in Medicare, Medicaid, and all other federal
health care programs pursuant to section 1128(a)(1) of the Social Security Act (Act) (42
U.S.C. § 1320a-7(a)(1)), effective August 20, 2007, based upon her conviction for a
criminal offense related to the delivery of an item or service under Medicare or a state
health care program. There is a basis for exclusion. Petitioner’s exclusion for the
minimum period' of five years is mandatory pursuant to section 1128(c)(3)(B) of the Act
(42 U.S.C. § 1320a-7(c)(3)(B)).

I. Background

The Inspector General of the Department of Health and Human Services (1.G.) notified
Petitioner by letter, dated July 31, 2007, that she was being excluded from participation in
Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1)
of the Act based upon her conviction in the District Court of Muskogee County,
Oklahoma, of a criminal offense related to the delivery of an item or service under
Medicare or a state health care program. The LG. advised her that the exclusion was for
the minimum statutory period of five years effective 20 days from the date of the letter.

' Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only
after the period of exclusion expires. Reinstatement is not automatic upon completion of
the period of exclusion.
2

Petitioner, by counsel, requested a hearing before an administrative law judge (ALJ) by
letter dated September 25, 2007. On October 29, 2007, the case was assigned to me for
earing and decision. On November 16, 2007, I convened a prehearing telephonic
conference, the substance of which was memorialized in my Order and Initial Briefing
Schedule issued November 16, 2007. During the conference the I.G.’s counsel stated her
position that this case may be resolved based on written submissions in lieu of an oral
earing and that the I.G. desired to move for summary judgment absent Petitioner’s
waiver of her right to an oral hearing. Petitioner’s counsel indicated that Petitioner would
not waive her right to a hearing. I advised the parties that the I1.G. would be permitted to
file a motion for summary judgment and supporting evidence and I established the
riefing schedule to which the parties agreed.

On December 31, 2007, the I.G. filed its brief (I.G. Brief) with exhibits (I.G. Exs.) 1
through 5, and Proposed Findings of Fact and Conclusions of Law.’ On February 14,
2008, Petitioner filed her response (P. Brief), with exhibits (P. Exs.) | and 2. On
February 29, 2008, the LG. filed its reply (I.G. Reply). No objections were raised to the
exhibits as submitted. I admit P. Exs. 1 and 2 and I.G. Exs. | through 5.

II. Discussion
A. Findings of Fact

The following findings of fact are based upon the undisputed assertions of fact in the
pleadings and the exhibits admitted:

1. On August 20, 2006, Petitioner was charged with one count of Obtaining Cash or
Merchandise by Bogus Check/False Pretenses, a misdemeanor, under Title 21,
Oklahoma Statutes (O.S.) § 1541.1, punishable by imprisonment for up to one year
and/or a fine up to $1000, or both. I.G. Exs. 3, at 1, 4, at 1 and 3, and 5, at 1; P.
Ex. 1, at 1.

> The L.G. did not style its initial pleading as a motion for summary judgment or
discuss the legal standard to be applied to a motion for summary judgment. However,
Petitioner recognized that the I.G. was authorized to file a motion for summary judgment
and specifically noted she was responding to the I.G.’s initial pleading as if it was a
motion for summary judgment. P. Brief at 1. The I.G.’s Reply does refer to the motion
for summary judgment and alludes to the standard applicable. I find no prejudice to
either party as both were clearly aware that the I.G. was requesting summary judgment.
3

Petitioner entered a plea of nolo contendere to the charge of Obtaining Cash or
Merchandise by Bogus Check/False Pretenses, and the District Court of Muskogee
County, Oklahoma, accepted that plea on August 17, 2006. P. Brief at 1; 1.G. Ex.
5; P. Ex. 1.

On August 17, 2006, the District Court of Muskogee County, Oklahoma, deferred
entering judgment and sentence for one year based upon Petitioner’s nolo
contendere plea to the charge of Obtaining Cash for Merchandise by Bogus
Check/False Pretenses, subject to her fulfillment of the conditions of probation
before judgment, which included payment of a $500 fine and $50 for Victim
Compensation Assessment; prohibition of employment with a vulnerable adult;
and that Petitioner would not violate any local, state, or federal law. I.G. Ex. 5; P.
Ex. 1; P. Brief at 2.

Petitioner does not dispute that the charge against Petitioner of Obtaining Cash for
Merchandise by Bogus Check/False Pretenses related to the delivery of an item or
service under Medicare or a state health care program.

The I.G. notified Petitioner by letter dated July 31, 2007, that she was being
excluded from participation in Medicare, Medicaid, and all federal health care
programs for the minimum statutory period of five years, pursuant to section

128(a)(1) of the Act. I.G. Exs. 1, and 2, at 2-4.

Petitioner filed a timely request for hearing by letter dated September 25, 2007.
.G. Ex. 2, at 1.

B. Conclusions of Law
Petitioner’s request for hearing was timely and I have jurisdiction over this case.
Summary judgment is appropriate.

Petitioner was convicted of a criminal offense within the meaning of section
128(i) of the Act (42 U.S.C. § 1320a-7(i)).

Petitioner was convicted of an offense related to the delivery of an item or service
under Medicare or a state health care program.

There is a basis for mandatory exclusion of Petitioner pursuant to section
128(a)(1) of the Act.

4

6. Pursuant to section 1128(c)(3)(B) of the Act, the minimum period of exclusion
under section 1128(a) is five years and that period is presumptively reasonable.

C. Issue

Whether there is a basis for Petitioner’s exclusion under
section 1128(a)(1) of the Act.

D. Applicable Law

Pursuant to section 1128(a)(1) of the Act, the Secretary of Health and Human Services
must exclude from participation in Medicare and Medicaid programs any individual
convicted of a criminal offense related to the delivery of an item or service under title
XVIII of the Act (Medicare) or under any state health care program. Section
1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the
Act shall be for a minimum period of five years. Pursuant to 42 C.F.R. § 1001.102(b), the
exclusion period may be extended based on the presence of specified aggravating factors.
Only if aggravating factors justify an exclusion period longer than five years may
mitigating factors be considered to reduce the exclusion period to no less than five years.
42 C.F.R. § 1001.102(c).

The standard of proof is a preponderance of the evidence. 42 C.F.R. § 1001.2007(c).
Petitioner bears the burden of proof and persuasion on affirmative defenses or mitigating
factors. I1.G. bears the burden on all other issues. 42 C.F.R. § 1005.15(b) and (c).

E. Analysis
1. Summary judgment is appropriate.

Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to
reasonable notice and an opportunity for a hearing. The right to hearing before an ALJ is
accorded to a sanctioned party by 42 C.F.R. § 1005.2 and the rights of both the sanctioned
party and the LG. to participate in a hearing are specified in 42 C.F.R. § 1005.3. Either or
both parties may choose to waive appearance at an oral hearing and to submit only
documentary evidence and written argument for my consideration. 42 C.F.R.

§ 1005.6(b)(5). The ALJ may also resolve a case, in whole or in part, by summary
judgment. 42 C.F.R. § 1005.4(b)(12). Summary judgment is appropriate and no hearing
is required where either: there are no disputed issues of material fact and the only
questions that must be decided involve application of law to the undisputed facts; or, the
moving party must prevail as a matter of law even if all disputed facts are resolved in
favor of the party against whom the motion is made. A party opposing summary
judgment must allege facts which, if true, would refute the facts relied upon by the
5

moving party. See, e.g., Fed. R. Civ. P. 56(c); Garden City Medical Clinic, DAB No.
1763 (2001); Everett Rehabilitation and Medical Center, DAB No. 1628, at 3 (1997) (in-
person hearing required where non-movant shows there are material facts in dispute that
require testimony); Thelma Walley, DAB No. 1367 (1992); see also New Millennium
CMHC, DAB CR672 (2000); New Life Plus Center, CMHC, DAB CR700 (2000).

There are no genuine issues of material fact in dispute in this case as discussed hereafter.
The sole issue in dispute before me is a question of law, i.e., whether Petitioner was
convicted within the meaning of the Act. P. Brief at 1. Accordingly, summary judgment
is appropriate.

2. There is a basis for exclusion under section 1128(a)(1) of the Act.

On April 20, 2006, the Attorney General of Oklahoma filed an Information against
Petitioner alleging that Petitioner

committed the crime of Obtaining Money by False Pretense, a
misdemeanor, in violation of Title 21 O.S. § 1541.1, by
obtaining from Healthcare Innovations, Inc. payments in an
amount of less than $500.00 by means of causing false claims
to be filed for home health care patient Patricia Rozell,
knowing the claims to be false with intent to cheat and
defraud.

1G. Ex. 3, at 1. The Affidavit of Probable Cause for the issuance of an arrest warrant for
Petitioner, issued April 20, 2006 (I.G. Ex. 4), indicates that Petitioner admitted to having
submitted false documents that home health services were provided, which caused
Medicare to be billed for services never provided. Petitioner earned $144 from her
employer based on the falsified records. I.G. Ex. 4, at 1-2.

Petitioner entered a plea of nolo contendere to one count of the crime of Obtaining Cash
or Merchandise by Bogus Check/False Pretenses in violation of Title 21, O.S. § 1541.1.
On August 17, 2006, the District Court of Muskogee County, Oklahoma, deferred the
entry of judgment and a one-year sentence to confinement for a period of one year during
which Petitioner was placed on probation. P. Brief at 1; 1.G. Ex. 5, at 1-2; P. Ex. 1, at 1-
2. Petitioner was ordered to pay a $500 fine and a $50 Victim Compensation
Assessment; she was prohibited from employment with any vulnerable adult; and it was
specified that she would not violate any local, state, or federal law during the probation
period. P. Brief at 2; 1.G. Ex. 5; P. Ex. 1.
6

The L.G. cites section 1128(a)(1) of the Act as the basis for Petitioner’s mandatory
exclusion. The statute provides:

(a) MANDATORY EXCLUSION. - The Secretary shall
exclude the following individuals and entities from
participation in any Federal health care program (as defined in
section 1128B(f)):

(1) Conviction of program-related crimes. — Any
individual or entity that has been convicted of a
criminal offense related to the delivery of an item or
service under title X VIII or under any State health care
program.

Clearly the statute requires exclusion from participation any individual or entity: (1)
convicted of a criminal offense; (2) where the offense is related to the delivery of an item
or service; and (3) the item or service is or was to be delivered under Medicare or any
state health care program.

Petitioner argues that she was not convicted under Oklahoma law. P. Brief at 1. She
asserts that she entered a nolo contendere plea not fully appreciating the consequences of
that plea, namely, that the plea could be deemed a conviction for the purposes of the
LG.’s exclusion. She claims that she believed that by entering the plea, the charge would
be “totally dismissed” if she had no violations of the law for the one-year period of
deferred judgment. She argues that her plea was not truly knowing and voluntary and
cannot support the exclusion. P. Brief at 1-4; P. Ex. 2.

Petitioner also disputes the accuracy of the events that led to the criminal charge as stated
in the charging documents (I.G. Exs. 3 and 4). She asserts that in conjunction with
performing a home health visit for the patient in question, she transported the patient to a
dialysis appointment; that the service was not in lieu of providing home health services;
and that she did not earn money for services not provided. She also asserts that as an
employee she had no control over her employer’s billing practices and cannot be deemed
culpable of any Medicare fraud committed by the employer. She denied knowing receipt
of money for services fraudulently billed to Medicare. She alleges that she merely
complied when her employer instructed her to visit patients and then made notes of those
visits. She also alleges that did not know which specific visits her employer would or
would not bill to Medicare. She does not accept that she committed any wrongdoing but
asserts that she merely pleaded nolo contendere to receive a deferred judgment and
sentence. P. Brief at 2-3; P. Ex. 2. Petitioner’s arguments are without merit.
7

Pursuant to section 1128(i) of the Act, an individual is “convicted” of a criminal offense
when a judgment of conviction has been entered by a federal, state, or local court whether
or not an appeal is pending or the record has been expunged; or when there has been a
finding of guilt in a federal, state, or local court; or when a plea of guilty or no contest has
been accepted in a federal, state, or local court; or when an accused individual enters a
first offender program, deferred adjudication program, or other arrangement where a
judgment of conviction has been withheld. The decision of the U.S. Court of Appeals for
the Ninth Circuit in Travers v. Shalala, 20 F.3d 993, 996-99 (9th Cir. 1994) is instructive.
The court in Travers recognized that it is the Social Security Act, and not state law, that
defines the term “conviction,” and that it is necessary to examine the substance of the
proceedings in the criminal court rather than to rely upon characterizations used by the
state or the parties. The court in Travers also defined “deferred prosecution” as an
agreement between the prosecutor and the defendant pursuant to which prosecution of the
charges is delayed, recognizing that “deferred adjudication” does not involve deferral of
prosecution. 20 F.3d at 996-97. According to the court, deferred prosecution would not
amount to a conviction under the Act, but a deferred adjudication clearly does. In this
case, Petitioner received the benefit of a deferred adjudication in the Oklahoma state
court. Although her deferred adjudication may not be considered a “conviction” under
the laws of the State of Oklahoma, her deferred adjudication clearly is a conviction within
the meaning of the Act, section 1128(1).

Petitioner’s plea that she did not understand that her nolo contendere plea and deferred
adjudication in the Oklahoma court would trigger the mandatory exclusion required by
section 1128(a)(1) of the Act is also without merit. Whether or not Petitioner’s plea was
knowing and voluntary and whether she may have misrepresented facts to the Oklahoma
court in order to receive the benefit of deferred adjudication are not issues within my
jurisdiction. The Secretary has provided by regulation that the underlying conviction is
not reviewable or subject to collateral attack, whether on substantive or procedural
grounds. 42 C.F.R. § 1001.2007(d).

Petitioner does not dispute the material facts: (1) Petitioner entered a nolo contendere
plea to one count of a misdemeanor charge; (2) the Oklahoma court accepted that plea on
August 17, 2006; and (3) based on the plea, the state court stayed entry of judgment and
the imposition of a one-year prison sentence pending Petitioner’s fulfillment of certain
conditions of her plea bargain. Petitioner also does not dispute that the offense was
related to the delivery of an item or service and that the item or service was to be
delivered under Medicare or any state health care program. Based on the foregoing, I
find as a matter of law that a “conviction” has occurred within the meaning of section
1128(4)(3) of the Act. Thus, there is a basis for Petitioner’s exclusion under section
1128(a)(1) of the Act and the I.G. entitled to judgment as a matter of law. Petitioner has
not demonstrated the existence of any material fact that would preclude summary
judgment for the I.G.

8

3. Pursuant to section 1128(c)(3)(B) of the Act, the minimum period of
exclusion under section 1128(a) is five years.

Petitioner has not disputed that the minimum period of exclusion pursuant to section
1128(a) is five years as mandated by section 1128(c)(3)(B), if I determine that she is
subject to mandatory exclusion. I have found there is a basis for her exclusion pursuant
to section 1128(a) and the minimum period of exclusion is thus five years.

Ill. Conclusions

For the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Act,
for the minimum statutory period of five years, effective August 20, 2007.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Sherry K. Jose, LICSW, ) Date: March 13, 2008
)
Petitioner, )
)

-Vv.- ) Docket No. C-08-19

) Decision No. CR1750
Centers for Medicare & Medicaid )
Services. )
)

DECISION

Petitioner, Sherry K. Jose, LICSW, appeals the Centers for Medicare and Medicaid
Services’ (CMS’s) determination to deny her request to enroll in the Medicare program as
a clinical social worker. The parties agree that the issue in dispute is purely legal, and
that the case can be decided on their written submissions, without need for an in-person
hearing. Pre-Hearing Conference Order (November 16, 2007).!

Because Petitioner does not possess a masters in social work (MSW), as required by the
Social Security Act (Act) and regulations, I affirm CMS’s denial of her enrollment
request.

' CMS has submitted a Brief in Support of Hearing Officer’s Decision,
accompanied by 12 exhibits (CMS Exs. 1-12). Petitioner submitted her arguments in the
form of a letter, without any additional exhibits. CMS also filed a reply. In the absence
of any objections, I admit into the record CMS Exs. 1-12.
Background

The Medicare Part B Carrier, Wisconsin Physicians Services Insurance Corporation,
denied Petitioner’s application to enroll in the Medicare program. CMS Ex. 5.” Ina
decision dated August 3, 2007, a Carrier Hearing Officer found that her enrollment
application had been properly denied, and Petitioner now files this appeal, pursuant to
section 1866(j)(2) of the Social Security Act. CMS Ex. 11.

Discussion

Petitioner is not eligible to enroll in the Medicare program
as a clinical social worker because she does not possess a
masters in social work as required by the statute and
regulations.

Medicare Part B is a supplementary medical insurance program for the aged and disabled.
Social Security Act (Act), sections 1831-1848. Among other benefits, the Part B program
will pay for services provided by clinical social workers who accept Medicare
assignment.’ Act, section 1842(b)(18)(A), (C)(iv); 42 C.F.R. §§ 410.150(b)(18); 424.55.
The statute and regulations define “clinical social worker” as an individual who possesses
a master’s degree or doctorate in social work, followed by at least two years of
supervised clinical social work, and who is licensed or certified by the state in which the
services are performed. Social Security Act (Act), section 1861(hh)(1); 42 C.F.R.

§ 410.73(a).

Here, the State of Minnesota has licensed Petitioner as a “licensed independent clinical
social worker,” which is its highest level of practice. However, because she lacks a
masters degree in social work, CMS maintains that she does not qualify to enroll in the

? To administer Medicare Part B, CMS contracts with private insurance companies
called carriers. Among other duties, carriers process and pay claims for reimbursement,
communicate information related to the administration of the Medicare program, and
assist in discharging administrative duties necessary to carry out program purposes. Act
§ 1842(a).

* | make this one finding of fact/conclusion of law.

* A Medicare provider or supplier who “accepts assignment” agrees to be paid
directly by the Medicare program, and may not charge or collect from the program
beneficiary any additional amounts except applicable coinsurance and deductibles. Act
section 1842(b)(18)(B); 42 C.F.R. § 424.55(b).
3

Medicare program as a clinical social worker. Petitioner, on the other hand, points out
that she satisfies federal requirements for licensing and clinical experience, and that she
possesses a master of arts in counseling and psychology. She argues that, because the
Minnesota Board of Social Work found her eligible to be licensed at its highest level of
practice, she has the knowledge and capacity to work in that field.

The language of the statute and regulation is plain: to qualify for enrollment, Petitioner
must have an MSW. I do not doubt that Petitioner’s masters program (as well as a wide
variety of other academic programs) shares some similarities with MSW programs. But it
is within the Secretary’s discretion to interpret which, if any, other types of degrees fall
within the statutory definition of “masters degree in social work.” 42 C.F.R. § 410.73(a).
The Secretary has opted not to expand that definition, and I have no authority to do so.
Moreover, even if I had such authority, nothing in this record convinces me that the
degrees are equivalent.

Conclusion

Petitioner is not eligible to enroll in the Medicare program as a clinical social worker
because she does not meet the statutory and regulatory requirements; she does not have a
masters degree in social work.

/s/
Carolyn Cozad Hughes
Administrative Law Judge