Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Office of Research Integrity,
Petitioner
v.
Philippe Bois, Ph.D.

Docket No. C-10-436
Decision No. CR2366

Date: May 16, 2011

AMENDED DECISION DISMISSING HEARING REQUEST

Petitioner, the Office of Research Integrity (ORI), charges that Respondent, Philippe
Bois, Ph.D., falsified data and the results of experiments and published his handiwork in
two scientific journals. For these actions, ORI proposes to debar him for three years from
eligibility for federal contracts.

Respondent Bois timely requested a hearing to challenge ORI’s actions. ORI moves to
dismiss his hearing request, arguing that it fails to create a genuine dispute of material
fact, as required by 42 C.F.R. § 93.503(a). I agree, and, for the reasons discussed below,
I dismiss Respondent Bois’ hearing request.

I. Background

Statutory and Regulatory Background. ORI has broad authority to investigate allegations
of research misconduct. Congress created ORI as an independent entity specifically
authorized to investigate allegations of research misconduct “in connection with projects
for which funds have been made available” and to take other actions, including imposing
remedies “with respect to such misconduct.” 42 U.S.C. § 289b(c)(1), (3), and (4).

The statute directs the agency to define, by regulation, the term “research misconduct.”
42 U.S.C. § 289b(a)(3)(A). When Respondent Bois’ questionable conduct commenced,
ORI’s implementing regulations were found at 42 C.F.R. Part 50, and they defined
“misconduct in science” as “fabrication, falsification, plagiarism, or other practices that
seriously deviate from those that are commonly accepted within the scientific community
for proposing, conducting, or reporting research.” The definition specifically excluded
‘honest error” and “honest differences in interpretations or judgments of data.”

42 CFR. § 50.102.

Effective June 15, 2005, which was prior to the publication of Respondent’s problematic
articles, ORI replaced Part 50 with more comprehensive regulations, titled “Public Health
Service Policies on Research Misconduct,” 42 C.F.R. Part 93. Those provisions define
“research misconduct” as “fabrication, falsification, or plagiarism in proposing,
performing, or reviewing research, or in reporting research results.” 42 C.F.R. § 93.103.
“Fabrication” means “making up data or results and recording or reporting them.” 42
C.F.R. § 93.103(a). “Falsification” is “manipulating research materials, equipment, or
processes, or changing or omitting data or results such that the research is not accurately
represented in the research record.” 42 C.F.R. § 93.103(b). Research misconduct does
not include honest error or differences of opinion. 42 C.F.R. § 93.103(d).

Beyond defining “misconduct in science,” the Part 50 regulations offer little specific
guidance as to the evidentiary standards I should apply here. However, Part 93 is more
enlightening. To find research misconduct under the current regulations, I must find, by
a preponderance of the evidence, that Respondent Bois “intentionally, knowingly, or
recklessly” significantly departed from accepted practices of the relevant researc
community. 42 C.F.R. § 93.104.

The new rules apply prospectively. 70 Fed. Reg. 28,370, 28,380 (May 17, 2005). I apply
the definition of research misconduct in effect at the time the misconduct occurred, which
means here that, for some of the alleged misconduct, I would apply Part 50, and for some
of the alleged misconduct, I would apply Part 93. However, I find that, in publishing
incomplete and inaccurate articles, Respondent Bois committed serious scientific
misconduct. Because the articles were published after June 15, 2005, and because the act
of publishing them more than warrants the three-year debarment, I could affirm the
proposed debarment without regard to the Part 50 regulations. In any event, the two
definitions of misconduct are consistent, and, as the discussion below shows, because
Respondent Bois’ pre-June 15, 2005 conduct seriously deviated from practices “accepted
within the scientific community,” he was then guilty of “misconduct in science” under 42
CFR. § 50.102.

Respondent filed his hearing request after June 15, 2005, so these proceedings are
governed by 42 C.F.R. Part 93. 70 Fed. Reg. at 28,380. Under those rules, an individual
may contest ORI findings of research misconduct — including any debarment or
suspension action — by requesting a hearing within 30 days of receiving ORI’s charge
letter. 42 C.F.R. § 93.501(a). However, ORI’s regulations dictate the form of the request
and strictly limit my authority to grant a respondent the requested hearing. A hearing
request must specifically deny each finding of research misconduct set forth in the charge
letter and each basis for that finding, or the finding and/or basis for the finding are
considered admitted. 42 C.F.R. § 93.503(b). It must also:

1) Admit or deny each finding of research misconduct and each factual assertion
made in support of the finding;

2) Accept or challenge each proposed [Department of Health and Human Services]
administrative action;

3) Provide detailed, substantive reasons for each denial or challenge;

4) Identify any legal issues or defenses that respondent intends to raise during the
proceeding; and

5) Identify any mitigating factors that the respondent intends to prove.

42 C.F.R. § 93.501(c). Iam directed to grant a hearing request only if the respondent
raises a genuine dispute over facts material to the findings of research misconduct. A
general denial or “assertion of error for each finding of research misconduct . . . is not
sufficient to establish a genuine dispute.” 42 C.F.R. § 93.503(a). I must dismiss a
hearing request if the respondent does not raise a genuine dispute over facts or law
“material to the findings of research misconduct and any administrative actions,” or does
not “raise any issue which may properly be addressed in a hearing.” 42 C.F.R.

§ 93.504(a)(2), (3).

Factual and Procedural Background. In this case, from 1999 through 2004, Respondent
Bois was a postdoctoral fellow, working in the laboratory of Dr. Gerard Grosveld in the
Department of Genetics and Tumor Biology at St. Jude Children’s Research Hospital in
Memphis, Tennessee. In 2004, he transferred to the lab of Dr. John Cleveland,
Department of Biochemistry, also at St. Jude’s, where he remained until April 2006,
when he left for reasons unrelated to any of the issues before me. ORI Jur. Ex. 5; Resp.
Opp. at 30.

ORI proposes a three-year debarment based on two instances of alleged scientific
misconduct. ORI charges that Respondent Bois knowingly, intentionally, or recklessly
fabricated and falsified data that he reported in two papers, for which he was the principal
author:
e “FOXOla Acts as a Selective Tumor Suppressor in Alveolar
Rhabdomyosarcoma,” by Philippe R.J. Bois, Kamel Izeradjene, Peter J. Houghton,
John L. Cleveland, Janet A. Houghton, and Gerard C. Grosveld, published in The
Journal of Cell Biology (JCB), Vol. 170 No. 6, September 12, 2005, pages 903-12
(subsequently retracted). ORI Mot. Dis. Ex. 1; and

e “Structural Dynamics of a-Actinin-Vinculin Interactions,” by Philippe R.J. Bois,
Robert A. Borgon, Clemens Vonrhein, and Tina Izard, which was published in
Molecular and Cellular Biology (MCB), Vol. 25, No. 14, July 2005, pages 6112-
22 (corrected August 2007). ORI Mot. Dis. Ex. 2.

I previously ruled that ORI has jurisdiction over the allegations of research misconduct
set forth in its charge letter. Ruling on Jurisdiction (Oct. 27, 2010).

ORI has filed a motion to dismiss (ORI M/Dismiss), and Respondent Bois responded
with a Memorandum in Opposition to ORI’s motion (Resp. Opp.). ORI then filed a reply
to Respondent’s memorandum (ORI Reply). The parties have also submitted proposed
exhibits. With his hearing request, Respondent submitted nine exhibits, marked A-I
(Resp. Exs. A-I). With its motion, ORI submitted 17 exhibits (ORI Exs. 1-17), and, with
its reply, ORI submitted three additional exhibits (ORI Reply Exs. 1-3).

IL. Discussion

A, Because Respondent Bois has not raised a genuine dispute over facts
material to the findings of research misconduct, I may not grant his
hearing request. 42 C.F.R. § 93.503(a).'

I. Undisputed evidence establishes that Respondent Bois
departed significantly from “accepted practices of the
relevant research community,” when he published articles
that did not completely and accurately represent the
research findings.

As a threshold matter, Respondent Bois has not disputed that he was the principal author
of the articles in question.’ He also admits that he made errors in his research and in
reporting his research. Resp. Opp. at 2-3 (Respondent concedes “errors in the research

' My findings of fact/conclusions of law are set forth, in italics and bold, in the
discussion captions of this decision.

* [discuss below Respondent Bois’ baffling claim that, although undeniably the principal
author of the July 2005 MCB article, he had little to no knowledge of, or involvement in,
the experiments discussed therein.
and reporting of research” which “were not corrected prior to the publication of the two
articles,” and that “he is responsible for some of those errors.”); Resp. Opp. at 8
(Respondent “promptly and openly admitted . . . that he made a mistake in his research as
it related to the JCB... .”); Resp. Opp. at 12 (“With respect to the JCB, ... the research
... was flawed.”); Resp. Opp. at 48 (“[T]here is no dispute that an error was made.”);
Resp. Opp. at 61 (“[Respondent] admits that he had neglected the particular result from
the February 9, 2003 experiment . . . .”); Hearing Request at 11-12, | 10; Hearing
Request at 20, §] 25; Resp. Opp. at 125 (“[Respondent] . . . admits that there was an error
in the MCB 2005.”); Hearing Request at 34-35, 55.

Nor has Respondent challenged ORI’s assertions that the “accepted practices of the
relevant research community” require experimental controls and repetitions of scientific
experiments. ORI M/Dismiss at 5-6; ORI Ex. 4 (“Repeating a science experiment is an
important step to verify that your results are consistent and not just an accident.”).

So the questions are: in conducting the research, did Respondent Bois “seriously
deviate” from accepted practices within the scientific community; and, in publishing the
admittedly flawed articles, did Respondent Bois “intentionally, knowingly, or recklessly”
depart significantly from these practices.

JCB article. Here, with respect to the alleged misconduct that culminated in the
publication of the JCB article, ORI charges that Respondent Bois conducted two
experiments (in February and December 2003) involving the effect of a protein
(FOXOl1a) on certain types of childhood tumors. He deviated from accepted practices
because he did not report the results of his February experiment (which did not support
his hypothesis). The December experiment purportedly supported his hypothesis, but he
deviated from accepted practices in conducting and reporting that experiment.

Specifically, ORI alleges the following facts, which — with limited exceptions that are not
material — Respondent has either conceded or has not explicitly denied:

e While working in Dr. Grosveld’s laboratory, Respondent studied certain types of
malignant tumors found in children. In February 2003 and December 2003,
Respondent conducted experiments involving a protein identified as FOXOla.
Charge Letter {J 7, 12; Hearing Request at 10-11;

e Respondent Bois hypothesized that FOXO1a suppressed tumors. ORI M/Dismiss
at 5; see Charge Letter 7, 9.

Respondent Bois agrees but accuses ORI of overlooking or ignoring the context
and background of his experiments. He claims that, based on his and Dr.
Grosveld’s earlier experiments, he “had every reason to believe that the FOXO
tumor suppressor protein was expressed in cell lines.” See Resp. Opp. at 33, see
also 24-25, 27. Respondent Bois provides no details about these earlier
experiments, which were not mentioned in his publication. He neither disputes
nor explains why investigators saw evidence of only the February and December
experiments. Nor has he claimed that anyone ever replicated his purported earlier
successes.°

Nevertheless, accepting as true his claim that some earlier experiments supported
is hypothesis does not alter the only conclusion that can be drawn from the
undisputed facts: Respondent Bois committed scientific misconduct by omitting
from his publication the contrary results. See 42 C.F.R. § 93.103(b)
(“Falsification” includes “omitting data or results such that the research is not
accurately represented ....”). Indeed, accepting his claim as true highlights the
significance of the February 2003 experiment — which purportedly yielded (to

im) a surprising, if undesirable result — and made it all the more important that he
adhere rigorously to accepted research practices, and that he include ail of his
purportedly contradictory results in his published article.

e Respondent’s February 2003 experiment indicated that FOXO 1a did not suppress
tumors. Charge Letter §§ 13, 18. In his hearing request, Respondent Bois agrees
that the February 2003 results were “in contradiction to the results” he and Dr.
Grosveld “had obtained previously in analyzing cell lines” (and thus were
inconsistent with his hypothesis). “Accordingly,” and in view of other demands
on his time, “the experimental process came to a standstill,” and he “postponed
further work on this specific experimental line of inquiry.” Resp. Opp. at 32;
Hearing Request at 11.

In his opposition memorandum, Respondent Bois deviates from the position
articulated in his hearing request. He implicitly concedes that the February 2003
experiment did not support his hypothesis but characterizes the results as
“inconclusive” rather than “in contradiction.” He suggests that, because they were
inconclusive, he forgot about them: they “did not register when he moved forward
with the research 11 months later.” Resp. Opp. Br. at 27. Of course, if I were
weighing the evidence, such inconsistent claims would likely undermine his
credibility. However, neither scenario justifies his publishing results without
ensuring that all of his data was accurately reported.

* Respondent elsewhere claims that his work in this area never involved more than one or
two experiments, a claim that is consistent with the investigators’ findings, but seems
inconsistent with his claim that his earlier (2002) experiments supported his hypothesis.
See Resp. Opp. at 36. Of course, Respondent’s offering inconsistent versions of events
does not create a dispute of material fact that would entitle him to a hearing under 42
C.F.R. § 93.503(a).
e Respondent Bois maintained the data from his February 2003 experiment in his
laboratory records. Charge Letter § 13;

e In December 2003, while still working in Dr. Grosveld’s laboratory, Respondent
Bois conducted a second experiment, which, he claimed, supported his hypothesis
that FOXO1a suppressed tumors. However, no existing laboratory notes or
records support this conclusion, and the laboratory was unable to reproduce
Respondent Bois’ results. Charge Letter J] 15, 28. The parties agree that the data
underlying the December 2003 experiment (if any) and Respondent Bois’
conclusions were wrong. Charge Letter §§ 17, 18; see Resp. Opp. at 12; ORI
M/Dismiss at 11;

e The December 2003 experiment included no “control”; accepted standards of
conduct for scientific research require that scientific experiments include a control
to which the experiment’s results can be compared. Charge Letter § 14;

e Respondent Bois did not repeat the December 2003 experiment to verify its
purported results; accepted standards of conduct for scientific research also require
that scientific experiments be repeated. Charge Letter §{j] 23, 24, 28; Resp. Opp. at
67;

e In September 2005, JCB published Respondent’s article, in which he claimed that
is research supported the hypothesis that FOXO1a suppressed tumors;

e The JCB article included Figure 1A from the December 2003 experiment, which
purported to show, falsely, that FOXOl1a suppressed tumors. Respondent
concedes the error in the figure but asserts that his article did not include other
errors. Charge Letter §¥ 9, 18, 16, 19, 20; Hearing Request at 11; Resp. Opp. at
34, 43. In making this claim, he does not seem to consider that his failure to
include the results of his February experiment was also an error;

¢ On or about May 7, 2007, JCB published a complete retraction of the JCB 2005
paper. The retraction said that Figure 1A was not correct and that, because the
paper’s (incorrect) conclusion was based on a faulty assumption having to do with
the absence of FOXO1a protein in primary tumors, the publication was forced to
retract the paper in its entirety. Charge Letter § 17; Hearing Request at 15; Resp.
Opp. at 44.

Thus, the undisputed evidence establishes that Respondent Bois did not mention the
results of the February experiment in the JCB article. Even accepting that, as he claims,
he genuinely forgot about it when he was writing up the results of his December study,
his failure to review all of his lab notes before reporting the results was certainly reckless.
That he has not had access to his notes since leaving the Grosveld lab does not excuse
him, because he initially drafted the article that eventually became his publication while
he was still there. In his hearing request, he concedes that the manuscript was submitted
to another publication in the Spring of 2004, well before he left Dr. Grosveld’s lab, and to
yet another publication in September 2004, just after he left. Charge Letter § 22; Hearing
Request at 18. Further, he concedes that he composed the problematic Figure 1A while
still at Dr. Grosveld’s lab. His computer contained multiple versions of the figure,
generated before and after his departure. Charge Letter 4] 21-22; ORI M/Dismiss at 22-
23; Resp. Opp. at 49-50, 51.

In any event, because he did not include a control in his December 2003 experiment, and
he did not repeat the experiment, Respondent Bois seriously deviated from accepted
practices in the relevant research community. Respondent did not challenge this
conclusion, which was contained in ORI’s charge letter. Charge Letter 30; Hearing
Request at 23; Resp. Opp. at 72. Although he claims, generally, that his errors were
unintentional, he offers no specific reasons for his deviations, from which I must
conclude that he knowingly and intentionally failed to include a control and failed to
repeat the experiment. See 42 C.F.R. § 93.503(b).

Respondent Bois therefore committed scientific misconduct in conducting and reporting
the December experiment, in publishing false data in Figure 1A, and in failing to report
the results of the February experiment.

MCB article. With respect to the alleged misconduct that culminated in the publication
of the MCB article, ORI alleges the following undisputed facts and argues that they also
establish that Respondent Bois committed scientific misconduct:

e After leaving the Grosveld lab, Respondent Bois took a position as a postdoctoral
fellow at Dr. John Cleveland’s lab. Respondent Bois also assisted his wife, Tina
Izard, Ph.D., “in the presentation of the figure that became Figure 4B,” that was
included in the MCB article. Charge Letter § 31; Hearing Request at 23-24; Resp.
Opp. at 74-75;

e On January 7, 2005, Robert Borgon, a graduate student, working in Dr. Izard’s
laboratory, responded to a request from Dr. Izard, the laboratory’s principal
investigator (P.I.), by emailing P.I. Izard and Respondent Bois scanned images 0:
a single-stained gel (Figure 4B), which served as an experimental control. Charge
Letter ¥ 43; ORI Ex. 8 at 3. P.I. Izard asked for the images because the MCB
article was still in manuscript form, and one of its reviewers had specifically asked
to see additional underlying support for the article’s hypothesis. Charge Letter {jf
35, 36, 43;

¢ On February 11, 2005, at 11:43 a.m. P.I. Izard sent an e-mail to Respondent Bois,
in which she wrote: “Dearest[,] can you please create a figure to show that papain
doe not affect the peptides? Thanks[.] Tina” She did not copy the graduate
student. Charge Letter | 43; ORI Ex. 8 at 3;

e Thereafter, Respondent Bois sent e-mails to P.I. Izard that progressively altered
the scanned image. He wrote “Et voila!,” (“and here it is!””), when he sent what
became the “final” image. Charge Letter § 43; ORI Ex. 8 at 4; ORI Ex. 9;

e Inthe meantime, Graduate Student Borgon sent Respondent Bois an e-mail with a
scanned image of a double-stained gel, although he apparently included an error in
is description. ORI Ex. 8 at 7. Nevertheless, the error was of no consequence
since Respondent rejected the slide as “too dirty for a figure,” advising Graduate
Student Borgon that “This will do,” referring to the altered version that he had
already sent to P.I. Izard. Charge Letter § 43; ORI Ex. 8 at 8;

e Figure 4B, which was published with the MCB article, did not accurately depict
the results of Graduate Student Borgon’s experiment (which, according to
Respondent, was otherwise valid and reproducible). Hearing Request at 25, 34;
ORI M/Dismiss at 33-34.

Respondent Bois concedes that he helped to create what ultimately became Figure 4B,
but submits what he characterizes as an “alternative chronology” for the creation of that
image. Hearing Request at 27-30; Resp. Opp. at 27. His alternative chronology is more
of a supplementation, in which he talks about errors purportedly made by Graduate
Student Borgon and suggests, without even alluding to a shred of evidence, that Graduate
Student Borgon himself engaged in some nefarious conduct.

I agree with ORI that, while Respondent Bois has added a confusing but ultimately
irrelevant series of accusations, he has not denied any of ORI’s dispositive factual
charges that: on February 11, P.I. Izard asked him to create a figure; he sent her
progressively altered versions of that figure, culminating in a final image, sent with the
message “Et voila!;” and his final, falsified image was included in the published article,
for which he took credit as principal author. Even if I agreed that Graduate Student
Borgon also acted improperly (which I emphatically do not because I see no evidence of
it), that fact would not excuse Respondent’s own misconduct.

Finally, Respondent Bois denies any involvement in the research underlying Figure 4B,
except to admit that he was “asked to assist in the presentation of the Figure that
ultimately became Figure 4B.” This seems a very peculiar, not to mention unethical,
level of involvement for a research article’s first author, and ORI challenges his assertion
as “intentionally misleading” and “inconsistent with . .. Respondent’s prior statements.”
10

Hearing Request at 23, 24; ORI M/Dismiss at 30-31; Resp. Opp. at 76.* Inasmuch as the
one false aspect of the article was the altered Figure 4B, which is the only portion of the
article to which Respondent admits involvement, my accepting this highly questionable
claim as true does not alter my inevitable conclusion that Respondent Bois’ manipulation
and subsequent publication of Figure 4B constituted scientific misconduct.

2. Respondent’s defenses do not raise a genuine dispute
over facts or law material to findings of research
misconduct.

Without specifying what they are, Respondent Bois repeatedly asserts that he has, in fact,
disputed issues of material fact, and provided detailed, substantive reasons for his denials
of the facts asserted in ORI’s charge letter. Resp. Opp. at 1, 3, 4, 11, 12, 21, 22, 23, 26,
27, 42, 43). But, as the above-discussion establishes, in his general denials of the
charges, he has offered few details, and, to the extent that he disputes any specific facts,
those facts are not material.

Instead, Respondent has come forward with the following affirmative defenses: 1) Dr.
John Cleveland, a co-author of the JCB article who was himself apparently charged with
misconduct, opined that Respondent was not guilty of scientific misconduct; 2) ORI has
not established that Respondent had a “conscious intent to deceive”; and 3) St. Jude’s
investigation of him was biased and unfair. None of his arguments raises a genuine
dispute material to the findings of research misconduct.

The opinion of Dr. John Cleveland. Respondent Bois argues that statements made by his
colleague and co-author, Dr. John Cleveland, create disputes of material fact. Dr.
Cleveland acknowledged that “mistakes were made” but opined that Dr. Bois probably
did not commit research misconduct. Resp. Opp. at 4; Hearing Request Ex. B. But Dr.
Cleveland’s opinion is not a “fact”; it is a conclusion, and, by his own admission, a
conclusion not supported by his knowledge of any underlying facts. Responding to
questions posed by a research integrity officer, Dr. Cleveland volunteered that he was not
really in a position to form an opinion; he did not have all the data, never looked at the

* “Only individuals that make substantive intellectual contributions should be listed as
authors and the order of authorship should be based on the degree of importance of each
author’s contribution to the project.” Avoiding Plagiarism, Self-plagiarism, and Other
Questionable Writing Practices: A Guide to Ethical Writing,
http://ori.hhs.gov/education/products/plagiarism. Moreover, not only is it unethical for
an uninvolved or marginally-involved individual to assume principal authorship, but it
suggests additional levels of misconduct. If, in fact, his involvement in and knowledge of
the underlying experiments were so limited, Respondent Bois could not legitimately have
contributed to the figure’s preparation.

11

notebooks; and he did not know how many experiments were performed. Hearing
Request Ex. B at 8.”

Respondent’s state of mind. Respondent argues that he is not guilty of scientific
misconduct because his errors were not the product of a “conscious effort to deceive.” In
Respondent’s view, unless ORI demonstrates that he had a “conscious intent to deceive,”
he falls within the “honest error” exception to scientific misconduct, 42 C.F.R. §§ 50.102
and 93.103(d). Resp. Opp. at 3, 19. ORI rightly points out that this “conscious effort to
deceive” standard is Respondent’s own creation and is not found in the statute,
regulations, or any other authority. ORI Reply at 11-12.

Moreover, contrary to Respondent’s implication, establishing honest error is an
affirmative defense, for which Respondent bears the burden of going forward and the
burden of proving by a preponderance of evidence. 42 C.F.R. § 93.516(b)(2). The
drafters of Part 93 (which are the regulations that govern these proceedings) recognized
an overlap between a respondent’s responsibility to prove an affirmative defense and the
agency’s responsibility to prove that research misconduct was committed intentionally,
knowingly or recklessly. So, as ORI has done here, the agency must show that the
research misconduct was intentional, knowing, or reckless.° The drafters explicitly
retained “honest error or difference of opinion” as an affirmative defense that the
respondent has the burden of proving by a preponderance of the evidence. 42 C.F.R.

§ 93.106; see 70 Fed. Reg. at 28,372.

St. Jude’s Investigation. Finally, Respondent Bois dedicates a substantial portion of his
argument to attacking St. Jude’s investigation. However, I have no authority to review
St. Jude’s procedures or misconduct findings, nor do I review ORI’s research misconduct
proceedings. Rather, I provide an independent, de novo review of ORI’s findings and the
proposed action. 42 C.F.R. § 93.517(b). Thus, Respondent Bois’ multiple complaints
about the conduct of those proceedings are irrelevant.

* Again, I find unseemly and disturbing the ease with which these research scientists
deny any meaningful involvement in the research that underlay the scientific publications
for which they took credit. How can the purported authors of a publication be so ignorant
of its formation? And if the named authors are not accountable for the publication’s
contents, who is?

° Thus, even if I accepted Respondent’s suggestion that, under Departmental Appeals
Board decisions pre-dating June 15, 2005, reckless departures from accepted practices
would not constitute scientific misconduct (which I do not), under Part 93, such rulings
are no longer valid.
12

B. The three-year debarment is commensurate with the seriousness of
Respondent Bois’ misconduct, and the need to protect public health and
safety, to promote the integrity of publically-supported research and the
research process, and to conserve public funds.

Because he is guilty of scientific misconduct, Respondent Bois is subject to debarment.
Considering that he committed multiple offenses, any one of which would justify a
debarment, the three-year period seems minimal. Respondent nevertheless challenges the
sanction, arguing that the erroneous articles were inconsequential. Resp. Opp. at 8-9. He
argues that the JCB research was “preliminary,” a “side project” that never advanced
beyond one or two experiments (which seems inconsistent with his claims that his 2002
experiments justified his hypothesis). Resp. Opp. at 36. He characterizes the error in his
MCB publication as insignificant. Resp. Opp. at 9.

As with other of ORI’s administrative actions, debarment is meant to be remedial, and the
penalty should be “commensurate with the seriousness of the misconduct, and the need to
protect the health and safety of the public, promote the integrity of [Public Health
Service] supported research and research process, and conserve public funds.” 42 C.F.R.
§ 93.408. To achieve these goals, the regulation lists mitigating and aggravating factors
that the agency may consider in determining the sanction. However, the regulation grants
the agency broad discretion, allowing it to consider “other factors as appropriate” and
specifically providing that “[t]he existence or nonexistence of any factor is not
determinative.” 42 C.F.R. § 93.408.

The listed factors are: a) whether the actions were knowing or intentional or was the
conduct reckless; b) was the misconduct an isolated event or part of a continuing or prior
pattern of dishonest conduct; c) did the misconduct have significant impact on the
proposed or reported research record, research subjects, other researchers, institutions, or
the public health or welfare; d) has the respondent accepted responsibility for the
misconduct by admitting the conduct, cooperating with the research misconduct
proceedings, demonstrating remorse and awareness of the significance and seriousness of
the misconduct; and taking steps to correct or prevent the recurrence of the misconduct;
e) does the respondent blame others; f) did he attempt to retaliate; g) is he presently
responsible for PHS supported research; and h) other factors appropriate to the
circumstances. 42 C.F.R. § 93.408.

First, the undisputed evidence establishes that at least some, if not all, of Respondent’s
misconduct was knowing and intentional. He deliberately conducted the December 2003
JCB experiment without a control and declined to repeat it, and then published the
unverified results in the JCB. He deliberately altered Figure 4B and published it in the
MCB.

Second, Respondent Bois was guilty of multiple instances of research misconduct.
13

Third, although he concedes — as he must — that his publications reflected his errors,
Respondent Bois has not accepted any responsibility for his misconduct and has instead
attempted, without presenting any credible evidence, to shift the blame to a graduate
student.

For these reasons, even without considering the impact of his misconduct, I would affirm
the relatively lenient three-year debarment. With respect to the impact of his misconduct,
ORI charges that publication of false results in the JCB article was serious because the
research involved a serious subject (understanding a soft tissue cancer found most often
in children) and used human primary tumor samples derived from children with tumors.
Charge Letter { 11. Respondent Bois argues that neither the subject of the research
(cancer found most often in children) nor the source of the samples studied makes the
falsification serious. He also claims that the errors had little or no impact on public
health and welfare because the article was retracted in May 2007. Hearing Request at 12;
Resp. Opp. at 35, 36.

That his erroneous publications did not have wider impact is fortuitous, but does not
diminish the seriousness of Respondent’s misconduct. When scientific research is
published, and thus disseminated to the broader scientific community, it moves it into a
higher realm of significance. Although Respondent trivializes the fact, others obviously
read and relied on his JCB article because, as he concedes, it was cited, if “only” seven
times. Resp. Opp. at 9. That it was cited at all means that his colleagues in the scientific
world studied and were ultimately misled by its contents, causing further waste of time
and resources. | also agree that his use of human tissue samples makes the misconduct
more serious.

In light of all of these circumstances, a three-year debarment is a penalty commensurate
with Respondent’s level of misconduct, and is the minimum necessary to protect public
health and safety, promote the integrity of publically-supported research, and to conserve
public funds.

II. Conclusion

For all of these reasons, I agree that Respondent Bois has not raised a genuine dispute
over facts or law material to the findings of research misconduct. The undisputed
evidence establishes that Respondent Bois committed scientific misconduct when he
failed to report the results of his February 2003 experiment in his published article, when
he published false data in Figure 1A, when he did not include a control for his December
2003 experiment, and when he did not repeat that experiment to verify its results. He
committed scientific misconduct when he altered Figure 4B and then published the
altered version. A three-year debarment is commensurate with the seriousness of his
misconduct and necessary to further the purposes of the statute and regulations governing
14

scientific research. I therefore dismiss his hearing request pursuant to 42 C.F.R. §
93.504(a)(2), (3).

/s/

Carolyn Cozad Hughes
Administrative Law Judge

7 Pursuant to 42 C.F.R. § 93.500(c), the Assistant Secretary for Health of the U.S.
Department of Health and Human Services (HHS) only reviews an Administrative Law
Judge’s (ALJ) “ruling on the merits of the ORI research misconduct” in accordance with
42 C.F.R. § 93.523, “the Administrative Law Judge’s ruling.” The decision under that
section constitutes the final HHS action, unless that ruling results in a recommendation
for debarment or suspension. In that instance, the ALJ’s ruling constitutes findings of
fact for the debarring official.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Ahmed Abouelhoda
(O.L. File Number 2-05-40316-9),

Petitioner
Vv.
The Inspector General.
Docket No. C-11-142
Decision No. CR2365

Date: May 3, 2011

DECISION

This matter is before me on the Inspector General’s (I.G.’s) Motion to Dismiss. It arises
in the context of the I.G.’s determination to exclude Petitioner Ahmed Abouelhoda from
participation in Medicare, Medicaid, and all federal health care programs for a period of
10 years pursuant to section 1128(a)(3) of the Social Security Act (Act), 42 U.S.C.

§ 1320a-7(a)(3). As I explain below, I find that Petitioner’s request for hearing was not
timely filed as required by 42 C.F.R. §§ 1001.2007(b) and 1005.2(c), and for that reason I
grant the I.G.’s Motion to Dismiss.

I. Procedural Background

By letter dated August 31, 2005, the LG. notified Petitioner that he was to be excluded
from Medicare, Medicaid, and all other federal health care programs for a period of 10
years. This notice-of-exclusion letter was mailed to an address in Woodside, New York.

At the request of Petitioner’s present counsel, the I.G. mailed a copy of the August 31,
2005 notice-of-exclusion letter to Petitioner’s counsel on August 11,2010. This copy of
the notice-of-exclusion letter was mailed to Petitioner’s counsel at his Manhattan office
address.
2

Acting through his counsel, Petitioner requested review of the exclusion by letter dated
December 3, 2010.

I convened a prehearing conference by telephone on December 28, 2010. During the
telephone conference, the timeliness of Petitioner’s request for hearing was discussed,
and counsel for the I.G. stated her intention to seek dismissal of the request for hearing as
untimely. By Order of that date, as amended by my subsequent Order of March 29, 2011,
l established a briefing schedule for the parties to submit their positions and exhibits. All
briefing is now complete, and the record in this case closed for purposes of 42 C.F.R.

§ 1005.20(c) on April 13, 2011.

The evidentiary record on which I decide the issues before me contains 11 exhibits. The
1.G. proffered five exhibits marked I.G. Exhibits 1-5 (I.G. Exs. 1-5). Petitioner proffered
six exhibits marked Petitioner’s Exhibits 1-6 (P. Exs. 1-6). All proffered exhibits are
admitted to this evidentiary record. Petitioner’s objection to I.G. Ex. 2 is overruled.'

II. Issue

The sole issue now before me is whether Petitioner’s request for hearing was filed in a
timely manner in compliance with the terms of 42 C.F.R. §§ 1001.2007(b) and 1005.2(c).
If the request was not filed in a timely manner, I am obliged by the mandatory terms of
42 C.F.R. § 1005.2(e)(1) to dismiss it.

This issue must be resolved against Petitioner. Petitioner’s argument that he did not
receive the I.G.’s notice-of-exclusion letter until sometime in 2010 is insubstantial, but
that is not the basis on which I decide the issue.

Instead, I find that Petitioner and his counsel received a second full and effective notice
of the I.G.’s action not later than August 17, 2010, and that October 18, 2010 was the last
possible date by which his request for hearing could be filed timely. Because he and his
counsel waited until December 3, 2010 to do so, the terms of 42 C.F.R. § 1005.2(e)(1)

' LG. Ex. 2 is the written Declaration of Peter P. Clark, given under penalty of perjury on
January 21, 2011. Mr. Clark is Exclusions Director, Office of Investigations, Office of
the Inspector General, United States Department of Health and Human Services. His
Declaration describes the policies and practices of his Office, in effect at all times
relevant to this appeal, in mailing notice-of-exclusion letters to persons such as Petitioner.
Petitioner objects to Mr. Clark’s declaration because it “does not state when he was hired
. .. or how long he has even been employed there.” P. Answer Brief (P. Ans. Br.) at 5.
This is a caviling objection and it borders on quibbling: the Declaration asserts not only a
general familiarity with his Office’s procedures since January 1, 2005, but also asserts
specific familiarity with the official records of his Office in this case. Mr. Clark’s
assertions are more than sufficient to support this finding that his Declaration is not
“unreliable” as that term is used in 42 C.F.R. § 1005.17.

3

require that I dismiss his request for hearing.
III. Controlling Statutes and Regulations

Section 1128(a) of the Act, 42 U.S.C. § 1320a-7(a), requires the exclusion from
participation in Medicare, Medicaid, and all other federal health care programs of any
individual or entity convicted of certain classes of criminal offenses. The terms of
section 1128(a) are restated in similar language at 42 C.F.R. § 1001.101. This mandatory
exclusion must be imposed for a minimum of five years. Act § 1128(c)(3)(B), 42 U.S.C.
§ 1320a-7(c)(3)(b). If aggravating factors are present, the period of exclusion may be
enhanced beyond five years. 42 C.F.R. § 1001.102(b).

The I.G. is charged with effecting exclusions based on sections 1128(a) and
1128(c)(3)(B) of the Act. See 42 C.F.R. § 1001.1001. If the I.G. determines that a
conviction constitutes a proper predicate for exclusion, he must send notice of his intent
to exclude to the affected individual or entity. The affected party is permitted to respond
to this notice of intent with “documentary evidence and written argument concerning
whether the exclusion is warranted and any related issues.” 42 C.F.R. § 1001.2001(a).

If the I.G. remains convinced that exclusion is warranted, he must send written notice of
his final decision to exclude to the affected individual or entity, and must in that notice
provide detailed information on a number of points, including the appeal rights of the
excluded party. 42 C.F.R. § 1001.2002; see also Act § 1128(c), 42 U.S.C. § 1320a-7(c).
The individual or entity to be excluded may appeal the exclusion by filing a request for
hearing before an Administrative Law Judge (ALJ). 42 C.F.R. § 1001.2007. That
regulation establishes a time limit for the filing of a request for hearing. Specifically, 42
C.F.R. § 1001.2007(b) provides that:

The excluded individual or entity has 60 days from the receipt of notice of
exclusion provided for in [section] 1001.2002 to file a request for such a
hearing.

This filing time limit is reiterated in the regulations governing the conduct of an excluded
party’s appeal before the ALJ that appear at 42 C.F.R. §§ 1005.1-1005.23. The 60-day
deadline is repeated at 42 C.F.R. § 1005.2(c):

The request for hearing will be made in writing to the DAB; signed by the
petitioner . . . or by his or her attorney; and sent by certified mail. The
request must be filed within 60 days after the notice, provided in
accordance with [section] 1001.2002 . . . is received by the petitioner or
respondent. For purposes of this section, the date of receipt of the notice
letter will be presumed to be 5 days after the date of such notice unless
there is a reasonable showing to the contrary.
4

The regulation at 42 C.F.R. § 1005.2(e) directs that:

The ALJ will dismiss a hearing request where—
(1) The petitioner’s or the respondent’s hearing request is not filed
in a timely manner.

The ALJ may not extend the 60-day filing deadline. 42 C.F.R. § 1005.2(e)(1). A tardy
or dilatory petitioner can gain relief only by negating the presumption of regular delivery
through a “reasonable showing” that the I.G.’s notice-of-exclusion letter was not received
as presumed by 42 C.F.R. § 1005.2(c).

IV. Findings of Fact and Conclusions of Law
I find and conclude that:

1. The I.G. first mailed a letter giving notice of the proposed exclusion of Petitioner from
Medicare, Medicaid, and all other federal health care programs pursuant to section
1128(a)(3) of the Act to Petitioner at 33-17 60th Street, Apartment 1, Woodside, New
York 11377, on August 31, 2005. I.G. Exs. 1, 2.

2. The I.G. mailed a copy of the August 31, 2005 notice-of-exclusion letter to
Petitioner’s counsel, Gary Burgoon, Esquire, Lifshutz & Lifshut (sic) P.C., 501 Fifth
Avenue, Suite 506, New York, NY 10017, on August 11, 2010. I.G. Exs. 1, 3, 4.

3. The I.G.’s August 11, 2010 mailing to Petitioner’s counsel included a printed
document headed “Please read carefully and retain; it contains important information
about your exclusion.” This document satisfied the requirements of 42 C.F.R.

§ 1001.2002(c). I.G. Exs. 3 at 5; 4 at paragraph 4.

4. Petitioner filed his request for hearing on December 3, 2010.

5. Petitioner’s request for hearing was not filed in a timely manner. 42 C.F.R.
§§ 1001.2007(b), 1005.2(c).

6. Petitioner’s request for hearing must be dismissed. 42 C.F.R. § 1005.2(e)(1).
V. Discussion

As to the events surrounding the I.G.’s actions and Petitioner’s circumstances in 2005,
the record before me is simply inconclusive. Each side of this appeal offers arguments
while overlooking or avoiding a candid discussion of certain factual gaps in its position.
For that reason I do not rely on the first mailing of the I.G.’s notice-of-exclusion letter on
August 31, 2005 as the event by which the 60-day appeal deadline established by 42
C.F.R. §§ 1001.2007(b) and 1005.2(c) is to be measured.
5

Instead, and in explicit reliance on the reasoning and analysis explained by
Administrative Law Judge (ALJ) C. C. Hughes in Samuel E. Kilgore, R.Ph., DAB
CR1513 (2006), I rely on the receipt of a copy of that notice-of-exclusion letter by
Petitioner’s counsel not later than August 17, 2010, which copy the I.G. mailed to
Petitioner’s counsel on August 11, 2010, as the event initiating the 60-day appeal period.
On that date, Petitioner and his counsel were made aware of all the information required
to be conveyed to them by 42 C.F.R. § 1001.2002. That they took no action in response
until six weeks after the expiration of the 60-day appeal period is abundantly clear on this
record, and their inaction requires the dismissal of Petitioner’s request for hearing.

The turbid early record in this case proves very little, but parts of it do demand some
discussion lest it appear that one or another of Petitioner’s arguments has been
overlooked. One of his arguments, unadorned by any evidence, is that the I.G. failed to
send Petitioner the notice of intent to exclude required by 42 C.F.R. § 1001.2001(a). See
P. Ans. Br. at 2-4. Now, a copy of that notice-of-intent letter has been proffered as L.G.
Ex. 5, and its date and the Woodside address on it (the same address that appears on the
1.G.’s notice-of-exclusion) would seem to contradict Petitioner’s charge that it was never
sent. But I need not decide whether the notice-of-intent letter was sent, for even if it had
not been, that would not invalidate the I.G.’s subsequent actions and would not provide
Petitioner with a defense to this exclusion. Brian Bacardi, D.P.M., DAB No. 1724
(2000).

Another of Petitioner’s arguments concerns his addresses during relevant times, and this
argument is made more interesting by what Petitioner declines to say about them. He
comes very close to denying that the Woodside address was ever a valid one for him, or
whether it is even now: “Additionally, neither the Inspector General nor Mr. Peter Clark
in his declaration . . . has ever stated in where they received Petitioner’s address from or
how they came to know or believe that they had the correct address before sending out
the exclusion notice.” P. Response Brief at 1.7 He does not explain how this position co-
exists with his argument involving the notice-of-intent letter. In any case, however,
neither Petitioner’s Declaration, P. Ex. 2, nor the Declaration of his sister, P. Ex. 3,
elucidates where he was living before he moved in with her in January 2005 or where he
went when he moved out in January 2006. Neither Declaration explicitly discusses

> That assertion is true as far as it goes, and it is also true that the question was not raised
until Petitioner filed his Response Brief (the last brief in this case) and that the I.G. has
had no opportunity to answer it. But the question of Petitioner’s address is further
obscured by the record of another address apparently in Petitioner’s name — this one at
85 East 10th Street in Manhattan — in the I.G.’s files. P. Ex. 1 at 1; 1G. Ex. 5 at2. No
explanation of this address has been offered by either side, but it was Petitioner’s official
address on file with the Board of Regents of the University of the State of New York
when it suspended his pharmacy license No. 049782 at its meeting on February 12-13,
2007. See www.regents.nysed.gov/Summaries/0207summary.htm; see FED. R. EVID.
201(c) and 902(5). The matter may be intriguing, but it is irrelevant to this decision.

6

whether Petitioner received mail — forwarded or not — at his sister’s address. Neither
Declaration sheds light on any of the myriad details connected to a temporary change of
domicile, such as the disposition of clothing, personal effects, and furniture, the
forwarding of mail, the arrangements made concerning utilities and services, and the
accommodation of any roommates, family, or companions who may have been living in
the premises vacated by Petitioner — and thus potentially dealing with mail delivered
there. Even if their Declarations are accepted fully at face value, Petitioner and his sister
still fall short of a candid or helpful description of the situation. However, I need not
decide whether the Woodside address was ever Petitioner’s valid mailing address, nor
whether mail addressed to him at the Woodside address ever reached him there or
anywhere else. The basis of my decision renders these questions irrelevant.

Petitioner’s claim of some level of psychological impairment during 2004 and 2005 is
both similarly flawed and similarly irrelevant. That he was treated for chemical
dependence between March 2004 and September 2005 is established by P. Ex. 4. But
that very document portrays Petitioner as a regimen-compliant outpatient, “consistent in
attendance,” who “maintained abstinence as demonstrated by negative urine drug screens
and breathalyzer tests” and whose course of treatment was marked by “active
engagement in self-help meetings and sponsor utilization.” Significantly, P. Ex. 4 reveals
that by September 2005 — that is, by the month following the I.G.’s notice-of-exclusion
letter, and with another month still remaining before the presumptive appeal deadline —
Petitioner had discontinued all prescribed psychotropic medications and was reporting no
further mental health concerns. Petitioner does not explain why, given his disavowal of
the Woodside mailing address and his categorical denial of actual receipt of the 1.G.’s
notice-of-exclusion letter, his mental capacity to understand and respond to that letter
might be relevant. Petitioner does not explain how the very limited impairment revealed
by P. Ex. 4 would have reduced his capacity to understand and react to the notice-of-
exclusion letter if he had received it. But again, these are questions that I need not
resolve, because Petitioner’s mental state in 2004 and 2005 is beside the point in light of
his counsel’s intervention in 2010.

And it is the intervention of Petitioner’s counsel in August 2010 that forms the basis of
my decision. In early August 2010 Petitioner’s counsel telephoned the I.G. and requested
a copy of the August 31, 2005 notice-of-exclusion letter. I.G. Exs. 3; 4 at paragraphs 2-4.
A copy of that notice-of-exclusion letter was sent to Petitioner’s counsel on August 11,
2010, and that mailing included a printed document bearing the heading “Please read
carefully and retain; it contains important information about your exclusion.” I.G. Exs. 3
at 5; 4 at paragraph 4. That mailing was not returned as undeliverable. I.G. Ex. 4 at
paragraph 5. Petitioner acknowledges requesting and receiving that mailing. P. Ans. Br.
at 4. And thus, whether the terms of 42 C.F.R. § 1005.2(c) or the terms of 42 C.F.R.

§ 1005.12(c) are used to calculate the presumptive date of Petitioner’s counsel’s receipt
of the I.G.’s August 11, 2010 mailing, the latest presumptive date of receipt is August 17,
2010.

This intervention by Petitioner’s counsel and the I.G.’s response to it are the factors that
7

bring this case squarely within the reasoning and analysis of Samuel E. Kilgore, R.Ph.,
DAB CR1513. In that case the LG. originally mailed a notice-of-exclusion letter to
Kilgore in August 2001. Kilgore claimed to have learned of his exclusion much later, in
2004 or 2005. In the spring of 2005 Kilgore communicated with the I.G., denied having
received the original mailing, and requested a copy of the notice-of-exclusion letter. The
1.G. complied with Kilgore’s request and sent him a copy of the August 2001 letter in late
May 2005. Kilgore filed a request for hearing to contest his exclusion in February 2006.

After surveying the evidence surrounding Kilgore’s address at the time of the original
mailing, the ALJ found that none of it established conclusively whether the address to
which it had been sent was valid or not. For that reason the ALJ declined to assess the
timeliness of Kilgore’s request for hearing in terms of the 2001 mailing of the notice-of-
exclusion letter. What the ALJ did, however, is precisely what I do in this situation: she
assessed the timeliness of Kilgore’s request for hearing in terms of his receipt of the copy
of the I.G.’s notice-of-exclusion letter sent to him at his request in May 2005. She had
little difficulty in determining that his February 2006 request for hearing was untimely,
and dismissed it pursuant to 42 C.F.R. § 1005.2(e)(1). Here, I assess the timeliness of
Petitioner’s request for hearing in terms of his counsel’s receipt of the copy of the I.G.’s
notice-of-exclusion letter not later than August 17, 2010. I have no difficulty in finding
that, although made fully aware of the nature of the exclusion and the 60-day deadline for
filing a request for hearing, Petitioner and his counsel took no action toward filing such a
request for hearing until December 3, 2010. That request for hearing was untimely by a
margin of more than six weeks, and the terms of 42 C.F.R. § 1005.2(e)(1) require its
dismissal.

Without attempting to resolve the factual questions of Petitioner’s actual connection to
the Woodside address, his actual access to mail delivered there between September 2005
and January 2006, or his actual mental condition between September 2005 and February
2006 — and thus without resolving any of the factual questions upon which the
presumption established by 42 C.F.R. § 1005.2(c) and the “reasonable showing to the
contrary” depend — I find and conclude that Petitioner and his counsel received a second
full and effective notice of his exclusion by the I.G.’s mailing of August 11, 2010. The
terms of 42 C.F.R. §§ 1005.2(c) and 1005.12(c) establish the presumptive date of
Petitioner’s receipt of the 1.G.’s August 11, 2010 mailing as not later than August 17,
2010. The 60-day period for filing Petitioner’s request for hearing established by 42
C.F.R. §§ 1001.2007(b) and 1005.2(c) thus expired on October 18, 2010. The regulations
and the unvarying decisions of this forum deny an ALJ the authority to extend the filing
period. Kris Durschmidt, DAB No. 2345 (2010); Cathy Statler, DAB No. 2241 (2009);
John Maiorano, R.Ph., DAB CR1113 (2003), aff'd, John Maiorano, R.Ph., v. Thompson,
Civil Action No. 04-2279, 2008 WL 304899, at *3-4 (D.N.J. 2008). Petitioner’s request
for hearing was not filed in a timely manner and it must be dismissed. 42 C.F.R.

§ 1005.2(e)(1).
VI. Conclusion

For the reasons set forth above, I grant the I.G.’s motion to dismiss. The request for
hearing filed by Petitioner Ahmed Abouelhoda on December 3, 2010 must be, and it is,
DISMISSED.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
ASAP Home Oxygen, Inc.

(Supplier Number: 4051890001),
Petitioner
Vv.

Centers for Medicare and Medicaid Services.
Docket No. C-11-75
Decision No. CR2364

Date: May 2, 2011

DECISION

I grant the motion of the Centers for Medicare and Medicaid Services (CMS) for
summary judgment and sustain the revocation of Medicare enrollment and billing
privileges of Petitioner, ASAP Home Oxygen, Inc. in accordance with 42 C.F.R. §
424.535(a)(8) for submitting claims for deceased beneficiaries.

I. Background and Procedural History

Petitioner is a supplier of home oxygen services for Medicare beneficiaries. On May 27,
2010, the National Supplier Clearinghouse (NSC), a CMS contractor, notified Petitioner
by letter that it would revoke its Medicare billing privileges effective 30 days from the
postmark of the letter. CMS Ex. 1. The notice letter stated that NSC determined
Petitioner was in violation of 42 C.F.R. § 424.535(a)(8) for the abuse of Medicare billing
privileges. Jd. at 1. According to the notice letter, “[d]uring the period of January 1,
2006 through February 28, 2010 [Petitioner’s] facility submitted claims for deceased
Medicare beneficiaries.” Id.
On June 9, 2010, Petitioner submitted both a corrective action plan (CAP) and a request
for reconsideration. CMS Ex. 2. In its CAP, Petitioner admitted that it submitted claims
for Medicare beneficiaries who were deceased on the alleged date of service, but it
argued that such errors represented a very small percentage of Petitioner’s total claims,’
and the errors were primarily the result of the fact that it is difficult to immediately know
when a patient dies because of the large number of patients Petitioner services. Jd. On
June 23, 2010, NSC rejected Petitioner’s CAP and stated that “the information submitted
does not support proof of compliance with all failed standards.” CMS Ex. 3. NSC
forwarded the matter to a Medicare Hearing Officer for reconsideration. Jd.

Before the contractor issued its reconsideration decision, Petitioner submitted a second
request for reconsideration on August 24, 2010. P. Ex. 2, at 9-11. With this request,
Petitioner submitted what it refers to as “Remit Data” consisting of voluminous
spreadsheets. Although Petitioner has not submitted a copy of this “Remit Data” for ALJ
review, CMS has submitted what it denotes as excerpts of this data as CMS Ex. 9.
Petitioner argued at the reconsideration level that the “Remit Data” revealed that the
majority of its claims were valid and that only a very small percentage of its total claims
submitted were erroneously billed.

On September 14, 2010, NSC issued an unfavorable reconsideration decision. CMS Ex.
4. The decision states:

According to the information in the case file which includes a detailed
Claim History Summary for [Petitioner], it is noted that during the period
of January 1, 2006 through February 28, 2010 [Petitioner] has billed
durable medical equipment and supplies to Medicare for beneficiaries that
are deceased. The claim history summaries indicate that Service Dates
occurred well after the date of beneficiary death and the frequency of billing
is more than that indicated by [Petitioner]. Sent to this hearing officer by
[Petitioner] is a detailed spreadsheet of Remit Data information by quarter
starting in October of 2006 through February 2010 .... In review of this
information and the Claim History Summary from Medicare it is noted
that [Petitioner] had billed for deceased Medicare beneficiaries well

after the beneficiary date of death, in greater frequency than indicated by
[Petitioner]. This is in direct violation of 42 CFR 424.535(a)(8).

Id. at 2.

' Petitioner claims that for the fourth quarter of 2009, nine out of 3,472 claims for oxygen
concentrators were denied for inadvertent billing to deceased patients. CMS Ex. 2.
Petitioner filed a hearing request (HR) with the Civil Remedies Division of the
Departmental Appeals Board to appeal the reconsideration decision. I issued an
Acknowledgment and Pre-hearing Order (Pre-Hearing Order) on November 10, 2010,
and in accordance with that order CMS filed a Motion for Summary Disposition and
Brief in Support Thereof (CMS Br.), accompanied by 11 exhibits (CMS Ex. 1-11).
Petitioner filed its Motion in Opposition of Summary Disposition and Pre-Hearing Brief
(P. Br.), accompanied by 6 exhibits (P. Exs. 1-6). CMS then filed a Reply Brief (CMS
Reply) and objected to Petitioner’s proposed exhibits. CMS argues that these exhibits
constitute new evidence which must be excluded at the Administrative Law Judge (ALJ)
level, and the new evidence is not relevant. In accordance with the terms of my Pre-
Hearing Order, witness affidavits shall not be considered new evidence. Furthermore, as
I discuss below, none of Petitioner’s new exhibits are material to the outcome of this
case. I therefore overrule the CMS objection. I admit CMS Exs. 1-11 and P. Exs. 1-6 to
the record.

II. Applicable Law

Section 424.535(a) of 42 C.F.R. authorizes CMS to “revoke a currently enrolled provider
or supplier’s Medicare billing privileges and any corresponding provider agreement or
supplier agreement” for reasons including, as relevant here:

(8) Abuse of billing privileges. The provider or supplier submits a claim

or claims for services that could not have been furnished to a specific
individual on the date of service. These instances include but are not limited
to situations where the beneficiary is deceased. .. .

Ill. Issue, Findings of Fact, Conclusions of Law
A. Issue

The issue in this case is whether CMS had a legitimate basis to revoke Petitioner’s
Medicare enrollment and billing in violation of 42 C.F.R. § 424.535(a)(8).

B. Applicable Standard
The Departmental Appeals Board (Board) stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . .. The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of
law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that,
if proven, would affect the outcome of the case under governing law. .. . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The ALJ's role in deciding a summary judgment motion differs from the ALJ’s role in
resolving a case after a hearing. The ALJ should not assess credibility or evaluate the
weight of conflicting evidence. Holy Cross Vill. at Notre Dame, Inc, DAB No. 2291, at 5
(2009).

C. Analysis

My findings and conclusions are in the italicized headings and subsequent discussions
below.

I. CMS was authorized to revoke Petitioner’s Medicare enrollment and
billing privileges under 42 C.F.R. § 424.535(a)(8).

Pursuant to 42 C.F.R. § 424.535(a)(8), CMS is authorized to revoke the billing privileges
of a supplier who abuses its billing privileges by submitting claims for services that could
not have been furnished to the specific beneficiary on the date of service. Regulatory
intent contemplated revocations being “initiated when evidence demonstrates multiple
instances, at least three, where abusive billing practices have taken place.” 73 Fed. Reg.
36,448, 36,455 (June 27, 2008) (emphasis added).

CMS argues that Petitioner abused its billing privileges and improperly submitted claims
for services provided to deceased beneficiaries on at least 50 occasions. In its hearing
request, Petitioner concedes that it billed Medicare for services to beneficiaries who were
deceased on multiple instances. Specifically, it is undisputed that Petitioner submitted
claims to Medicare for services for 49 beneficiaries who were deceased on the date of
service reported by Petitioner. P. Br. at 11-13. Of these claims, 39 of the 49 improperly
submitted claims are attributed to Petitioner’s past practice of submitting claims for
maintenance and servicing fees to Medicare on an automated and systemic basis without
any checks or monitoring of billing to ensure individual eligibility. P. Br. at 12. It is also
undisputed that Petitioner billed Medicare for services for deceased individuals on ten
other occasions. Petitioner states that these improper claims were simply “data entry
keying errors” and “accidental billing errors.” P. Br. at 13.

Petitioner presents a material issue of fact with regard to the deceased status of one
beneficiary who CMS claimed Petitioner improperly billed Medicare for services. P. Ex.
3, at 46. I accept Petitioner’s assertions with regard to this particular Medicare
beneficiary as true. However, this one claim alone does not create a genuine material
issue of fact with regard to Petitioner’s other separate abusive billing practices which
would defeat the CMS motion for summary judgment.

Petitioner claims it is currently able to prevent the errors which led to the 39 improperly
submitted Medicare claims and has instituted a new billing procedure to ensure eligibility
of its patients. P. Br. at 12; P. Ex. 6. However, as previously discussed, a revocation
under 42 C.F.R. § 424.535(a)(8) “may be initiated when evidence demonstrates multiple
instances, at least three, where abusive billing practices have taken place.” 73 Fed. Reg.
at 36,455 (emphasis added). It is undisputed that Petitioner billed Medicare at least 39
times for maintenance and servicing fees for beneficiaries who were actually deceased on
the reported date of service. See CMS Ex. 5. All of these claims sought payment for
services allegedly rendered several months after the beneficiary had died. /d. Petitioner
admits that it has submitted claims for services for deceased individuals on numerous
instances over several years. HR; P. Br. at 11-13. The facts clearly establish a pattern of
improper billing which, as Petitioner concedes, resulted in well over three wrongly
submitted Medicare claims.

Petitioner also claims that it did not have adequate information regarding the claims CMS
questioned during the reconsideration process and was therefore deprived of its due
process rights. P. Br. at 6-7. However, a Petitioner is not deprived of due process when
CMS provides Petitioner sufficient notice of the legal basis for the revocation and a
reasonable opportunity to respond at the ALJ hearing level. See Green Hills Enters.,
LLC, DAB No. 2199, at 8 (2008); see also Abercrombie v. Clarke, 920 F.2d 1351, 1360
(7th Cir. 1990), cert. denied, 520 U.S. 809 (1991) (holding that defects in formal notice
may be cured during the course of an administrative proceeding, and due process is
satisfied as long as the party is reasonably apprised of, and given opportunity to address,
the issues in controversy). Here I find that CMS, through its brief, provided Petitioner
sufficient notice, and I provided a reasonable opportunity to respond to CMS’s basis for
revocation involving the submission of 49 Medicare claims for deceased individuals.

Finally, Petitioner argues that its billing errors were accidental and that it is committed to
complying with the regulatory requirements. Petitioner claims it instituted a new billing
procedure and believes it should be allowed the opportunity to rectify any deficiencies in
its billing. P. Br. at 12-14. Even if] assume all Petitioner’s statements are true and that
Petitioner will make necessary corrections in the future, applicable regulations still bind
me. | lack authority to invalidate or change an existing regulation or grant Petitioner an
exemption from compliance with regulatory requirements. /866/CPayday.com, DAB

No. 2289, at 14 (2009). I must sustain CMS’s determination and may not second guess
CMS’s judgment if a legitimate basis for the revocation exists and where the facts
established noncompliance with one or more of the regulatory standards at the time of the
revocation.

Because Petitioner repeatedly submitted claims for deceased beneficiaries, CMS was
authorized to revoke Petitioner’s billing privileges. Petitioner argues that a CMS policy
allowed Petitioner to charge service and maintenance fees to deceased beneficiaries
retrospectively. Pr. Br. at 11-12. I find this defense unavailing, however, considering the
policy states in part, “... the equipment must be medically necessary as of the date such
payment is claimed.” /d. Thirty-nine individuals were deceased at the time Petitioner
made its claims, so clearly these individuals did not then have a medical necessity for
oxygen equipment.

2. The issues involving Petitioner’s corrective action plan are not
reviewable in this forum.

Petitioner also argues that it should have been afforded the opportunity to submit a
comprehensive corrective action plan. However, I cannot address this issue, as CMS’s
decision whether or not to accept a CAP is not an initial determination and not
reviewable by an ALJ. 42 C.F.R. § 405.874(e).

The Board recently addressed the issue of an opportunity to correct through a CAP and
explained how it is distinct from the contractor reconsideration process:

After the initial notice of revocation, the supplier has two tracks

to seek to avoid revocation and may elect to pursue either or both
concurrently. [Medicare Program Integrity Manual (MPIM)],

Ch. 10, § 19.A. The supplier, within 60 days, may request
“reconsideration” of whether the basis for revocation is erroneous or,
within 30 days, it may submit a CAP to demonstrate that it has corrected
that basis. If the contractor accepts the CAP, it notifies the supplier,

and any reconsideration request is withdrawn. Ifthe contractor denies

the CAP, the reconsideration process may proceed to a hearing before a
hearing officer, who reviews “the Medicare contractor’s reason for
imposing a. . . revocation at the time it issued the action... .” Id.

An unfavorable hearing officer decision is appealable to an ALJ,

who reviews the basis for the revocation. Jd. No provision is made for

an appeal of the contractor’s decision not to reinstate based on the CAP. Id.
The hearing officer conducting the reconsideration (and the ALJ on appeal
of the hearing officer decision) are limited to reviewing the basis for
revocation set out in the initial notice, not the merits of any contractor
decision that corrective action under a CAP was unacceptable.

DMS Imaging, Inc., DAB No. 2313, at 7-8 (2010) (footnote omitted).
Thus, the contractor’s evaluation of whether to accept a CAP is not an initial
determination and not appealable. However, CMS’s reconsideration decision arises from
the contractor’s initial determination to revoke Petitioner’s Medicare billing privileges
and is appealable through the administrative process, including the present review.
Emmanuel Brown M.D. and Simeon Obeng M.D., DAB CR2145, at 6-8 (2010).

IV. Conclusion

The undisputed facts establish that CMS is entitled to summary judgment as a matter of
law. I therefore grant summary judgment in favor of CMS and sustain the revocation of
Petitioner’s Medicare enrollment and billing privileges.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Nicola Pike, D.P.M.,
Petitioner,
v.
Centers for Medicare and Medicaid Services
Docket No. C-11-79
Decision No. CR2363

Date: April 27, 2011

DECISION

I deny the motion of the Centers for Medicare and Medicaid Services (CMS) to dismiss
the hearing request of Petitioner Nicola Pike, D.P.M. I decide this case based on
summary judgment and find that the effective date of Petitioner’s enrollment in the
Medicare program is August 3, 2009. Thus, pursuant to 42 C.F.R. § 424.521 (a),
Petitioner may retrospectively bill for services rendered to Medicare beneficiaries as of
July 4, 2009.

I. Background

This case arises from the October 21, 2010 reconsideration decision that affirmed the
initial determination of the Medicare contractor, Wisconsin Physician Service Insurance
Corporation (WPS), regarding Petitioner’s enrollment date in the Medicare program as a
supplier.' Petitioner is a podiatrist practicing in Sioux Center, lowa, who was active in
the Medicare program as an employee of a hospital-based practice from 2002 until 2008.

' Medicare defines “supplier” to mean “a physician or other practitioner, a facility, or
other entity (other than a provider of services) that furnishes items or services” under the
Medicare statute. Social Security Act (Act) § 1861(d), 42 U.S.C. § 1395x(d).
In September of 2008, Petitioner advised WPS of her decision to open her own private
practice. A WPS representative informed Petitioner that due to a change in her
employment status she needed to submit a new provider enrollment application (also
known as Form 8551). Hearing Request (HR) at 2; Petitioner’s Brief (P. Br.) at 3.

Following the approval of one of Petitioner’s subsequent enrollment applications, WPS
determined that Petitioner was eligible for enrollment in the Medicare program as a
supplier as of August 21, 2009 and could retrospectively submit claims for payment as of
July 22, 2009. Dissatisfied with the determination, Petitioner requested a reconsideration
decision seeking an earlier enrollment date. WPS responded with an unfavorable
decision in January 2010 prompting Petitioner to seek review of the unfavorable
determination before a hearing official. The appeal was received at the Civil Remedies
Division, docketed as C-10-537, assigned to Administrative Law Judge Keith Sickendick,
and subsequently reassigned to Board Member Leslie Sussan.”

Board Member Sussan held a hearing in August 2010 where Petitioner presented new
evidence which consisted of an enrollment application with a signature date of June 22,
2009 and a date of receipt stamp of August 3, 2009. According to Petitioner, the
application established that WPS received Petitioner’s application on a date earlier than
the August 21, 2009 date used to determine Petitioner’s enrollment eligibility. Board
Member Sussan issued an order remanding the decision to CMS for further review and to
provide Petitioner with a new effective enrollment date determination based on the new
evidence. P. Br. at 5-7; P. Exhibit (P. Ex.) 6.

CMS thereafter issued an unfavorable effective date determination, finding that WPS
properly established Petitioner’s Medicare enrollment effective date of August 21, 2009
with a corresponding retrospective billing date of July 22, 2009.° P. Ex. 7. Petitioner
now challenges that effective date redetermination. Petitioner’s October 28, 2010
hearing request was received at the Civil Remedies Division and assigned to me on
November 15, 2010 for hearing and decision. My pre-hearing order allowed the parties
to file their exchanges and arguments.

CMS has moved to dismiss, arguing that Medicare regulations do not allow a supplier
whose Medicare enrollment has been granted to appeal the effective date of their billing
privileges. In the alternative, CMS seeks summary judgment asserting that there are no
material issues in dispute regarding its effective date determination. Petitioner filed a
response opposing CMS’s motions, accompanied by a cross-motion for summary

> Pursuant to 42 C.F.R. § 498.44, a member of the Departmental Appeals Board may be
designated a hearing official under 42 C.F.R. Part 498.

> For clarity, I use “effective date” to refer to the effective date of enrollment in Medicare
and not the date on which retrospective billing begins.
judgment. With its motions, CMS submits six exhibits (CMS Exs. 1-6). With its
response and motion, Petitioner submits seven exhibits (P. Exs. 1-7).

II. Issues
The issues in this case are:

1. Whether Petitioner may challenge the effective date of her approved Medicare
enrollment and billing privileges; and if so,

2. Whether WPS and CMS correctly determined that effective date.
Ill. Analysis

My findings of fact and conclusions of law are set forth in italics and bold in the
discussion caption of the decision.

I. Petitioner may challenge the effective date of her Medicare enrollment and
billing privileges.

CMS claims that the regulations that govern a supplier’s enrollment in Medicare, at

42 C.F.R. Part 424, do not allow for a hearing to challenge its effective date of
enrollment. According to CMS, these regulations allow only a challenge to a denial of
enrollment or a revocation of enrollment and not to a determination as to the effective
date of enrollment. Therefore, CMS argues that I do not have jurisdiction to hear and
decide Petitioner’s appeal. CMS Br. at 11-16.

I find the effective date of a Medicare supplier approval is in fact an initial determination
reviewable in this forum. Medicare regulations define an appealable “initial
determination,” to include “[t]he effective date of a Medicare provider agreement or
supplier approval.” 42 C.F.R. §§ 498.3(b)(15), 498.5(d). The regulatory language is
unambiguous. The Board has similarly interpreted this regulation to allow a supplier the
right to challenge the effective date of its enrollment. Victor Alvarez, M.D., DAB 2325,
at 15 (2010) (although there are no appeal rights for a rejected enrollment application, a
provider or supplier may appeal an assigned effective date after CMS has made an
effective date determination).

Accordingly, I find that I have the authority to review the effective date of Petitioner’s
enrollment application and decline to dismiss this case.
2, Summary judgment is appropriate in this case.

Both parties have moved for summary judgment. The Departmental Appeals Board
(Board) stated the standard for summary judgment as follows:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . . . The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of

law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. . . . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an ALJ in deciding a summary judgment motion differs from the ALJ’s role
in resolving a case after a hearing. The ALJ should not assess credibility or evaluate the
weight of conflicting evidence. Holy Cross Vill. at Notre Dame, Inc., DAB No. 2291, at
4-5 (2009).

The parties do dispute whether the enrollment application WPS received from Petitioner
on August 3, 2009, and then returned to Petitioner, contained an original signature or a
stamped or copied signature. According to CMS, the application contained a stamped or
copied signature, and therefore WPS returned an invalid application to Petitioner.
Petitioner argues that the application contained an original signature and therefore should
not have been returned. But even if I infer that the application contained a stamped or
copied signature, and this disputed fact is then resolved in CMS’s favor, Petitioner still
prevails as a matter of law as discussed in the next section of this decision. Therefore,
although the parties argue this factual dispute, I do not find it material to the outcome in
this case, and I find summary judgment is appropriate.

3. WPS should have based Petitioner’s effective date of Medicare enrollment
and billing privileges on the receipt date of her August 3, 2009 application.

The enrollment requirements for suppliers are outlined at 42 U.S.C. § 1395ce(j)(1)(A)
and 42 C.F.R. Part 424. The determination of the effective date of Medicare enrollment
is governed by 42 C.F.R. § 424.520, which provides, in part, that the effective date of
enrollment for suppliers such as Petitioner is “the /ater of the date of filing of a Medicare
enrollment application that was subsequently approved by a Medicare contractor or the
date an enrolled physician . . . first began furnishing services at a new practice location.”
42 C.F.R. § 424.520(d) (emphasis added).* Therefore, the effective date of Medicare
enrollment depends on the date the contractor first received an approvable application.
This is consistent with the preamble to the final rule and the plain language of the
regulation. 73 Fed. Reg. 69,769 (Nov. 19, 2008); 42 C.F.R. § 424.520(d) (emphasis
added).

Petitioner claims to have submitted enrollment applications in December 2008, May
2009, and on June 22, 2009. P. Br. at 4-5. As for the December 2008 application,
Petitioner claims that she downloaded the application form directly from the CMS
website and submitted the complete application to WPS. Petitioner states that WPS
returned the application because it was not the correct form. Petitioner has come forward
with no evidence showing WPS received the December 2008 application and returned it
to her. Petitioner states that she is unable to find a copy of the December 2008
application she submitted. HR at 2; P. Br. at 5. I cannot provide Petitioner with any
relief related to the December 2008 application. Petitioner has provided no evidence of
specific facts establishing the December 2008 receipt by WPS, and therefore I cannot
consider that application in determining an earlier effective date of enrollment. Petitioner
also claims to have submitted an application in May 2009. However, Petitioner has not
provided any proof of receipt by WPS for its submission, and therefore I may not
consider that application in determining an earlier enrollment date for Petitioner.

Petitioner, however, has presented evidence that she submitted a signed Medicare
enrollment application that WPS received on August 3, 2009. P. Ex. 5; P. Ex. 4, at 2.
This enrollment application, which Petitioner first proffered at the August 2010 hearing,
is identified as P. Ex. 5 and shows three signature dates of June 22, 2009 along with
Petitioner’s signature. P. Ex. 5, at 1, 5, 23. CMS also presents a copy of this application
as CMS Ex. 3, which shows a signature date of June 22, 2009 on two pages along with
Petitioner’s signature. CMS Ex. 3, at 2, 22.

CMS does not dispute that Petitioner submitted the June 22, 2009 enrollment application
and that WPS received it on August 3, 2011. P. Ex. 5; CMS Ex. 3; CMS Ex. 4, at 1;
CMS Ex. 6. CMS submits the declaration of Kelly Hartung, a Contract Coordination
Manager at WPS, who explains WPS’s procedures for processing enrollment
applications. Ms. Hartung acknowledges that WPS received an application from
Petitioner on August 3, 2009, but it was returned to Petitioner because of a “copied
signature.” CMS Ex. 6; CMS Ex. 4.

* A supplier may then also retrospectively bill for up to 30 days prior to the date of filing
of the approved Medicare enrollment application. 42 C.F.R. § 424.521 (a)(1).
6

Petitioner’s office manager, Susan Sancenito, confirms the return of the June 22, 2009
non-processed application, and she states that she then submitted to WPS another
application with the same information. P. Ex. 4, at 2. Ms. Hartung confirms that WPS
received a subsequent application on August 21, 2009, which WPS accepted after it
received corrections and updates from Petitioner. CMS Ex. 6, at 2. The October 21,
2010 unfavorable redetermination decision from Alisha Banks, Health Insurance
Specialist, Division of Provider & Supplier Enrollment at CMS, also acknowledges WPS
having received an application from Petitioner on August 3, 2009 and that WPS returned
the application because the signature was determined to be stamped or copied. Ms.
Banks further notes that the returned application was an “invalid application” and could
not be used to determine Petitioner’s effective date. P. Ex. 7, at 2.

A Medicare contractor, upon receipt of an application that has missing information or
supporting documentation, will request the information or documentation from the
supplier and allow the supplier at least 30 days to respond with the missing information
in order to cure any deficiencies in the application. 42 C.F.R. § 424.525. The Board
addressed this rule in a recent decision, Tri-Valley Family Medicine, Inc., DAB No. 2358
(2010). The petitioner in that case was a physician whose initial and subsequent
enrollment applications were returned by the contractor. The Medicare contractor
claimed that it returned both applications because Petitioner failed to sign the certification
statement section. In addressing petitioner’s challenge on appeal, the Board found that
the Medicare contractor should not have returned the applications to petitioner, but rather,
it should have afforded him the opportunity to cure the application deficiency. The
Board stated:

Nothing in the regulations or their preamble specifically addressed what
process would be followed if an application was not signed in all places
where a signature was required. But the only two process options the
regulation established were that the contractor could either treat the missing
signature like any other missing information and request it within the
regulatory deadline or treat the failure as noncompliance and deny the
application, after giving the provider or supplier an opportunity to submit a
corrective action plan, and then affording a right to appeal. Under either
option, the regulations clearly provided applicants with an opportunity to
cure any deficiencies in an application before any adverse action could be
taken.

Id. at 6, citing 71 Fed. Reg. at 20,754, 20,759 (April 21, 2006); 68 Fed. Reg. at 22,070
(April 25, 2003) (emphasis added).

The Board maintained that a Medicare contractor is required to give an applicant the
opportunity to cure any deficiencies or to provide any documentation that may be missing
before the enrollment application can be rejected. The Board stated that the preamble to
the final rule specifically states that “[r]ejection would not occur if the provider or
supplier is actively communicating with us to resolve any issues regardless of any
timeframes.” Id. at 4, see 71 Fed. Reg. at 20,759.

Applying the Board’s analysis to the case before me, I find WPS should have either
treated the question as to whether Petitioner’s signature was stamped or copied like any
missing information and requested verification from Petitioner within the regulatory
deadline; or WPS should have treated the failure as noncompliance and denied the
application, but only after allowing Petitioner an opportunity to submit a corrective action
plan. Under either option, the regulations provided Petitioner with an opportunity to cure
any signature deficiencies in her June 22, 2009 application within 30 calendar days,
before WPS could reject the application. 42 C.F.R. § 424.525.

CMS maintains that when WPS closed the application and returned it to Petitioner, WPS
deemed it “an invalid application,” and therefore it was not used in determining
Petitioner’s effective date. P. Ex. 7, at2. Then on August 21, 2009, after WPS received
an additional application from Petitioner with the required signature, WPS asked
Petitioner for more information which Petitioner promptly supplied. CMS Exs. 1, 28, 40,
43, 46-49, 90-101. WPS approved and subsequently processed that application with an
enrollment effective date of August 21, 2009 and a retrospective billing date of July 22,
2009.

However, CMS has provided no reason for the application WPS received on August 3,
2009 to have been returned to Petitioner but for the determination of a copied or stamped
signature. There is no dispute that Petitioner was actively working with WPS to resolve
any outstanding issues with her application. I find that WPS received an application from
Petitioner on August 3, 2009 that could have been subsequently approved had WPS
afforded Petitioner the 30-day opportunity to cure any deficiencies with the application.

Accordingly, I conclude that Petitioner is entitled to an effective enrollment date of
August 3, 2009, which is the date WPS received an enrollment application from
Petitioner that could have been processed to approval had it not been returned for a
signature deficiency. I further conclude that Petitioner is entitled to receive payment for
covered Medicare services retrospectively to July 4, 2009, which is 30 days prior to its
August 3, 2009 effective date of enrollment. 42 C.F.R. § 424.521(a)(1).

IV. Conclusion

For the reasons explained above, I conclude based on the undisputed facts and as a matter
of law that WPS did receive an application from Petitioner on August 3, 2009 which
properly started the Medicare enrollment application process. I further conclude that the
application should have been processed to approval by the Medicare contractor WPS.
Thus, I order CMS to provide Petitioner with a new effective date of enrollment in the
Medicare program of August 3, 2009 and a retrospective billing date of July 4, 2009.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Care With Dignity Convalescent Hospital,
(CCN: 05-5698),
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-17
Decision No. CR2362
Date: April 26, 2011

DECISION DISMISSING REQUEST FOR HEARING

I dismiss the hearing request of Petitioner, Care With Dignity Convalescent Hospital.
Petitioner forfeited its right to a hearing in this case because it failed to comply with my
pre-hearing orders and failed to file either a pre-hearing brief or proposed exhibits.

I. Background

Petitioner is a skilled nursing facility doing business in San Diego, California. It
participates in the Medicare program. Its participation in Medicare is governed by
sections 1819 and 1866 of the Social Security Act and by implementing regulations at

42 C.F.R. Parts 483 and 488. Its hearing rights in this case are governed by regulations at
42 CFR. Part 498.

The Centers for Medicare and Medicaid Services (CMS) determined to impose remedies
against Petitioner based on surveys of Petitioner’s facility that found that Petitioner was
not complying substantially with Medicare participation requirements. Petitioner
requested a hearing and the case was assigned to me for a hearing and a decision.
I issued a pre-hearing order to the parties that directed them to file pre-hearing exchanges
consisting of proposed exhibits and briefs addressing all of the issues of the case. CMS
complied with my order on February 22 by filing a brief and proposed exhibits.
Petitioner’s exchange was due 30 days later.

Petitioner failed to file an exchange. I then issued an order to show cause to Petitioner
that directed it to either file a pre-hearing exchange or to explain why it had failed to do
so. Petitioner filed no response to the order to show cause.

IL. Issue, findings of fact and conclusions of law
A. Issue

The issue before me is whether I should dismiss Petitioner’s hearing request.
B. Findings of fact and conclusions of law

I make the following findings of fact and conclusions of law. Petitioner failed to comply
with my pre-hearing orders in this case. It filed no pre-hearing exchange in response to
my initial order nor did it respond to the order to show cause that I issued to it after it
failed to file a pre-hearing exchange. More important, Petitioner failed to offer any
argument or evidence in response to CMS’s pre-hearing exchange and failed to mount
any defense to CMS’s allegations and evidence of noncompliance. In its exchange CMS
filed 35 proposed exhibits, including the written direct testimony of its proposed
witnesses, detailing its case against Petitioner. CMS also filed a pre-hearing brief that
articulated its fact assertions and its legal arguments. Petitioner was thus put on notice
precisely of CMS’s case and yet, it failed to file anything in response.

An administrative law judge may dismiss a party’s hearing request when that party has no
right to a hearing. 42 C.F.R. § 498.70(b). I find that Petitioner forfeited its right to a
earing. First, it failed to comply with any of the pre-hearing orders. I effectively gave
Petitioner two opportunities to mount a defense to CMS’s allegations and evidence.
Notwithstanding, Petitioner filed no pre-hearing exchange in compliance with the
deadline I set initially nor did it file anything in response to the order to show cause that I
issued. Second, Petitioner abandoned its hearing request. CMS presented a
comprehensive case against Petitioner, offering evidence and argument as to why CMS’s
remedy determinations should be sustained. That case imposed on Petitioner the duty to
file evidence and argument of its own if it wanted a hearing. Petitioner filed nothing.

/s/
Steven T. Kessel
Administrative Law Judge