Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

In the Case of:
John W. Crews, Date: December 5, 1997
Petitioner,

Docket No. C-97-271
Decision No. CR509

-v-

The Inspector General.

DECISION

I sustain the determination of the Inspector General (I.G.)
to exclude Petitioner, John W. Crews, from participating in
Medicare, Medicaid, Maternal and Child Health Services Block
Grant and Block Grants to States for Social Services programs
until Petitioner obtains a Nursing Home Administrator license
in the State of Virginia.' I base my decision on evidence
which proves that Petitioner surrendered his license during
the pendency in that State of a formal disciplinary
proceeding involving his Nursing Home Administrator license
that concerned his professional competence, professional
performance, or financial integrity.

BACKGROUND

In a letter (Notice) dated February 21, 1997, the I.G.
notified Petitioner that he was being excluded from
participating in Medicare and Medicaid because his license to
practice medicine or provide health care in the State of
Virginia was revoked, suspended, or otherwise lost or was
surrendered while a formal disciplinary proceeding was
pending before the licensing authority for reasons bearing on
Petitioner's professional competence, professional
performance, or financial integrity. The I.G. asserted that
Petitioner's exclusion was authorized by section 1128(b) (4)
of the Social Security Act (Act). Additionally, the I.G.

' I use the term "Medicaid" hereafter to refer to all
State health care programs from which Petitioner was
excluded.
2

advised Petitioner that his exclusion would remain in effect
until he obtained a valid license in the State of Virginia.

Petitioner requested a hearing and the case was assigned to
me for decision. The parties have each submitted written
arguments and proposed exhibits. Petitioner made a request
for the opportunity for oral argument, which I denied. Order
Denying Petitioner's Request for the Opportunity for Oral
Argument, dated October 28, 1997.

The I.G. submitted one proposed exhibit (I.G. Ex. 1) and
three attachments. I have remarked the attachments as
exhibits. I.G. Attachment 1 is now I.G. Ex. 2; I.G.
Attachment 2 is now I.G. Ex. 3; and I.G. Attachment 3 is now
I.G. Ex. 4. Petitioner did not object to my receiving the
documents submitted by the I.G. into evidence. I thus admit
I.G. Exs. 1-4 into evidence. Petitioner submitted eight
exhibits (P. Exs. 1-8) and Attachments A-F. I have remarked
the attachments as exhibits. Attachment A is now P. Ex. 9;
Attachment B is now P. Ex. 10; Attachment c is now P. Ex. 11;
Attachment D is now P. Ex. 12; Attachment E is now P. Ex. 13;
Attachment F is now P. Ex. 14. The I.G. did not object to my
receiving the documents submitted by Petitioner into
evidence. I thus admit P. Exs. 1-14 into evidence. In
deciding this case, I have considered the exhibits, the
applicable law, and the arguments of the parties.

APPLICABLE LAW

Pursuant to section 1128(b)(4) of the Act, the I.G. may
exclude "({aJjny individual or entity -- (A) whose license to
provide health care has been revoked or suspended by any
State licensing authority, or who otherwise lost such a
license or the right to apply for or renew such a license,
for reasons bearing on the individual's or entity's
professional competence, professional performance, or
financial integrity, or (B) who surrendered such a license
while a formal disciplinary proceeding was pending before
such an authority and the proceeding concerned the
individual's or entity's professional competence,
professional performance, or financial integrity."

Section 1128(c) (3) of the Act was amended by section 212 of
the Health Insurance Portability and Accountability Act of
1996 (Pub. L. 104-191). A new subparagraph, section
1128(c)(3)(E), was added, which states that the length of an
exclusion under section 1128(b)(4) "shall not be less than
the period during which the individual's or entity's license
to provide health care is revoked, suspended, or surrendered,
or the individual or the entity is excluded or suspended from
a Federal or State health care program." Prior to 1996, the
Act provided no criteria for establishing the length of
3

exclusions for individuals or entities excluded pursuant to
section 1128(b)(4). The 1996 amendments require, at section
1128(c) (3) (E), that an individual or entity who is excluded
under section 1128(b) (4) be excluded for not less than the
period during which the individual's or entity's license to
provide health care is revoked, suspended, or surrendered.
Under the 1996 amendments, no issue of reasonableness exists
where the exclusion imposed by the I.G. is concurrent with
the loss, suspension, or revocation of a State license. A
concurrent exclusion, as in Petitioner's case, is the
mandated minimum required by law.?

PETITIONER'S ARGUMENTS

Petitioner's primary argument is that he is not a provider of
health care as required by section 1128(b)(4) of the Act. He
maintains that, while his license as a nursing home
administrator involves the management and administration of a
facility which provides health care services through the
efforts of its physician and nurse staff, his duties did not
involve the provision of care directly to patients.

Petitioner also maintains that he did not surrender his
license as specified in section 1128(b) (4) (B) of the Act.
Rather, he argues that his license expired on March 31, 1996,
prior to the institution of disciplinary proceedings and
before the July 17, 1996 Consent Order in his case.

Finally, Petitioner contends that the I.G. is not required to
exclude him even if the statutory criteria are met for
exclusion under section 1128(b) (4) of the Act. Petitioner
contends that because section 1128(b) (4) was only meant "to
reach more serious offenders," the I.G. should have used
discretion and not excluded him.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. At all times relevant to this case, Petitioner was a
Nursing Home Administrator who was licensed by the Virginia
Board of Nursing Home Administrators (Board).

2. At all times relevant to this case, Petitioner held the
Nursing Home Administrator's license for Grace Lodge Nursing
Home (Grace Lodge), located in Lynchburg, Virginia.

? An issue of reasonableness will arise only if the

I.G. imposes an exclusion for a longer term than the sanction
which has been imposed by a State licensing authority. In
that event, the administrative law judge will hear and decide
the issue of whether the period of exclusion which extends
beyond the concurrent exclusion term is reasonable.
4

3. As Administrator, Petitioner was directly responsible for
the management and operation of Grace Lodge, for ensuring
that Grace Lodge was in compliance with federal and state
regulations and standards, and for ensuring that proper care
was provided to its residents.

4. On August 13-16, 1991, the Health Care Financing
Administration (HCFA) conducted an inspection of Grace Lodge
and found that it was not in compliance with federal long
term care facility requirements and Virginia nursing home
regulations. I.G. Ex. 1; P. Ex. 6.

5. On May 26-28, 1992, May 11-13, 1993, and April 20-22,
1994, the Virginia Department of Health conducted Medicaid
certification and nursing. home licensure inspections of Grace
Lodge and found that it was not in compliance with federal
long term care facility requirements and Virginia nursing
home regulations. I.G. Ex. 1; P. Ex. 6.

6. On April 26, 1995 and on February 28, 1996, the Informal
Conference Committee of the Board (Committee) met to review
allegations that Petitioner, as a result of the deficiencies
set forth in the August 16, 1991, May 28, 1992, May 13, 1993,
and April 22, 1994, HCFA Statements of Deficiencies, may have
violated § 54.1-3103 of the Code of Virginia and §
7.1(1),(2), and (3) of the regulations of the Virginia Board
of Nursing Home Administrators. I.G. Ex. 1.

7. On April 26, 1995 and February 28, 1996, the Committee
also reviewed allegations that Petitioner may have violated
§§ 7.1(6), 8.1, 8.3(A), 8.4, 8.5, and 8.8(C) of the
regulations of the Board, in that Petitioner failed to
provide proof of completion of the twenty continuing
education classroom hours required for the 1994 licensure
year. I.G. Ex. 1.

8. In its notice to Petitioner of the convening of the
February 28, 1996 conference, the Board advised Petitioner
that if the Committee found a violation and was of the
opinion that dismissal of the charges was not appropriate,
the Committee would either present its findings to the full
Board with the recommendation for disciplinary sanction in
the form of a Consent Order or refer the case for formal
hearing. I.G. Ex. 1.

9. On April 5, 1996, Petitioner, in writing, notified the
Director, Long Term Care Services, Office of Health
Facilities Regulation, Virginia Department of Health, that he
was no longer the licensed administrator of Grace Lodge as
his service as administrator terminated effective March 31,
1996. P. Ex. 2.
5

10. On July 10, 1996, Petitioner entered into a Consent
Order with the Board which found that, as a result of the
1991, 1992, 1993, and 1994 HCFA Statements of Deficiencies,
Grace Lodge was not in compliance with the applicable federal
long term care requirements and Virginia nursing home
regulations and that Petitioner had failed to provide proof
of completion of the 20 hours of continuing education
required for the 1994 licensure year. I.G. Ex. 1.

11. In the July 10, 1996 Consent Order, the Board accepted
“the SURRENDER of the license of (Petitioner) to practice
nursing home administration in the Commonwealth of Virginia
upon express condition that this Consent Order is in lieu of
further proceedings affecting the license of (Petitioner)."
I.G. Ex. 1.

12. On February 21, 1997, the I.G. notified Petitioner of
his indefinite exclusion from participation in Medicare and
Medicaid pursuant to section 1128(b)(4) of the Act.

13. Section 1128(b)(4)(B) of the Act authorizes the I.G. to
exclude an individual who voluntarily surrenders his license
to provide health care during the pendency of formal
disciplinary proceedings by the State's licensing authority
which concern the individual's professional competence,
professional performance, or financial integrity.

14. Petitioner, as a nursing home administrator, possessed a
license to provide health care within the scope of section
1128(b) (4) of the Act.

15. Petitioner surrendered his Nursing Home Administrator's
license during the pendency of a formal disciplinary
proceeding within the scope of section 1128(b)(4)(B) of the
Act.

16. Petitioner's surrender of his Nursing Home
Administrator's license was for reasons bearing on his
professional competence, professional performance, or
financial integrity within the scope of section 1128(b) (4) of
the Act.

17. The I.G. was authorized to exclude Petitioner pursuant
to section 1128(b)(4)(B) of the Act.

18. Where an exclusion is imposed pursuant to section
1128(b) (4) of the Act, the period of the exclusion shall not
be less than the period during which the individual's license
to provide health care is revoked, suspended, or surrendered.
Section 1128(c)(3)(E) of the Act.
6

19. When an exclusion is imposed pursuant to section
1128(b) (4) of the Act and the period of exclusion is
concurrent with the loss, suspension, revocation, or
surrender of a State license, then no issue of reasonableness
concerning the length of exclusion exists.

20. The exclusion imposed by the I.G. against Petitioner,
which will remain in effect until Petitioner regains a
license to provide health care in the State of Virginia, was
authorized under sections 1128(b)(4) and 1128(c)(3)(E) of the
Act.

DISCUSSION

In my review, I find that the record establishes that
Petitioner surrendered his Nursing Home Administrator's
license while a formal disciplinary proceeding was pending
before the Virginia licensing authority concerning his
professional performance, professional competence, or
financial integrity. In arriving at this determination, I
specifically reject Petitioner's contention that a Nursing
Home Administrator's license is not a license to provide
health care within the scope of section 1128(b) (4) of the
Act. It is clear from the wording of the statute that
section 1128(b) (4) encompasses entities which have licenses
to provide health care, such as nursing homes, even though
these entities provide such services only through the
employment of medical personnel such as doctors and nurses.
In view of this, it is disingenuous for Petitioner to argue
that his license does not relate to health care.

At all times relevant to this litigation, Petitioner was the
administrator of a Medicare/Medicaid long-term care facility
and, as such, was directly responsible for ensuring that
proper care was provided to its residents. In fact, one of
the overriding reasons that Virginia requires its nursing
home administrators to be licensed is to ensure that the
nursing home and its residents are properly maintained ina
healthy and safe manner. See 18 Va. Admin. Code § 95-20-470
(I.G. Ex. 2). The Board, may, among other things, suspend,
or revoke, or place on probation, a nursing home
administrator's license, if it finds that a nursing home
administrator was "conducting the practice of nursing home
administration in such a manner as to constitute a danger to
the health, safety, and well-being of the residents, staff,
or public. ..". Id. It therefore strains credulity for
Petitioner to contend that he is not licensed as a provider
of health care services where he bears the ultimate
responsibility for ensuring that health care services of the
nursing home are provided properly to residents in accordance
with relevant regulatory requirements.
7

Such conclusion is consistent with my decision in Maurice
Labbe, DAB CR488 (1997), in which I held that a nursing home
administrator who, in response to allegations by the Maine
Nursing Home Administrators Board, permanently surrendered
his license by entering into a consent agreement, was
properly subject to an exclusion under sections 1128(b) (4) (A)
and 1128(b)(4)(B) of the Act until he regained his license in
Maine. Under the terms of the consent agreement, Labbe
agreed to surrender his Nursing Home Administrator's license
and not apply for any presently offered or future offered
category of license in the State of Maine.

In Muhammad A. Malick, DAB CR463 (1997), the petitioner
operated a business which administered sonogram and blood
tests. He was found subject to exclusion under section
1128(a)(1). I rejected the petitioner's argument that he was
not subject to exclusion because he was not a health care
practitioner providing direct services to patients.
Similarly, in Ifeoma Afeonyi, DAB CR262 (1993) I held that
the I.G.'s exclusion authority under section 1128 (a) (1)
(which involves those who "deliver" health care items or
services under Medicare or Medicaid) applied to Petitioner
even though she was an owner of a medical clinic and not a
health-care practitioner. Just as the individuals in Malick
and Afeonyi who owned or operated facilities were still
subject to mandatory exclusion under section 1128(a)(1) of
the Act, Petitioner need not be licensed to directly provide
health care to nursing home residents to be subject to
exclusion under section 1128(b) (4).

I note further that, under the federal regulations for
Medicare/Medicaid certification of long term care facilities,
a nursing home is required to have an administrator who is
"(1ljicensed by the State where licensing is required." 42
C.F.R. § 483.75(d)(2)(i).? Moreover, under Virginia law, in
order to provide health care services to residents, all
nursing homes must have a duly licensed administrator. Thus,
an administrator's license is essential to provide health
care services in such facilities. Without a licensed
administrator, Grace Lodge would not be able to function in
providing health care services to its residents.

Petitioner argues that he let his license expire on March 31,
1996, and then subsequently agreed to a "surrender" of that
license. The record does not support Petitioner's contention
that his license expired. The record reflects that the
Committee met on April 26, 1995, to consider whether

3° Virginia requires that its nursing home
administrators be licensed. See 18 Va. Admin. Code § 95-20-
470 (I.G. Ex. 2).
8

Petitioner violated Virginia regulations in his management of
Grace Lodge. On January 30, 1996, such Committee sent
Petitioner notice that such proceeding would reconvene on
February 28, 1996. I.G. Ex. 1. In correspondence dated
April 5, 1996, to the Director, Long Term Care Services,
Office of Health Facilities Regulation of the Virginia
Department of Health, Petitioner notified the director that,
as of March 31, 1996, his service as administrator of Grace
Lodge terminated. such chronology does not, without more,
indicate that Petitioner's license expired and/or that it
might not be the subject of administrative sanction.
Furthermore, the Consent Order dated July 10, 1996, entered
into by the Board and Petitioner and signed by Petitioner
states that the Board "hereby accepts the SURRENDER of the
license of John W. Crews, N.H.A., to practice nursing home
administration in the Commonwealth of Virginia upon express
condition that this Consent Order is in lieu of further
proceedings affecting the license of Mr. Crews." I.G. Ex. 1.
Such language indicates that if Petitioner had not
surrendered his license, further proceedings would be
necessary, an unlikely occurrence if the license had expired
or if Petitioner did not have the right to readily retain his
licensure. More importantly, such language clearly reflects
that the circumstances surrounding Petitioner's license was
viewed as a surrender by both parties to the Consent Order.

I find that Petitioner's license was surrendered while a
formal disciplinary proceeding was pending before the Board.
During its April 26, 1995 meeting, the Committee considered
allegations that Petitioner may have violated Virginia
regulations governing his license as a Nursing Home
Administrator. I.G. Ex. 1. The January 30, 1996 letter sent
to Petitioner by the Committee indicated that the Committee
would reconvene on February 28, 1996, and that the purpose of
the Conference was to review allegations against Petitioner.
It further stated that if the Committee found a violation,
the Committee would either present its findings to the full
Board with the recommendation for disciplinary sanction in
the form of a Consent Order or refer the case for formal
hearing in accordance with §§ 54.1-110 and 9-6.14:12 of the
Code of Virginia. On July 10, 1996, Petitioner signed such
Consent Order which was accepted by the Board on that date.
I.G. Ex. 1.

Petitioner as administrator of Grace Lodge was responsible
for management of the facility, for ensuring that it was in
compliance with federal and state regulations and standards,
and for ensuring that it was properly providing services to
its residents. 42 C.F.R. § 483.75; see 22 Va. Admin. Code §
40-71-60 (P. Ex. 11); see also Ernest Valle, DAB CR309
(1994); Jerry L. Edmonson, DAB CR59 (1989). During the years
1991 through 1994, HCFA and the Virginia Department of Health
9

conducted surveys of Grace Lodge and found its operation
deficient in a number of areas including patient care. The
surveys revealed that the residents of Grace Lodge were not
given adequate medical care and that issues were raised
concerning the safety of the facility. P. Exs. 6 and 7. The
facility received from HCFA a Statement of Deficiencies after
each survey which set forth the deficiencies. I.G. Ex.1; P.
Ex. 6. The allegations that Grace Lodge was not in
compliance with federal long-term care requirements during
the period of time when Petitioner, as the licensed Nursing
Home Administrator, was responsible for ensuring the
facility's compliance, bore directly on his professional
performance or professional competence.

The entire reason and purpose for the disciplinary proceeding
initiated by the Board was to examine Petitioner's
professional competence and professional performance in light
of the specific allegations raised in the HCFA Statements of
Deficiencies. These allegations related to Petitioner's
professional performance and competence as they pertained to
his ability to properly manage Grace Lodge. Thus, the
requirements of section 1128(b)(4)(B) of the Act have been
met.

Previous decisions of the Departmental Appeals Board (DAB)
administrative law judges (ALJs) establish that a chronology
such as occurred in Petitioner's case constitutes a license
surrender within the scope of section 1128(b) (4) (B) of the
Act. An ALJ found the I.G.'s indefinite exclusion of a
provider who violated section 1128(b) (4) to be reasonable in
Dillard P. Enright, DAB CR138 (1991). In that case, the
petitioner alleged that his nursing license was not
surrendered while a formal disciplinary proceeding was
pending. Enright involved a petitioner who surrendered his
nursing license to a Nursing Board before formal findings
were made as to the allegations in a complaint filed against
him. In this decision, the ALJ found that the petitioner's
license surrender at an "informal meeting" before the Nursing
Board constituted a surrender while a formal disciplinary
proceeding was pending, within the meaning of section

1128(b) (4)(B) of the Act. The ALJ found that "(iJf
Petitioner had not surrendered his license, the Nursing Board
would have had a responsibility to resolve the issues raised

by the claims. . .. The Nursing Board, in the absence of
Petitioner's surrender of his license, was fully prepared to
go forward." Enright, at 9. Likewise, in this case, if

Petitioner had not entered into a Consent Order, the
Committee would have referred the case "for formal hearing in
accordance with § 54.1-110 and § 9-6.14:12 of the Code of
Virginia." I.G. Ex. 1.
10

Petitioner has contended that the proceeding conducted by the
Board on February 28, 1996 was not a formal disciplinary
proceeding within the meaning of section 1128(b) (4) (B) of the
Act. Petitioner states that under Virginia state law, there
are both informal and formal administrative processes.
Petitioner argues that "the informal fact finding procedures
do not rise to the level of a formal disciplinary level
proceeding . . ." and that the distinction in Virginia law
between informal and formal proceedings would be "rendered
meaningless" if the informal proceedings under Virginia law
are determined to constitute formal disciplinary proceedings
under section 1128(b) (4) (B) of the Act. Petitioner's
Memorandum in Opposition, at 9-10.

The fact that, under Virginia law, the proceedings before the
Board were not considered "formal" is not definitive or
meaningful in interpreting section 1128(b)(4)(B). This case
is governed by federal law, and the interpretation of a
federal statute or regulation is a question of federal, not

state, law. Chester A. Bennett, M.D., DAB CR64 (1990).

In John W. Foderick, M.D., DAB CR43 (1989), the ALJ stated
that "({a]jlthough section 1128(b)(4)(B) does not define the
term ‘formal disciplinary proceeding,' it is reasonable to
conclude from the face of the statute, and from legislative
history, that the law refers to a license proceeding which
places a party's license in jeopardy and which provides that
party with an opportunity to defend against charges which
might result in a license suspension or revocation. This
interpretation is consistent with the purpose of the law. . .
+ The law presumes that an individual or entity who
surrenders a health care license in the face of charges, and
in the circumstance where he has the opportunity to defend
himself, is as likely to be untrustworthy as the individual
or entity who loses a license after litigating the issue of
his or her professional competence, performance, or financial
integrity." Foderick, at 6-7.

In the present case, Petitioner surrendered his license in
the face of the Committee's investigation of allegations
involving Grace Lodge and also, his failure to provide proof
of completion of the required classroom hours for the 1994
licensure year. I.G. Ex. 1. A letter from the Board dated
January 30, 1996, notified Petitioner of the allegations and
provided him with the opportunity to respond. I.G. Ex. 1.
Petitioner was subject to the jurisdiction of the Board, and
if Petitioner had not surrendered his license, the Board
would have continued its investigation of the allegations
which could have led to sanctions including license
suspension or revocation. Prior to the completion of formal
proceedings, Petitioner entered into a Consent Order with the
Board. I.G. Ex. 1. According to the Consent Order,
11

Petitioner "consents to the following order

license to practice nursing home administration in the
Commonwealth of Virginia." Id. (emphasis added). Under the
terms of the Consent Order, Petitioner agreed to surrender
his license to the Board in lieu of the Board pursuing
further proceedings against his license.

Even were I to accept Petitioner's assertion that his license
expired, after which he did not seek relicensure, an
appellate panel of the DAB has held that the language of
section 1128(b) (4) (B) does not require actual physical
surrender of the license document. William I, Cooper, M.D.,
DAB No. 1534 (1995), at 4.‘ The appellate panel in c Cooper
upheld the ALJ's conclusion, stating that the term "license"
can mean a permission to act, as well as the document
evidencing that that permission has been conferred. Id. In
this case, I find that Petitioner, by entering into the
Consent Order, relinquished the permission conferred on him
by the Board to be a nursing home administrator under
circumstances described by section 1128(b) (4) (B).

In addition to citing section 1128(b)(4)(B) of the Act as the
basis for the exclusion against Petitioner, the I.G. has also
cited section 1128(b) (4) (A) of the Act as an alternative
basis.’ Because I have determined that the circumstances of

* The citation for the Civil Remedies Division

decision in Cooper is Dr. William I. Cooper, DAB CR381
(1995).

5 In her reply brief, the I.G. cited section
1128(b) (4) (A) of the Act as a basis for Petitioner's
exclusion. After receiving the I.G.'s brief, Petitioner
filed a Motion for Sanctions against the I.G. Petitioner
made this motion on grounds that the I.G. filed a reply brief
without authority to do so and failed to comply with the
procedures of the Departmental Appeals Board, Civil Remedies
Division. Petitioner moved that I strike the I.G.'s reply
brief in its entirety and that I refuse to consider such
brief. In the alternative, Petitioner requested the
opportunity to reply to the I.G.'s reply brief, with the
costs of such response assessed against the I.G. Further,
Petitioner moved that I prohibit the I.G. from introducing a
new legal basis for Petitioner's exclusion and a recent Civil
Remedies decision in support of its position. The I.G. did
not file a response to Petitioner's motion.

I issued a Ruling dated September 26, 1997, in which I denied

Petitioner's motion to impose sanctions against the I.G. I

permitted the I.G.'s reply brief, in its entirety, to become
(continued...)
12

Petitioner's case leave no doubt that a license "surrender"
did occur within the meaning of section 1128(b)(4)(B) of the
Act, I do not find it necessary to reach the issue of whether
Petitioner's exclusion can be sustained under section
1128(b) (4) (A) of the Act. However, were I to consider this
issue, it is likely that I would apply the appellate panel's
reasoning in Cooper and find that Petitioner's "surrender" of
his license falls also within the meaning of section

1128(b) (4) (A) of the Act.®

5(...continued)

part of the record, and I granted Petitioner the opportunity
to file a rebuttal brief to the I.G.'s reply brief. I stated
that costs of filing Petitioner's rebuttal brief would be
solely borne by Petitioner. Furthermore, I did not prohibit
the I.G. from introducing the decision of Maurice Labbe,
supra, in support of its position. Finally, I deferred
ruling on Petitioner's request that I prohibit the I.G. from
introducing a new legal basis for Petitioner's exclusion.

Petitioner filed a rebuttal brief. In its rebuttal brief,
Petitioner contended, among other things, that the I.G. cited
section 1128(b) (4) (A) of the Act as a basis for Petitioner's
exclusion for the first time in her reply brief. Petitioner
argued that, until the I.G.'s reply brief, the sole alleged
basis for Petitioner's exclusion was section 1128(b) (4) (B).
Petitioner contended that the circumstances of his case did
not meet the criteria of section 1128(b)(4)(A). Petitioner
argued also that the Labbe decision was distinguishable from
his case. Additionally, Petitioner made a request for the
opportunity for oral argument, which I denied. Order Denying
Petitioner's Request for the Opportunity for Oral Argument,
dated October 28, 1997.

® Contrary to Petitioner's contention that the
“otherwise lost" language contained in section 1128(b) (4) (A)
of the Act cannot be interpreted to refer to the surrender of
a license because a license surrender is specifically
addressed in section 1128(b)(4)(B), the appellate panel in
Cooper concluded that the broad “otherwise lost" language
used by Congress indicates that Congress intended section
1128(b) (4) (A) to encompass any loss that occurs by a means
other than revocation or suspension by a licensing authority.
Cooper, at 6. The appellate panel in Cooper moreover stated
that such an interpretation of section 1128(b) (4) (A) would
not render section 1128(b)(4)(B) superfluous. Id. In the
Cooper case, the appellate panel concluded that Dr. Cooper,
who had "surrendered" his license to practice medicine within
the meaning of section 1128(b)(4)(B) of the Act, could also
have been excluded under section 1128(b) (4) (A).
13

Finally, Petitioner contends that for the I.G. to take action
against him is unwarranted because section 1128(b)(4) of the
Act is meant to apply to "more serious offenders." This
argument is without merit. The I.G.'s use of discretion in
deciding to impose a permissive exclusion is not reviewable.
42 C.F.R. § 1005.4(c) (5); Nanette Neu, R.N., DAB CR429
(1996).

CONCLUSION
I conclude that the I.G. was authorized to exclude Petitioner
pursuant to section 1128(b) (4)(B) of the Act. I conclude

also that the term of exclusion imposed by the I.G. is
mandated by section 1128(c) (3) (E) of the Act.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Di

In the Case of:

Michael Blake Runyon, D.P.M., Date: November 25, 1997

Petitioner,

“Veo Docket No. C-96-093
Decision No. CR508

The Inspector General.

DECISION

I decide that I am without authority to hear and decide
Petitioner's September 8, 1997 motion to reopen his case.

I. Background

On September 8, 1995, I issued a decision in the case of
Michael Blake Runyon, D.P.M., DAB CR392 (1995).
Subsequently, Petitioner Michael Runyon appealed that
decision to the Departmental Appeals Board (DAB). On
January 19, 1996, an appellate panel of the DAB remanded

that case to me for further proceedings. Michael Blake
Runyon, D.P.M., DAB No. 1555 (1996). I issued a decision

on remand in that case on June 13, 1996 sustaining
Petitioner's five-year exclusion. Michael Blake Runyon,
D.P.M., DAB CR422 (1996).

On September 8, 1997, Petitioner wrote to the Civil
Remedies Division of the DAB.' P. Ex. 1. Petitioner
stated that his letter "serves as a MOTION TO REOPEN" his
case because he had "several points to offer that will
make a difference." Id. Petitioner's September 8, 1997

! Although Petitioner did not designate his

September 8, 1997 letter as an exhibit, I have identified
it as P. Ex. 1, because it appears to contain statements
by Petitioner that Petitioner considers to be
evidentiary. For purposes of making a record, I am
receiving into evidence P. Ex. 1.
2

letter is a request that I reopen and revise my June 13,
1996 decision in his case.”

II. Applicable law

42 C.F.R. § 1005.4 enumerates the authority of the
administrative law judge (ALJ) but contains no language
relating specifically to an ALJ's authority to reopen and
revise decisions already issued.

42 C.F.R. § 1005.20(d) provides that, unless the initial
decision is appealed to the DAB, it will be final and
binding on the parties 30 days after the ALJ serves the
parties with a copy of the decision. If the service is
by mail, the date of service will be deemed to be 5 days
from the date of mailing.

III. Issue, findings of fact and conclusions of law

The issue is whether I have authority to hear and decide
Petitioner's September 8, 1997 request to reopen and
revise my June 13, 1996 decision. In concluding that I
do not have such authority, I make the following findings
of fact and conclusions of law (Findings). These
Findings address only the question of my authority to
hear and decide Petitioner's September 8, 1997 request to
reopen and revise my June 13, 1996 decision in
Petitioner's case. I make no findings concerning the
merits of Petitioner's September 8, 1997 request to
reopen and revise my decision of June 13, 1996, inasmuch

2? prior to the body of Petitioner's September 8,
1997 letter, Petitioner referenced his letter as follows:
RE: Docket No. C-96-093
Decision NO. CR422
Dated: January 19, 1996

Pp. Ex. 1.

The decision issued by an appellate panel of the DAB,
Michael Blake Runyon, D.P.M., DAB No. 1555 (1996), is
dated January 19, 1996. However, my decision on remand,
Michael Blake Runyon, D.P.M., DAB CR422 (1996), is dated
June 13, 1996. Since my decision on remand is identified
as docket number C-96-093, has decision number CR422, and
is the last decision in Petitioner's case, I am assuming
that Petitioner merely put the wrong date in his letter
and that Petitioner is trying to reopen the June 13, 1996
decision on remand.
3

as I have no authority to do so. I discuss my Findings
below, at Part IV of this decision.

Findings

1. A decision on remand was issued in Petitioner's case
on June 13, 1996.

2. Petitioner made his September 8, 1997 request that I
reopen and revise my June 13, 1996 decision more than 30
days after the date of the decision.

3. I do not have authority to hear and decide
Petitioner's September 8, 1997 request to reopen and
revise my June 13, 1996 decision in Petitioner's case
under the regulations contained in 42 C.F.R. Part 1005.

Iv. Discussion

The regulations that govern Petitioner's request to
reopen and revise my June 13, 1996 decision are contained
in 42 C.F.R. Part 1005. My authority to hear and decide
Petitioner's September 8, 1997 request depends on the
timing of Petitioner's request. For purposes of this
decision, the relevant facts are that my decision on
remand sustaining Petitioner's five-year exclusion was
issued on June 13, 1996 and that Petitioner requested
that I reopen and revise my June 13, 1996 decision by
letter dated September 8, 1997. Thus, more than 30 days
elapsed between the date of the June 13, 1996 decision
and the date of Petitioner's September 8, 1997 letter
requesting that I reopen and revise my June 13, 1996
decision.

There is no language in the regulations that specifically
addresses the authority of an ALJ to reopen or revise an
ALJ decision that was already issued. Additionally,
under 42 C.F.R. § 1005.20(d), an initial decision by an
ALJ becomes final and binding on the parties 30 days
after the ALJ serves a copy of the decision on the
parties unless the initial decision is appealed to the
DAB.

This issue has been addressed previously in Keith 0.
Irby, DAB CR427 (1996) by ALJ Steven Kessel. As stated
in Irby:

A logical reading of 42 C.F.R. §1005.20(d) is that
it permits an administrative law judge to consider
reopening and revising a decision during the 30-day
time period prior to the decision becoming final and
binding or during the dates between the date of
4

service of a decision on the parties and the date of
appeal of that decision. However, it is also
logical to read the regulations as precluding the
administrative law judge from reopening or revising
a decision after that decision becomes final and
binding or after DAB appellate review is sought.

Id. at 5.

The September 8, 1997 letter by Petitioner requesting
that I reopen and revise my decision of June 13, 1996,
was not made within 30 days of my serving a copy of that
decision on him. Therefore, under 42 C.F.R. Part 1005, I
am without authority to hear and decide Petitioner's
September 8, 1997 request to reopen and revise my June
13, 1996 decision.

Iv. Conclusion
I conclude that I have no authority to hear and decide
Petitioner's September 8, 1997 request that I reopen and

revise my June 13, 1996 decision in his case. Therefore,
I dismiss his request for a hearing.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:

Belmont Nursing &
Rehabilitation Center,

Date: November 25, 1997

Petitioner,
-vV Docket No. C-96-407

Decision No. CR507

Health Care Financing
Administration.

DECISION

Below, I explain my reasons for granting the Health Care
Financing Administration's (HCFA) motion for summary affirmance
against Petitioner, thereby sustaining HCFA's findings that
Petitioner was not in substantial compliance with Medicare
participation requirements and its imposition of the remedies of
denial of payment for new admissions and a civil money penalty
(CMP) in the amount of $300 per day.

I. Procedural history and background facts

The procedural history and background facts which I recite in
this portion of my decision are not disputed by the parties.

Petitioner is a 100-plus-bed skilled nursing facility located in
Madison, Wisconsin. Petitioner participates in the Medicare
progran.

The State of Wisconsin Department of Health and Social Services
(State agency) conducted a survey of Petitioner's long-term care
facility on April 25, 1996. The surveyors concluded that the
facility was out of compliance with a number of Medicare
participation requirements (HCFA Ex. 2)'. By letter dated May 3,

' Throughout this decision I will refer to the various
written submissions by the parties as follows:
(continued...)
2

1996, the State agency advised Petitioner that in order to avoid
the imposition of remedies, the facility was required to correct
its deficiencies by May 25, 1996. HCFA Ex. 6 at 1. A revisit
survey conducted by the State agency on June 10, 1996 found that
Petitioner remained out of compliance with Medicare participation
requirements. HCFA Ex. 3. By letter dated June 17, 1996, the
State agency advised Petitioner that the surveyors hada cited the
facility for 10 deficiencies, 5 of which had been noted on the
previous survey and had not been corrected. Petitioner was
advised that one of the new deficiencies, that dealing with the
care and treatment of pressure sores (F-Tag 314), constituted
substandard quality of care as defined at 42 C.F.R. § 488.301.
Moreover, section 1819(g)(5)(C) of the Social Security Act (Act)
required that the attending physician of each resident who was
found to have received substandard quality of care, as well as
the Wisconsin Department of Regulation and Licensing, be notified
of the substandard quality of care. Finally, the letter notified
Petitioner that because of the change in the seriousness of
Petitioner's noncompliance, the State agency would recommend the
remedy of denial of payment, for new admissions effective July 8,
1996. HCFA Ex. 6 at 5 - 6.?

Upon receipt of the findings and recommendations from the State
agency, HCFA adopted the findings but not the recommendations of
that agency as to the remedy. By letter dated July 22, 1996,
HCFA advised Petitioner that it was imposing a CMP in the amount
of $300 per day effective April 25, 1996 and mandatory denial of
payment for new admissions ef fective August 12, 1996. HCFA

'(...continued)
a. Exhibits offered by HCFA will be identified as HCFA Ex.
(number).
b. Exhibits offered by Petitioner will be identified as
P. Ex. (number).
c. Documents offered by HCFA in support of its motion for
summary affirmance will be identified as HCFA Attach.
(number).
da. HCFA's brief in support of motion for summary
affirmation will be identified as HCFA Br. at (page).
e. Petitioner's brief in opposition to the motion for
summary affirmation will be identified as P. Br. at (page).

? It is noted that the remedy of denial of payment for new
admissions is mandatory, pursuant to 42 C.F.R. § 488.417(b) (1),
when a facility is not in substantial compliance three months
after the last day of the survey identifying the noncompliance.
In this case, mandatory denial of payment for new admissions
would have been effective on or about July 26, 1996 (three months
after the survey was completed on April 25, 1996). In deciding to
impose the remedy effective July 8, 1996, the State was in effect
recommending a more severe penalty.
3

Attach. 4. Further, Petitioner was prohibited from offering or
conducting a Nurse Aide Training and/or Competency Evaluation
Program for two years from June 10, 1996 and was notified that
the contingent remedy of termination of Petitioner's Medicare
participation would be imposed in the event that the facility had
not attained compliance by October 25, 1996. The letter advised
Petitioner that the remedy was being imposed in response to
Petitioner's continued noncompliance with Medicare participation
requirements. This letter constituted HCFA's initial
determination. Accordingly, Petitioner was notified of its right
to request a hearing before an administrative law judge (ALJ).

Petitioner filed its request for hearing on August 15, 1996,
stating in pertinent part "[b]ased on the DHHS letter of June 17,
1996, Belmont respectfully requests a hearing under 42 C.F.R.
Part 498. Specifically, Belmont challenges the basis for the
findings of substandard quality of care as evidenced by the
information presented at the Informal Dispute Resolution
Conference of July 2, 1996." HCFA Attach. 5.

The State agency conducted a second survey revisit to
Petitioner's facility on September 11, 1996. The survey team
found continuing noncompliance with Medicare participation
requirements. .HCFA Ex. 4. By letter dated November 6, 1996,
Petitioner requested that the findings from the September 11,
1996 survey be incorporated into its appeal. HCFA Attach. 6.

On October 23, 1996, the State agency conducted a third revisit,
at which time the facility was found to be in substantial
compliance effective October 18, 1996. By letter dated October
29, 1996, the State agency advised that it would recommend to
HCFA that the remedy of denial of payment for new admissions be
discontinued effective October 18, 1996 and that the facility's
certification as a skilled nursing facility be continued. HCFA
Ex. 6 at 9, 10.

By letter dated November 27, 1996, HCFA advised Petitioner that
based on the findings of the State agency, the mandatory denial
of payment for new admissions imposed effective August 12, 1996
would be discontinued effective October 18, 1996, that
termination would not be imposed, and that the CMP of $300 per
day effective April 25, 1996 was discontinued effective October
18, 1996. The letter advised Petitioner that the total amount of
the CMP due was $52,800, representing a CMP of $300 per day for
176 days (April 25, 1996 through November 17, 1996). HCFA Ex. 6
at 12, 13.

3 This date appears to be incorrect. I have assumed that
the controlling date here is October 18, 1996 because that is
when the facility was found to be in compliance. HCFA Ex. 6. I
will use the October 18th date throughout this Decision.
4

Pursuant to Petitioner's request for hearing, this matter was
originally assigned to ALJ Mimi Hwang Leahy. Judge Leahy held a
prehearing conference by telephone with the parties on November
26, 1996 and at that time established time frames for the
exchange of proposed exhibits and identification of witnesses.
This matter was subsequently reassigned to me and ultimately set
for trial in Madison, Wisconsin on October 30 and 31, 1997.
Prior to trial, HCFA submitted nine proposed exhibits, marked as
HCFA Ex. 1- 9. It later moved to submit three additional
exhibits, marked as HCFA Ex. 10 - 12, and still later amended
exhibit 11 and withdrew exhibit 12, all without objection from
Petitioner. Petitioner has submitted 47 exhibits, marked P. Ex.
1 - 47, with no objection from HCFA. At this time, I am hereby
receiving all of the proposed exhibits into the record in this
case.

In a joint stipulation dated April 7, 1997, Petitioner withdrew
its challenge to the findings from the April 25, 1996 survey.
HCFA Attach. 1.

In a letter dated June 16, 1997, Petitioner withdrew its
challenge to the findings from the June 10, 1996 survey except
for certain deficiency examples cited by the surveyors under F-
Tag 314, Pressure sores, 42 C.F.R. § 483.25(c), namely with
respect to residents 13, 16, 17, 21, 23, 25, and 29. HCFA
Attach. 2.

In a letter dated August 8, 1997, Petitioner withdrew its
challenge to the September 11, 1997 survey findings. HCFA
Attach. 3.

In response to Petitioner's withdrawal of challenges to the
surveys in question, HCFA filed two motions, first asking the
undersigned to rule on the question of whether Petitioner had a
right to hearing on the finding of Substandard Quality of Care,
and secondly, assuming Petitioner had no right to hearing on this
issue, requesting in effect summary judgment, arguing that there
were no material issues of fact requiring a hearing.

Both parties filed briefs with respect to the issues raised in
the two HCFA motions. Subsequently, I issued a ruling with
respect to HCFA's first motion, finding that as a matter of law,
Petitioner did not have a right to hearing on the State agency's
finding of Substandard Quality of Care in this case. Rather than
reiterate my rationale for that ruling herein, I am hereby
incorporating that ruling by reference and making it a part
hereof as if it were set forth in its entirety as a part of this
Decision. Petitioner's objections to that ruling are noted for
the record.
5

On October 15, 1997, a telephone prehearing conference was held
with the parties at which time they gave oral argument in support
of their respective positions with regard to HCFA's motion for
summary affirmance. I decided at that time that it would be
helpful to hear the testimony of Mr. Mark Dykstra, a HCFA program
representative, with respect to a possible unresolved issue of
fact, that being the reasonableness of the amount of the CMP
imposed against Petitioner, HCFA having advanced the argument
that even if the matter went to trial, and even if Petitioner
would prevail in showing that the seven examples in dispute
should not have been cited, the CMP would remain unchanged.

The sworn testimony of Mr. Dykstra was taken by telephone in the
presence of the parties on October 20, 1997. A transcript of
that testimony will be made available to the parties herein.
Following the conclusion of Mr. Dykstra's testimony, I ruled
orally that HCFA's motion for summary affirmance was granted, and
I accordingly canceled the trial scheduled for October 30 - 31,
1997. I advised the parties that I would follow my oral ruling
with this written decision.

II. Findings of Fact and Conclusions of Law

In support of my decision to grant HCFA's motion for summary
affirmance in this case, I hereby make the following findings of
fact and conclusions of law (FFCL):

1. A motion for summary disposition is appropriate, and no
evidentiary hearing is required, where there is no genuine issue
of material fact.

2. 42 C.F.R. § 498.3(b) defines those determinations made by
HCFA which are deemed "initial determinations" from which
affected parties have a right of appeal. The following
subsections of that regulation are controlling in the case before
me:

(12) with respect to a SNF [skilled nursing facility] or NF
(nursing facility], a finding of noncompliance that results
in the imposition of a remedy specified in 488.406 of this
chapter, except the State monitoring remedy, and the loss of
the approval for a nurse-aide training program.

(13) the level of noncompliance found by HCFA in a SNF or NF
but only if a successful challenge on this issue would
affect the range of civil money penalty amounts that HCFA
could collect.

3. In this case, HCFA imposed only two remedies specified in 42
C.F.R. § 488.406, namely denial of payment for new admissions,
extending from August 12, 1996 through October 17, 1996 and a CMP
6

in the amount of $300 per day extending from April 25, 1996
through October 18, 1996. HCFA Attach. 4; HCFA Ex. 6 at 12.

4. The findings of noncompliance which resulted in the
imposition of the aforesaid remedies were those findings made by
the State agency, and adopted by HCFA, in the surveys concluded
on April 25, 1996 and June 10, 1996. HCFA Ex. 2, 3; HCFA Attach.
4. Findings of noncompliance resulting from a third survey ending
September 11, 1996 (HCFA Ex. 4) resulted in the continuation of
the previously imposed remedies. Those findings of deficiency
and noncompliance from the three surveys are as follows‘:

April 25, survey--

F-Tag 221--Physical restraints. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.13(a). HCFA Ex. 2 at 1 - 4;

F-Tag 241--Quality of life. Failure to comply substantially
with the requirements of 42 C.F.R. § 483.15(a). HCFA Ex. 2
at 4-7.

F-Tag 272--Resident assessment. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.20(b). HCFA Ex. 2 at 15 - 20.

F-Tag 279--Resident assessment. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.20(d). HCFA Ex. 2 at 20 - 24.

F-Tag 318--Quality of care. Failure to comply substantially
with the requirements of 42 C.F.R. § 483.25(e)(2). HCFA Ex.
2 at 25 - 26.

F-Tag 364--Dietary services. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.35(d)(1), (2). HCFA Ex. 2 at 26 - 28.

F-Tag 441--Infection Control. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.65(a)(1) - (3). HCFA Ex. 2 at 28 - 33.

* I have included in this list of deficiencies only those
which the State surveyors classified as having a scope and
severity of "D" and higher. The surveyors found some
deficiencies with lower scope and severity levels, but pursuant
to the regulations, levels "A," "B," and "C," constitute
substantial compliance. 42 C.F.R. §§ 488.301, 488.404(b); HCFA
Br. at 6.
June

7
F-Tag 444--Infection control. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.65(b) (3). HCFA Ex. 2 at 33 - 35.

10, 1996 survey--

F-Tag 241--Quality of life. Failure to comply substantially
with the requirements of 42 C.F.R. § 483.15(a). HCFA Ex. 3

at 1-5.

F-Tag 272--Resident assessment. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.20(b). HCFA Ex. 3 at 5 - 11.

F-Tag 279--Resident assessment. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.20(d). HCFA Ex. 3 at 11 - 19.

F-Tag 312--Quality of care. Failure to comply substantially

with the requirements of 42 C.F.R. § 483.25(a) (3).
3 at 19 - 23.

HCFA Ex.

F-Tag 314--Quality of care. Failure to comply substantially
with the requirements of 42 C.F.R. § 483.25(c). HCFA Ex. 3

at 23 - 66.

F-Tag 318--Quality of care. Failure to comply substantially

with the requirements of 42 C.F.R. § 483.25(e) (2).
3 at 66 - 68.

September 11, 1996 survey--

F-Tag 272--Resident assessment. Failure to comply
substantially with the requirements of 42 C.F.R. §
483.20(b). HCFA Ex. 4 at 1 - 5.

HCFA Ex.

F-Tag 312--Quality of care. Failure to comply substantially

with the requirements of 42 C.F.R. § 483.25(a) (3).
4at5- 11.

HCFA Ex.

F-Tag 314--Quality of care. Failure to comply substantially
with the requirements of 42 C.F.R. § 483.25(c). HCFA Ex. 4

at 11 - 31.

F-Tag 324--Quality of care. Failure to comply substantially

with the requirements of 42 C.F.R. § 483.25(b) (2).
4 at 31 - 36.

HCFA Ex.

5. Petitioner withdrew its challenge to the findings of the

April 25, 1996 survey by stipulation dated April 7,
Attach. 1.

1997.

HCFA
8

6. Petitioner withdrew its challenge to the findings of the June
10, 1996 survey by letter dated June 16, 1997. HCFA Attach. 2.
However, Petitioner did not withdraw its challenge to the scope
and severity of one of the findings, F-Tag 314, noting its
disagreement with 7 of 14 resident examples cited by the
surveyors in support of this one finding.

7. Petitioner withdrew its challenge to the findings of the
September 11, 1196 survey by letter dated August 8, 1997. HCFA
Attach. 3.

8. Based upon the findings of the three surveys noted above,
which are now unchallenged by Petitioner, I find that the
Petitioner was not in substantial compliance with the Medicare
participation requirements set forth in FFCL number 4 herein,
including the requirements of 42 C.F.R. § 483.25(c), during the
period from April 26, 1996 through October 18, 1996.

9. As a result of the Petitioner's noncompliance with Medicare
participation requirements, HCFA has established a basis for the
imposition of the remedies of denial of payment for new
admissions and a CMP against Petitioner.

10. 42 C.F.R. § 488.417(b) makes denial of payment for new
admissions mandatory where a facility is not in substantial
compliance three months after the last day of the survey
identifying the noncompliance. April 25, 1996, was the last day
of the survey originally identifying the noncompliance. By
virtue of the fact that Petitioner does not challenge the
findings that it was out of compliance through October 17, 1996,
a period of more than three months, HCFA's imposition of the
remedy was mandated under the regulations.

11. In cases where HCFA has imposed a CMP, review by the ALJ is
limited to determining whether or not a basis for imposition of
the penalty exists, that is, whether or not the facility was in
substantial compliance with Medicare participation requirements,
and whether or not the amount of that penalty is reasonable. 42
C.F.R. § 488.438(e), (f).

12. Petitioner has no right to a hearing, under the regulations,
to challenge examples used to support a finding of substantial
noncompliance where the finding itself is not contested. 42
C.F.R. § 488.438(e), (f).

13. Petitioner did not specifically raise the issue as to the
reasonableness of the amount of the CMP in its request for
hearing filed on August 15, 1996, (HCFA Attach. 5), nor in its
amended request for hearing filed November 6, 1996. HCFA Attach.
6.
9

14. 42 C.F.R. § 498.40(b) (1), (2) require that a request for
hearing "must" (emphasis added):

(1) identify the specific issues, and the findings of fact
and conclusions of law with which the affected party
disagrees; and

(2) specify the basis for contending that the findings and
conclusions are incorrect.

15. Petitioner's request for hearing challenges only the basis
for the State agency's finding of substandard quality of care,
however, as I have previously ruled, Petitioner has no right to
hearing on this issue.

16. Inasmuch as my scope of review is limited to determining
whether there is a basis for imposition of remedies, that is
whether or not the facility was out of compliance with Medicare
requirements, and inasmuch as a basis has been established and is
not in dispute, the only remaining issue over which I have
jurisdiction is the question as to whether the amount of the CMP
is reasonable. By not raising that issue in its request for
hearing, Petitioner has waived its right to hearing on that
issue. Accordingly, I find that there are no material facts at
issue which would require an evidentiary hearing, and HCFA's
motion for summary affirmance should be granted.

17. Even if I were to take jurisdiction of the issue of the
amount of the CMP, and even if Petitioner should prevail in
showing, at trial, that 7 of the 14 resident examples cited by
HCFA in support of its finding that Petitioner was out of
compliance with 42 C.F.R. § 483.25(c) were incorrect, the amount
of the CMP assessed by HCFA would be reasonable.

III. Governing law

Under both the Act and applicable regulations, Petitioner is
classified as a long-term care facility. In order to participate
in Medicare, a long-term care facility must comply with federal
participation requirements. The statutory requirements for
participation by a long-term care facility are contained in the
Act, at sections 1819 and 1919. Regulations which govern the
participation of a long-term care facility are published at 42
C.F.R. Part 483.

Part 488 of the regulations provide that facilities which
participate in Medicare may be surveyed on behalf of HCFA by
State survey agencies to determine whether the facilities are
complying with participation requirements. 42 C.F.R. § 488.10 -
488.28. The regulations contain special survey provisions for
long-term care facilities. 42 C.F.R. § 488.300 - 488.325.
10

If as a result of the survey findings a facility is found not to
be in substantial compliance with participation requirements, a
State or HCFA may impose a variety of remedies designed to ensure
prompt compliance with program requirements. 42 C.F.R. §
488.402(a). Available remedies, and the factors to be considered
in selecting those remedies are set forth at 42 C.F.R. § 488.406
and 42 C.F.R. § 488.404 respectively. Those remedies include the
denial of payment for new admissions and CMPs, remedies imposed
in this case, among others.

The term "substantial compliance" is defined to mean:

a level of compliance with the requirements of participation
such that any identified deficiencies pose no greater risk
to resident health or safety than the potential for causing
minimal harm. 42 C.F.R. § 488.301.

A long-term care facility which wishes to contest HCFA's
determination to impose one or more of the enforcement remedies
specified at 42 C.F.R. § 488.406 (except the State monitoring
remedy and the loss of the approval for a nurse-aide training
program) is entitled to a hearing before an ALJ. The facility
may contest the finding(s) of noncompliance that resulted in the
imposition of the remedy but may not appeal the choice of remedy.
42 C.F.R. § 498.3(b) (12), (13); 42 C.F.R. § 488.408(g)(1), (2).

The right to a hearing, and the authority of an ALJ to conduct a
hearing, is based on a determination by HCFA to impose one of the
enforcement remedies specified at 42 C.F.R. § 488.406. 42 C.F.R.
SS 488.408(g), 498.3(b). Where HCFA has determined not to impose
one of the aforementioned remedies, the facility has no right to
a hearing and the administrative law judge is not authorized to
conduct a hearing. Rafael Convalescent Hospital, DAB CR444
(1996), aff'd, DAB 1616 (1997).

Iv. Discussion
Stipulated facts and findings

In this case, the Petitioner does not contend that it was in
compliance with Medicare conditions of participation or that
there was no basis for HCFA's imposition of a CMP or mandatory
denial of payment for new admissions. As pointed out by counsel
for HCFA, Petitioner's withdrawal of all but limited challenges
to the three surveys in question is in essence an admission that
it was out of compliance, and that it was out of compliance for
the entire period from April 25 - October 17, 1996. HCFA Br. at
6, 7. Likewise, Petitioner states unequivocally that it "seeks
to overturn seven examples cited in F-314 - Pressure Sores,
leaving only three examples at an actual harm level." Petitioner
concedes that it was out of compliance with F-Tag 314 and all of
the other findings contained in HCFA Ex. 2 - 4 and it concedes
11

that its lack of compliance with the requirements of 42 C.F.R. §
483.25(c) resulted in actual harm to three of the residents cited
by the State surveyors in the June 1996 survey, as examples of
Petitioner's deficiency. P. Br. at 4.

Petitioner's challenge is to the scope and severity assigned by
the surveyors to F-Tag 314 in the June survey

HCFA's procedures require surveyors, upon making a finding of
deficiency, to assess the scope and severity of that deficiency.
With respect to F-Tag 314, the surveyors concluded that there was
a "pattern" of noncompliance that resulted in actual harm.
Petitioner contends that the proper scope of the deficiency is
"isolated". Petitioner argues that it is a 132-bed facility and
if it is successful in challenging seven of the resident examples
cited by the surveyors, there would only be three remaining
examples of residents who suffered actual harm. It contends
further, that if HCFA is able to establish only three residents
harmed in a 132-bed facility, these examples should be considered
"isolated" whereas a larger number of examples might constitute a
"pattern." P. Br. at 5.

In effect, Petitioner wishes to lower the scope of the
deficiency. Petitioner freely admits that its primary reason for
wishing to do so is that the finding by the surveyors of a
"pattern" of behavior leading to patient harm was the finding
which triggered the finding of substandard quality of care.
Petitioner states "(f]rom the beginning, Belmont has contested
and continues to contest HCFA's determination that it delivered
sQc [substandard quality of care].

I have previously ruled that Petitioner has no right to hearing
on the finding of substandard quality of care. Even so,
Petitioner contends it has a right to hearing to contest the
seven resident examples in question because: (1) those findings
were a part of the basis for the CMP and (2) because the scope of
a deficiency is a factor which HCFA must consider in determining
the amount of the penalty, and which an ALJ must consider in
reviewing the amount of the penalty. P. Br. at 6, 7. I will
attempt to address each argument separately hereafter.

The Basis Argument

42 C.F.R. § 498.3(b)(12) grants an affected party the right to
appeal a finding of noncompliance that results in the imposition
of a remedy. Similarly 42 C.F.R. § 488.438(e) provides that,
prior to reviewing the amount of CMP imposed, the ALJ must first
determine whether there is a basis for imposition of that
penalty, and basis is defined at 42 C.F.R. § 488.430 as the
determination that the facility is not in substantial compliance.
12

When read together, it would appear that it is the finding of
substantial noncompliance which gives rise to the right to
hearing and which Petitioner has the right to contest, not any
particular factor which might have gone into making that finding,
unless a challenge to an element of the finding would change the
finding itself.

In this case, Petitioner concedes it was not in substantial
compliance, and having made that concession it is obvious that a
challenge to any of the facts leading to the finding would not
change the finding itself.

One of the exhibits offered by HCFA, HCFA Ex. 5 at 7, isa
document prepared by a HCFA surveyor who, after reviewing the
findings by the State survey agency, makes recommendations to the
official authorized to impose a penalty. The HCFA surveyor makes
the comment "F314 was the deficiency that drove the remedy--
Pressure sores." Petitioner interprets this sentence to mean,.
apparently, that this is the finding which lead to the imposition
of the remedy, and accordingly, it argues, it has the right to
challenge the facts upon which that finding was based. I do not
agree with either Petitioner's assumption as to what the sentence
in question means, nor to the conclusion Petitioner reaches as a
result. The surveyor's statement is not the statement of HCFA.
HCFA states its official position through the notice of
imposition of civil money penalty, in this case dated July 22,
1996. HCFA Attach. 4. That is the document from which
Petitioner derives the right of appeal. That document refers to
the deficiencies found in the first survey, April 25, 1996, lists
the deficiencies found in the second survey, June 10, 1996, and
states in pertinent part, "[{i]n response to your facility's
continued noncompliance, the Health Care Financing Administration
is imposing the following remedy against your facility... ."
HCFA has made it clear that the basis for imposition of the CMP
was all of the deficiencies found in the course of the two
surveys, not just F-Tag 314.

Even if it were true, however, that the surveyor's findings that
Petitioner was not in substantial compliance with F-Tag 314 were
the findings that lead to the imposition of the remedy, the fact
is that Petitioner has conceded that it was not in substantial
compliance with F-Tag 314. I do not read the regulations as
granting Petitioner the right to a hearing to challenge examples
used to support a finding of noncompliance where the finding
itself is not contested.

The undersigned would further note that at the time that the HCFA
surveyor made her comment that F-Tag 314 drove the remedy, the
remedy which had been recommended by the State agency was denial
of payment for new admissions effective July 8, 1996. HCFA Ex.
6. It is clear that the decision to impose a CMP was HCFA's and
13

that HCFA's decision was based on the facilities continued
noncompliance with a number of participation requirements. Id.

Amount of Penalty Argument

Petitioner argues that the seven resident examples which it
challenges under F-Tag 314 have relevance to the amount of
penalty imposed. In support of its position, Petitioner cites 42
C.F.R. § 488.438(b) which requires HCFA, in assessing the amount
of the CMP, to take into consideration the factors specified in
section 488.404 of that chapter. 42 C.F.R. § 488.404(b) (2)
requires HCFA to consider whether the deficiencies are isolated,
constitute a pattern, or are widespread. In this case, the State
agency found that the deficiencies under F-Tag 314 constituted a
pattern. Petitioner intends to prove, by challenging the seven
examples in question, that the deficiencies were isolated. If
successful, Petitioner contends, HCFA would be forced to
reconsider its chosen remedy and/or the amount of the CMP
assessed. P. Br. at 6, 7.

with respect to Petitioner's contention that if it is successful
HCFA would be forced to reconsider its chosen remedy, I find its
position has no merit. First, as noted above, HCFA decided to
impose a remedy because the facility was in substantial
noncompliance with a number of participation requirements. 42
C.F.R. § 488.408(g)(2) provides clearly that "{a] facility may
not appeal the choice of remedy. . . ." It is the intent of the
regulations to leave the choice of remedy in the discretion of
HCFA. HCFA cannot be "forced to reconsider its chosen remedy,"
and Petitioner's challenge to the seven resident examples in
question would have no bearing on the choice of remedy, even if
the challenge were successful.

With respect to Petitioner's contention that HCFA would be forced
to reassess the amount of the CMP, I likewise find that
Petitioner's argument is not supported by the facts or governing
law.

Unlike Petitioner's challenge to the selection of the remedy
itself, however, a facility does have the right to challenge the
amount of CMP assessed. 42 C.F.R. § 488.438 (e) provides
essentially that an ALJ may review the amount of a CMP to
determine if that amount is reasonable and subparagraph (f) of
that regulation authorizes the judge to take into consideration
the factors set forth in 42 C.F.R. § 488.404 with respect to the
scope of the deficiency as one of a number of factors in
determining the amount of the CMP.

Petitioner in this particular instance, however, has waived its
right to challenge the reasonableness of the amount of the CMP
because it did not raise the issue timely. 42 C.F.R. § 498.40(b)
14

states, in pertinent part, that the request for hearing must
(emphasis added):

(1) identify the specific issues, and the findings of fact
and conclusions of law with which the affected party
disagrees; and

(2) specify the basis for contending that the findings and
conclusions are incorrect.

In filing its request for hearing on August 15, 1996, Petitioner
specifically identified only one issue--"the basis for the
findings of substandard quality of care." HCFA Attach. 5.°
Further, Petitioner amended its request for hearing on November
6, 1996, incorporating its objections to the findings of the
September 11, 1996 revisit survey, but did not raise any
challenges to the reasonableness of the amount of the CMP. HCFA
Attach. 6.

Petitioner contends that I should construe its request for
hearing as incorporating a challenge to the amount of the CMP.
Petitioner states "[l]ogically, a challenge to the basis of the
penalty presumes a challenge to the penalty itself." P. Br. at
5. Even if one were to accept that argument as correct,
Petitioner never challenged the basis for imposition of the CMP
and therefore one cannot presume a challenge to the amount of
that penalty. I do not accept the argument as being valid even
if Petitioner had challenged the basis for imposition of the CMP.
The regulation cited above clearly requires a Petitioner to
identify with specificity those findings with which it disagrees.
Petitioner did not identify the amount of the CMP as being in
issue in this case in its request for hearing and I will not
permit it to do so at this late date.

I would note for the record, however, that even were I to permit
this matter to go forward to trial on the issue of the amount of
the CMP, and even if Petitioner would prevail in its attempt to
show that the scope of the deficiency under F-Tag 314 was
"isolated" rather than constituting "a pattern" as determined by
HCFA, I would still find that the amount of the penalty assessed,
$300 per day, was reasonable.

I note again that Petitioner has withdrawn its challenge to all
of the State agency's findings that Petitioner was not in
substantial compliance with participation requirements. (It's
challenge is only to the scope of one of the findings.) Of
particular importance in reviewing those findings is that the
Petitioner was found to be out of compliance on the April 25,

* I have previously ruled that Petitioner does not have a
right to hearing on this issue. See Attached Ruling.
15

1996 survey with F-Tag 241, a Quality of life requirement, in
violation of 42 C.F.R. § 483.15(a) and that the surveyors had
assessed this deficiency at "harm level 3/isolated." HCFA Ex. 2
at 1, 4 - 6. With respect to the F-Tag 314 deficiency noted in
the June 10, 1996 survey, Petitioner challenges the finding that
there was a pattern of noncompliance, but admits that the harm
level was three and that there was isolated harm to at least
three residents. HCFA Ex. 3; P. Br. at 5. With respect to the
September 11, 1996 survey, Petitioner admits that it was out of
compliance with F-Tag 312, a Quality of care requirement in
violation of 42 C.F.R. § 483.25(a)(3) and F-Tag 314 also a
Quality of care requirement, in violation of 42 C.F.R. §
483.25(c). The surveyors found both of those deficiencies to be
at harm level 3/isolated. HCFA Ex. 4 at 1, 5 - 31. These are
serious deficiencies involving violations of multiple
participation requirements and which the facility admits resulted
in actual harm to its residents.

42 C.F.R. § 488.408 gives guidance to HCFA by grouping
deficiencies into one of three categories according to how
serious the noncompliance is, and sets forth appropriate remedies
for each category from which HCFA can select. The major
deficiencies in this case fall into category two as the evidence
establishes that there were one or more deficiencies that
constituted actual harm but not immediate jeopardy. 42 C.F.R. §
488.408(d)(2) (ii). Among the remedies HCFA may impose in this
category are CMPs of $50 - 3,000 per day. 42 C.F.R. §
488.408(d) (1) (iii).

In reviewing the amount of the penalty, the ALJ is limited to
reviewing only whether HCFA or the State took into account those
factors set forth in 42 C.F.R. § 488.438(f). These include:

(1) the facility's history of noncompliance, including
repeated deficiencies;

(2) the facility's financial condition;
(3) the factors specified in 42 C.F.R. § 488.404; and
(4) the facility's degree of culpability.

Because HCFA had asserted that, even if Petitioner should prevail
in showing that the scope of the F-Tag 314 deficiency was
somewhat less than the scope relied upon by HCFA as a factor in
determining the amount of the CMP, the amount of the CMP would
not change, and that therefore a trial on the facts alleged by
Petitioner was immaterial, I elected to take the sworn testimony
of Mr. Mark Dykstra, a program representative for HCFA, by
telephone on October 20, 1997, without objection from either
party.
16

Mr. Dykstra testified that on July 22, 1996, he was the main
recommending official who recommended the imposition and amount
of the CMP in this case. Tr. at 7. He testified that in making
his recommendation he reviewed the State's certificate of
Petitioner's noncompliance and the State's recommendation. He
considered the Petitioner's financial condition as set forth in
HCFA Ex. 5 at 7 - 9, the facility's history of noncompliance as
set forth at HCFA Ex. 5 at 6, the seriousness/scope of the
deficiencies, the relationship of one deficiency to another and
the facility's degree of culpability as well as other remedies
being imposed, all as set forth in HCFA Ex. 5 at 7. Tr. at 39.
He recommended a CMP in the amount of $300 per day. When asked
if his recommendation would remain the same if the scope of F-Tag
314 were changed from "pattern of deficiencies" to "isolated
deficiencies" he stated that while he could not be 100 percent
certain what he would have done at that time, it was "quite
likely" his recommendation would have been the same. Tr. at 39.
He explained that in his view there was an entire situation or
pattern of activities that lead to health care problems in the
facility, and that it was not likely that a change in the scope
and severity of one deficiency would have changed his
recommendation.

In retrospect, the testimony of Mr. Dykstra was not necessary in
reaching a decision in this case. The fact is that the
Petitioner did not raise the issue of the amount of the CMP and
it is not properly before me. Even if it were, however, and were
I to exercise my authority to set a CMP in this case, should
Petitioner prevail in persuading me that the scope and severity
of F-Tag 314 was less than that found by HCFA, I would find that
the uncontroverted evidence in this case justified a CMP higher
than that imposed by HCFA. Because of the documented harm to a
number of residents, caused by at least three deficient
practices, considering the facility's good financial condition, a
strong financial remedy would be warranted to ensure Petitioner's
compliance with participation requirements.

A finding that the scope of Petitioner's F-Tag 314 deficiency was
isolated harm as opposed to a pattern of harm would not change
the fact that Petitioner caused harm to other patients by other
deficiencies which themselves warranted CMPs in the range of $50
- $3000 per day, nor would it change the fact that this
Petitioner has admitted it was not in substantial compliance with
any of the requirements of participation cited as being deficient
in an initial survey and two revisits. The amount of the CMP in
this case was more than reasonable and nothing Petitioner could
prove at trial on the limited issue it raises would change that
fact. I find then, that the facts challenged by Petitioner would
have no material bearing on the reasonableness of the CMP imposed
in this case.
17
Vv. Conclusion

For the reasons set forth above, I find that there are no
material facts in dispute in this case requiring a hearing. I
find further that HCFA has established, and Petitioner has
conceded, that Petitioner was not in substantial compliance with
Medicare participation requirements, that accordingly a basis
exists for the imposition of the remedies of denial of payment
for new admissions and a CMP in the amount of $300 per day. I
decide further that Petitioner has no right to hearing to
challenge the amount of the CMP imposed as it did not timely
raise that issue in its request for hearing, and that, even if I
were to take jurisdiction of the issue, the amount of that
penalty was reasonable. The facts disputed by Petitioner would
not materially affect the amount of the penalty imposed.
Finally, I conclude that the only issue raised by Petitioner, the
finding that the Petitioner provided substandard quality of care,
is not an issue to which Petitioner has a right to hearing. A
motion for summary disposition is appropriate before the
Departmental Appeals Board where there is no genuine issue of
material fact. Campesinos Unidos, Inc., DAB 1518 (1995). HCFA
Br. at 9. Accordingly, HCFA's motion for summary affirmation is
granted. Petitioner has raised several constitutional challenges
to the regulations governing this proceeding. Those challenges
are preserved herein for purposes of appeal of my decision.

/s/

Stephen J. Ahlgren
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

In the Case of:

Samuel Arnold, D.D.S., Date: November 19, 1997

Petitioner,

- Vv. - Docket No. C-97~-231
Decision No. CR506

The Inspector General.

DECISION

By letter dated February 21, 1997, the Inspector General
(I.G.), United States Department of Health and Human
Services, notified Samuel Arnold, D.D.S. (Petitioner), that
he would be excluded from participation in the Medicare,
Medicaid, Maternal and Child Health Services Block Grant and
Block Grants to States for Social Services programs for a
period of five years.' The I.G. explained that an exclusion
of at least five years is mandatory under sections 1128(a) (1)
and 1128(c) (3)(B) of the Social Security Act (Act) because
Petitioner had been convicted of a criminal offense related
to the delivery of an item or service under the Medicaid
program.

Petitioner filed a request for review of the I.G.'s action.

I convened a prehearing conference on April 10, 1997. During
the conference, counsel for the I.G. indicated that she did
not think that an in-person hearing was necessary in this
case, and that she wished to move for disposition based on a
written record. I established a briefing schedule which I
set forth in my April 21, 1997 Order and Schedule for Filing
Briefs and Documentary Evidence (April 21, 1997 Order).

The I.G. moved for summary disposition, accompanied by an
initial brief and three proposed exhibits (I.G. Ex. 1 - 3).
Petitioner filed a response brief. The I.G. filed a reply

1 Unless the context indicates otherwise, I use the
term "Medicaid" to refer to all State health care programs
from which Petitioner was excluded.
2

brief. Petitioner did not object to the three exhibits
submitted by the I.G. and I admit I.G. Ex. 1 - 3 into
evidence.?

Because there are no material and relevant factual issues in
dispute (the only matter to be decided is the legal
significance of the undisputed facts), I have decided the
case on the basis of the parties' written submissions in lieu
of an in-person hearing. I affirm the I.G.'s determination
to exclude Petitioner from participation in the Medicare and
Medicaid programs for a period of five years.

APPLICABLE LAW

Sections 1128(a)(1) and 1128(c) (3) (B) of the Act make it
mandatory for any individual who has been convicted of a
criminal offense related to the delivery of an item or
service under Medicare or Medicaid to be excluded from
participation in such programs for a period of at least five
years.

PETITIONER'S ARGUMENTS

Petitioner contends that he was not guilty of the criminal
conduct for which he has been convicted but instead pled
guilty on the advice of his attorney. Petitioner contends
also that the I.G. acted improperly in having his exclusion
begin four years after the date of his criminal conviction.
Petitioner alleges that adverse actions were taken against
him because he is Jewish and because he has sought to assist
the poor and disadvantaged. Finally, Petitioner contends

2? In his August 4, 1997 response brief, Petitioner
indicated that due to a bad connection, he had had difficulty
hearing what was said during the April 10, 1997 telephone
conference. Based on this, Petitioner stated that he does
"not understand why any decision could have been made
regarding that conversation." My April 21, 1997 Order
memorializes the April 10, 1997 telephone conference, and it
shows that no outcome determinative rulings or decisions were
made by me during the conference. I merely established a
briefing schedule to allow the parties the opportunity to
present their arguments in writing. In addition, I reserved
judgment at that time on the issue of whether an in-person
hearing would be necessary in this case. Accordingly, given
that the April 10, 1997 conference was concerned merely with
the procedural business of establishing a briefing schedule;
that the record contains an Order memorializing what occurred
at the April 10, 1997 conference; and that Petitioner at no
time objected to the briefing schedule; I do not find that
Petitioner has shown that he has been prejudiced by any
difficulty he may have had in hearing what was said during
the prehearing conference.
3

that such exclusion is excessive because he is the only
dentist available in the area to provide dental services to
poor and disadvantaged patients.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant to this case, Petitioner was a
dentist licensed to practice in the State of Ohio. I.G.
Initial Brief at p. 2; Petitioner Response Brief at p. 1.

2. On May 21, 1992, a four-count indictment was filed
against Petitioner in the Court of Common Pleas of Franklin
County, Ohio, Criminal Division. I.G. Ex. 1.

3. Count One of that indictment charged that during the
period from September 1986 to February 1991, Petitioner, in
his capacity as President of Midwest Mobile Dental Care,
Inc., knowingly made false or misleading statements on direct
entry submission tapes in order to obtain improper
reimbursement from the Ohio Medicaid program. Count One
charged also that the value of the funds reimbursed due to
Petitioner's false or misleading statements was in the amount
of $5,000 or more. I.G. Ex. 1.

4. Count one of the indictment alleged that Petitioner's
offense constitutes Medicaid Fraud in violation of Ohio
Revised Code Section 2913.40(B). I.G. Ex. 1.

5. On February 11, 1993, Petitioner pled guilty to Count One
of the indictment. Based on its acceptance of Petitioner's
plea, the court found Petitioner guilty of that offense. The
court sentenced Petitioner to a 24-month suspended period of
incarceration and to a 36-month period of probation. In
addition, the court directed Petitioner to pay restitution
and court costs. I.G. Ex. 2.

6. Petitioner's guilty plea, and the court's acceptance of
that plea, constitutes a "conviction" within the meaning of
section 1128(i) (3) of the Act.

7. Petitioner was convicted of a criminal offense related to
the delivery of an item or service under the Medicaid
program, within the meaning of section 1128(a)(1) of the Act.

8. Petitioner may not utilize this administrative proceeding
to collaterally attack his criminal conviction by seeking to
show that he did not do the act charged.

9. Pursuant to section 1128(a)(1) of the Act, the I.G. is
required to exclude Petitioner from participating in the
Medicare and Medicaid programs.

10. The minimum mandatory period for exclusions pursuant to
section 1128(a)(1) of the Act is five years.
4

11. The I.G. properly excluded Petitioner from participation
in the Medicare and Medicaid programs for a period of five
years pursuant to sections 1128(a)(1) and 1128(c) (3) (B) of
the Act.

12. An administrative law judge is without authority to
change the effective date of an exclusion imposed and
directed by the I.G.

13. Neither the I.G. nor the administrative law judge has
the authority to reduce the five-year minimum exclusion
mandated by sections 1128(a)(1) and 1128(c)(3)(B) of the Act.

DISCUSSION

Petitioner does not dispute that he was convicted of a
criminal offense. Nor does he dispute that the offense
underlying his conviction is program-related. Moreover, the
undisputed evidence adduced by the I.G. establishes that
Petitioner was convicted of a criminal offense related to the
delivery of an item or service under Medicaid, within the
meaning of section 1128(a)(1) of the Act. For this reason,
Petitioner is required to be excluded for at least five years
as a matter of law.

The first statutory requirement for mandatory exclusion
pursuant to section 1128(a)(1) of the Act is that the
individual to be excluded must have been convicted of a
criminal offense. Section 1128(i)(3) of the Act expressly
provides that when an individual enters a plea of guilty toa
criminal charge and the court accepts such plea, the
individual will be regarded as having been "convicted" within
the meaning of the mandatory exclusion provisions of the Act.

In the case at hand, undisputed evidence establishes that the
“State of Ohio charged Petitioner with the offense of Medicaid
Fraud. Petitioner pled guilty to this offense. Based on
this plea, the court found Petitioner guilty of the offense.
The evidence establishes that Petitioner pled guilty in order
to dispose of the criminal charge against him, and the court
disposed of the case based on its receipt of Petitioner's
guilty plea. That transaction amounts to "acceptance" of a
guilty plea within the meaning of section 1128(i)(3) of the
Act, and Petitioner was therefore convicted of a criminal
offense within the meaning of that provision.

The statute further requires that the criminal offense in
question must have been "program-related," i.e., related to
the delivery of items or services under Medicaid or Medicare.
It is well-established that filing false Medicare or Medicaid
claims relates to the delivery of items or services under
such programs and clearly constitutes program-related
misconduct, sufficient to mandate exclusion. Jack W. Greene,
DAB CR19 (1989), aff'd, DAB 1078 (1989), aff'd sub nom.

5

Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990).
In the case at hand, Petitioner was convicted of defrauding
Medicaid by intentionally making false statements in order to
obtain reimbursement to which Petitioner was not entitled.
This offense is tantamount to filing false Medicaid claims,
and therefore it is program-related.

Furthermore, it has been held that a criminal offense meets
the statutory test for program-related misconduct where
either the Medicare or Medicaid program is the victim of the

crime. Domingos R. Freitas, DAB CR272, at 30 (1993), citing
Napoleon S. Maminta, M.D., DAB 1135 (1990). The record. shows

that Petitioner was convicted of making false statements
which led to his receipt of fraudulent Medicaid
reimbursement. Petitioner's offense victimized the Medicaid
program because it caused Medicaid to make payments to
Petitioner to which he was not entitled. This had an adverse
financial impact on the Medicaid program. Under the test
enunciated in Maminta and Freitas, I find that Petitioner's
offense is program-related.

Petitioner seeks to challenge his exclusion by asserting that
he was not in fact guilty of the offense for which he has
been convicted. Petitioner claims that he was singled out
because he is Jewish and because he serves a disadvantaged
population. However, under section 1128(a)(1) of the Act,
proof that an appropriate criminal conviction has occurred
ends the inquiry as to whether mandatory exclusion is called
for. These administrative proceedings cannot be used to
attack the substantive decision arrived at by the court. The
law does not permit me to look behind the fact of conviction.
When an individual has been convicted of a crime encompassed
by section 1128(a)(1), exclusion is mandatory; such
individual's subsequent claim of innocence will not be
considered in this forum. Russell E. Baisley and Patricia
Mary Baisley, DAB CR128 (1991); 42 C.F.R. § 1001.2007(d).

Petitioner asserts also that it is unfair that his exclusion
did not commence at the date of his criminal conviction and
that such delay "added to (his) sentence." I find no merit
in this claim. The I.G. has the discretion to determine when
to impose an exclusion. Lawrence Wynn, DAB CR344 (1994).
Neither the statute nor the regulations set any specific
deadline for the I.G. to act. As a matter of law, an
exclusion must take effect 20 days from the date of the
I.G.'s notice of exclusion. 42 C.F.R. § 1001.2002. An
administrative law judge is without authority to change the
effective date of any exclusion imposed and directed by the
I.G. Also, an administrative law judge lacks the authority
to compel the I.G. to send out notices of exclusions by any
date certain. The regulations are clear that the effective
date of an exclusion is not a reviewable issue in this
administrative proceeding. 42 C.F.R. § 1001.2007.
6

Petitioner maintains that his exclusion should be shortened
because his disadvantaged patients do not have access to
another dentist who can treat them. I am without the
authority to consider this argument because I do not have
authority to reduce the five-year minimum exclusion mandated
by section 1128(c) (3) (B) of the Act.

CONCLUSION

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that
Petitioner herein be excluded from the Medicare and Medicaid
programs for a period of at least five years because he has
been convicted of a criminal offense related to the delivery
of an item or service under the Medicaid program. The five-
year exclusion is therefore sustained.

/s/

Joseph K. Riotto
Administrative Law Judge