Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Plaza Surgical Center, ) Date: December 3, 2007

(CCN 05-C0001680), )
)
Petitioner, )
)

-Vv.- ) Docket No. C-05-185

) Decision No. CR1705
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I enter summary judgement in favor of the Centers for Medicare & Medicaid Services
(CMS) and against Plaza Surgical Center (Petitioner). I find that Petitioner’s effective
date of participation in the Medicare program is September 28, 2004.

I. Background

Petitioner is a ambulatory surgical center (ASC) located in Monterey Park, California,
that sought certification for initial participation in the Medicare Program. Petitioner was
surveyed by the Accreditation Association for Ambulatory Health Care, Inc. (AAAHC)
on June 11, 2004, and Petitioner subsequently submitted an application for Medicare
enrollment in September 2004. The application was processed and Petitioner was
notified by CMS on November 4, 2004, that it had been certified for initial participation
in the Medicare Program effective September 28, 2004.

On November 22, 2004, Petitioner requested reconsideration of the effective date of
certification arguing that it had provided care to Medicare beneficiaries as of February 9,
2004. Petitioner further indicated that it understood that it was able to back bill to the
original date it filed its application for enrollment. Petitioner maintained that it had filed
a CMS Form 855B (Medicare enrollment application for ASCs) prior to September 2004
and it had not been appropriately processed by the Medicare carrier.
2

CMS informed Petitioner by letter dated December 3, 2004, that Petitioner’s request for
reconsideration had been denied. CMS explained that while Petitioner had been surveyed
by an accrediting organization and had “deemed status” as of June 11, 2004, it was
subject to additional requirements that had to be met before a determination as to an
effective date or approval could be made pursuant to 42 C.F.R. § 489.13(d)(1)(i). CMS
further informed Petitioner that it had not received CMS Form 855B from Petitioner,
which is a requirement for participation in the Medicare program. CMS maintained that
the correct effective date of participation was September 28, 2004, the day that CMS
approved Form 855B which was also the date that Petitioner met all federal requirements
of participation.

By letter dated January 27, 2005, Petitioned filed a request for hearing with CMS
appealing the determination by CMS that Petitioner was certified to participate in the
Medicare Program effective September 28, 2004. Petitioner maintains that CMS should
have certified it to participate in the Medicare program effective June 11, 2004.

The case was assigned to me for hearing and decision. The parties conferred and agreed
that they each would submit motions for summary judgement. A briefing schedule was
proposed by the parties for the submission of their respective motions. CMS filed its
initial brief in support of its Motion for Summary Judgment (CMS Br.). Petitioner also
filed an initial brief in support of its Motion for Summary Judgment (P. Br.). Both CMS
and Petitioner filed reply briefs. (CMS R. Br.), (P. R. Br.). CMS submitted three (3)
attachments with its initial brief, which for the purposes of this decision I will refer to as
proposed CMS Exhibits 1-3 (CMS Exs. 1-3). Along with its initial brief, Petitioner
submitted five (5) proposed exhibits (P. Exs. 1-5). Without objection from the parties, I
receive into evidence the exhibits tendered by each party.

If. Applicable Law

Title XVII of the Social Security Act (Act) provides for payment of part or all of the cost
of covered services furnished to eligible individuals by qualified providers of services and
suppliers. The Act includes as Part B coverages under section 1832(a)(2)(f) services
furnished in connection with surgical procedures specified by the Secretary at an ASC
which meets health, safety and other standards specified by the Secretary and has entered
into an agreement with the Secretary to participate and accept payment as an ASC. The
act of meeting all applicable standards is referred to as “certification.”

The regulations at 42 C.F.R. Part 416 contain the requirements for ASC participation
agreements and the substantive health, safety, and other conditions for coverage specified
by the Secretary. An entity may qualify for a participation agreement if CMS finds the
entity in compliance based on a survey of the facility by a State survey agency. 42 C.F.R.
3

§ 416.26(b). In the alternative, an entity may qualify for a participation agreement based
on accreditation “by a national accrediting body . . . that CMS determines provides
reasonable assurance that the conditions are met.” 42 C.F.R. § 416.26(a). The second
process is referred to as “deemed status.”

The effective date for a participation agreement is subject to the requirements of 42
C.F.R. § 489.13. For a facility (other than a federally qualified health center, or a
community mental health center) that is surveyed by federal or state surveyors and meets
all federal requirements, the effective date of the provider or supplier participation
agreement is “the date the survey (including the Life Safety Code survey, if applicable) is
completed, if on that date the provider or supplier meets all applicable Federal
requirements as set forth in this chapter.” 42 C.F.R. § 489.13(b). Ifa facility (other than
a skilled nursing facility) fails to meet any of the specified requirements on the date the
survey is completed, the effective date is the earlier of the following:

(i) The date on which the provider or supplier meets all requirements.

(ii) The date on which a provider or supplier is found to meet all conditions of
participation or coverage, but has lower level deficiencies, and CMS or the
State survey agency receives an acceptable plan of correction for the lower
level deficiencies, or an approvable waiver request, or both. (The date of
receipt is the effective date regardless of when CMS approves the plan of
correction or the waiver request, or both.)

42 C.F.R. § 489.13(c)(2).

A different rule applies under 42 C.F.R. § 489.13(d)(1) to determine the effective date for
a provider or supplier “currently accredited by a national accrediting organization whose
program had CMS approval at the time of the accreditation survey and accreditation, and
on the basis of accreditation, CMS has deemed the provider or supplier to meet Federal
requirements.” Under these circumstances the effective date depends on whether the
provider or supplier is subject to requirements in addition to those included in the
accreditation organization’s approval program. If there are additional requirements to
which the entity is subject, then the effective date “is the date on which the provider or
supplier meets all requirements, including the additional requirements.” 42 C.F.R.

§ 489.13(d)(1)(i). If at the time of the initial request to participate, the entity “is not
subject to additional requirements,” then the effective date is the date of the “initial request
for participation if on that date the provider or supplier met all federal requirements.” 42
C.F.R. § 489.13(d)(1)(ii).
4

A retroactive effective date for a participation agreement is available pursuant to 42 C.F.R.
§ 489.13(d)(2). The section permits an effective date that is retroactive “for up to one year
to encompass dates on which the provider or supplier furnished, to a Medicare beneficiary,
covered services for which it has not been paid.”

III. Issues, findings of fact and conclusions of law
A. Issues
The issues in this case are:
1. Whether summary judgment is appropriate; and

2. Whether the effective date of Petitioner’s participation is September 28,
2004 or an earlier date.

B. Findings of fact and conclusions of law

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

1. Summary judgment is appropriate in this case because there are no disputed
issues of material fact.

An administrative law judge (ALJ) may decide a case on summary judgment, without an
evidentiary hearing, if the case presents no genuine issue of material fact. Crestview
Parke Care Center v. Thompson, 373 F.3d 743, 750 (6" Cir. 2004); Livingston Care
Center v. Dep’t. of Health & Human Services, No. 03-3489, 2004 WL 1922168, at 3 (6
Cir. Aug. 24, 2004). By interpretive rule, this tribunal has established a summary
judgment procedure “akin to the summary judgment standard contained in Federal Rule of
Civil Procedure 56.” Crestview Parke Care Center, 373 F.3d 743, 750. Under that rule,
the moving party may show the absence of a genuine factual dispute by presenting
evidence so one-sided that it must prevail as a matter of law, or by showing that the non-
moving party has presented no evidence “sufficient to establish the existence of an element
essential to that party’s case, and on which that party will bear the burden of proof at
trial.” Livingston Care Center, No. 03-3489, 2004 WL 1922168, at 4, citing Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986). The nonmoving party must then act
affirmatively by tendering evidence of specific facts showing that a dispute exists.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986). See
also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehabilitation Center,

5

DAB No. 1918 (2004). A mere scintilla of supporting evidence is not sufficient. “If the
evidence is merely colorable or is not significantly probative summary judgment may be
granted.” Livingston Care Center, No. 03-3489, 2004 WL 1922168, at 4, quoting
Anderson vy. Liberty Lobby, 477 U.S. 242, at 249-250 (1986). In deciding a summary
judgment motion an ALJ may not make credibility determinations or weigh conflicting
evidence but must instead view the entire record in the light most favorable to the non-
moving party, all reasonable inferences drawn from the evidence in that party’s favor.
Innsbruck HealthCare Center, DAB No. 1948 (2004); Madison Health Care, Inc., DAB
No. 1927 (2004).

This case is appropriate for summary judgment. The parties conferred and agreed that the
case could be resolved through cross motions for summary judgment. The parties agree
that there are no material issues of facts in dispute in this case. Thus, the only issues
before me are legal, and can be decided based on written submissions, without the need for
an in-person hearing. The central legal issue in this case is whether CMS correctly
certified Petitioner to participate in Medicare on September 28, 2004. In evaluating the
parties submissions, I find that even if I construe the entire record in the light most
favorable to Petitioner, as discussed below, I find that CMS correctly certified Petitioner to
participate in Medicare on September 28, 2004.

2. The effective date of Petitioner’s participation in Medicare is September
28, 2004.

Petitioner raises several arguments, the first of which is its assertion that it is entitled to an
effective certification date of June 11, 2004. Petitioner maintains that it should have been
“deemed” to have been certified effective June 11, 2004, based on an accreditation that it
received from the AAAHC. P. Br. at 1-2. Petitioner maintains that this accreditation
ought to have been accepted by CMS because the AAAHC is an organization whose
accreditation of a provider of services or a supplier of items is accepted under applicable
regulations as sufficient to deem that provider as having met Medicare participation
requirements. P. Br. at 2-3.

There is no dispute that Petitioner had AAAHC accreditation as of June 11, 2004.

CMS maintains that in order to participate in the Medicare Program as an ASC, the
provider must, in addition to the survey by the Federal or State surveyors or another
national accrediting organization with a program approved by CMS, complete and submit
a Provider/Supplier Enrollment Application Form (Form 855B), (CMS Ex. 2). CMS
contends that Form 855B must be reviewed and approved by CMS before Petitioner can
participate in the Medicare Program. CMS Br. at 2. CMS maintains that participation is
limited to facilities that “have in effect an agreement obtained in accordance with this
subpart.” 42 C.F.R. § 416.25(b). According to CMS, Petitioner’s Form 855B was
6

reviewed and approved on September 28, 2004, and on that same day Petitioner also met
all federal requirements in accordance with 42 C.F.R. 489.13(d)(1)(i). CMS Br. at 8.
Thus, CMS maintains the effective date of September 28, 2004 is the correct date of
certification which should be sustained by this forum.

Petitioner argues that the submission of Form 855B is not an additional requirement with
which it had to comply before it was certified. Petitioner maintains that if Form 855B is
always an additional requirement, as CMS contends, then there would be no point in
distinguishing 42 C.F.R. § 489.13(d)(1)(i) - Provider or supplier subject to additional
requirements from 42 C.F.R. § 489.13(d)(1)(ii) - Provider or supplier not subject to
additional requirements. P. Br. at 3-4. Following this logic, Petitioner contends Form
855B would always be an “additional requirement” and therefore there would be no
purpose for the alternative effective dates, and no provider or supplier accredited as
compliant with federal requirements may have an effective date other than that
corresponding to the submission of form 855B.

I do not agree with Petitioner. The regulations at 42 C.F.R. § 489.2, set forth which
providers are subject to Part 489 regulations. Section 489.2(b) states in part:

The following providers are subject to the provisions of this part:
(1) Hospitals.

(2) Skilled nursing facilities (SNFs)

(3) Home health agencies (HHAs)

(4) Clinics, rehabilitation agencies, and public health agencies

42 CER. § 489.2(b).

Thus 489.13(d)(1)(i) and (ii) is a more general regulation which applies to hospitals, SNFs,
etc. Part 416 - Ambulatory Surgical Services is a more specific regulation which applies
to ASCs. Therefore, the more general regulation 42 C.F.R. § 489.13(d)(1)(i) and (ii)
simply does not apply to Petitioner as an ASC. The more specific regulation which
applies to Petitioner lies at 42 C.F.R. § 416.26(c). 42 C.F.R. Part 416 gives CMS the
authority to set ASC requirements for provider participation in the Medicare program. 42
C.F.R. § 416.26 (c) specifically states that:
7

... IfCMS determines, after reviewing the survey agency recommendation and
other evidence relating to the qualification of the ASC, that the facility meets the
requirements of this part... .

CMS maintains that the “other evidence relating to the qualification of the ASC” is CMS
Form 855B which must be submitted and approved prior to any issuance of a provider
agreement, or an effective date.

The importance of the information provided in Form 855B, according to CMS, is nota
mere formality as Petitioner suggests, but an integral part of CMS’s review process. The
general instructions to Form 855B, also known as the Medicare Federal Health Care
Provider/Supplier Enrollment Application, are very clear about the importance of
completing the form and the significance of the information provided. Indeed the
instructions state that the:

[a]pplication has been designed by CMS to assist in the administration of the
Medicare program and to ensure that the Medicare program is in compliance with
all regulatory requirements. The information collected in this application will be
used to ensure that payments made from the Medicare trust fund are paid only to
qualified health care suppliers, and that the amounts of the payments are correct.

CMS Ex. 2.

Indeed the application requires information such as the qualifications of the health care
supplier, where and how the supplier intends to render services, persons having ownership
interest, etc. These are certainly legitimate questions for CMS to ask and consider before
making a determination as to whether to accept or reject a potential Medicare provider
applicant.

Petitioner further argues that an approved CMS Form 855B is not an “additional
requirement” for effective date determination, because the regulations do not specifically
indicate that Form 855B is a requirement for Medicare participation. Petitioner reasons
that if the legislature wanted Form 855B to be a requirement for Medicare participation, it
would have been specifically delineated in this part. Petitioner points out that 42 C.F. R. §
489.10 provides specific examples of these “additional requirements,” such as bond
requirements, advance directives requirements, and capitalization requirements which are
express provisions of the type of additional requirements necessary for some kinds of
providers or suppliers. Therefore, Petitioner maintains that failure to mention Form 855B
as an “additional requirement” under 42 C.F.R. § 489.10 indicates Form 855B is not a
necessary part of all provider requirements.
8

Petitioner is incorrect. The absence of Form 855B as a requirement in the regulations is
not determinative. 42 C.F.R. Part 416 gives CMS the authority to set requirements for
provider participation in the Medicare program. It would be impracticable, indeed
impossible, for law makers to publish any and all possible provisions of a regulation. An
ASC applying for Medicare participation is considered a “prospective supplier.” A
prospective supplier has a right to a hearing before an ALJ on the issue of whether it
“meets the conditions for coverage of its services as those conditions are set forth
elsewhere in this chapter.” 42 C.F.R. § 498.3(b)(4). The “conditions for coverage of its
services” are not contained in the “deeming” language of 42 C.F.R. § 416.26(a), but are set
forth in subpart C of 42 C.F.R. Part 416. That subpart is specifically incorporated in 42
C.F.R. § 416.26(c), which addresses the requirements for acceptance of the ASC as
qualified to furnish ambulatory surgical services.

The regulations at 42 C.F.R. § 416.26(c) dictates that a provider agreement will not be
approved nor an effective date granted until after CMS has reviewed a survey and other
evidence relating to the qualifications of the ASC. As previously noted, the other evidence
relating to the qualification of the ASC in this case refers to CMS’s review of Form 855B.

Petitioner further argues that even if submission of Form 855B is required, the form was
submitted on four different occasions and the prior submissions provide a basis for
granting the June 11, 2004 effective date.' However, Petitioner has advanced no objective
evidence that it submitted completed forms on previous occasions. Petitioner may well
have submitted Form 855B previously; however, the regulations require that the form be
submitted and approved prior to CMS setting an effective certification date. 42 C.F.R. §
416.26 (c) and (e). A Departmental Appeals Board ALJ has held that a provider does not
have an interest in the Medicare program until CMS acts independently to approve a
provider’s application for provider status. Mariner Health Home Care of Metro West,
DAB CR980 (2002). CMS acted in accordance with the regulations and its own policies
and procedures in determining that Petitioner did not meet all federal requirements until
Petitioner had been accredited and had an approved CMS Form 855B. Thus, | find that
CMS correctly certified Petitioner’s effective date of participation in Medicare as
September 28, 2007.

‘Guadalupe M. Ojeda, director of nursing for Petitioner, declared that she
submitted several Medicare Provider/Supplier Enrollment Applications beginning as early
as February 9, 2004. P. Ex. 2. However, due to an incorrect form submission and/or
delivery mishaps, none of the applications were processed by CMS’ carrier, National
Heritage Insurance Company (NHIC) until September 2004.
9

Finally, CMS maintains that this tribunal does not have the authority to award an earlier
date of certification in this case or compel CMS to award an earlier certification date.
CMS argues that the regulations and case law establish that retroactive certification is
permitted but not required. Oak Lawn Endoscopy, DAB No. 1952 (2004).

A retroactive effective date for a participation agreement is available pursuant to 42 C.F.R.
§ 489.13(d)(2). This “Special rule” permits an effective date that is retroactive

“for up to one year to encompass dates on which the provider or supplier furnished, to a
Medicare beneficiary, covered services for which it has not been paid.” 42 C.F.R.

§ 489.13(d)(2).

According to CMS, there is no support in the regulations, statute or preamble which
establish the proposition that this tribunal can require or compel CMS to use its discretion
to certify a retroactive effective date. Furthermore, CMS maintains that case law has
established that neither the doctrine of estoppel nor any other equitable remedy would
entitle Petitioner to claim an earlier effective date. Maher A.A. Azer (Florence Dialysis
Center, Inc.), DAB CR994, at 5 (2003) quoting Arbor Hospital of Greater Indianapolis,
DAB No. 1591 (1996) and SRA d/b/a St. May Parish Dialysis Center, DAB CR341
(1994).

Petitioner argues that the “Special rule” for retroactivity is not required in this case to give
effect to the June 11, 2004 date, and the AAAHC approval was all that is required to
certify Plaza as complying with all federal requirements. Petitioner maintains that since
CMS Form 855B is not a federal requirement, and it was found to meet all federa
requirements, that the AAAHC certification date of June 11, 2004 should be accepted by
CMS. However, Petitioner also asserts that the preamble to 42 C.F.R. § 489.13 confirms
that “retroactivity should be applied in narrow circumstances such as in a situation where a
facility was certified by an approved accrediting organization but did not immediately
apply for Medicare certification.” P. Br. at 9. Petitioner asserts that the circumstance
described in the preamble where retroactivity is applicable is precisely the same
circumstance in this case.

CMS maintains that Petitioner’s interpretation of the “Special rule” is incorrect and
unavailing. The regulation itself, CMS asserts, as construed by the DAB, clearly confers
discretion on CMS to decide whether or not to grant retroactivity based on the facts of
each individual case. CMS R. Br. at 6. See Oak Lawn Endoscopy, DAB No. 1952, at 14
n.7 (2004).
10

I find the arguments advanced by CMS relative to the issue of retroactivity to be
persuasive and supported by case law. I find that I do not have the authority to compel
CMS to use its discretion to certify a retroactive effective date. The discretion to grant or
deny retroactivity as to a certification date clearly lies with CMS.

IV. Conclusion

I find that Petitioner’s effective date of participation in the Medicare program is September
28, 2004, the date it met all federal requirements. Therefore, I enter summary judgment in
favor of CMS and against Plaza Surgical Center .

/s/
Alfonso J. Montano
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
David Matthew Lanning, ) Date: December 3, 2007

)
Petitioner, )
)

-Vv.- ) Docket No. C-07-488

) Decision No. CR1704
The Inspector General. )
)

DECISION

Pursuant to Section 1128(b)(4) of the Social Security Act (Act), the Inspector General
(1.G.) has excluded Petitioner, David Matthew Lanning, from participation in Medicare,
Medicaid, and all federal health care programs so long as his California emergency
medical technician-paramedic (EMT-P) license is suspended. Petitioner appeals. I find
that Petitioner’s EMT-P license was revoked for reasons bearing on his professional
competence and performance, so the I.G. appropriately excluded him from program
participation.

Discussion

In a letter dated March 30, 2007, the I.G. advised Petitioner that he was excluded from
participation in Medicare, Medicaid, and all federal health care programs because his
license to provide health care as an EMT-P in the State of California had been revoked,
suspended or otherwise lost or was surrendered while a formal disciplinary proceeding
was pending before a state licensing authority for reasons bearing on his professional
competence, professional performance, or financial integrity. I.G. Ex. 3. Petitioner
timely requested review and the matter has been assigned to me for resolution.
2

I held a telephone prehearing conference on July 9, 2007, during which Petitioner
conceded that he surrendered his license while a formal disciplinary hearing was pending.
Order and Schedule for Filing Briefs (Order) at 2 (July 12, 2007). During that conference
I noted that, based on the documentation and the representations of the parties, it appeared
that the dispute here is legal, not factual, so the matter could be resolved based on the
written record, without need for an in-person hearing. I directed the parties to include
with their submissions a request for an in-person hearing if they believed that material
facts are in dispute, and such testimony is necessary. Order at 2. Neither party has
suggested than an in-person hearing is necessary.

The I.G. has submitted three exhibits (I.G. Exs. 1-3). Petitioner has submitted four
exhibits, marked exhibits A-D. To conform to Civil Remedies procedures, we have re-
marked those documents P. Exs. 1-4. In the absence of any objections, I admit into
evidence I.G. Exs. 1-3 and P. Exs. 1-4.

1. Because the state licensing authority suspended Petitioner’s EMT-P
license for reasons bearing on his professional competence or
performance, the I.G. may appropriately exclude him from participation
in Medicare, Medicaid, and other federally funded health care programs.”

The statute authorizes the Secretary to exclude from participation in any federal health
care program an individual whose license to provide health care “has been revoked or
suspended by any State licensing authority” for reasons bearing on the individual’s
“professional competence, professional performance, or financial integrity.” Act,

§ 1128(b)(4)(A); see also 42 C.F.R. § 1001.501.

The uncontroverted record establishes that, in a decision and order dated June 13, 2006,
the Director of the Emergency Medical Services Authority for the State of California
revoked Petitioner’s EMT-P license because Petitioner had purposely submitted
fraudulent clinical rotation forms. He claimed clinical experience that he did not have.
LG. Ex. 1. The decision characterizes his action as “a fraudulent, dishonest, or corrupt
act which is substantially related to the qualifications, functions and duties of prehospital
personnel.” I.G. Ex. 1, at 3.

* My findings of fact and conclusions of law are set forth, in italics and bold, in
the discussion captions of this opinion.
3

Petitioner admits that his license was revoked because he falsified approximately 40
hours of clinical experience. P. Br. at 1. Nor does he dispute the I.G.’s conclusion that
his license was lost for reasons bearing on his professional competence and performance.
The I.G. is thus authorized to exclude him.

2. The exclusion period may not be less than the period during which
Petitioner’s medical license is revoked.

Although acknowledging that he must be excluded, Petitioner complains about certain
ambiguities as to the length of his exclusion. He points out that he is not and will not be
eligible for an EMT-P license because he does not and will not be able to obtain the
experience required to achieve that grade. However, he may be able to obtain a lower-
graded EMT license. Petitioner’s concern is that the I.G. may require reinstatement of the
higher graded license, which is impossible, and would amount to a permanent exclusion.

Whether Petitioner’s obtaining a lower-graded EMT license would allow his renewed
program participation is within the discretion of the 1.G. The I.G. would necessarily
make that determination when Petitioner applies for reinstatement, and is thus probably
not reviewable by me, (but arguably reviewable in another forum if the I.G. abuses that
discretion). However, I see nothing in the statute or regulations that would necessarily
preclude Petitioner’s participation in the program so long as he obtains an EMT license of
some sort. The statute simply requires that the period of exclusion “shall not be less than
the period during which the individual’s or entity’s license ...is...revoked....” Act,
§ 1128(c)(3)(E); see also 42 C.F.R. § 1001.501(b)(1). It does not necessarily require that
the license be at exactly the same grade.

Conclusion

For the above reasons, I conclude that the I.G. properly excluded Petitioner from
participation in Medicare, Medicaid, and all other federal health care programs so long as
his EMT license is revoked. I make no comment on his eligibility for reinstatement
should he obtain an EMT license that is graded lower than the one he relinquished.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Katie Herman, ) Date:November 29, 2007

)
Petitioner, )
)

-Vv.- ) Docket No. C-07-615

) Decision No. CR1703
The Inspector General. )
)

DECISION

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

I. Procedural Background

Katie Herman, Petitioner, was a Licensed Practical Nurse and Medicaid provider in the
State of Ohio between July 2005 and April 2006. She billed the Ohio Medicare program
for Medicaid services purportedly provided during that period to two individuals, JM and
SM, who were Medicare recipients.

On June 20, 2006, Petitioner was named in an Indictment handed up by the Special Grand
Jury sitting for the Court of Common Pleas, Franklin County, Ohio: the Indictment
charged Petitioner with one count of Medicaid fraud, in violation of OHIO REV. CODE

§ 2913.40(B), a fifth-degree felony based on the amount of Petitioner’s claims for
services.
2

Petitioner appeared with present counsel in the Court of Common Pleas, Franklin County,
Ohio, on November 13, 2006, and pleaded guilty to the stipulated lesser offense of first-
degree misdemeanor Medicaid fraud. She was sentenced on the same day to a suspended
term of 10 days’ jail time and was fined $100.00.

As required by the terms of section 1128(a) of the Act, 42 U.S.C. § 1320a-7(a), the I.G.
began the process of excluding Petitioner from participation in Medicare, Medicaid, and
all other federal health care programs. Section 1128(a)(1) of the Act mandates the
exclusion, for a period of not less than five years, of “[a]ny individual or entity that has
been convicted ofa criminal offense related to the delivery of an item or service under...
any State health care program.” On June 29, 2007, the I.G. notified Petitioner that she
was to be excluded pursuant to the terms of section 1128(a)(1) of the Act for the
mandatory minimum period of five years.

Acting through her trial counsel, Petitioner timely sought review of the L.G.’s action by
letter dated July 24, 2007. I convened a telephonic prehearing conference on August 23,
2007, pursuant to 42 C.F.R. § 1005.6, in order to discuss the issues presented by the case,
and the procedures best suited for addressing those issues. The parties agreed that the
case likely could be decided on written submissions, and by Order of August 23, 2007, I
established a schedule for the submission of documents and briefs. All briefing is now
complete, and the record in this case closed on November 21, 2007. Throughout these
proceedings, Petitioner has been represented by her trial counsel in the Ohio criminal
case.

The evidentiary record on which I decide the issues before me consists of 10 exhibits.
The L.G. proffered eight exhibits marked I.G. Exhibits 1-8 (I.G. Exs. 1-8). In an untimely
Motion in Limine filed simultaneously with her response to the I.G.’s brief (Response),
Petitioner sought to exclude I.G. Exhibits 4, 5, 6, and 8. Because Petitioner’s Motion
ignored the explicit deadline established for objection to exhibits established in paragraph
6 of the Order of August 23, 2007, it is denied. Additional reasons for denial of the
Motion appear in the discussion below. LG. Exs. 1-8 are admitted as designated.

Petitioner proffered two exhibits. In disregard of clear and repeated written directions,
Petitioner’s two exhibits as proffered were un-paginated, marked “Exhibit A” and
“Exhibit B,” and bore no indication of the docket number of this case. To ensure that the
record is orderly and complete, Petitioner’s “Exhibit A” is admitted with the designation
Petitioner’s Exhibit 1 (P. Ex. 1), and Petitioner’s “Exhibit B” is admitted with the
designation Petitioner’s Exhibit 2 (P. Ex. 2).
II. Issues

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

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

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

Both issues must be resolved in favor of the I.G.’s position. Section 1128(a)(1) of the Act
mandates Petitioner's exclusion, for her predicate conviction has been established. A
five-year period of exclusion is reasonable as a matter of law, since it is the minimum
period established by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B).

Ill. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of any “individual or entity that has been convicted of a criminal offense related
to the delivery of an item or service under Title XVIII or under any State health care
program.” The terms of section 1128(a)(1) are restated in regulatory language at 42
C.F.R. § 1001.101(a). This statutory provision makes no distinction between felony
convictions and misdemeanor convictions as predicates for mandatory exclusion.

In Ohio, the crime of Medicaid fraud is defined by a specific statute, OHIO REV. CODE
§ 2913.40(B), which provides:

No person shall knowingly make or cause to be made a false or misleading
statement or representation for use in obtaining reimbursement from the
medical assistance program.

The crime of Medicaid Fraud is classified by degree according to the value of the
property, services, or funds fraudulently obtained. As classified by OHIO REV. CODE
§ 2913(E), Medicaid fraud can range from a first-degree misdemeanor to a third-degree
felony:
4

Whoever violates this section is guilty of medicaid fraud. Except as
otherwise provided in this division, medicaid fraud is a misdemeanor of the
first degree. If the value of property, services, or funds obtained in violation
of this section is five hundred dollars or more and is less than five thousand
dollars, medicaid fraud is a felony of the fifth degree. If the value of
property, services, or funds obtained in violation of this section is five
thousand dollars or more and is less than one hundred thousand dollars,
medicaid fraud is a felony of the fourth degree. If the value of the property,
services, or funds obtained in violation of this section is one hundred
thousand dollars or more, medicaid fraud is a felony of the third degree.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual... bya... State... court, regardless
of... whether the judgment of conviction or other record relating to criminal conduct has
been expunged,” section 1128(i)(1) of the Act; “when there has been a finding of guilt
against the individual... bya... State... court,” section 1128(i)(2) of the Act; “when a
plea of guilty or nolo contendere by the individual .. . has been accepted by a... State. .
. court,” section 1128(i)(3) of the Act; or “when the individual . . . has entered into
participation ina... deferred adjudication ... program where judgment of conviction
has been withheld,” section 1128(i)(4) of the Act, 42 U.S.C. §§ 1320a-7(i)(1)-(4). These
definitions are repeated at 42 C.F.R. § 1001.2.

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

IV. Findings and Conclusions

I find and conclude as follows:

1. On her plea of guilty on November 13, 2006, in the Court of Common Pleas, Franklin
County, Ohio, Petitioner Katie Herman was found guilty of the first-degree misdemeanor
offense of Medicaid fraud, in violation of OHIO REV. CODE § 2913.40(B). I.G. Exs. 5, 6,
8.

2. Final judgment of conviction was entered against Petitioner, and sentence was
imposed upon her, in the Court of Common Pleas, on November 13, 2006. I.G. Ex. 6.
5

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

4. A nexus and a common-sense connection exist between the criminal offense to which
Petitioner pleaded guilty and of which she was found guilty, as noted above in Findings 1
and 2, and on which plea and finding of guilt the final judgment of conviction was
entered and sentence imposed, as noted in Finding 3, and the delivery of an item or
service under a State health care program. I.G. Exs. 5, 6, and 8; P. Ex. 1; Berton Siegel,
D.O., DAB No. 1467 (1994).

5. On June 29, 2007, the I.G. notified Petitioner that she was to be excluded from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years, based on the authority set out in section 1128(a)(1) of the Act.

6. On July 24, 2007, and acting through counsel, Petitioner perfected her appeal from the
LG.'s action by filing a timely hearing request.

7. By reason of Petitioner’s conviction, a basis exists for the 1.G.’s exercise of authority,
pursuant to section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), to exclude Petitioner
from participation in Medicare, Medicaid, and all other federal health care programs.

8. By reason of her conviction, Petitioner was subject to, and the I.G. was required to
impose, the mandatory minimum five-year period of exclusion from Medicare, Medicaid,
and all other federal health care programs. Section 1128(c)(3)(B) of the Act; 42 C.F.R.

§ 1001.102(a).

9. Because the five-year period of Petitioner’s exclusion is the mandatory minimum
period provided by law, it is therefore not unreasonable. Section 1128(c)(3)(B) of the
Act; 42 C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).

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

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under Title XVIII of the Act (Medicare) or any state health care program. Thelma
Walley, DAB No. 1367; Boris Lipovsky, M.D., DAB No. 1363 (1992); Mark D. Perrault,
M.D., DAB CR1471 (2006); Andrew L. Branch, DAB CR1359 (2005); Lyle Kai, R.Ph.,
DAB CR1262 (2004), rev'd on other grounds, DAB No. 1979 (2005). Those two
essential elements are fully established in the record before me.

Petitioner does not deny here that she has been convicted. The fact of her misdemeanor
conviction is clear and undisputed: I.G. Ex. 6 shows that on November 13, 2006,
Petitioner appeared with her present counsel in the Court of Common Pleas and pleaded
guilty to the first-degree-misdemeanor crime of Medicaid fraud. The trial court’s
acceptance of that guilty plea and its finding of Petitioner’s guilt are manifest in the fact
that the trial court proceeded immediately to the imposition of sentence. I.G. Exs. 4, 6.
Those procedural steps satisfy the definitions of “conviction” set out at sections
1128(i)(1), 1128(4)(2), and 1128(i)(3) of the Act. The LG. has proven the first essential
element.

Petitioner’s defense to the exclusion takes three forms. It is based partly on her denial of
a nexus or common-sense connection between her crime and Ohio’s Medicaid program,
the second essential element; partly on the fact that she appears here convicted ofa
misdemeanor, and not a felony; and partly on the assertion that the I.G. should have
reviewed her conviction under the discretionary authority conveyed to him by section
1128(b)(1)(a) of the Act.

Petitioner’s first defense fails when examined in the light of the documents reflecting her
conviction. The original Indictment could hardly be plainer in relating her activity to the
Ohio Medicaid program:

Beginning on or about July 3, 2005 and continuing until on or about April
2, 2006, in Franklin County, Ohio, as a continuing course of conduct, Katie
Herman did knowingly make or cause to be made false or misleading
statements or representations to the Ohio Department of Job and Family
Services for use in obtaining reimbursement from the State of Ohio Medical
7

Assistance Program, also known as Medicaid, the value of the funds
obtained being five hundred dollars or more, all in violation of R.C.
2913.40(B), a felony of the fifth degree.

LG. Ex. 5.

But the relationship of her crime to the Ohio Medicaid program is even plainer in light of
the Bill of Particulars filed by prosecutors on July 27, 2006:

Specifically, Herman, a Medicaid provider, knowingly made and/or caused
to be made claims to the Medicaid program that stated and/or represented
that certain services had been provided to [JM and SM]... , Medicaid
recipients, when, in fact, these services had not been provided. The loss to
the Medicaid program was $2,536.50.

.G. Ex. 8.

The submission of false billings to the Medicare and Medicaid programs has been
consistently held to be a program-related crime within the reach of section 1128(a)(1).
Jack W. Greene, DAB No. 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp.
835 (E.D. Tenn. 1990); Mark D. Perrault, M.D., DAB CR1471; Kennard C. Kobrin,
DAB CR1213 (2004); Norman Imperial, DAB CR833 (2001); Egbert Aung Kyang Tan,
M.D., DAB CR798 (2001); Mark Zweig, M.D., DAB CR563 (1999); Alan J. Chernick,
D.D.S., DAB CR434 (1996). I find that the Indictment and the Bill of Particulars,
especially when read in the context of the sentencing document and OHIO REV. CODE
§ 2913(E), demonstrate the requisite nexus and common-sense connection between the
criminal act and the program. Berton Siegel, D.O., DAB No. 1467. [also believe that
Petitioner’s conviction for violating OHIO REV. CODE § 2913.40(B), given the statute’s
specific application to the Medicaid program, is a program-related crime as a matter of
law. See, e.g., Stanley Junious Benn, DAB CR1501 (2006); Mark D. Perrault, M.D.,
DAB CR1471. The LG. has proved the second essential element.

Petitioner’s second defense is without substance. The plain language of section
1128(a)(1) makes no distinction whatsoever between convictions based on misdemeanors
and convictions based on felonies. A conviction based on either class of criminal offense
is an adequate predicate for an exclusion based on section 1128(a)(1). Lorna Fay
Gardner, DAB No. 1733 (2000); Tanya A. Chuoke, DAB No. 1721 (2000); Amable de los
Reyes Aguiluz, DAB CR1417 (2006). It will be noted, moreover, that the only difference

8

between the Indictment’s felony charge and Petitioner’s misdemeanor plea is the amount
of loss, negotiated down from $2536.50 to less than $500.00. The essential elements of
the crime, and the quantum of mens rea required to be proven, are precisely the same.

Petitioner’s third defense is the one she appears to rely on most heavily. Petitioner would
avoid the mandatory effect of section 1128(a)(1) by arguing that “the sole issue to be
determined on appeal is whether such exclusion, if any, should more properly occur
pursuant to 42 U.S.C. 1320a-7(b)(1).” P. Ans. Br., at 3. That particular provision forms
part of section 1128(b) of the Act, 42 U.S.C. § 1320a-7(b). Section 1128(b) provides for
permissive, rather than mandatory, exclusions, and is generally regarded as appropriate to
situations in which individuals or entities may present less-serious threats to the integrity
of the protected programs. But once a conviction is shown to be within the ambit of
section 1128(a)(1), the mandatory operation of that section bars any petitioner, including
this one, from demanding that other more lenient, more discretionary, or more favorable
exclusionary provisions should be applied instead. Even in situations where the
underlying conviction could plausibly be argued to fall within both section 1128(a)(1) and
one or more of the permissive exclusions or three-year mandatory minimum periods of
sections 1128(b)(1)-(15), the rule is clear: if section 1128(a)(1) fits, then the mandatory
exclusion and mandatory minimum period prescribed by section 1128(a)(1) must be
imposed. Neither the I.G. nor the Administrative Law Judge may choose to proceed
otherwise.' Stacy Ann Battle, D.D.S., DAB No. 1843 (2002); Tarvinder Singh, D.D.S.,
DAB No. 1752 (2000); Lorna Fay Gardner, DAB No. 1733; Douglas Schram, R.Ph.,
DAB No. 1372 (1992); Niranjana B. Parikh, M.D., DAB No. 1334 (1992); David S.
Muransky, D.C., DAB No. 1227 (1991); Leon Brown, M.D., DAB No. 1208 (1990);
Napoleon S. Maminta, M.D., DAB No. 1135 (1990); Charles W. Wheeler, DAB No. 1123
(1990); Jack W. Greene, DAB No. 1078 , aff'd sub nom. Greene v. Sullivan, 731 F. Supp.
835.

When Petitioner filed her Response Brief, she also filed a Motion in Limine by which she
sought to exclude from my consideration I.G. Exs. 4, 5, 6, and 8, four documents
reflecting her conviction. I have noted the untimeliness of that Motion and have denied it
for that reason. But there are other reasons on which I rely, entirely independent of any

' In a somewhat unclear argument, Petitioner cites Syed Hussaini, DAB CR193
(1992), as supporting the notion that the magnitude of Petitioner’s crime requires her
exclusion to be based exclusively on section 1128(b)(1) of the Act. Unclear or not, such
an argument is not original: reliance on Hussaini for that notion was soundly and
explicitly rejected in Niranjana B. Parikh, M.D., DAB No. 1334 (1992), and again in
Muhammad R. Chaudhry, M.D., DAB CR326 (1994).
9

question of timeliness, and entirely sufficient in themselves, for my denial of the Motion
in Limine. Those reasons are the legal insufficiency of the facts and theory on which the
Motion is based.

Petitioner’s Motion asserts that she has applied for the sealing of her conviction record
pursuant to an Ohio statutory procedure set out at OHIO REV. CODE § 2953.31-36. That
procedure allows the sentencing court to order records of convictions sealed in some
circumstances. The Motion does not claim that the Court of Common Pleas has entered
such an order, but does rather baldly assert that “Such motions are routinely granted.”
Pet. Motion at 2. Thus, Petitioner’s Motion relies on an assumption and an expectation,
not on an accomplished fact. On the date of this Decision, Petitioner’s conviction
remains unsealed, and it remains in full force and effect under Ohio law.”

But assuming arguendo that the Ohio procedure were carried to a successful completion
and Petitioner’s conviction were effectively expunged from the public record, that result
would not require excluding the documents and would not invalidate her conviction as a
predicate for the I.G.’s proposed exclusion. Section 1128(i)(1) of the Act explicitly
defines “conviction” to include those circumstances “when a judgment of conviction has
een entered against the individual... by a... State... court, regardless of... whether
the judgment of conviction or other record relating to criminal conduct has been
expunged.” The Ohio procedure on which Petitioner now relies has been assayed at least
twice in this forum and has been held insufficient to bar the I.G.’s imposition of a section
128(a) mandatory exclusion. Robert F. Tschinkel, R.Ph., DAB CR1323 (2005); Karen
S. Tanner, DAB CR795 (2001). This forum has never denied that dispositions like those
provided by OHIO REV. CODE § 2953.31-36 might well represent reasonable state
choices in criminal justice policy, but the operation of such a policy in Ohio does not
protect Petitioner here. For purposes of this federal exclusion sanction, based on federal
policy choices, created and authorized by federal statute and intended to protect federally-
funded health programs, federal law defines “conviction.” Travers v. Shalala, 20 F.3d
993 (9th Cir. 1994); Marc Schneider, D.M.D., DAB No. 2007 (2005); Carolyn Westin,
DAB No. 1381 (1993), aff'd sub nom. Westin v. Shalala, 845 F. Supp. 1446 (D. Kan.
1994); Mark D. Perrault, M.D., DAB CR1471; Theresa A. Bass, DAB CR1397 (2006);
Gerald David Austin, DAB CR1207 (2004).

> Tt may usefully be pointed out that the record-sealing procedure is hardly
automatic: OHIO REV. CODE § 2953.32(B) requires that upon the filing of an application
for such relief the court “shall set a date for a hearing,” requires that the prosecutor’s
office be notified of the hearing, and allows the prosecutor to object to the proposed
sealing of the record of conviction.
10

Without citation of authority, Petitioner challenges the proposed period of exclusion as
“unreasonable as a matter of law.” P. Ans. Br. at 3. But the five-year period of exclusion
proposed in this case is the statutory minimum required by section 1128(c)(3)(B) of the
Act. As a matter of law it is not unreasonable. 42 C.F.R. § 1001.2007(a)(2). Neither the
Departmental Appeals Board nor I may reduce it. Mark K. Mileski, DAB No. 1945
(2004); Salvacion Lee, M.D., DAB No. 1850 (2002); Krishnaswami Sriram, M.D., DAB
CR1463 (2006), aff'd, DAB No. 2038 (2006).

Resolution of a case by summary disposition is appropriate when there are no disputed
issues of material fact and when the undisputed facts, clear and not subject to conflicting
interpretation, demonstrate that one party is entitled to judgment as a matter of law.
Michael J. Rosen, M.D., DAB No. 2096; Thelma Walley, DAB No. 1367. Summary
disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). This forum looks to
FED. R. Clv. P. 56 for guidance in applying that regulation. Robert C. Greenwood, DAB
No. 1423 (1993). The material facts in this case are undisputed, clear, and unambiguous.
They support summary disposition as a matter of law. This Decision issues accordingly.

VI. Conclusion

For the reasons set out above, the I.G.’s Motion for Summary Affirmance should be, and
itis, GRANTED. The I.G.’s exclusion of Petitioner Katie Herman from participation in
Medicare, Medicaid, and all other federal health care programs for a period of five years,
pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), is
thereby affirmed.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:

Optima Home Health Services, Inc.,
(CCN: 23-7487), Date: November 29, 2007

Petitioner,

Docket No. C-07-671
Centers for Medicare & Medicaid Decision No. CR1702

Services.

ee SYS HS YS HS YS YS YH YS

DECISION DISMISSING HEARING REQUEST

For the reasons set forth below, I dismiss as untimely the hearing request filed by
Petitioner, Optima Home Health Services, Inc. (hereafter Petitioner or HHA).

I. Background

Petitioner is a home health agency, located in Troy, Michigan, that participated in the
Medicare program. Following a recertification survey completed December 13, 2006,
and revisit survey completed January 31, 2007, the Centers for Medicare & Medicaid
Services (CMS) determined that it was not in substantial compliance with program
requirements. In a notice letter dated March 26, 2007, CMS advised the HHA that, based
on its noncompliance, CMS would terminate the facility’s provider agreement effective
April 25, 2007.

The notice further advised Petitioner of its options: if it believed that it was in
compliance it should so notify CMS immediately, and, if CMS found credible its
allegation of compliance, it would authorize a resurvey. In the alternative, the HHA
could bring itself into compliance and reapply to the program. Or it could request a
hearing before an administrative law judge. The letter said:
2

If you desire a hearing, you must request it not later than 60
days from the date you receive this notice. The request for a
hearing should state why the decision is considered incorrect
and should be accompanied by any evidence which you
decide to bring to the attention of the hearing examiner.

(Emphasis added) CMS Ex. 1. The letter was sent via fax and certified mail. CMS Ex. 1,
at 3.

na subsequent letter, dated May 18, 2007, CMS advised the HHA that, based on the
findings of a May 2, 2007 revisit, it remained out of compliance, so its Medicare
participation terminated effective April 25, 2007. The letter reminded Petitioner that its
appeal rights had been set forth in CMS’s March 26, 2007 notice letter.

Petitioner did not request a hearing until June 17, 2007, when it sent, via fax, a letter
advising that it “would like to appeal the decision of CMS to terminate our provider
number.” CMS Ex. 1, at 10. The fax cover sheet says “We would like to appeal [and] be
eard.” CMS Ex. 1, at 9. Although the letter itself is dated “05/17/07,” that date is
obviously incorrect. Petitioner does not claim to have filed the appeal on May 17, 2007,
and its fax transmission sheet is dated “6/17/2007.”

na letter dated June 20, 2007, attorneys for Petitioner also requested “a hearing before
an Administrative Law Judge . . . regarding [CMS’s] May 18, 2007 final decision
indicating that Optima’s Medicare provider agreement is terminated as of April 25,
2007.” CMS Ex. 1, at 12.

II. Discussion

Petitioner is not entitled to a hearing because it did not file a timely
hearing request and did not seek an extension of time for filing.'

CMS has filed a motion to dismiss, arguing that Petitioner’s hearing request was not
timely filed. I agree.

Section 1866(h) of the Act authorizes administrative review of determinations that a
provider fails to comply substantially with the program requirements “to the same extent
as is provided in section 205(b) [of the Act].” Under section 205(b), the Secretary must
provide reasonable notice and opportunity for a hearing “upon request by [the affected

' T make this one finding of fact/conclusion of law.
3

party] who makes a showing in writing that his or her rights may be prejudiced” by the
Secretary’s decision. The hearing request “must be filed within sixty days” after receipt
of the notice of CMS’s determination (emphasis added). Act, section 205(b). The 60 day
time limit is thus a statutory requirement. See Cary Health and Rehabilitation Center,
DAB No. 1771, at 8-9 (2001).

Similarly, the regulations mandate that the affected party “file the request in writing
within 60 days from receipt of the notice . . . unless that period is extended... .” 42
C.F.R. § 498.40(a). On motion of a party, or on his or her own motion, the administrative
law judge (ALJ) may dismiss a hearing request where that request was not timely filed
and the time for filing was not extended. 42 C.F.R. § 498.70(c). Under §§ 498.40(a)(2)
and 498.22(b)(3), receipt is “presumed to be 5 days after the date on the notice unless
there is a showing that it was, in fact, received earlier or later.”

Here, the notice language in CMS’s March 26, 2007 letter is clear and unconditional:
Petitioner’s appeal had to be filed within 60 days of receipt. Nothing in CMS’s May 18
letter suggests any alteration of that deadline. In fact, the May letter specifically reminds
Petitioner that its appeal rights were set forth in the earlier correspondence. CMS Ex. 1,
at 4. Since the March 26 letter was also sent by facsimile, Petitioner likely received it on
March 26, but CMS does not rely on that possibility. Instead, CMS points to the
presumption that the date of receipt is five days after the date of the notice. 42 C.F.R.

§ 498.40(a)(2). Based on that presumption, which Petitioner does not dispute, it received
its notice on or before March 31, and its deadline for appeal was May 30, 2007.
Petitioner first requested a hearing on June 17, 2007, so its hearing request was untimely
and, absent a showing of good cause for my granting an extension of time in which to
file, should be dismissed pursuant to 42 C.F.R. § 498.70.

Petition does not exactly claim that it filed a timely appeal. Instead, it argues that it and
its counsel

were in constant contact either telephonically or in written correspondence
with multiple representatives of CMS, including Douglas Wolfe,
persistently voicing its position that the [HHA] was diligently working to
correct the deficiencies in compliance with the Medicare Conditions of
Participation, or alternatively to request a hearing before an Administrative
Law Judge.

P. Response at 4. Petitioner also asserts — without providing any supporting declaration
or other evidence — that an unnamed representative “was told by Douglas Wolfe of CMS
that [Petitioner] initiated its appeal on May 9, 2007.” Jd. In a sworn declaration, Douglas
Wolfe, CMS Program Representative, challenges the accuracy of this assertion. CMS Ex.
4

2. Since the allegation is unsupported, I reject it. See, Heckler v. Community Health
Services of Crawford County, Inc., 467 U.S. 51, 65 (in which the Supreme Court cautions
that a Medicare supplier’s purported reliance on oral advice be treated with skepticism).
Further, Petitioner is vague about the timing and circumstances of Mr. Wolfe’s purported
representation, and has not explained how (or even if) it relied on such representation to
its detriment. Its eventual filing (albeit late filing) of a written request — without any
reference to any earlier filing — suggests that Petitioner did not believe it had filed a valid
hearing request prior to June 17.

I have no doubt that Petitioner was in contact with CMS staff, attempting to persuade
them that it was correcting its deficiencies. But nothing before me shows that it opted to
file a hearing request until after the filing deadline had passed. Indeed, the evidence
suggests that Petitioner’s initial strategy was to negotiate its way out of the termination,
persuading CMS not to take the action based on its promises to correct. Such a strategy is
understandable inasmuch as the HHA was not claiming that it was in compliance at the
time of the December and January surveys (which were the bases for the termination);
rather, it was first promising to make the necessary corrections, and later claiming that the
corrections had been made.

Moreover, a hearing request must be in writing, so conversations with CMS staff would
not satisfy the regulatory requirement. 42 C.F.R. § 498.40(a).

Petitioner refers to two letters that it purportedly sent to CMS on May 9 and May 30,
2007. It submitted no copy of any May 9 letter, which is peculiar in light of its
suggestion that it requested its hearing on May 9 by means of this document. However,
along with its reply, CMS submits a copy of the May 9 document, which is a letter from
Petitioner’s counsel to CMS. CMS Ex. 3. The letter does not request a hearing; rather, it
introduces counsel as Petitioner’s representative, acknowledges the survey findings
underlying CMS’s March 26 determination, and represents that those problems have been
resolved, points out that the HHA has already submitted its Plan of Correction and
believes that its deficiencies have been corrected. The letter mentions no disagreement
with CMS’s December and January survey findings. See 42 C.F.R. § 498.40(b).

CMS has also submitted a copy of Petitioner’s letter dated May 30, 2007, which is
stamped “received” by CMS on May 31, 2007, one day after the filing deadline.
Although Petitioner argues that the letter was hand-delivered on May 30, 2007 (a fact that
CMS hotly disputes), it doesn’t really matter when it was delivered because, like the May
9 letter, this document is not a request for hearing, and Petitioner plainly did not consider
it a request for hearing. The letter responds to CMS’s May 18 letter, which referenced a
May 2 revisit during which the state survey agency determined that the HHA’s
noncompliance continued. I note that the HHA’s termination was based on the findings
5

of the December 13, 2006 and January 31, 2007 surveys, and not the May 2 revisit.
Petitioner’s May 30 letter suggests misunderstandings between its staff and the May 2
surveyors, and asks that CMS review some additional evidence and reconsider its
decision. CMS Ex. 1, at 6. Again, the letter identifies no issues, findings of fact, nor
conclusions of law with which Petitioner disagrees. It specifies no basis for contending
that the findings and conclusions underlying CMS’s March 26, 2007 determination were
incorrect — regulatory requirements for a hearing request. 42 C.F.R. § 498.40(b). In fact,
the letter says absolutely nothing about the March 26, 2007 determination.

I note also that when Petitioner finally filed its hearing requests, on June 17 and 20, 2007,
it’s requests were unequivocal. It said that if CMS would not reverse its decision, “we
would like to schedule a hearing before the administrative judge,” (CMS Ex. 1, at 10) and
“[w]e are writing to request a hearing before an Administrative Law Judge. ...” CMS
Ex. 1, at 12.

If a hearing request is not filed within 60 days, the affected party may file with the ALJ a
written request for an extension of time stating the reasons why the request was not filed
timely. Upon a showing of good cause, the ALJ may extend the time for filing. 42
C.F.R. § 498.40(c). Petitioner has filed no such request, and offers no credible
justification for extending the filing deadline.

Ill. Conclusion

Because Petitioner’s hearing request was untimely, I exercise my authority under 42
C.F.R. § 498.70 and dismiss this case.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Advanced Ambulatory, Inc., )
) Date: November 29, 2007
Petitioner, )
) Docket No. C-06-62
-Vv.- ) Decision No. CR1701
)
Centers for Medicare & )
Medicaid Services. )
)
DECISION

l affirm the determination of the Medicare Part B Hearing Officer (Hearing Officer) to
uphold the denial by the Medicare Part B Carrier, TrailBlazer Health Enterprises, LLC
(the Carrier), of Advance Ambulatory’s (Petitioner) application for enrollment as a
Medicare provider. I find that the Hearing Officer correctly determined that Petitioner
does not meet the regulatory requirements for obtaining a Medicare Provider
Identification Number (PIN or enrollment number).

I. APPLICABLE AUTHORITY

Title XVIII of the Social Security Act (Act) established the Medicare program, a federally
funded health insurance program that provides payment for covered services furnished to
aged and certain disabled individuals. Act, section 1801-1896. Section 1831 of the Act
establishes the supplementary medical insurance benefits program for the aged and
disabled known as Medicare Part B.

Section 1866(j) of the Act, as amended by section 936 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, authorized the
Secretary of Health and Human Services (Secretary) to establish a process for the
enrollment in the Medicare program of providers of services and suppliers. Section
1866(j)(2) of the Act gives providers and suppliers appeal rights, for certain
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determinations involving enrollment, using the procedures that apply under section
1866(h)(1)(A) of the Act. Those procedures are set out at 42 C.F.R. Part 498, et seg., and
provide for hearings by Administrative Law Judges (ALJs) and review by the
Departmental Appeals Board (Board).

Pursuant to 42 C.F.R. § 410.33(a), an Independent Diagnostic Testing Facility (IDTF) is
described as “a fixed location, a mobile entity, or an individual nonphysician practitioner
. .. [that is] independent of a physician’s office or hospital” where diagnostic procedures
are carried out. “Carriers will pay for diagnostic procedures under the physician fee
schedule only when performed by a physician, a group practice of physicians, an
approved supplier of portable x-ray services, a nurse practitioner, or a clinical nurse
specialist when he or she performs a test he or she is authorized by the State to perform.”
42 C.F.R. § 410.33(a)(1).

Pursuant to 42 C.F.R. § 410.32(c), portable x-ray services are “furnished in a place of
residence used as the patient’s home” and are covered if furnished under the supervision
of a physician and are limited to certain types of skeletal films, chest or abdominal films,
and diagnostic mammograms if the portable x-ray supplier meets the certification
requirements.

Pursuant to 42 C.F.R. § 410.34, Medicare Part B pays for diagnostic mammography
services if they meet the required conditions of coverage.

In provider appeals under 42 C.F.R. Part 498, the Board has determined that CMS must
make a prima facie case that an entity has failed to comply substantially with federal
requirements. See MediSource Corporation, DAB No. 2011 (2006). “Prima facie”
means that the evidence is “[s]ufficient to establish a fact or raise a presumption unless
disproved or rebutted.” Black’s Law Dictionary 1228 (8" ed. 2004); see also Hillman
Rehabilitation Center, DAB No. 1611, at 8 (1997), aff'd, Hillman Rehabilitation Center
v. U.S. Dept. of Health and Human Services, No. 98-3789 (GEB) (D.N.J. May 13, 1999).
To prevail, the entity must overcome CMS’s showing by a preponderance of the
evidence. Batavia Nursing and Convalescent Center, DAB No. 1904 (2004); Batavia
Nursing and Convalescent Inn, DAB No. 1911 (2004); Emerald Oaks, DAB No. 1800
(2001); Cross Creek Health Care Center, DAB No. 1665 (1998); Hillman, DAB No.
1611 (1997).

Il. PROCEDURAL BACKGROUND

Petitioner applied for enrollment as a mobile facility/portable unit supplier and indicated
that it believed it would receive reimbursement in conformity with Ambulatory Surgical
Center grouper rates. Petitioner attached the Ambulatory Surgical Center (ASC) Current
Procedural Terminology codes along with its application. The Hearing Officer concluded
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that Petitioner’s business of providing Mobile Ambulatory Surgery Units did not qualify
for enrollment as an Ambulatory Surgical Center, Independent Diagnostic Testing
Facility, or Mobile Facility and, therefore, the request by Petitioner for a Medicare
provider number was denied. The Hearing Officer advised Petitioner of its appeal rights
and that it could appeal the decision to an ALJ.

By letter dated October 27, 2005 (hearing request), Petitioner, acting pro se, filed a timely
appeal of the Hearing Officer’s decision. In its hearing request, Petitioner challenges the
October 21, 2005 decision of the Hearing Officer, arguing that it is qualified to receive a
Medicare Part B provider enrollment number.

On January 5, 2006’, Petitioner submitted a letter, prepared by Rob Pupelis, President of
Advanced Ambulatory, to be accepted as its Prehearing Memorandum along with five
exhibits (P. Exs.) la-5a*. On February 2, 2006, CMS submitted Respondent’s Prehearing
Memorandum along with eight exhibits (CMS Exs.) 1-8. On May 11, 2006, I held a
prehearing conference with the parties to discuss the issue in the case and whether the
case required an in-person hearing or could be addressed through written submissions.
Petitioner retained and was represented by legal counsel at the prehearing conference.
Counsel for CMS argued that the matter involved a purely legal issue which could be
resolved through briefs. CMS also indicated that it intended to file a Motion for
Summary Judgment. Petitioner’s counsel maintained that, in order to understand the type
of services that were provided by Petitioner, an in-person hearing would be required.
Petitioner’s counsel requested leave to submit a response to CMS’s initial brief. CMS did
not oppose and I granted Petitioner’s request. I issued a prehearing order providing
Petitioner 30 days to file its amended prehearing memorandum. | also instructe
Petitioner to make its arguments as to why an in-person hearing was necessary in this
case. On June 27, 2006, Petitioner submitted “Advanced Ambulatory, Inc.’s (Advances
in Healthcare) Brief in Support of its Appeal” (Petitioner’s Brief) along with seven
exhibits, P. Exs. 1b-7b. In its brief, Petitioner included a single sentence indicating: “AAT
elieves that a full explanation of its role in healthcare would be best served through an in
person hearing and live testimony.” Petitioner’s Brief at 9.

' This letter was incorrectly date stamped January 5, 2005.

> Before retaining counsel, Petitioner filed five exhibits with its initial Prehearing
Memorandum (received January 5, 2006). Petitioner’s counsel then filed seven exhibits
with his June 27, 2006 submission. To prevent confusion, I have identified the exhibits
that were submitted along with Petitioner’s initial brief as P. Exs. la-5a and the exhibits
filed with Petitioner’s second brief have been identified as P. Exs. 1b-7b.
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On June 26, 2006, CMS submitted “Respondent’s Motion for Summary Judgment and
Brief in Support Thereof’ (CMS’s Motion for Summary Judgment). On July 11, 2006,
Petitioner submitted its “Response to CMS’ Motion for Summary Judgment” (Petitioner’s
Response). Neither party has objected to the admissibility of any of the exhibits. I
therefore admit into evidence CMS Exs. 1-8, and P. Exs. la-5a and 1b-7b.

III. ISSUES
The issues in the matter before me are:
1. Whether summary judgment is appropriate in this case; and

2. Whether Petitioner qualifies as a defined Mobile Facility/Portable Unit.

IV. FINDINGS OF FACT AND CONCLUSIONS OF LAW

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

A, Summary judgment is appropriate under the circumstances of this
case.

Iam deciding this case on CMS’s Motion for Summary Judgment. An ALJ may decide a
case on summary judgment, without an evidentiary hearing, if the case presents no
genuine issue of material fact. Crestview Parke Care Center v. Thompson, 373 F.3d 743,
750 (6" Cir. 2004); Livingston Care Center v. U.S. Dep’t. of Health & Human Services,
388 F.3d 168, 172 (6" Cir. 2004). By interpretive rule, this tribunal has established a
summary judgment procedure “akin to the summary judgment standard contained in
Federal Rule of Civil Procedure 56.” Crestview Parke Care Center, 373 F.3d at 750.
Under that rule, the moving party may show the absence of a genuine factual dispute by
presenting evidence so one-sided that it must prevail as a matter of law, or by showing
that the non-moving party has presented no evidence “sufficient to establish the existence
of an element essential to that party’s case, and on which that party will bear the burden
of proof at trial.” Livingston, 388 F.3d at 173, citing Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). The nonmoving party must then act affirmatively by tendering evidence
of specific facts showing that a dispute exists. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586 n.11 (1986). See also, Vandalia Park, DAB No. 1939
(2004); Lebanon Nursing and Rehabilitation Center, DAB No. 1918 (2004). A mere
scintilla of supporting evidence is not sufficient. “If the evidence is merely colorable or is
not significantly probative summary judgment may be granted.” Livingston, 388 F.3d at
173, quoting Anderson v. Liberty Lobby, 477 U.S. 242, 249-250 (1986). In deciding a
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summary judgment motion, an ALJ may not make credibility determinations or weigh
conflicting evidence but must instead view the entire record in the light most favorable to
the non-moving party, all reasonable inferences drawn from the evidence in that party’s
favor. Innsbruck HealthCare Center, DAB No. 1948 (2004); Madison Health Care, Inc.,
DAB No. 1927 (2004).

Petitioner notes in its prehearing brief that AAI believes that a full explanation of its role
in healthcare would be best served through an in-person hearing and live testimony.
Petitioner’s Brief at 9. In its Response to CMS’s Motion for Summary Judgment,
Petitioner maintains that a genuine issue of material fact exists with regard to Petitioner’s
role as a health care provider, as well as the reasoning for the failure of CMS to recognize
Petitioner as a provider under the program. Petitioner’s Response at 1. Petitioner’s role
as a health care provider is clearly set out in Petitioner’s prehearing submission as well as
in its response to CMS’s Motion for Summary Judgment. What services Petitioner
provides is not in dispute. Petitioner fails to point to any material factual dispute or
misunderstanding on the part of CMS as to what services Petitioner provides or
Petitioner’s role as a health care provider. Thus, | find there is no factual dispute as to
what services Petitioner provides or its role as a health care provider. Petitioner’s second
argument as to the reasoning for CMS’s failure to recognize Petitioner as a provider under
the program is a purely legal issue. As the only real issue before me legal in nature, the
case is appropriate for summary judgment.

In evaluating the parties’ submissions, I find that even if I construe the entire record in the
light most favorable to Petitioner, as discussed below, I would find that Petitioner fails to
meet the criteria to be considered a mobile facility/portable unit. Moreover, Petitioner
has tendered no specific facts to support that a material fact is in dispute, and CMS has
made a prima facie case that it is otherwise entitled to judgment as a matter of law. See
Carrier Mills Nursing Home, DAB No. 1883, at 3-4 (2003).

B. Petitioner has not established that it qualifies as a Mobile
Facility/Portable Unit

The Medicare Program Integrity Manual, provides that the terms mobile facility/portable
unit apply:

... when a service that requires medical equipment is provided in a vehicle,
or the equipment for the service is transported to multiple locations within a
geographic area. The most common types of mobile facilities/portable units
are mobile independent diagnostic testing facilities, portable X-ray units,
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portable mammography units, and mobile clinics. Physical therapists and
other medical practitioners (e.g. physicians, nurse practitioners, physician
assistants) who perform services at multiple locations (i.e. house calls,
assisted living facilities) are not considered to be mobile facilities/portable
units.

Medicare Program Integrity Manual, section 1.1.

Petitioner submitted an application for a Medicare enrollment number and designated its
specialty as a Portable Unit Supplier. CMS Ex. 2, at 2. The section entitled “comments”
(Section E of the application) asked the applicant to explain among other things “the

method by which the supplier renders health care services.” Jd. at 3. Petitioner provided

the following explanation:

From its corporate office in Houston, AAI delivers advanced
surgical services to Physicians in Houston, San Antonio,
Austin, Corpus Christi and surrounding areas. Like a hospital
or surgery center, we provide the equipment, instrumentation
and supplies, as well as any technical support the doctor needs
to perform surgical procedures.

Our portable units enable health care organizations,
physicians, and patients to benefit through reduced costs for
minimally invasive surgical procedures, increased physician
productivity, greater access to advanced technologies and
improved patient satisfaction.

Id.

Petitioner explains in its hearing request that their specialty fits CMS’s definition for
“Mobile Facility/Portable Unit.” According to Petitioner, AAI provides:

equipment & instrumentation (lasers, endoscopes, surgical generators, etc.)
disposables (over 100 various items)

tech support (scrub techs and assistants)

surgical field (disinfected or sterile)

Beyer

Petitioner’s Brief at 3. Petitioner also sets up the surgical field in order to maintain “the
highest standards of sterile surgical requirements.” Jd.
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Petitioner contends that the definition of a “mobile facility” does not exclude Petitioner’s
specialty and that if their specialty is not excluded by CMS’s own definition of mobile
facility, then their application must be approved. Petitioner’s Brief at 5. Petitioner
asserts that the services they provide are “compatible” with the examples of common
types of mobile facilities listed in the mobile facility definition. Petitioner maintains that
“services performed” by the entity is not defined. /d. at 6. Petitioner also contends that
the exclusions listed in the definition of a “mobile facility” do not apply to it because it
does not provide the actual service at the location, it provides “the ability to perform the
service under the direct supervision of a physician, similar to that in a surgical hospital or
other surgical center.” Jd. at 5.

CMS argues that Petitioner fails to qualify as a defined mobile facility/portable unit
because Petitioner does not provide the same or a similar type equipment or service that
has been specified in CMS’s explanation of the definition of a mobile facility/portable
unit. CMS asserts that the common provider types of mobile facilities/portable units,
such as IDTFs, portable X-ray units, and portable mammography units have each been
designated as a specialty by regulation. (42 C.F.R. §§ 410.33, 410.32(c), 410.34
respectively). CMS’s Motion for Summary Judgment at 6. CMS asserts that it is clear
from Petitioner’s application that it is supplying surgical equipment to a physician’s
office. Thus, it is clear that Petitioner is not supplying diagnostic, x-ray, mammography
or patient transportation services. Jd. at 7. Petitioner does not meet the criteria to qualify
for any one of the provider types that CMS has deemed as a covered provider type, nor
are the services provided by Petitioner designated as a specialty by regulation.

CMS also contends that “[Petitioner’s] service is provided to the physician and is
intended to enhance the physician’s office rather than providing a direct to patient
service.” Jd. at9. Moreover, CMS argues that physician services are excluded from the
mobile facility/portable unit definition. CMS explains that certain services provided by
physicians are not covered as facility services, but are covered primarily by Medicare Part
B as reasonable and medically necessary physicians’ services. Jd. at 10.

Petitioner’s explanation of the type of equipment and services it provides is not consistent
with the definition of what is considered a mobile facility/portable unit. The services that
Petitioner provides do not require medical equipment, are not provided in a vehicle and
are not even remotely similar to the type of “service that requires medical equipment” that
the Medicare Program Integrity Manual specifies. The service Petitioner lists in
Petitioner’s Brief in Support of its Appeal is essentially “tech support.” Petitioner
indicates that prior to a physician beginning a procedure, the Petitioner’s “technician” sets
up the surgical field. Petitioner’s Brief at 3. “Tech support” does not require medical
equipment and is not provided in a vehicle, it is a service that is provided on-site in a
physician’s office. Furthermore, tech support is a service that is clearly provided for the
physician’s benefit and it is only indirectly of benefit to the patient.
The Medicare Program Integrity Manual identifies physical therapists and other medical
practitioners (e.g., physicians, nurse practitioners, physician assistants) who perform
services at multiple locations (e.g., house calls, assisted living facilities) as individuals
that are not considered to be mobile facilities/portable units. Therefore, it would follow
that individuals that provide technical support to a physician cannot be considered as a
mobile facility/portable unit either. As CMS maintains, citing 42 C.F.R. § 416.61(b),
physician services and medical and other health services for which payment can be made
under other Medicare provisions are excluded from facility services. The regulations at
42 C.F.R. § 410.20(a) also provide that physicians’ services means professional services
performed by physicians for a patient, including diagnosis, therapy, surgery, consultation,
and home, office, and institutional calls. CMS’s Motion for Summary Judgment at 10.
The Act and its implementing regulations provide other ways for the individuals and
entities that perform medically necessary services to be paid. A particular procedure has
been applied to take into account and provide payment for the supplies and equipment
necessary for a physician to perform medically necessary services within the physician’s
office. See Act, section 1848. That procedure is physician reimbursement for these
supplies and services. It is from the physician’s reimbursement that Petitioner should be
seeking to be reimbursed for the services it has provided directly to the physician.

The equipment Petitioner lists as being provided are: lasers, endoscopes, surgical
generators, and disposables. Petitioner’s Brief at 3. This type of medical equipment does
not fall within the definition of the term mobile facility/portable unit. As previously
noted, examples listed in the Medicare Program Integrity Manual are diagnostic x-ray,
mammography, and mobile clinic. Petitioner’s medical equipment and medical services
do not constitute diagnostic x-ray or mammography equipment, or patient transportation.
Nor does the equipment cited by Petitioner qualify as a mobile clinic as Petitioner is not
providing medical clinic services to patients. As CMS points out, if the first sentence of
the definition of the term mobile facility/portable unit is considered without taking into
account the remaining provisions of the definition, then “an entity that transports surgical
gloves and a syringe could be classified as a mobile facility/portable unit,” because
practically any entity transporting any type of medical equipment could be designated as
a mobile facility/portable unit. CMS’s Motion for Summary Judgment at 6. However,
the applicable definition must be read in its entirety and applied to the facts before me.

Applying the definition to the term mobile facility/portable unit as set forth in the
Medicare Program Integrity Manual, section 1.1, I must find that the equipment Petitioner
provides does not result in services directly provided to the patient or Medicare
beneficiary. Rather, Petitioner provides a service to the physician who is treating
Medicare beneficiaries. Petitioner provides the convenience of lasers, endoscopes,
surgical generators, and disposables to the physician so that he or she can render services
in an office setting rather than utilizing a hospital or surgical unit. Petitioner submits a
number of affidavits and letters from physicians who have utilized Petitioner’s services in
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the past. The authors of the letters and affidavits praise the services provided by
Petitioner. The fact that Petitioner provides services to physicians that is of value and
assistance to them is not in dispute. However, Petitioner’s services primarily benefit the
medical practitioner in facilitating his or her ability to perform physician services. The
services Petitioner provides to the physician do not result in direct rendition of services
from Petitioner to a Medicare patient. The affidavits and letters submitted by Petitioner
do not contradict this conclusion. Essentially, Petitioner is servicing another provider and
not a beneficiary. While the most common types of mobile facilities/portable units
provide services directly to the patient, the same cannot be said about the types of medical
equipment that Petitioner is using to justify its classification as a mobile facility/portable
unit supplier.

Finally, as previously noted, Petitioner anticipated being certified as a mobile
facility/portable unit supplier, but apparently sought to be reimbursed under the
Ambulatory Surgical Center payment codes. Petitioner undercuts its own position by
arguing, on the one hand, that it fits the requirements and should be enrolled as mobile
facility provider/portable unit supplier while, on the other hand, it seeks to be reimbursed
as an ASC. If Petitioner indeed fits the requirements to be enrolled as a mobile
facility/portable unit supplier, it would not require special treatment relative to
reimbursement. Petitioner maintains that it did not apply for enrollment as an ASC, and
CMS asserts that Petitioner would not qualify to participate as an ASC in the Medicare
program under the applicable regulations. CMS’s Motion for Summary Judgment at 11.

Vv. CONCLUSION

Petitioner has failed to establish that it fits within or satisfies the requirements of the
definition of the term mobile facility/portable unit supplier. Thus, Petitioner does not
qualify for a Medicare Part B provider enrollment number as a mobile facility/portable
unit supplier. I therefore affirm the CMS’s denial of Petitioner’s enrollment application.

/s/
Alfonso J. Montano
Administrative Law Judge