Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Frederick Brodeur, M.D.
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-16-623
Decision No. CR4703

Date: September 13, 2016

DECISION

I sustain the determination of a Medicare contractor, as affirmed on reconsideration and
ratified by the Centers for Medicare & Medicaid Services (CMS), to assign an effective
date for reactivation of Medicare billing privileges to Petitioner, Frederick Brodeur,
M.D., of October 20, 2015.!

I. Background

Petitioner, a physician, filed a hearing request in order to challenge the effective date of
reactivation of his Medicare billing privileges. In his hearing request Petitioner included
exhibits identified as the affidavit of Elizabeth Kamm plus Exhibits A-H. CMS filed a
motion for summary judgment or for, in the alternative, a decision based on the written
record. With its motion CMS filed exhibits that are identified as CMS Ex. 1-CMS Ex.
15. Petitioner filed a brief opposing CMS’s motion but no additional exhibits. CMS then

' As CMS observes, technically, Petitioner’s effective reactivation date should be
November 19, 2015. However, CMS has not contested the contractor’s determination to
assign an effective reactivation date of October 20, 2015 to Petitioner.
moved to file a reply brief. I grant CMS’s motion. I receive all of the parties’ exhibits
into the record.

It is unnecessary that I decide whether grounds exist to grant CMS’s motion for summary
judgment inasmuch as CMS has not requested cross-examination of the one witness
(Elizabeth Kamm) whose affidavit is of record. CMS has not offered the testimony of
witnesses. I decide the case based on the parties’ written exchanges including their
exhibits.

IL. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether the contractor appropriately assigned an effective date of October
20, 2015 to Petitioner for reactivation of his Medicare billing privileges.

B. Findings of Fact and Conclusions of Law

In order to maintain Medicare billing privileges, a Medicare supplier such as Petitioner
must “revalidate” its enrollment information at least once every five years by
resubmitting and recertifying the accuracy of its enrollment application. 42 C.F.R. §
424.515. The supplier must file the appropriate enrollment application within 60
calendar days of CMS’s notification of the need to re-file. 42 C.F.R. § 424.515(a)(2).

CMS may deactivate a supplier’s Medicare billing privileges if the supplier fails to file
the required application for enrollment within 90 days of CMS’s notice to re-file. 42
C.F.R. § 424.540(a)(3). CMS will not pay the supplier for items or services allegedly
provided on dates when billing privileges are deactivated. 42 C.F.R. § 424.555(b).

A decision by CMS or one of its contractors to deactivate a supplier’s billing privileges is
non-reviewable because it is not an initial determination that confers hearing rights. See
42 C.F.R. § 498.3. The recourse for a supplier whose billing privileges have been
deactivated for any reason other than nonsubmission of a claim is to file a new Medicare
enrollment application. 42 C.F.R. § 424.540(b)(1).

The regulation governing the effective date of participation in Medicare states in relevant
part that the effective participation date of a physician supplier shall be the filing date of a
Medicare enrollment application that is subsequently approved by a Medicare contractor.
42 C.F.R. § 424.520(d). Thus, the regulatory criterion for establishing an effective date
of reactivation of billing privileges for a physician supplier is the date when that
physician submits a reactivation application that is subsequently approved by a Medicare
contractor. However, as a matter of policy, CMS has decided that it will grant a
deactivated physician supplier an effective reactivation date of the date that his or her
billing privileges were deactivated if the physician supplier submits a reactivation
application within 120 days of the date of deactivation of billing privileges. Medicare
Program Integrity Manual (MPIM) § 15.29.4.3 (rev. 578, effective May 15, 2015). For
applications submitted after 120 days, the regulatory criterion stated by 42 C.F.R. §
424.520(d) applies. Id.

This policy is an act of largesse by CMS. There is nothing in the regulations that requires
CMS to assign a physician supplier whose billing privileges have been deactivated an
effective reactivation date as of the date of deactivation. CMS can, if it chooses, rely on
the regulatory language of 42 C.F.R. § 424.520(d) to establish an effective reactivation
date.

I find the determinative facts of this case to be as follows. On January 13, 2015, a
Medicare contractor sent a letter to Petitioner advising him that it would be necessary to
revalidate his Medicare enrollment information. CMS Ex. 1; CMS Ex. 2. Petitioner did
not respond to this request. On March 30, 2015, the contractor contacted Petitioner’s
group practice by telephone, notifying it that it had not received a revalidation application
from Petitioner. CMS Ex. 6.

Despite these notifications Petitioner did not file a revalidation application. On May 21,
2015, the contractor deactivated Petitioner’s billing privileges. CMS Ex. 7.

The contractor received an application filed on Petitioner’s behalf for reactivation of his
billing privileges on November 19, 2015, more than 120 days from the date that it had
deactivated his billing privileges.” CMS Ex. 8. The contractor processed this application
and assigned Petitioner an effective date for reactivation of his billing privileges of
October 20, 2015. CMS Ex. 10.

These facts fully support the contractor’s determination. They establish that Petitioner
failed to file an enrollment application despite being requested to do so by the contractor.
The contractor acted consistent with regulatory requirements and deactivated Petitioner’s
billing privileges after 90 days had elapsed from its request for revalidation information
without receiving an application from Petitioner. Petitioner finally requested reactivation
but more than 120 days after the date of deactivation of his billing privileges.
Consequently, the contractor reactivated Petitioner’s billing privileges consistent with the
regulatory criterion.

Petitioner makes both fact and legal arguments to assert that the contractor and CMS
erred. I find that these arguments, individually and collectively, are without merit.

> On that same date the contractor also received from Petitioner an application for
reassignment of his Medicare benefits. CMS Ex. 9.
First, Petitioner — relying on the affidavit of Elizabeth Kamm — asserts that an individual
revalidation application was filed on his behalf on January 29, 2015; that Ms. Kamm was
subsequently assured by the contractor that Petitioner’s application was in order; and that
it would be processed. Elizabeth Kamm affidavit at 1-3, 6-21. However, Petitioner
submitted nothing to corroborate this assertion and I find it not to be credible. Petitioner
has not offered a copy of the individual enrollment application that he contends was filed
on his behalf on January 29, 2015. He contends that the application was filed
electronically on that date but he has not offered any supporting data. The contractor has
no record of receiving an individual revalidation application from Petitioner prior to
receiving an application from Petitioner signed November 19, 2015 and received on
November 19. What the contractor does have in its records is an application dated
January 20, 2015 for revalidation of Petitioner’s group practice. CMS Ex. 13. That
application is not the same thing as an application for individual revalidation and does not
substitute for it.*

Lalso do not find to be credible Ms. Kamm’s assertion that she was assured by a
contractor’s representative that the contractor had on file Petitioner’s individual
revalidation application. Petitioner offered nothing to corroborate these claims, neither
written confirmation nor even notes of the alleged conversations.

Petitioner also asserts that he was denied access to certain contractor “call logs” and the
testimony of the contractor’s employees which, he contends, might show that his
assertions about conversations between Ms. Kamm and the contractor’s representative
are accurate. Discovery is not available to parties in cases involving CMS. 42 C.F.R.
Part 498. However, these same regulations allow for administrative law judges to issue
subpoenas. 42 C.F.R. § 498.58. Petitioner could have requested that I subpoena call logs
or related documents or contractor’s employees as witnesses, and I would have evaluated
that request. Petitioner did not do so.

Furthermore, I do not accept Petitioner’s contention that: “without said call logs or the
testimony of any [contractor’s] employees that Ms. Kamm spoke with at the time, it is
impossible for [Petitioner] to submit additional evidence to demonstrate that his initial
Individual Revalidation application was received ....” Petitioner’s brief at 2.
Submission of a copy of the application, if one exists, does not depend on call logs or the
testimony of a contractor’s employee.

Petitioner also contends that the contractor sent its notice of deactivation of Petitioner’s
billing privileges to an address “that has not been associated with [Petitioner] since

> The only application that the contractor received in January 2015 related to Petitioner
was an application to reassign his benefits to the group practice. CMS Ex. 3.
2013.” Petitioner’s brief at 3; CMS Ex. 7 at 1. Petitioner argues that the notice was sent
to Petitioner’s former correspondence address in Kentucky rather than Petitioner’s
current address in Wisconsin.

Whether or not that is so, the address to which the contractor sent the notice was the
address that Petitioner had provided to the contractor as his correspondence address in
his 2013 CMS-855I Medicare Enrollment application. CMS Ex. 15 at 3. The contractor
relied on the information that Petitioner had supplied to it and which was on file as of
May 21, 2015, the date of the notice of deactivation. It was Petitioner’s duty to advise
the contractor of any change in his address by filing the appropriate form with the
contractor.

Petitioner argues that the application that was filed on his behalf in January 2015 for
reassignment of benefits showed his current address. From that, Petitioner asserts that
the contractor and CMS were aware of his change of address and should have sent him
notices based on that. Effectively, Petitioner is asserting that the contractor and CMS are
under an obligation to infer a change of address from any document that contains a
different address than the mailing address that Petitioner previously submitted.

I find that argument to be without merit. The regulations explicitly require suppliers and
providers to provide notice to CMS and its contractors of their addresses and any
change. They do not require CMS or one of its contractors to be mind readers and draw
inferences from documents that suggest, but that do not directly state, a change of
address. The burden was on Petitioner to correct his address with the appropriate
notification.

In the end, Petitioner’s arguments reduce at least partially to equitable claims. He asserts
that he was misled by the contractor’s employees into believing that he need not file
anything with the contractor to revalidate his Medicare enrollment even after being told
by the contractor on March 30, 2015, that it had not received a revalidation application
from him (Ms. Kamm concedes in her affidavit that Petitioner’s practice received a
telephone message from the contractor on that date informing it that an individual
revalidation application had not been received). See Elizabeth Kamm Affidavit at 2,
13-14. In effect, Petitioner contends that CMS should be estopped from deactivating his
billing privileges because he would timely have filed a reactivation application had he
known that the contractor hadn’t received one from him.

As a general rule estoppel will not lie against CMS. Office of Pers. Mgmt. v. Richmond,
496 U.S. 414, 426 (1990). I am not authorized to grant Petitioner an earlier effective

reactivation date than that which is authorized by regulation. US Ultrasound, DAB No.
2302, at 8 (2010). Furthermore, even if I had such authority, Petitioner has not
established a basis for application of the estoppel doctrine. Petitioner has not shown that
anything that was allegedly said by the contractor constituted affirmative misconduct as
opposed to, potentially, mere error.

Petitioner also argues that the contractor’s determination rests on a conflict between CMS
policy and a controlling regulation and it demands that I remand this case for reevaluation
by the contractor. He relies on 42 C.F.R. § 424.540(c), which, he contends, effectively
nullifies any policy determination by CMS or a contractor that allows for non-payment of
claims for services delivered during a period of deactivation.

Petitioner misreads this regulation. The regulation states:

Deactivation of Medicare billing privileges is considered an action to
protect the provider or supplier from misuse of its billing number and to
protect the Medicare Trust Funds from unnecessary overpayments. The
deactivation of Medicare billing privileges does not have any effect on a
provider or supplier’s participation agreement or conditions of
participation.

This language does not mean that a provider or supplier whose billing privileges are
deactivated will nonetheless be able to claim reimbursement from Medicare for items or
services provided during the deactivation period. Rather, it means exactly what it plainly
says: deactivation of billing privileges is not tantamount to revocation of participation.
A deactivated provider or supplier may reactivate his or her billing privileges by
supplying CMS or its contractor via a new enrollment application with the information
needed to update his or her enrollment information. 42 C.F.R. § 424.540(b)(1). By
contrast a provider or supplier whose participation is revoked must reapply for
participation and must satisfy anew all of the criteria for participation.

Furthermore, Petitioner’s argument avoids the explicit language of 42 C.F.R.
§ 424.555(b). That regulation states that:

No payment may be made for otherwise Medicare covered items or services
furnished to a Medicare beneficiary by a provider or supplier if the billing
privileges of the provider or supplier are deactivated... .
It is this language that controls this case and it explicitly directs nonpayment to Petitioner
for Medicare items or services during the period when his Medicare billing privileges
were deactivated. Nothing in 42 C.F.R. § 424.540(c) conflicts with either this language
or CMS policy.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
West Side House LTC Facility,
(CCN: 22-5500),
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-644
ALJ Ruling No. 2016-19

Date: September 9, 2016

DISMISSAL

For the reasons set forth below, I dismiss as untimely the hearing request filed by
Petitioner, West Side House LTC Facility.

Background
The following facts are not in dispute:

Petitioner is a skilled nursing facility located in Worcester, Massachusetts, that
participates in the Medicare program. The Massachusetts state survey agency surveyed
the facility on December 29, 2015, January 4, 2016, February 24, 2016, and March 8,
2016. Based on findings from these surveys, the Centers for Medicare & Medicaid
Services (CMS) determined that the facility was not in substantial compliance with
Medicare requirements. CMS Ex. 1. Ina notice letter dated March 10, 2016, CMS
advised Petitioner that the facility was not in substantial compliance and that CMS was
therefore imposing remedies, including civil money penalties (CMPs) of $1,450 per day
for 57 days (December 29, 2015 — February 23, 2016) and $250 per day from February
24 until the facility achieved substantial compliance. CMS Ex. 1.!

A section of the notice letter — prominently captioned “APPEAL RIGHTS” — advises
the facility of its right to request a hearing before an administrative law judge (ALJ): “If
you disagree with the determination made based on the December 29, 2015, January 4,
2016, February 24, 2016, and/or March 8, 2016 surveys, you or your legal representative
may request a hearing before an [ALJ] ....” The letter then cites the regulations that
govern such appeals — 42 C.F.R. § 498.40 et seq. The letter warns that “an appeal/request
for hearing must be filed no later than sixty (60) calendar days from the date of your
receipt of this letter.’ CMS Ex. | at 4. The letter instructs the facility to file its hearing
request electronically and explains how to do so. CMS Ex. | at 5. It also advises
Petitioner that filing an appeal does not stop CMS from imposing a penalty. CMS Ex. 1
at 4.

CMS sent the notice letter by USPS, and the facility received it on March 14, 2016. CMS
Ex. 3.

In a letter dated and filed June 17, 2016, Petitioner requested a hearing. CMS now moves
to dismiss the request as untimely, which Petitioner opposes. ”

Discussion

Petitioner is not entitled to a hearing because it did not file a
timely hearing request, and no good cause justifies
extending the time for filing.

Section 1866(h) of the Social Security Act authorizes administrative review of
determinations that a provider fails to comply substantially with Medicare program
requirements “to the same extent as is provided in section 205(b) of the [Act].”

42 U.S.C. § 1395cc(h)(1). Under section 205(b), the Secretary of Health and Human
Services must provide reasonable notice and opportunity for a hearing “upon request by
[the affected party] who makes a showing in writing that his or her rights may be
prejudiced” by the Secretary’s decision. 42 U.S.C. § 405(b)(1). The hearing request

' CMS subsequently determined that the facility achieved substantial compliance as of
March 9, 2016. CMS Ex. 2.

2 CMS accompanied its motion and brief with three exhibits (CMS Exs. 1-3). With its
response (P. Br.), Petitioner filed one exhibit (P. Ex. 1).

3 T make this one finding of fact/conclusion of law.
“must be filed within sixty days” after receipt of the notice of CMS’s determination. Id.
(emphasis added). The 60-day time limit is thus a statutory requirement. See Cary
Health and Rehab. Ctr., 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)(2). On motion of a party, or his/her own motion, the 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).

No one disputes that the facility received its notice on March 14, which means that its
hearing request was due no later than May 13, 2016. Petitioner’s June 17 hearing request
was therefore untimely and, absent a showing of good cause for my extending the time in
which to file, should be dismissed pursuant to 42 C.F.R. § 498.70.

Good cause. Petitioner argues that it reasonably believed that a health insurance
specialist from CMS extended the time for filing the appeal. P. Br. at 4-5. Nothing in the
record supports this claim.

According to Petitioner, the facility requested independent informal dispute resolution
(IIDR), and an IIDR committee recommended that CMS overturn two “G-level
deficiencies.”* P. Br. at 4. An email dated May 16, 2016, from the facility’s regional
executive director/owner to a CMS health insurance specialist, describes an earlier
(“Wednesday last week”) telephone conversation between the two. In that conversation
(according to the email):

e the executive director asked if the IIDR committee’s recommendation would
affect the amount of the CMP;

e the CMS health insurance specialist told him that removing the G-level
deficiencies would lower the amount of the CMP;

e the executive director asked if he should nevertheless mail the full payment to
CMS, and the CMS health insurance specialist told him “to wait and allow [her]
time to review the case.”

Second attachment to hearing request. Alluding to a March 24 letter from CMS, the
executive director pointed out that the deadline for his paying the CMP was May 19.
Otherwise he would be liable for interest at an annual rate of 9.75%, which he wanted to
avoid. Id.

4 Scope and severity level G represents an isolated instance of substantial noncompliance
that causes actual harm.
Two days later, in an email dated May 18, the CMS health insurance specialist advised
the facility that the G-level deficiencies would remain and that payment of the CMP
would be due on or before June 18, 2016. Jd.

Nothing in that May 16 email or elsewhere suggests that anyone discussed extending the
deadline for Petitioner’s requesting a hearing. In fact, the March 24 letter says that
interest on the CMP would accrue at 9.75% rate “ifan appeal is not filed, or a check is
not received” by May 19. CMS Ex. 2 at 2 (emphasis added). From this and the contents
of the May 16 email, I can reasonably infer that Petitioner did not then intend to appeal,
but did not want to pay immediately the full amount of the CMP ($86,150) in case CMS
lowered it based on the IIDR recommendation. At the same time, Petitioner wanted to
avoid paying 9.75% interest. It appears that CMS accommodated Petitioner’s request and
delayed the payment due date.

CMS’s March 10 notice letter was not ambiguous, and the evidence establishes that
Petitioner well knew when its hearing request was due. Petitioner had no reason to think
that the deadline had been extended because no one from CMS or anywhere else
suggested that it had been.

Moreover, as Petitioner should have known, the CMS insurance specialist had no
authority to extend the filing period. The regulations that govern these proceedings —
which are cited in the notice letter — specifically direct the affected party to file its request
for extension with the ALJ and provide that the ALJ has the authority to extend the time
for filing. 42 C.F.R. § 498.40(c); see Heckler v. Cmty. Health Servs. of Crawford Cnty.,
Inc., 467 U.S. 51, 63 (1984) (holding that those who participate in the Medicare program
are supposed to understand program rules).

In light of CMS’s explicit instructions and in the absence of any evidence suggesting that
the appeal deadline was extended, I find not credible Petitioner’s claim that the executive
director thought that CMS had extended the deadline for requesting an ALJ hearing.
Moreover, even if I accepted his claim that he misunderstood the deadline, I find such a
“misunderstanding” wholly unreasonable.
Conclusion

Because Petitioner did not request a hearing within sixty days of receiving the March 10,
2016 notice letter, and no good cause justifies my extending the time for filing, I dismiss
its request pursuant to 42 C.F.R. § 498.70(c).

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Bayou Shores, SNF, LLC, d/b/a Rehabilitation Center of St. Petersburg,
(CCN: 10-5772),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-1643
Decision No.: CR4701

Date: September 8, 2016

DECISION

Petitioner, Bayou Shores, SNF, LLC, d/b/a Rehabilitation Center of St. Petersburg, was a
long-term-care facility, located in St. Petersburg, Florida, that participated in the
Medicare program. Following a series of surveys, ending in July 2014, the Centers for
Medicare & Medicaid Services (CMS) determined that the facility was not in substantial
compliance with program requirements and that its deficiencies posed immediate
jeopardy to resident health and safety. Based on those determinations, CMS terminated
the facility’s program participation and imposed other remedies, including a civil money
penalty (CMP).

Petitioner filed a hearing request challenging the termination and CMS’s refusal to allow
it an additional opportunity to correct its deficiencies, but did not challenge the
deficiencies themselves nor the immediate jeopardy finding.

CMS moved for partial summary judgment. In a ruling dated December 16, 2014", I
found that the facility had a significant number of serious deficiencies, any one of which

' A typographical error indicates the wrong year: the published Ruling is dated
December 16, 20/5, rather than December 16, 2014, when it was issued.
put it out of substantial compliance with program requirements. CMS was therefore
authorized to impose a penalty — including termination — and federal regulations preclude
me from reviewing the penalty imposed or CMS’s determination to reject the facility’s
plan of correction. I therefore granted CMS’s motion. Bayou Shores, SNF, LLC, ALJ
Ruling 2015-6 (December 16, 2014).

I affirm my December 16, 2014 ruling and incorporate it into this final decision.

Although given ample opportunity, Petitioner has not challenged CMS’s immediate
jeopardy determination nor the amount of the CMP. Instead, Petitioner challenges the
duration of the CMP, arguing that it brought itself into substantial compliance prior to the
date of its termination.

For the reasons discussed below, I affirm CMS’s determinations as to the duration of the
facility’s substantial noncompliance and the duration of the immediate jeopardy. The
amount of the CMP — $3,050 per day — is reasonable as a matter of law.

Background

The Social Security Act (Act) sets forth requirements for nursing facilities to participate
in the Medicare program and authorizes the Secretary of Health and Human Services to
promulgate regulations implementing those statutory provisions. Act § 1819. The
Secretary’s regulations are found at 42 C.F.R. Part 483. To participate in the Medicare
program, a nursing facility must maintain substantial compliance with program
requirements. To be in substantial compliance, a facility’s deficiencies may pose no
greater risk to resident health and safety than “the potential for causing minimal harm.”
42 CFR. § 488.301.

The Secretary contracts with state survey agencies to survey skilled nursing facilities in
order to determine whether they are in substantial compliance. Act § 1864(a); 42 C.F.R.
§ 488.20. Each facility must be surveyed annually, with no more than fifteen months
elapsing between surveys, and must be surveyed more often, if necessary, to ensure that
identified deficiencies are corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a),
488.308. The state agency must also investigate all complaints. Act § 1819(g)(4).

Here, the Florida Agency for Healthcare Administration (state agency) completed a series
of surveys: on February 10, 2014, March 20, 2014, and July 11, 2014. For each of these
surveys, CMS determined that the facility was not in substantial compliance with
multiple program requirements and that its deficiencies posed immediate jeopardy to
resident health and safety. CMS Exhibits (Exs.) 4, 5, 6.

The February 10, 2014 survey findings reflect a seriously deficient facility whose
deficiencies posed immediate jeopardy to resident health and safety:
42 C.F.R. § 483.10(b)(4) (Tag F155) (resident rights — notice of rights and
services) at scope and severity level K (pattern of noncompliance that posed
immediate jeopardy to resident health and safety);

42 CFR. §§
of rights and

QCFR.§4

483.10(b)(5)-(10), 483.10(b)(1) (Tag F156) (resident rights — notice
services) at scope and severity level K;

83.10(c)(2)-(5) (Tag F159) (resident rights — protection of resident

funds) at scope and severity level D (isolated instance of substantial
noncompliance that caused no actual harm with the potential for more than
minimal harm);

42 CFR. §4
severity leve

42 CFR. §4
severity leve

42 C.F.R. § 4
assessments)

42 CFR. §§

83.15(g)(1) (Tag F250) (quality of life — social services) at scope and
K;

83.15(h)(2) (Tag F253) (quality of life — environment ) at scope and
D;

83.20(b)(1) (Tag F272) (resident assessment — comprehensive
at scope and severity level D;

483.20(d), 483.20(k)(1) (Tag F279) (resident assessment — use and

comprehensive care plans) at scope and severity level D;

QCFR.§4

scope and severity level D;

42 CFR. §4
and severity

42 CFR. §4
and severity

42 C.F.R. §4
consultation,

83.25(a)(3) (Tag F312) (quality of care — activities of daily living) at
83.25(b) (Tag F313) (quality of care — vision and hearing) at scope
level D;

83.25(d) (Tag F315) (quality of care — urinary incontinence) at scope
level D;

83.60(b),(d),(e) (Tag F431) (pharmacy services — service
drug labeling and storage) at scope and severity level E (pattern of

noncompliance that caused no actual harm with the potential for more than
minimal harm);

QCFR.§4

QCFR.§4

83.65 (Tag F441) (infection control) at scope and severity level D);

83.75 (Tag F490) (administration) at scope and severity level K; and
© 42 C.F.R. § 483.75()(1) (Tag F514) (administration — clinical records) at scope
and severity level K;

CMS Ex. 4.

CMS gave the facility an opportunity to correct its deficiencies but, in the meantime, the
state agency received abuse complaints. The state surveyors returned to the facility,
conducting a complaint investigation (CMS Ex. 5) and completing the follow-up survey
on March 20, 2014 (CMS Ex. 6). They again found multiple deficiencies, including
some that posed immediate jeopardy to resident health and safety.

Complaint investigation:

© 42 C.F.R. § 483.13(b), (c)(1)(i) (Tag F223) (resident behavior and facility
practices — abuse and staff treatment of residents) at scope and severity level J
(isolated instance of noncompliance that poses immediate jeopardy to resident
health and safety) (new deficiency); *

© 42 C.F.R. § 483.13(c)(1)(ii)-(iii), (c)(2)-(4) (Tag F225) (resident behavior and
facility practices — staff treatment of residents) at scope and severity level J (new
deficiency);

© 42C.F.R. § 483.13(c) (Tag F226) (resident behavior and facility practices — staff
treatment of residents) at scope and severity level J (new deficiency);

© 42 C.F.R. § 483.20(k)(3)(ii) (Tag F282) (resident assessment — comprehensive
care plans) at scope and severity level D (new deficiency);

e 42 C.F.R. § 483.25(f)(1) (Tag F319) (quality of care — mental and psychosocial
functioning) at scope and severity level J (new deficiency);

e 42 C.F.R. § 483.25(h) (Tag F323) (quality of care — accident prevention) at scope
and severity level D (new deficiency); and

> | view repeat deficiencies narrowly, considering a deficiency repeated if cited under the
same F-tag. I am not bound by F-tags, however. I am bound by the regulations.
Arguably, repeated noncompliance with the same regulation should be considered a
repeat deficiency. Indeed, many of the deficiencies cited under new tag numbers are at
least related to deficiencies cited previously. But that issue is not material in this case, so
I need not decide it.
42 C.F.R. § 483.35(i) (Tag F371) (dietary services — sanitary conditions) at scope
and severity level E (new deficiency).

CMS Ex. 5.

Follow-up survey:

42 C.F.R. § 4
coordination,

83.20(g) -(j) (Tag F278) (resident assessment — accuracy,
certification, penalty for falsification) at scope and severity level D

(new deficiency);

42 C.F.R. § 4
consultation,
deficiency);

QCFR. $4

83.60(b),(d),(e) (Tag F431) (pharmacy services — service
drug labeling and storage) at scope and severity level E (repeat

83.65 (Tag F441) (infection control) at scope and severity level D

(repeat deficiency);

QCFR. $4

83.75 (Tag F490) (administration) at scope and severity level J

(repeat deficiency); and

42 CFR. §4
assurance) at

CMS Ex. 6.

83.75(0)(1) (Tag 520) (administration — quality assessment and
scope and severity level J (new deficiency).

Notwithstanding these survey findings, CMS gave the facility an additional opportunity
to correct. Responding to another complaint, the surveyors returned to the facility in July
to investigate. While there, they also completed the recertification survey on July 11,
2014. Again, they cited multiple deficiencies that posed immediate jeopardy to resident
health and safety:

42 C.F.R. § 483.13(c) (Tag F224) (resident behavior and facility practices— staff
treatment of residents) at scope and severity level J (new deficiency);

42 C.F.R. § 483.13(c)(1)(ii)-(iii), (c)(2)-(4) (Tag F225) (resident behavior and
facility practices — staff treatment of residents: employee histories of
abuse/neglect/mistreatment; reporting and investigating violations) at scope and
severity level J (repeat deficiency);
© 42C.F.R. § 483.13(c) (Tag F226) (resident behavior and facility practices — staff
treatment of residents: anti-abuse and neglect policies and procedures) at scope
and severity level J (repeat deficiency);

© 42 C.F.R. § 483.20(k)(3)(ii) (Tag F282) (resident assessment — comprehensive
care plans/qualified persons) at scope and severity level D (repeat deficiency);

e 42 C.F.R. § 483.25(h) (Tag F323) (quality of care — accident prevention) at scope
and severity level J (repeat deficiency);

© 42 C.F.R. § 483.35(i) (Tag F371) (dietary services — sanitary conditions) at scope
and severity level E (repeat deficiency);

© 42C.F.R. § 483.65 (Tag F441)(infection control) at scope and severity level D
(repeat deficiency);

© 42 C.F.R. § 483.75 (Tag F490) (administration) at scope and severity level J
(repeat deficiency);

© 42 C.F.R. § 483.75(d)(1)-(2) (Tag F493) (administration - governing body) at
scope and severity level K (new deficiency); and

© 42C.F.R. § 483.75(0)(1) (Tag F520) (administration - quality assessment and
assurance) at scope and severity level J (repeat deficiency).

CMS Exs. 1, 2.

In conjunction with the recertification survey, state surveyors completed the facility’s
annual life safety code (LSC) survey on July 9, 2014, and found LSC deficiencies:

¢ K038 (LSC §§ 7.1 and 19.2.1) — which includes means of egress requirements — at
scope and severity level D;

e K051 (LSC §19.3.4 and 9.6) — which governs fire alarm systems — at scope and
severity level D;

¢ K062 (LSC §§ 19.7.6; 9.7.5; and 4.6.12) — which governs sprinkler systems — at
scope and severity level D; and
e K076 (LSC §§ 4.3.1.1.2 and 19.3.2.4) — which governs medical gas storage and
administration — at scope and severity level D.

CMS Ex. 3.

By letter dated July 22, 2014, CMS advised the facility that it was not in substantial
compliance with program requirements, that conditions in the facility posed immediate
jeopardy to resident health and safety, and that “the substandard quality of care” existing
on June 21, 2014, was ongoing. CMS Ex. 7 at 1; see P. Ex. 22 at 1-2 (state agency letter
advising the facility of its immediate jeopardy findings and its recommendation that CMS
terminate). Based on the July 22 survey findings, CMS terminated the facility’s program
participation as of August 3, 2014, denied payment for new admissions as of July 24,
2014, and imposed a $3,050 per day CMP, effective June 21, 2014. CMS Ex. 7 at 2.

Petitioner appealed.’ It conceded that it was not in substantial compliance at the time of
the July survey but challenged the termination, arguing that the facility subsequently
corrected its deficiencies. Petitioner’s Hearing Request (July 31, 2014). CMS moved for
partial summary judgment.

In a ruling dated December 16, 2014, I found that, because the facility was not in
substantial compliance with program requirements, CMS was authorized to impose a
remedy and that its choice of remedies is not reviewable. Bayou Shores, SNF, LLC , ALJ
Ruling 2015-6 (December 16, 2014). For the same reason, I am not authorized to review
CMS’s decision to impose a DPNA. As explained in my ruling, so long as CMS has a
basis for imposing a remedy, I have no authority to review its determination to do so nor

> To avoid termination, Petitioner also sought emergency injunctive relief from the U.S.
District Court for the Middle District of Florida. When that court dismissed the case on
jurisdictional grounds (Bayou Shores SNF, LLC v. Burwell, No. 8:14-CV-1849-T-
33MAP, 2014 WL 4059900, 6-8 (M.D. Fla. Aug. 15, 2014), Petitioner went to the
bankruptcy court. The bankruptcy court “assumed authority over the Medicare and
Medicaid provider agreements”; it enjoined CMS from terminating the facility’s
Medicare agreement, determined for itself that Bayou Shores was qualified to participate
in the program, and required the Secretary of Health and Human Services to continue
paying benefits to the facility. Florida Agency for Health Care Admin. v. Bayou Shores
SNF, LLC, Case No. 15-13731, 2016 WL 3675462, at *5 (11" Cir. July 11, 2016).
Thereafter, the United States District Court for the Middle District of Florida reversed,
finding that the bankruptcy court had no jurisdiction over Medicare claims. Jn re Bayou
Shores SNF, LLC, 533 B.R. 337, 343 (M.D. Fla. 2015). The Eleventh Circuit Court of
Appeals affirmed the District Court. Florida Agency for Health Care Admin. v. Bayou
Shores SNF, LLC, 2016 WL 3675462 at *6 (11 Cir. July 11, 2016).

may I review CMS’s choice of remedy. Act § 1819(h); 42 C.F.R. §§ 488.402, 488.406,
488.408(g)(2), 488.438(e); 498.3(d)(14); Beverly Health & Rehab. Servs., Inc. v.
Thompson, 223 F. Supp. 73, 111 (D.D.C. 2002) (holding that the “determination of what
remedy to seek is beyond challenge.”).

I also found that CMS need not afford a deficient facility the opportunity to correct its
substantial noncompliance and that I have no authority to review its rejection of the
facility’s plan of correction. Bayou Shores, SNF, LLC , ALJ Ruling 2015-6 at 5-6
(December 16, 2014), citing Blossom South, 987 F. Supp. at 302; Oaks of Mid City, DAB
2375 at 29-30 (2011); Hermina Traeye Mem’! Nursing Home, DAB No. 1810 at 13
(2002).

My ruling offered Petitioner a final opportunity to challenge the immediate jeopardy
determination, as well as the amount of the CMP. Petitioner does not challenge CMS’s
finding of immediate jeopardy as of the July 11 survey. Instead, it doubles down on its
earlier arguments, pointing out that it submitted an “Allegation of Compliance,” and
claiming that it was in substantial compliance “no later than July 28, 2014.” P. Br. at 3,
5; P. Ex. 4 at 2 (Martin Decl. {§ 7, 8). From this, Petitioner argues that, because it
achieved substantial compliance no later than July 28, the CMP — which lasted until the
date of its termination — is unreasonable.* But, as the following discussion shows,
Petitioner has not established that it ever achieved substantial compliance or that its
deficiencies no longer posed immediate jeopardy to resident health and safety.

4 As the Eleventh Circuit observed, terminating repeat offenders, like Petitioner, “was a
key part of Congress’s overhaul of nursing home regulations and was intended to stop
‘instances in which substandard providers had avoided termination from Medicare by
claiming that they had cured serious violations of safety standards, only to lapse back into
noncompliance after the threat of administrative sanction was removed.” Bayou at *19;
See H.R. Rep. No. 100-391(1), 100" Cong., 1*t Sess. (1987) (expressing the goal of
eliminating the “yo-yo” or “roller coaster” phenomenon); Heartland Manor at Carriage
Town, DAB No. 1664 (1998).

> In federal court, the parties argued over the effective date of termination. CMS
maintained that the provider agreement terminated on August 3, before Petitioner
petitioned the bankruptcy court; Petitioner contested that position, arguing for a later
effective date (which, ironically, could result in a substantially higher CMP). The
Eleventh Circuit declined to resolve the issue. Bayou at *6, n.9, *22. Petitioner has not
raised that issue here, so CMS’s position prevails; the parties are squabbling over when
the CMP ends, i.e., whether the CMP should be imposed up to July 28" or through
August 2.
Discussion

CMS’s determinations as to the duration of the facility’s substantial
noncompliance and the duration of the immediate jeopardy are consistent with
statutory and regulatory requirements and must be affirmed.®

Once a facility has been found to be out of substantial compliance (as Petitioner was
here), it remains so until it affirmatively demonstrates that it has achieved substantial
compliance once again. Ridgecrest Healthcare Ctr., DAB No. 2493 at 2-3 (2013); Taos
Living Ctr., DAB No. 2293 at 20 (2009); Premier Living & Rehab Ctr., DAB No. 2146 at
23 (2008); Lake City Extended Care, DAB No. 1658 at 12-15 (1998). The burden is on
the facility to prove that it is back in compliance, not on CMS to prove that deficiencies
continued to exist. Asbury Ctr. at Johnson City, DAB No. 1815 at 19-20 (2002).

The facility must show that the incidents of noncompliance have ceased and that it has
implemented appropriate measures to insure that similar incidents will not recur.
Libertywood Nursing Ctr., DAB No. 2433 at 15, citing Life Care Ctr. of Elizabethton,
DAB No. 2356 at 16 (2011); accord, 42 C.F.R. § 488.454(a) and (e); Hermina Traeye
Mem’! Nursing Home, DAB No. 1810 at 12 (holding that, to be found in substantial
compliance earlier than the date of the resurvey, the facility must supply documentation
“acceptable to CMS” showing that it was in substantial compliance and was capable of
remaining in substantial compliance on the earlier date); Cross Creek Care Ctr., DAB
No. 1665 (1998). A facility’s return to substantial compliance usually must be
established through a resurvey. 42 C.F.R. § 488.454(a); Ridgecrest at 2-3.

Petitioner has conceded that, as of July 11, its deficiencies were many, and they were
serious. The facility neglected its residents, failed to provide them with the quality of
care they needed, and was not administered effectively, among other problems. See CMS
Exs. 4, 6.

The most dangerous situation cited by the July survey team involved Resident 210’s
(R210’s) elopement from the facility and the facility’s response — or lack of response — to
is departure. R210 transferred into the facility on June 20, 2014. He was alert but
confused and had a history of injury (hematoma) from falls. He “frequently” walked the
corridors and was known for “‘exit-seeking” behavior. As part of his transfer order, his
physician stated that he “needs secure unit.” CMS Ex. | at 11, 15, 16; CMS Ex. 9 at 3,7
(Bartlett Decl. {§ 4, 7); CMS Ex. 10 at 3, 7 (Benjamin Decl. § 4, 7). The facility placed
im in its “secure unit” on the second floor, but took no steps to assess his risk for
elopement, and — aside from his placement — adopted no procedures for keeping him safe.
No one told staff that he was an elopement risk. Jd. As it turned out, the “secure unit”

® T make this one finding of fact/conclusion of law.
10

was not so secure and, without anyone noticing, R210 made his way out of the unit, down
to the first floor, and out the exit. No one can say how long he was gone, but he was
found “down the road,” having attempted to “walk home.” CMS Ex. | at 7, 9, 14; CMS
Ex. 9 at 4-5 (Bartlett Decl. ¥f 4, 5).

While the facility was undeniably deficient for its lack of effort in preventing R210’s
elopement, its response to his disappearance was simply appalling. Staff did not ask the
police to help find him. No one notified R210’s physician that he had eloped. Staff did
not report the elopement to the appropriate state agency. They did not even document the
elopement in a nurse’s note or elsewhere, which might have alerted others of the need for
vigilance to prevent another elopement. CMS Ex. | at 9, 10; CMS Ex. 9 at 3, 5 (Bartlett
Decl. ff 4, 5).

No one investigated the elopement. Indeed, although the “secure unit” was equipped
with video surveillance equipment, no one bothered to review it. CMS Ex. 9 at 5
(Bartlett Decl. 4.5). The facility’s director of nursing (DON) told the surveyors that
management hadn’t reported or investigated because they didn’t consider R210’s
departure an elopement. CMS Ex. 9 at 5 (Bartlett Decl. § 5).

Of course, R210’s departure was an elopement, and it put R210 in grave danger. As
CMS points out, any elderly and confused resident who wanders outdoors unsupervised
is at risk of serious injury. Given the circumstances, R210’s risk was even more
significant. He was wandering outside on a summer day in Florida, risking dehydration
and heat stroke. CMS Ex. | at 9 (stating “it was hot out there”); see CMS Ex. | at 12
(indicating a heat index between 109 and 113 degrees that day). The facility was located
near a body of water (the bayou), putting him at risk of drowning. A busy street
connected the facility to the bus stop where he was eventually found; he could have been
hit by a car or truck. CMS Ex. 1 at 11, 13; CMS Ex. 9 at 7 (Bartlett Decl. § 7); CMS Ex.
10 at 7 (Benjamin Decl. {| 7).

Without an investigation to determine how and why the elopement happened, the facility
is not in a position to take steps to prevent it from recurring. That a mentally impaired
resident, who is unable to care for his own safety, could wander off unnoticed “presents a
significant likelihood” that other vulnerable residents could leave and encounter the
hazards of wandering away, such as falls and traffic. Century Care of Crystal Coast,
DAB No. 2076 at 24 (2007).

This and other deficiencies put the facility out of substantial compliance with program
requirements:

e The facility failed to provide R210 (and others) the goods and services they
needed to avoid physical harm, mental anguish, or mental illness and was guilty of
neglect. 42 C.F.R. § 488.301. It was out of substantial compliance with 42 C.F.R.
11

§ 483.13(c), which mandates that it develop and implement written policies and
procedures to prohibit resident neglect. It must assure that all alleged violations
involving neglect are reported immediately to the facility administrator and the
appropriate state officials. It must have evidence that all alleged violations are
thoroughly investigated and, if verified, that the facility has taken appropriate
corrective action.

e The facility also failed to provide R210 with the quality of care he needed in order
to maintain the highest practicable physical, mental, and psychosocial well-being.
It did not ensure that he was adequately supervised to prevent accidents and was
thus not in substantial compliance with 42 C.F.R. § 483.25(h). See Act § 1819(b).

e Finally, the facility was not governed in a manner that enabled it to use its
resources effectively and efficiently to attain or maintain the highest practicable
physical, mental, and psychosocial well-being of each resident. Neither its
governing body nor its quality assessment and assurance committee were
performing their duties as required, which put the facility out of substantial
compliance with 42 C.F.R. §§ 483.75, 483.75(d), and 483.75(0).

Given the dangers faced by R210 and other confused and vulnerable residents who elope
from facilities, the deficiencies cited posed immediate jeopardy to resident health and
safety. 42 C.F.R. § 488.301 (defining immediate jeopardy as noncompliance that has
caused or is likely to cause “serious injury, harm, impairment, or death to a resident”).

What happened to R210, while serious, does not, in itself, constitute the underlying
deficiency. The facility’s failure to meet a participation requirement “is what constitutes
the deficiency, not any particular event that was used as evidence of the deficiency.”
Oceanside Nursing & Rehab. Ctr., DAB No. 2382 at 18 (2011) (quoting Regency
Gardens Nursing Ctr., DAB No. 1858 at 21 (2002). These are precisely the types of
deficiencies that the regulators contemplated when they specified that a facility’s return
to substantial compliance would usually be established through a resurvey. 42 C.F.R. §
488.454(a). Unlike a leaky roof or broken dishwasher, they reflect deep-rooted problems
that do not lend themselves to a quick fix.

To show that it corrected, Petitioner presents evidence that it: 1) hired consultants;’ 2)
reviewed the facility’s policies and procedures regarding elopement;* 3) interviewed

7 These consultants have opined that the facility is in substantial compliance. The
opinion of a facility’s paid consultant does not substitute for a survey.

® Tn fact, the facility had policies and procedures in place to address resident wandering,
elopement, abuse, neglect, reporting and response, and investigations. However, neither
management nor staff followed those policies. CMS Ex. 1 at 3-6, 30-32, 49-51.
12

some staff members; 4) provided in-service training; 5) held a quality assurance meeting;
and 6) “developed tools” for monitoring compliance.

These interventions might help a facility achieve substantial compliance if properly
implemented, but introducing them does not establish substantial compliance. Until the
facility can demonstrate that its training and other interventions were effective, i.e., that
staff capably followed the training, that management put the monitoring tools in place,
and that those interventions resolved the problem, the facility has not met its significant
burden of demonstrating that it has alleviated the level of threat to resident health and
safety. Oceanside, DAB No. 2382 at 19; Premier Living & Rehab. Ctr., DAB CR1602
(2007), aff'd, DAB No. 2146 (2008). This can only be established over time. Moreover,
CMS may justifiably view Petitioner’s promises of correction with a critical eye,
considering that it afforded the facility two previous opportunities to correct; the facility
promised correction; but follow-up surveys established on-going noncompliance that was
immediate jeopardy.

CMS imposed a penalty of $3,050 per day, which is the minimum per day penalty for
deficiencies constituting immediate jeopardy. 42 C.F.R. §§ 488.408(e)(iii),
488.438(a)(1)(i). The amount of the CMP is therefore reasonable as a matter of law.

Conclusion

Petitioner acknowledges that the facility had multiple deficiencies and was not in
substantial compliance with program requirements and that its deficiencies posed
immediate jeopardy. It has not met its “significant burden” of establishing that it
removed the immediate jeopardy and achieved substantial compliance prior to the date of
its termination. The facility was therefore not in substantial compliance with program
requirements from February 2014 through the date of its termination. The penalty
imposed — $3,050 per day from June 21, 2014, through the date of the termination — is
reasonable as a matter of law.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Robert Kolbusz, M.D.,
(OI File No. 5-07-4-0118-9),

Petitioner,
v.
The Inspector General.
Docket No. C-16-463
Decision No. CR4700

Date: September 8, 2016

DECISION

Petitioner, Robert Kolbusz, M.D., was a physician, licensed to practice in the State of
Illinois, who fabricated patient diagnoses and falsified medical records so that he could
bill Medicare and private insurers for treating nonexistent conditions. He was convicted
on three felony counts of mail fraud and three felony counts of wire fraud. Based on his
convictions, the Inspector General (IG) has excluded him for 30 years from participating
in Medicare, Medicaid, and all federal health care programs, as provided for in section
1128(a)(1) and 1128(a)(3) of the Social Security Act (Act). Petitioner now challenges the
length of the exclusion. For the reasons discussed below, I find that the IG properly
excluded Petitioner and, given the enormity of his crimes, that the 30-year exclusion falls
within a reasonable range.

Background

By letter dated January 29, 2016, the IG notified Petitioner Kolbusz that he was excluded
from participating in Medicare, Medicaid, and all federal health care programs for a
period of 30 years, because he had been convicted of criminal offenses related to: 1) the
delivery of an item or service under the Medicare or state health care program; and 2)
fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial
misconduct in connection with the delivery of a health care item of service. The letter
explained that sections 1128(a)(1) and 1128(a)(3) of the Act authorize the exclusion. IG
Ex. 1.

Petitioner concedes that he was convicted and is subject to exclusion under sections
1128(a)(1) and 1128(a)(3). Order and Schedule for Filing Briefs and Documentary
Evidence at 2 (May 3, 2016); P. Brief (Br.) attachment at 1.

Each party submitted a written argument (IG Br.; P. Br.). The IG also submitted eight
exhibits (IG Exs. 1-8) and a reply brief (IG Reply). Petitioner submitted three exhibits
(P. Exs. 1-3) and two attachments (P. Atts. 1-2). In the absence of an objection, I admit
into evidence IG Exs. 1-8 and P. Exs. 1-3 and P. Atts. 1-2.

The parties agree that this case does not require an in-person hearing. IG Br. at 17; P. Br.
at 4.

Issue

Because the parties agree that the IG has a basis upon which to exclude Petitioner from
program participation, the sole issue before me is whether the length of the exclusion (30
years) is reasonable. 42 C.F.R. § 1001.2007.

Discussion

Section 1128(a)(1) of the Act mandates that the Secretary of Health and Human Services
exclude an individual who has been convicted under federal or state law of a criminal
offense related to the delivery of an item or service under Medicare or a state health care
program. 42 C.F.R. § 1001.101(a).

Section 1128(a)(3) says that an individual or entity convicted of felony fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct in
connection with the delivery of a health care item or service must also be excluded from
participation in federal health care programs. 42 C.F.R. § 1001.101(c).

In this case, Petitioner was a dermatologist who owned and operated a clinic in Downers
Grove, Illinois. IG Ex. 7 at 1; see IG Ex. 3 at 1. From 2003 until 2010, he submitted
false claims to Medicare and private insurers, billing for treatments that he did not
provide to patients who did not suffer from the conditions he described. To justify the
billings, he manufactured medical records, including operating reports, ascribing the
fictitious diagnoses and treatments to his actual patients. IG Ex. 7 at 4-5. The scheme
was lucrative, costing Medicare and the private insurers millions of dollars. IG Ex. 7 at
5-12.

A federal jury convicted Petitioner Kolbusz on three felony counts of mail fraud, in
violation of 18 U.S.C. § 1341, and three felony counts of wire fraud, in violation of 18
U.S.C. §1343. IG Ex. 3 at 1. The court entered judgment on August 28, 2015.

The court sentenced Petitioner Kolbusz to 84 months (7 years) in prison, followed by two
years of supervised release, and ordered him to pay $3,764,381.69 in restitution. IG Ex.
3 at 2-3, 6.

Based on the aggravating factors in this case, and the
absence of any mitigating factor, the 30-year exclusion falls
within a reasonable range.

Aggravating factors. An exclusion under either section 1128(a)(1) or 1128(a)(3) must be
for a minimum period of five years. Act, § 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a),
1001.2007(a)(2). Federal regulations set forth criteria for lengthening exclusions beyond
the five-year minimum. 42 C.F.R. § 1001.102(b). Evidence that does not pertain to one
of the aggravating or mitigating factors (42 C.F.R. § 1001.102(c)) listed in the regulations
may not be used to decide whether an exclusion of a particular length is reasonable.

Among the factors that may serve as bases for lengthening the period of exclusion are the
four that the IG cites to justify the period of exclusion in this case: 1) the acts resulting in
the conviction, or similar acts, resulted in a financial loss to a government program or
other entity of $5,000 or more; 2) the acts resulting in the conviction, or similar acts,
were committed over a period of one year or more; 3) the sentence imposed by the court
included incarceration; and 4) the convicted individual has been the subject of any other
adverse action by any federal, state, or local government agency or board, if the adverse
action is based on the same set of circumstances that serves as a basis for the exclusion.
42 C.F.R. § 1001.102(b). The presence of an aggravating factor or factors, not offset by
any mitigating factor or factors, justifies lengthening the mandatory period of exclusion.

Financial loss to Medicare and Medicaid programs (42 C.F.R. § 1001.102(b)(1)).
Petitioner’s actions resulted in program financial losses many, many times greater than
the $5,000 threshold for aggravation. The sentencing judge ordered him to pay a
whopping $3,764,381.69 in restitution to the victims of his crime. Of this amount, he
was to pay $1,087,865.27 to the Medicare Trust fund; $2,651,517.97 to private insurers;
and the rest ($24,998.45) to a long list of patient victims. IG Ex. 3 at 6-10.

' T make this one finding of fact/conclusion of law.
Restitution has long been considered a reasonable measure of program losses. Jason
Hollady, M.D., DAB No. 1855 (2002). I consider the enormity of the program’s financial
losses here an exceptionally aggravating factor that compels a period of exclusion
significantly longer than the five-year minimum. See Jeremy Robinson, DAB No. 1905
(2004); Donald A. Burstein, PhD., DAB No. 1865 (2003).

Petitioner does not challenge the amount of program losses but argues that, in the absence
of published guidelines correlating the dollar amounts to lengths of exclusions, the IG’s
determination is arbitrary and capricious. I disagree. As the regulations reflect, the
amount of the program losses reflects, in part, the seriousness of the individual’s crime
and thus the level of threat he poses to program integrity. While the process is inexact, so
long as the IG reasonably translates the aggravating factor into an increase in the period
of exclusion, I must affirm its determination. Moreover, that one corrupt physician could
cause losses of three to four million dollars underscores the importance of excluding the
unscrupulous. Health care programs simply cannot withstand this level of fraud.

Petitioner also points to the sentencing court’s orders for restitution and forfeiture (IG
Exs. 3 and 4) suggesting that he has already been punished financially and has repaid the
programs. First, an exclusion is remedial rather than punitive; its purpose is to protect
program integrity and program beneficiaries. In any event, that Petitioner had to return
the money he stole can hardly be considered additional punishment. Finally, in deciding
whether a period of exclusion is reasonable, the regulations direct me to consider the
financial loss “regardless of whether full or partial restitution has been made.” 42 C.F.R.
§ 1001.102(b)(1).

Duration of crime (42 C.F.R. § 1001.102(b)(2)). Petitioner’s criminal acts were
committed over a period of approximately seven years — beginning in 2003 and
continuing into 2010 — which is significantly longer than one year necessary for
aggravation. IG Ex. 7 at 4. The Departmental Appeals Board has “accorded weight
sufficient to sustain a 15-year exclusion to the fact that wrongful acts were committed for
even just ‘slightly more’ than the one-year minimum standard.” Jeremy Robinson, DAB
No. 1905 at 12, citing Donald A. Burstein, Ph.D., DAB No. 1865 at 12.

Incarceration (42 C.F.R. § 1001.102(b)(5)). The criminal court sentenced Petitioner to a
substantial period of incarceration — 84 months (7 years). IG Ex. 3 at 2.

Any period of incarceration justifies increasing the period of exclusion. Generally, the
longer the jail time, the greater the increase, because a lengthy sentence evidences a more
serious offense. See Jeremy Robinson, DAB No. 1905 at 12 (characterizing a nine-month
incarceration as “relatively substantial.”); Jason Hollady, M.D., DAB No. 1855 at 12
(2002); Stacy Ann Battle, DDS., DAB No. 1843 (2002) (finding that four months in a
alfway house, followed by four months home confinement justifies lengthening the
period of exclusion); Brenda Mills, M.D., DAB CR1461, aff'd DAB No. 2061 (2007)
(finding that six months home confinement justifies increase in length of exclusion).

Other adverse actions (42 C.F.R. § 1001.102(b)(9)). Based on the circumstances
underlying this exclusion, the Division of Professional Regulation of the Illinois
Department of Financial and Professional Regulation indefinitely suspended Petitioner’s
license to practice medicine. IG Ex. 5.

No mitigating factors. The regulations consider mitigating just three factors: 1) a
petitioner was convicted of three or fewer misdemeanor offenses and the resulting
financial loss to the program was less than $1,500; 2) the record in the criminal
proceedings demonstrates that a petitioner had a mental, physical, or emotional condition
that reduced his culpability; and 3) a petitioner’s cooperation with federal or state
officials resulted in others being convicted or excluded, or additional cases being
investigated, or a civil money penalty being imposed. 42 C.F.R. § 1001.102(c).

Obviously, because Petitioner’s felony conviction involved program financial losses
many, many times greater than $5,000, the first factor does not apply here. Nor does
Petitioner claim any mental, physical, or emotional condition that reduced his culpability.
He also does not claim to have cooperated with federal or state officials.

Instead, Petitioner points to remarks made by the sentencing judge who explained that he
considered 84 months incarceration sufficient to punish the offense, impress upon the
defendant respect for the law, protect the public from further crimes by him, and deter
others. The judge opined that the 324-405 months (27 to 33+ years) called for by
sentencing guidelines would be “grossly inappropriate.” P. Att. 2 at 2. I do not consider
these remarks mitigating.

Discovery request. With his submissions, Petitioner requests, for the first time, that the
IG provide him with copies of the cases cited in the IG’s brief. Had Petitioner made this
request at the time of the prehearing conference, I’d likely have directed the IG to do so,
as a courtesy. However, providing the cited cases would not have changed the outcome
here, and, at this point, directing the IG to produce them would unduly delay these
proceedings. 42 C.F.R. § 1005.7(e)(2)(iii).

Conclusion

So long as the period of exclusion is within a reasonable range, based on demonstrated
criteria, I have no authority to change it. Jeremy Robinson, DAB No. 1905 at 5; Joann
Fletcher Cash, DAB No. 1725 at 7 (2000), citing 57 Fed. Reg. 3298, 3321 (1992). In this
case, Petitioner’s crimes demonstrate that he presents a significant risk to the integrity of
health care programs. He billed for procedures that were unnecessary, costing insurance
programs, including Medicare, over 3.7 million dollars. Even more reprehensible, to
cover his tracks, he falsified patient records. He continued this illegal conduct for about
seven years, which is a very long time. His conduct was such that the sentencing judge
sent him to prison for seven years. He lost his medical license. Based on these
aggravating circumstances, and the absence of any mitigating circumstances, a 30-year
exclusion falls within a reasonable range.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Rebecca Koontz,
(OI File No. H-16-40536-9),
Petitioner,
v.

The Inspector General.
Docket No. C-16-497
Decision No. CR4699

Date: September 7, 2016

DECISION

Petitioner, Rebecca Koontz, was a registered nurse in the State of Indiana. She stole
narcotics from her employer, a hospital, and was convicted of unlawful possession of a
controlled substance. Pursuant to section 1128(a)(3) of the Social Security Act (Act), the
Inspector General (IG) has excluded her from participating in the Medicare, Medicaid,
and all federal health care programs for a period of five years.

For the reasons discussed below, I find that the IG is authorized to exclude Petitioner, and
that the statute mandates a minimum five-year exclusion.

Background

In a letter dated March 31, 2016, the IG advised Petitioner Koontz that, because she had
been convicted of a felony offense related to fraud, theft, embezzlement, breach of
fiduciary responsibility or other financial misconduct in connection with the delivery of a
healthcare item or service, the IG was excluding her from participating in Medicare,
Medicaid, and all federal health care programs for a period of five years. IG Ex. 1.
Petitioner requested review.

The parties have submitted their written arguments. (IG Br.; P. Br.). With his brief, the
IG submitted six exhibits (IG Exs. 1-6); Petitioner submitted seven exhibits (P. Exs. A-
G). The IG submitted a reply.

The IG objects to my admitting Petitioner’s exhibits because they are marked by letters
rather than numbers, contrary to the directions included in my prehearing order. I
consider this objection frivolous, particularly considering that Petitioner is appearing pro
se. We afford greater latitude to pro se petitioners and certainly would not exclude
evidence based on a relatively minor transgression.

The IG also objects to my admitting P. Exs. C through G, arguing that they are irrelevant.
The regulations direct me to exclude evidence that is irrelevant or immaterial (42 C.F.R.
§ 1005.17(c)). Ido not consider these documents irrelevant. They address Petitioner’s
compliance with a court-ordered treatment program, which was a condition of the court’s
withholding a judgment of conviction. As such, they are relevant for determining the
nature of the court’s actions.

I admit into evidence IG Exs. 1-6 and P. Exs. A-G.

I directed the parties to indicate in their briefs whether an in-person hearing would be
necessary, and, if so, to “describe the testimony it wishes to present, the names of the
witnesses it would call, and a summary of each witness’s proposed testimony.” I
specifically directed the parties to explain why the testimony would be relevant. Order
and Schedule for Filing Briefs at 3 (June 13, 2016); Informal Brief of Petitioner at 2, §
IIL; Informal Brief of Inspector General at 2-3 § III. The IG indicates that an in-person
hearing is not necessary. IG Br. at 13. Petitioner did not respond to that question, but she
does not contend that an in-person hearing is necessary, and she lists no potential
witnesses. I therefore decide this case based on the written record.

Discussion

Petitioner must be excluded from program participation for
a minimum of five years because she was convicted of a
felony relating to fraud and theft in connection with the
delivery of a healthcare item or service.'

' [make this one finding of fact/conclusion of law.
Section 1128(a)(3) provides that an individual or entity convicted of felony fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct in
connection with the delivery of a health care item or service must be excluded from
participation in federal health care programs for a minimum of five years. See 42 C.F.R.
§ 1001.101(c).

Petitioner Koontz was a registered nurse, working at a hospital in Fort Wayne, Indiana,
where she had access to the hospital’s narcotics. She appropriated some of those
narcotics, morphine and hydromorphone, for her personal use. IG Ex. 2 at 2-4; IG Ex. 3.
In an information dated July 7, 2015, she was charged with three felony counts of
nowingly or intentionally possessing a narcotic drug, morphine, without a valid
prescription or order, and two felony counts of possessing the narcotic drug,
ydromorphone, without a valid prescription or order. IG Ex. 4.

On September 28, 2015, Petitioner Koontz pled guilty to all five felony counts. IG Ex. 5.
The Indiana Superior Court took her guilty plea “under advisement” and placed her in the
Drug Court Diversion Program, a pre-sentence, post-plea intervention program. IG Exs.
5, 6. Under the terms of her “participation agreement,” her sentencing was deferred
pending her completion of the program. She agreed to supervision by the court and by a
“case manager” and to comply with a long list of requirements (e.g., attend programs,
appear in court as required, not possess alcohol or drugs, submit to random drug testing,
etc.). If she violated the terms of her agreement, she would be convicted and sentenced.
IG Ex. 6.

Petitioner’s felony convictions were plainly related to theft and fraud in connection with
the delivery of a health care item (drugs). She stole narcotics from her employer. She is
therefore subject to exclusion.

Petitioner, however, argues that, because she entered the Drug Court Diversion Program,
no judgment was entered against her. So long as she complies with the program
requirements, she will not be convicted.

Under the Act and regulations, a person is “convicted” when “a judgment of conviction
as been entered” regardless of whether that judgment has been expunged or otherwise
removed. Act § 1128(i)(1); 42 C.F.R. § 1001.2(a)(2). Further, individuals who
participate in “deferred adjudication or other program or arrangement where judgment of
conviction has been withheld” are also “convicted” within the meaning of the statute.
Act § 1128(i)(4); 42 C.F.R. § 1001.2(d). Based on these provisions, the Departmental
Appeals Board (Board) characterizes as “well established” the principle that a
“conviction” includes “diverted, deferred and expunged convictions regardless of
whether state law treats such actions as a conviction.” Henry L. Gupton, DAB No. 2058
at 8 (2007), aff'd sub nom. Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Tenn. 2008).

The Board explained why, in these I.G. proceedings, the federal definition of
“conviction” must apply. That definition differs from many state criminal law
definitions. For exclusion purposes, Congress deliberately defined “conviction” broadly
to ensure that exclusions would not hinge on the state criminal justice policies. Quoting
the legislative history, the Board explained:

The rationale for the different meanings of “conviction” for
state criminal law versus federal exclusion law purposes
follows from the distinct goals involved. The goals of
criminal law generally involve punishment and rehabilitation
of the offender, possibly deterrence of future misconduct by
the same or other persons, and various public policy goals.
footnote omitted] Exclusions imposed by the I.G., by
contrast, are civil sanctions, designed to protect the
beneficiaries of health care programs and the federal fisc, and
are thus remedial in nature rather than primarily punitive or
deterrent. ... In the effort to protect both beneficiaries and
funds, Congress could logically conclude that it was better to
exclude providers whose involvement in the criminal system
raised serious concerns about their integrity and
trustworthiness, even if they were not subjected to criminal
sanctions for reasons of state policy.

Gupton, at 7-8.

Petitioner also explains that she has complied with all requirements, is clean and sober,
and was not aware of the ramifications of her entering the drug program. I accept these
assertions as true; however they are not bases for overturning a mandatory exclusion.

Because Petitioner’s conviction falls squarely within the statutory and regulatory
definition of “conviction,” she is subject to exclusion. An exclusion brought under
section 1128(a)(3) must be for a minimum period of five years. Act § 1128(c)(3)(B);
42 CFR. § 1001.2007(a)(2).
Conclusion

For these reasons, I conclude that the I.G. properly excluded Petitioner from participation
in Medicare, Medicaid and all federal health care programs, and I sustain the five-year
exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Miracle Deeds Medical Supplies, LLC,
(PTAN: 7411920001),
Petitioner,

v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-614
Decision No. CR4697

Date: September 2, 2016

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
revoke the Medicare enrollment and billing privileges of Petitioner, Miracle Deeds
Medical Supplies, LLC.

I. Background

Petitioner, an orthotics supplier, requested a hearing in order to challenge CMS’s adverse
determination. CMS filed a motion for summary judgment along with six proposed
exhibits that it identified as CMS Ex. 1-CMS Ex. 6. Petitioner filed a brief in opposition
to CMS’s motion and eight proposed exhibits that it identified as MDMS Ex. 1-MDMS
Ex. 8. I receive the parties’ exhibits into the record.

It is unnecessary that I decide whether the criteria for summary judgment are met here
inasmuch as Petitioner did not request a hearing in order to cross-examine the one
witness whose declaration CMS offered. Petitioner offered no testimony on its behalf.
Petitioner listed two witnesses but failed to provide written direct testimony as per my
Acknowledgment and Pre-hearing Order. I decide the case based on the parties’
exchanges.
IL. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether grounds exist for CMS to revoke Petitioner’s Medicare enrollment
and billing privileges.

B. Findings of Fact and Conclusions of Law

Petitioner maintains a business address in Abilene, Texas. The undisputed facts establish
that on two occasions (on December 15 and 18, 2015), a site investigator employed by a
Medicare contractor attempted to visit Petitioner’s place of business in order to conduct a
site inspection. Petitioner’s facility was closed on both occasions even though the
inspector visited the facility during posted business hours. CMS Ex. 2 at 2; CMS Ex. 6 at
495, 6. On the first occasion, there was a “closed” sign, stating that Petitioner’s owner
would return by 12:00 p.m. CMS Ex. 2 at 1; CMS Ex. 6 at 9 5. On the second occasion,
there was nothing posted by Petitioner to explain why it was closed or when it would
reopen. CMS Ex. 2 at 1; CMS Ex. 6 at J 6.

In order to remain eligible for Medicare reimbursement a supplier must be accessible to
the public and staffed during posted hours of operation. 42 C.F.R. § 424.57(c)(7)(C).
Furthermore, a supplier must be operational. 42 C.F.R. § 424.535(a)(5). The term
“operational” means that a supplier, among other things, must be open to the public for
purposes of providing health care related services. 42 C.F.R. § 424.502. The facts
plainly establish that Petitioner failed to meet these requirements. It was not accessible to
the public, and it was not staffed during posted business hours.

CMS may revoke a supplier’s Medicare participation and billing privileges if that
supplier fails to comply with the criteria of 42 C.F.R. §§ 424.57 or 424.535. CMS and its
contractor have that authority here based on Petitioner’s failure to be open during posted
hours of operation and to be operational.

Petitioner does not contend explicitly that it was open during the failed attempts to
conduct on-site inspections of its premises. Rather, it asserts that it had an emergency
phone number and a notice with its proprietor's estimated time of return posted on the
exterior of its premises. According to Petitioner, anyone wishing to meet with its staff or
proprietor could have called that number and arranged a meeting “in a matter of
minutes.” Petitioner’s brief at 1.

Photographs taken by the inspector of the outside of Petitioner’s business show a phone
number painted on the building’s front door. There is no sign stating that this is an
emergency phone number. CMS Ex. 2 at 2. I make no finding as to whether calling that
number would have prompted Petitioner’s proprietor to come down to the site and open
it. Leaving a phone number for potential customers to call does not make a facility open
and accessible during posted hours. Having represented that it would be open at specific
hours, Petitioner was obligated to have someone on the premises during those hours.
Posting a phone number is not an acceptable substitute for being open and accessible.

Petitioner also seems to suggest that the inspector may not have visited the correct
address while attempting to inspect Petitioner’s facility. Petitioner’s brief at 2. No facts
support this contention. I am satisfied from the evidence offered by CMS that the
inspector attempted to conduct on-site inspections at Petitioner’s actual business address.
CMS Ex. 2.

Petitioner’s remaining arguments focus on the hardships that its owners encountered
while attempting to operate the business, hardships that Petitioner contends prevented
them from always operating the business during posted hours. That provides no legal
excuse for failing to be open and accessible during posted hours or failing to be
operational. The regulations governing operations and accessibility do not allow for
exceptions.

Petitioner’s remaining arguments also reduce to assertions that CMS should withhold
imposition of remedies based on considerations of fairness. I do not have authority to
address equitable arguments. Amber Mullins, N.P., DAB No. 2729 (2016).

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Ezmina Lalani, D.O.,
(NPI: 1831407964 / PTAN: 437461 YXPF),
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Respondent
Docket No. C-16-353
Decision No. CR4696
Date: August 30, 2016
DECISION REMANDING AND DISMISSING CASE
This case is remanded to the Centers for Medicare & Medicaid Services (CMS) pursuant
to 42 C.F.R. § 498.56(d).' This case is dismissed pursuant to 42 C.F.R. § 498.70(b) to
permit action by CMS in accordance with current regulations. This dismissal is without
prejudice to any right of Petitioner to request a hearing as to a determination by CMS on

remand that triggers such a right. Either party may request in writing that I vacate, for
good cause, the dismissal within 60 days of the date of this Decision. 42 C.F.R. § 498.72.

' References are to the revision of the Code of Federal Regulations (C.F.R.) in effect at
the time of the initial and reconsidered determinations, unless otherwise stated.
I. Procedural History and Findings of Fact

Novitas Solutions, Inc. (Novitas), a Medicare administrative contractor, notified
Petitioner by letter dated October 13, 2015, that her “Reassignment of Benefits request”
was approved. The letter does not mention approval of a Medicare enrollment
application. The letter stated that Petitioner’s effective date was July 19, 2015.” Centers
for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 12.7 Because the letter only
refers to approval of Petitioner’s reassignment request, the letter could be read to state
that July 19, 2015, was the effective date of the reassignment from Petitioner to EA
Health Physicians Medical Group Texas PA (EA Health) rather than a Medicare
enrollment date. CMS Ex. 12 at 2. At best the letter is unclear.

On October 21, 2015, Petitioner requested reconsideration of the initial determination.
Petitioner requested that the “effective date” be changed to May 1, 2015, the date she first

> Novitas lists Petitioner’s “effective date” as July 19, 2015. CMS Ex. 12 at 2. Novitas’
characterization is in error. The effective date of enrollment for Petitioner as a physician
would be the date that Petitioner’s applications that were processed to completion by
Novitas were filed. 42 C.F.R. § 424.520(d)(1). Novitas actually received Petitioner’s
CMS-855I and CMS-855R applications on August 18, 2015, so the applications were
filed by Petitioner on or before that date. Therefore, August 18, 2015 would be the
effective date of enrollment. Alexander C. Gatzimos, MD, JD, LLC , DAB No. 2730
(2016). July 19, 2015, which is 30 days prior to the effective of enrollment, would be the
earliest date for which Petitioner could retrospectively bill. 42 C.F.R. § 424.521(a). The
effective date and retrospective billing dates were addressed in the reconsidered
determination. CMS Ex. 4 at 2. This is a common error that has recurred for several
years in contractor notices and appears to be based on the imprecise use of terms in some
CMS policies. In its brief, counsel for CMS also incorrectly refers to the first day of the
retrospective billing period as the “effective date” of Petitioner’s enrollment. CMS Br. at
2,7, 9. Counsel is encouraged to be cautious in the use of terms and not simply rely upon
the terms used by the contractor.

> Counsel for CMS failed to follow the direction of the Acknowledgment and Prehearing
Order dated March 7, 2016 (Prehearing Order), paragraph II.D.1, which required that the
“first CMS exhibit will be a copy of the decision that is challenged with copies of the
evidence considered by the hearing officer or official who made the reconsideration
decision.” Counsel’s failure to follow directions makes it difficult to know exactly what
evidence was considered on reconsideration. Counsel should ensure compliance with all
orders to avoid the need for remedial action and unnecessarily complicating the task of
the fact finder.
began providing services to Medicare beneficiaries at her new employer, EA Health.
CMS Exs. 13, 15.

Novitas notified Petitioner by letter dated February 19, 2016, that her request for
reconsideration was denied. CMS Ex. 4. The reconsidered determination states that
Novitas received a CMS-855I (Medicare enrollment application) and a CMS-855R
(reassignment of benefits application) from Petitioner on May 21, 2015. But, because
Petitioner only partially responded to Novitas’ request for additional information, the
May 21 applications were rejected on July 8, 2015. The reconsidered determination
states further that Novitas received a CMS-855I and two CMS-855R applications from
Petitioner on August 18, 2015, and these applications were approved on October 13,
2015. The reconsidered determination explained that the effective date of Medicare
billing privileges would be August 18, 2015, the date the applications were received, and
that pursuant to 42 C.F.R. § 424.521(a), the first day authorized for retrospective billing
would be July 19, 2015. CMS Ex. 4 at 2. It is clear from the reconsidered determination
that the reconsideration hearing officer treated Petitioner as a new enrollee in Medicare.
The reconsideration hearing officer did not take note of the fact that the initial
determination dated October 13, 2015, approved a reassignment but did not specifically
treat Petitioner as newly enrolling in Medicare. The reconsidered determination does not
reflect that the hearing officer considered publically available evidence that Petitioner
may have already been enrolled in Medicare. If Petitioner was already enrolled and
merely requesting to reassign her benefits, the reconsidered determination was in error
both as to the facts and CMS policy related to an enrolled provider reassigning benefits.
Accordingly, remand is necessary to permit a new reconsidered determination.

On February 26, 2016, Petitioner’s employer, acting as Petitioner’s representative,
requested a hearing (RFH) before an administrative law judge (ALJ). RFH. Petitioner
alleges that her application was for the reassignment of benefits to her employer and that
she requested an effective date of April 30, 2015 for the reassignment. Petitioner asks
that the effective date of the reassignment be no later than May 21, 2015, the date Novitas
received her initial CMS-855B. RFH. The case was assigned to me on March 7, 2016,
for hearing and decision, and a Prehearing Order was issued at my direction.

CMS filed a motion for summary judgment, a brief in support of its motion, and CMS
Exs. | through 15 on March 28, 2016. Petitioner filed her response to the CMS motion
for summary judgment with no exhibits on May 4, 2016 (P. Br.). On May 20, 2016,
CMS filed a reply. Petitioner has not objected to my consideration of CMS Exs. 1
through 15 and they are admitted as evidence.

Petitioner’s National Provider Identifier (NPI) is 1831407964. CMS Ex. 12 at 2. The
NPI, a single, unique, ten-digit identifier for each health care provider, is required by 45
C.F.R. §§ 162.406 - .410. Pursuant to 45 C.F.R. § 162.408(f), CMS disseminates
National Provider System (NPS) information, including NPIs, upon approved requests.
CMS maintains the National Plan and Provider Enumeration System (NPPES) NPI
Registry website (https://npiregistry.cms.hhs.gov/) to provide NPI information upon
public request. The NPPES NPI Registry indicates that Petitioner may have been
enrolled in Medicare as early as September 23, 2010, and that the entry in the registry
was updated as of April 15, 2014. The registry indicates that the NPI continues in active
status.

IL. Discussion
A. Applicable Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. Payment under the program for services rendered to
Medicare-eligible beneficiaries may only be made to eligible providers of services and
suppliers.* Administration of the Part B program is through contractors such as
Noridian. Act § 1842(a) (42 U.S.C. § 1395u(a)).

The Act requires the Secretary of Health and Human Services (the Secretary) to issue
regulations that establish a process for the enrollment of providers and suppliers,
including the right to a hearing and judicial review of certain enrollment determinations.
Act § 1866(j) (42 U.S.C. § 1395ce(j)).

Pursuant to 42 C.F.R. § 424.505, a provider or supplier must be enrolled in the Medicare
program and be issued a billing number to have billing privileges and to be eligible to
receive payment for services rendered to a Medicare-eligible beneficiary. The effective
date of enrollment in Medicare of a physician, nonphysician practitioner, and physician
and nonphysician practitioner organizations is governed by 42 C.F.R. § 424.520(d). The

* Petitioner is a “supplier” under the Act and the regulations. A “supplier” furnishes
services under Medicare and the term supplier applies to physicians or other practitioners
and facilities that are not included within the definition of the phrase “provider of
services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider of services,” commonly
shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing
facilities, comprehensive outpatient rehabilitation facilities, home health agencies,
hospice programs, and a fund as described in sections 1814(g) and 1835(e) of the Act.
Act § 1861(u) (42 U.S.C. § 1395x(u)). The distinction between providers and suppliers is
important because they are treated differently under the Act for some purposes. Act

§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)).
effective date of enrollment for a physician or nonphysician practitioner may only be the
later of two dates: the date when the physician filed an application for enrollment that
was subsequently approved by a Medicare contractor charged with reviewing the
application on behalf of CMS; or the date when the physician first began providing
services at a new practice location. /d. An enrolled physician or nonphysician
practitioner may retrospectively bill Medicare for services provided to Medicare-eligible
beneficiaries up to 30 days prior to the effective date of enrollment, if circumstances
precluded enrollment before the services were provided. Retrospective billing for up to
90 days prior to the effective date of enrollment is permitted only in case of a
Presidentially-declared disaster pursuant to 42 U.S.C. §§ 5121-5206. 42 C.F.R.

§ 424.521.

The Medicare beneficiary, one who is entitled to benefits under Medicare part A or
enrolled under part B, is the individual covered by Medicare and entitled to request
payment for Medicare-covered health care items and services. Act § 1802. The
assignment of the right to file a claim for Medicare coverage of health care charges from
a Medicare beneficiary to a Medicare-enrolled provider or supplier is limited. The
reassignment of the right to file a Medicare-claim from an enrolled provider or supplier to
another is very limited. 42 C.F.R. pt. 424, subpt. F. Reassignment to an employer is
permitted from a supplier, such as a physician, when reassignment is required as a
condition of employment. 42 C.F.R. § 424.80(b)(1). The Secretary’s regulations do not
specify an effective date for an authorized reassignment. 42 C.F.R. pt. 424, subpt. F.
However, CMS has issued a policy statement found in the Medicare Program Integrity
Manual, CMS Pub. 100-08 (MPIM) that directs CMS and Medicare contractors regarding
determinations related to reassignments. MPIM § 15.5.20A requires that a CMS-855R
must be completed and filed by an individual that wants to reassign benefits to an eligible
entity or to terminate a reassignment. Both the party seeking to reassign (reassignor) and
the party to whom reassignment is intended (reassignee) must be enrolled in Medicare. A
party seeking to reassign that is not enrolled may submit a CMS-855I concurrently with
the CMS-855R to accomplish enrollment and reassignment. If the party receiving the
reassignment is not enrolled, that party must file the appropriate version of CMS-855.
MPIM §15.5.20A. The MPIM further provides that:

If the reassignor currently has an active Form CMS-8551
on file and is only submitting a Form CMS-855R to
establish a new reassignment, the effective date shall be
the date the practitioner began or will begin rendering
services with the reassignee. If the Form CMS-855R is
accompanied by a Form CMS-855], the effective date of the
enrollment and the reassignment shall be consistent with the
30-day rule (i.e., the later of the date of filing or the date the
reassignor first began furnishing services at the new location)
specified in section 15.17 of this chapter.
MPIM § 15.5.20E.5 (emphasis added).

MPIM 15.8.1A addresses when a contractor should return an application. Among other
situations, the policy requires the return of an application when the application is not
necessary for the transaction requested. The policy lists the example of an enrolled
physician who wants to reassign benefits and submits both a CMS-855I and a CMS-
855R, which appears to be the case before me. The policy specifies that because only the
CMS-855R is required, the CMS-855I “shall be returned.” MPIM 15.8.1A.

B. Analysis

Pursuant to 42 C.F.R. § 498.56(d), I may remand a case to CMS for consideration of a
new issue and a new determination.

Publically available information from CMS through the NPPES NPI Registry indicates
at Petitioner may have been enrolled in Medicare as early as September 23, 2010, and
that the entry in the registry was updated as of April 15, 2014. The registry indicates that
the NPI continues in active status. There is no evidence to suggest that Petitioner’s
enrollment was terminated at any time.

ct

If Petitioner was enrolled at the time she submitted the CMS-855Is and CMS-855Rs
involved in this case and, if as Petitioner indicates, she was merely requesting
reassignment to a new employer, CMS policy requires that the CMS-855Is be returned to
Petitioner and treated as if never filed. MPIM § 15.8.1.

If Petitioner was already enrolled and only attempting to reassign benefits to a new
employer, the effective date of that reassignment should be determined according to
MPIM § 15.5.20E.5, as there is no regulatory provision establishing an effective date for
a reassignment by a physician to an employer.

The hearing officer does not indicate in the reconsidered determination that CMS records
were checked to confirm Petitioner’s enrollment status. The reconsidered determination
does not address why the initial determination addressed only reassignment. If Petitioner
was already enrolled and only reassigning her benefits to a new employer, the
reconsidered determination incorrectly determined an effective date of enrollment and
failed to establish an effective date of reassignment consistent with the published policy
of CMS.

Accordingly, this case is remanded to CMS for a new reconsidered determination that
addresses the issues specified herein; such additional issues as CMS and the hearing
officer determine necessary and appropriate; and action consistent with the Act,
regulations, and CMS policy. This case is dismissed to permit action by CMS. The
parties may request that an order dismissing a case be vacated within 60 days for good
cause shown pursuant to 42 C.F.R. § 498.72. If CMS completes its action on this case
more than 60 days from the date of this Order and Petitioner desires my further review,

Petitioner will file a request for hearing referring to this case with a copy of this Decision
attached.

III. Conclusion

For the foregoing reasons, this case is remanded and dismissed.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Hartford HealthCare at Home, Inc.
(PTAN: 07-7041, NPI: 1073529566),
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-419
Decision Number CR4695
Date: August 30, 2016
DECISION
I sustain the imposition of civil money penalties against Petitioner, Hartford HealthCare
at Home, Inc., in amounts of $5,000 per day for each day of a period that began on
December 7, 2015, and that ran through January 7, 2016.
I. Background
Petitioner, a home health agency, filed a hearing request to challenge the determination
by the Centers for Medicare & Medicaid Services (CMS) to impose civil money penalties
against it. CMS filed a motion for summary judgment along with nine proposed exhibits
that it identified as CMS Exhibit (Ex.) 1-CMS Ex. 9. Petitioner opposed the motion and
filed six proposed exhibits that it identified as P. Ex. 1-P. Ex. 6. I receive the parties’
exhibits into the record.
It is unnecessary that I decide whether the criteria for summary judgment are met here.
CMS did not offer any witnesses’ testimony. Petitioner offered affidavits from three
witnesses, but CMS did not request to cross-examine these individuals. Consequently, no

point would be served by holding an in-person hearing. I decide the case based on the
parties’ written exchanges.
II. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether CMS may be estopped from imposing a remedy against Petitioner.
B. Findings of Fact and Conclusions of Law

This case involves a single and narrow issue, that being whether I should estop CMS
from imposing civil money penalties against Petitioner. Petitioner has not disputed the
findings of noncompliance on which CMS bases its penalty determination, nor has it
disputed the duration of its noncompliance or the reasonableness of the penalty amount.
Rather, Petitioner’s sole argument is that it was misled by statements made to it by a
representative of the State of Connecticut into believing that, if it corrected its
noncompliance by a date certain, no penalties would be imposed against it.

Petitioner’s argument is without merit. As a matter of law, CMS generally may not be
estopped from imposing remedies, including civil money penalties, against a
noncompliant facility. Office of Pers. Mgmt. v. Richmond, 496 U.S. 414 (1990). That
principle has been upheld repeatedly. Amber Mullins, N.P., DAB No. 2729 (2016).
Indeed, neither the administrative law judge nor the Departmental Appeals Board has
authority to redress claims for equitable relief. US Ultrasound, DAB No. 2302 (2010).

Petitioner argues that this case falls within an exception to the general rule, asserting that
a government agent affirmatively misled it into delaying correcting its deficiencies.
Petitioner characterizes the statements made to it by this agent as active malfeasance
rather than mere error.

I find no basis in the record to support Petitioner’s argument. Petitioner rests its case on
statements that are, at worst, ambiguous. There is nothing in those statements suggesting
malfeasance.

Petitioner received a series of notices from a representative of the State of Connecticut in
the wake of a survey in which it was found noncompliant with Medicare participation
requirements. P. Ex. 1. These letters, which plainly were intended to warn Petitioner of
the adverse consequences of its noncompliance, all contained the following language:

If you believe these deficiencies have been corrected, you may contact. . .
with your written credible allegation of compliance. If you choose and so
indicate, the . . . [plan of correction] may constitute your allegation of
compliance. We may accept the written allegation of compliance and
presume compliance until substantiated by a revisit .. . or other means. Jn
such a case, neither the CMS Regional Office nor the State Medicaid
Agency will impose the previously recommended remedy(ies) at that time.

P. Ex. 1 at 2 (emphasis added).

The State superseded these notices with an amended notice, dated January 8, 2016, in
which it deleted language concerning possible non-imposition of remedies. Jd. at 10-11.

The language in the quoted paragraph in the pre-January 8 notices suggests that remedies
might not be imposed against Petitioner if it submitted allegations of compliance that
were subsequently verified. But, it contains nothing suggesting that either the State of
Connecticut or CMS would definitely withhold imposition of remedies in that event. The
use of the word “may” and the subsequent reference to “in such a case” plainly implies
that the State and CMS had discretion to decide whether, and under what circumstances,
they would impose remedies.

Petitioner can argue with some justification that the communications between it and the
representative of the State were ambiguous. It cannot argue credibly that anyone
promised it that remedies would be withheld if it corrected its deficiencies. I note that
Petitioner’s witnesses do not aver that a State representative ever made such a promise to
them. P. Ex. 4; P. Ex. 5; P. Ex. 6. These witnesses aver only that the State’s
representative neither warned them explicitly that remedies would be imposed nor did she
ever state anything in meetings that contradicted the quoted language of the notices.

These notices and the subsequent meetings with the State’s representative could have
given Petitioner reason to believe that remedies might ultimately be withheld. But, these
notices do not affirmatively tell Petitioner that remedies would be withheld. Therefore,
Petitioner has not established grounds for finding an exception to the rule that estoppel
will not lie against the government.

/s/
Steven T. Kessel
Administrative Law Judge