Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Nightingale Home Healthcare, Inc.
(CCN: 15-7474),

Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-16-254
Decision No. CR4605

Date: May 9, 2016

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose the following remedies against Petitioner Nightingale Home Healthcare, Inc.:

e Termination of Petitioner’s participation in the Medicare program effective
December 10, 2015.

e Imposition of civil money penalties in the amount of $10,000 per day for each day
of a period that began on November 9, 2015, and ending December 10, 2015.

I base my decision on evidence establishing that Petitioner violated regulatory conditions
governing its participation in Medicare and that the level of its noncompliance was so
egregious as to put Medicare beneficiaries at immediate jeopardy.
I. Background

Petitioner requested a hearing to challenge CMS’s remedy determinations.' The parties
agreed that the case could be heard based on their written exchanges. CMS submitted a
brief (CMS Br.) plus 56 proposed exhibits that it identified as CMS Ex. 1 —- CMS Ex. 56.
Petitioner submitted a brief (P. Br.) plus 20 proposed exhibits that it identified as P. Ex. 1
—P. Ex. 20. It also submitted seven additional exhibits consisting of written declarations
of witnesses and related documents that it did not identify. I identify these as follows:
declaration of Sharon Kennell — P. Ex. 21; declaration of Michelle Olson — P. Ex. 22;
declaration of Barry Mathis — P. Ex. 23; declaration of Piper Brar (with attached
documents) — P Ex. 24; declaration of Toshia Hicks — P. Ex. 25; declaration of Joseph V.
Basile — P. Ex. 26; and curriculum vitae of Sharon Kennell — P. Ex. 27. I receive into the
record CMS Exs. 1-56 and P. Exs. 1-27.

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

The issues are whether Petitioner failed to comply with one or more conditions governing
Medicare participation of home health agencies at a level of noncompliance that
comprises immediate jeopardy for patients under Petitioner’s care, and whether CMS’s
remedy determinations are authorized by applicable regulations.

B. Findings of Fact and Conclusions of Law

In order to participate in Medicare a home health agency such as Petitioner must comply
with conditions of participation that are established at 42 C.F.R. Part 484. Failure by an
agency to comply with even one condition of participation is grounds for CMS to
terminate that agency’s Medicare participation. Social Security Act (Act) § 1866(b)(2);
42 C.F.R. § 489.53(a)(3). If there is a finding of immediate jeopardy-level
noncompliance then CMS will terminate an agency’s participation no more than 23 days
from the last day of the survey at which the finding of immediate jeopardy was made.
42 C.F.R. § 488.825(a).” The term “immediate jeopardy” is defined by regulations to

' A federal bankruptcy court enjoined CMS’s imposition of a remedy. I understand that
the bankruptcy court’s order is presently under appeal.

> In fact, CMS may terminate a home health agency’s participation in an immediate
jeopardy situation with less than 23 days’ notice. The regulations authorize “immediate”
termination where immediate jeopardy is found. 42 C.F.R. § 488.825(a)(1). Where
termination of participation is imposed because of immediate jeopardy CMS may give
the home health agency only two days’ notice of the termination. 42 C.F.R.

§ 489.53(d)(2)(B)(iii). Thus, termination on 23 days’ notice in an instance of immediate
mean “a situation in which the . . . [home health agency’s] noncompliance with one or
more requirements of participation has caused, or is likely to cause serious injury, harm,
impairment, or death to a patient(s).” 42 C.F.R. § 488.805. Where there is a finding of
immediate jeopardy and a home health agency challenges that finding, the finding may be
overturned only where there is a showing that CMS’s determination is clearly erroneous.
42 CFR. § 498.60(c)(2).

The regulations authorize imposition of remedies in addition to termination of
participation in the instance of a home health agency’s noncompliance with participation
requirements. These remedies include civil money penalties. 42 C.F.R. § 488.820(a).
Penalties may be imposed for each day of an agency’s noncompliance regardless whether
there is a finding of immediate jeopardy. 42 C.F.R. § 488.845(a)(1). Penalties of up to
$10,000 per day may be imposed where there is immediate jeopardy that results in actual
harm to residents. 42 C.F.R. § 488.845(a)(3)(i). There are additional regulatory factors
that may be considered in determining the appropriate amount of a civil money penalty.
42 C.F.R. § 488.815(a)-(f), including: the extent to which deficiencies pose immediate
jeopardy; the nature, incidence, manner, degree, and duration of deficiencies or
noncompliance; the agency’s overall compliance history and the presence of repeat
deficiencies; the extent to which deficiencies are directly related to the failure to provide
quality patient care; the extent to which an agency is part of a larger organization with
performance problems; and, an indication of any system-wide failure to provide quality
care.

The evidence in this case overwhelmingly proves that Petitioner failed to comply with
more than one condition of participation and that its noncompliance put its patients in
immediate jeopardy. Petitioner was surveyed twice on behalf of CMS — on November 9,
2015, and again on December 10, 2015 — and each survey established immediate
jeopardy-level noncompliance. As I discuss above, CMS could have terminated
Petitioner’s participation on as early as November 9, 2015, based on the noncompliance
findings made at the November survey. It had additional, albeit unnecessary, justification
to terminate Petitioner’s participation based on the evidence of noncompliance unearthed
at the December 10 survey. CMS’s determination to terminate Petitioner’s participation
is thus more than supported by the evidence.

Moreover, there is powerful evidence to support imposition of civil money penalties of
$10,000 per day against Petitioner for each day of the period beginning on November 9,
2015, and ending on December 10, 2015. Petitioner manifested immediate jeopardy-
level noncompliance throughout this period and the noncompliance was particularly
egregious in that it harmed patients.

jeopardy-level noncompliance is a matter of administrative discretion and not a legal
requirement.
CMS found that Petitioner violated numerous conditions of participation at both the
November and December surveys. I find it unnecessary to address all of these instances
of noncompliance. CMS has imposed remedies that are only available upon a finding of
immediate jeopardy, including the termination of Petitioner’s provider agreement within
23 days of the last survey and a $10,000 per day civil money penalty. See 42 C.F.R.

§§ 488.825, 488.820. Therefore, I address only the findings of immediate jeopardy-level
noncompliance made by CMS at the November survey and evidence establishing that
Petitioner failed to eliminate immediate jeopardy as of the December survey. These
findings and their supporting evidence, in and of themselves, are sufficient basis for the
remedies that CMS elected to impose.

1. Immediate jeopardy-level noncompliance at the November survey.

a. Failure to comply with the condition stated at 42 C.F.R.
§ 484.18.

The applicable regulation requires that patients of a home health agency be “accepted for
treatment on the basis of a reasonable expectation that the patient’s medical, nursing, and
social needs can be met adequately by the agency in the patient’s place of residence” and
that care follow “a written plan of care established and periodically reviewed by a doctor
....” 42 CER. § 484.18.

Petitioner violated these requirements so egregiously that it caused immediate jeopardy
for its patients:

e Its staff frequently failed to conduct patient visits according to the patients’ care
plans and physicians’ orders. CMS Ex. 3 at 222-350. These frequent failures to
provide care not only were derelictions of the condition requiring Petitioner to
meet patients’ nursing needs but they harmed or placed patients at great risk for
arm. For example, Petitioner’s staff neglected Patient 4 egregiously in direct
violation of his physician’s orders. It failed to provide the patient with prescribed
ome health visits for a period of nearly a month, failed to ensure the patient’s
certification for home health was up-to-date, failed to provide him with prescribed
care, and failed to carry out the patient’s physician’s orders. When Petitioner
finally sent a nurse to visit the patient he was discovered to be suffering from a
ife-threatening infection (sepsis).

Patient 4 required the use of a Foley catheter and had a history of urinary tract
infections. | take notice that a Foley catheter is a catheter that is inserted into a
patient’s bladder in order to drain the bladder of urine. Patient 4’s physician
ordered that the catheter be changed monthly and as needed and that the patient
receive bladder irrigation with a sterile solution as needed. CMS Ex. 9 at 20. In
spite of these orders Petitioner’s staff failed to provide care to the resident in

September and early October 2015, not sending a registered nurse to see the
patient during a period of about a month. CMS Ex. 9 at 54.° Petitioner’s staff also
failed to reassess the patient during this period and failed to revise the patient’s
plan of care as needed. CMS Ex. 50 § 136. As of September 7, 2015, Patient 4’s
certification period ended with no recertification, nor was there any update to
Patient 4’s care plan for further skilled nursing care.* Id.; CMS Ex. 9 at 29; P. Ex.
2 at 22. Patient 4 was not discharged from Petitioner’s care, either. CMS Ex. 50
§| 138; see 42 C.F.R. § 484.55(d)(3). Petitioner simply stopped providing skilled
nursing visits. By October 5, 2015, Patient 4 had developed a fever and was
lethargic. The patient’s wife called his urologist who ordered a urinalysis be
conducted as soon as possible. The patient’s wife then called Petitioner and
finally precipitated a home visit. When the nurse arrived on that date she found
Patient 4 to be in severe distress. CMS Ex. 9 at 60. The patient was hospitalized
and diagnosed to be suffering from sepsis. Id. at § 124.

There were numerous other instances in which Petitioner’s staff failed to conduct
scheduled or ordered patient visits. Patients who did not receive visits included
Patients 1,5, 10, 11, 12, 13, and 14. CMS Ex. 50 4] 69, 229, 346, 395, 420, 452;
CMS Ex. 51 §§ 16, 29; CMS Ex. 55 at 20.

e Petitioner failed to provide its patients with care that conformed to the residents’
written care plans and physicians’ orders. This failure was shown most notably in
the failure of Petitioner’s staff to monitor the effects of the anti-coagulant
Coumadin on Patient | and to notify the patient’s physician that the patient was
experiencing extremely adverse effects from administration of Coumadin.

On August 11, 2015, at an initial assessment, the patient showed a Prothrombin
Time/International Normalized Ration (PT/INR) reading of 5.1. CMS Ex. 7 at
121. I take notice that PT/INR is a measurement of the time it takes for an

> The evidence establishes that the nurse who had been seeing Patient 4 on a regular
basis was injured in early September 2015 and stopped making visits to the patient. Id.
In the ensuing weeks Patient 4’s wife called Petitioner on numerous occasions in an
unsuccessful effort to have a nurse come and visit the patient. CMS Ex. 6 at 11.

* Petitioner points out that an addendum to Patient 4’s care plan was effective between
September 8 and November 6, 2015. P. Br. at 6; P. Ex. 2 at 22. That addendum only
addressed home health aides, and did not include any other care for Patient 4. The
addendum was likely just that — an addition to, not a replacement for, Patient 4’s care.
Indeed, Petitioner utterly fails to explain or produce any evidence as to why skilled
nursing visits would have been eliminated for a patient that was ordered to have routine
changes and monitoring of his indwelling Foley catheter, which is undeniably beyond the
scope of a home health aide.
individual’s blood to clot. The higher the reading the longer it takes for blood to
clot. Therapeutic INR range is between 2 and 3, and anything higher than 3 poses
angers to the patient from potential bleeding. CMS Ex. 50 457. The patient’s
physician was notified and he left orders that Coumadin be withheld from the
patient for two days and that the patient’s PT/INR then be rechecked. Jd. § 58.
The physician received no response for a week and finally called Patient 1’s
family directly. He learned that no PT/INR reading had been done for Patient 1
since August 11. Jd. § 60. A physician’s note on August 20, 2015, says that
Patient 1 needed a PT/INR test that day, but there is no evidence that test actually
appened. CMS Ex. 7 at 159.

On August 24, 2015, the physician ordered Coumadin be restarted for Patient 1
and that the patient’s PT/INR be read two days later. CMS Ex. 7 at 158.

However, a nurse did not attempt to visit the patient until the evening of August
25, contrary to the patient’s family’s request that visits be made during morning
ours. CMS Ex. 50 § 68. A nurse finally checked the patient’s PT/INR on August
28, 2015. Id. § 72. On August 31, the patient’s family informed Petitioner that
the patient had been taken to the emergency room with an extremely high INR
reading. CMS Ex. 7 at 17. Petitioner’s staff did not notify the patient’s physician
about this situation.

On September 7, 2015, Patient 1 returned to the emergency room suffering from
Coumadin toxicity. At the emergency room the patient’s PT/INR reading was 11,
indicating that the patient was at extreme risk for bleeding. CMS Ex. 7 at 222.

Petitioner’s response to this evidence consists, in the main, with picking nits with the
surveyors’ findings. Indeed, Petitioner devotes much of its brief to finding fault with the
procedures used by the surveyors, their manner of obtaining evidence, or in identifying
alleged minor errors that the surveyors made. These arguments beg the question of
Petitioner’s compliance because they do not address the central findings that I have
discussed above.

In particular, Petitioner does not deny the failure by its staff to provide maintenance of
Patient 4’s Foley catheter and to assess the resident for signs of infection. It does not
deny that there were no visits by a registered nurse to Patient 4 during the period in
September and early October 2015. Petitioner argues that on September 25, 2015, it sent
a licensed practical nurse to visit Patient 4 to “check on supplies for . . . ‘[the patient’s]
feeding tube.” P. Br. at 6. But, Petitioner does not assert that a registered nurse visited
Patient 4 at any time between early September and October 5. Nor does Petitioner
contend that its staff actually provided skilled maintenance of the patient’s Foley catheter
during the early September — October 5 period. Thus, CMS’s assertions of immediate
jeopardy-level noncompliance are unrebutted.

Petitioner argues that it is unfair to conclude that its staff caused Patient 4 to experience
sepsis and subsequently to die through its failure to provide care to the resident. That
assertion notwithstanding, the reasonable inference that I draw from the evidence is that
Petitioner’s staff’s neglect of Patient 4 was a direct and contributing cause to the patient’s
development of an infection. The obvious reason that the patient’s physician ordered
regular checks of the patient’s catheter and irrigation is that a catheter can be an entry
point for infectious germs. Petitioner and its staff utterly disregarded the physician’s
instructions for a month, at the end of which time the resident had developed an infection
later diagnosed as sepsis. That is far more evidence than one needs to infer cause and
effect.

Nor does Petitioner provide credible rebuttal to the evidence that CMS offered
concerning the care that its staff provided to Patient 1. It argues about the number of
telephone contacts with the patient’s physician and it accuses the surveyors of making
inaccurate statements about the communications with members of the patient’s family.
But, these arguments are red herrings. At no point does Petitioner deny that its staff
failed to do PT/INR tests as ordered and that it failed to communicate results to the
patient’s physician. At bottom, the deficiency asserted by CMS is that Petitioner failed to
monitor Patient 1’s clotting times closely and thereby allowed the patient to develop
Coumadin toxicity. Petitioner offers no rebuttal to that.

b. Failure to comply with the condition stated at 42 C.F.R.
§ 484.30.

The regulation at issue requires a home health agency to provide “skilled nursing services
by or under the supervision of a registered nurse and in accordance with [the patient’s]
plan of care.” 42 C.F.R. § 484.30. CMS asserts that Petitioner’s staff failed to comply
with this requirement, specifically, in providing ordered care including wound care to
patients, with the consequence that patients were put at grave risk for serious harm.

There is overwhelming evidence to support this assertion. That evidence is particularly
strong in the case of the care that Petitioner’s staff provided to Patient 5. The care that
Petitioner’s staff provided to this patient is not only poorly documented but it is
impossible to discern from Petitioner’s own records exactly what care the staff provided
to him. One cannot tell from the patient’s record how many wounds the patient was
suffering from nor can one discern the condition of these wounds or precisely what
treatment the patient was receiving for them. CMS Ex. 50 4 197-237. For example,
nurses used “Wound #1” to describe at least two separate wounds on Patient 5’s legs and
feet. CMS Ex. 10 at 77, 79. Other notes document a traumatic wound on Resident 5’s
right shin, while subsequent notes identify what is presumably the same wound on his left
shin. CMS Ex. 10 at 79, 80, 83.
Such absent or poor documentation only supports the conclusion that Petitioner did not
follow Patient 5’s care plan for wound care. Moreover, the dangers posed by improper or
poorly documented wound care are obvious. Infection is one obvious likely consequence
of poor wound care. In the case of Patient 5 Petitioner’s staff left the patient exposed to
the risk of infection by failing to document the wound care that it provided to him. That
is immediate jeopardy-level noncompliance.

CMS alleges also that Petitioner’s staff violated the requirements of the regulation by
providing unauthorized treatments to various patients and it offered evidence that
strongly supports this assertion. CMS Ex. 50 §§j 206, 440. In part, it appears that this
problem stemmed from Petitioner’s staff not reporting new issues to patients’ physicians.
See, e.g., CMS Ex. 10 at 77; CMS Ex. 50 § 208. These actions by Petitioner’s staff
further jeopardized patients. A home health agency may not provide treatments to
residents that are not authorized by a physician.

Petitioner offered no evidence to rebut CMS’s assertions. It does not deny that its staff
failed to document the wound care that it provided (if it provided care at all) to Patient 5.
Nor does it deny that its staff provided unauthorized treatments to some patients. It offers
arguments concerning whether some of the care provided by its staff to Patient 5 was, in
fact, authorized by a physician. But, whether or not this care was authorized, Petitioner’s
assertions fail to address the bulk of the evidence of immediate jeopardy-level
noncompliance offered by CMS and certainly does not establish that the immediate
jeopardy finding was erroneous.

2. Failure by Petitioner to prove that it had removed immediate
jeopardy-level noncompliance as of the December survey.

As I discuss above CMS had the authority to terminate Petitioner’s participation
immediately based on the findings of immediate jeopardy-level noncompliance made at
the November survey. It was under no obligation to allow Petitioner the opportunity to
correct the deficiencies that had been identified. However, CMS held its imposition of
the remedy of termination of participation in abeyance pending its receipt of several plans
of correction from Petitioner and the outcome of the December revisit survey. CMS Ex.
37 at 33; CMS Ex. 38 at 1-2; CMS Ex. 509511.

The fact that CMS gave Petitioner the opportunity to correct its immediate jeopardy-level
noncompliance did not confer any rights on Petitioner. It remained Petitioner’s burden to
prove that, in fact, it had eliminated immediate jeopardy. Meridian Nursing Ctr., DAB
No. 2265 at 21 (2009), aff’d sub nom. Fal-Meridian Inc. v. U.S. Dept. of Health &
Human Servs., 604 F.3d 445 (7th Cir. 2010). As I discuss below, Petitioner plainly
failed to meet that burden. It did not prove that it had eliminated immediate jeopardy-
level noncompliance as of the December survey.
The evidence strongly supports the conclusion that Petitioner failed to eliminate
immediate jeopardy in the following respects: (1) its staff continued to fail to document
wound care adequately; (2) the staff continued to fail to conduct PT/INR tests as ordered
and to document test results; (3) the staff continued to fail to visit patients as scheduled;
and (4) the staff continued to fail to review patient medical records and patient plans of
correction in order to sure that all necessary care was being provided to patients as
ordered.

For example, Patient 31 was identified in Petitioner’s records as having six surgical
wounds. CMS Ex. 45 at 12, 19-23, 39. Applicable standards of nursing care required
Petitioner’s staff to document and assess each of those wounds. CMS Ex. 53 § 13.
Clearly, failure to document and assess wounds can put a patient at a grave risk for
infection. However, Petitioner’s staff failed to assess the patient’s wounds during visits
on November 21 and 24, 2015. CMS Ex. 45 at 41-44. One of Petitioner’s staff nurses
visited the patient on December 2 and 3, 2015. However, the nurse failed even to
mention the patient’s wounds in the nursing notes and failed to assess them.

One element of Petitioner’s plan of correction called for staff training on documenting
wounds. CMS Ex. 37 at 53. It is obvious from the evidence cited above that, if training
was conducted, it was ineffective.

As another example, Patient 29 was scheduled to receive a PT/INR test on November 30,
2015. CMS Ex. 43 at 16, 22, 27-28. But, the patient did not receive the test as
scheduled. It was not administered until the following day, December 1, 2015. CMS Ex.
43 at 2, 29, 63; CMS Ex. 52 § 18. Petitioner’s failure to administer the PT/INR test
timely contravened Petitioner’s plan of correction, which specifically required the staff to
complete PT/INR tests as ordered on specific dates and times. CMS Ex. 37 at 52.

Evidence obtained at the December survey establishes that Petitioner’s staff continued to
fail to perform patient visits as scheduled. For example, the nurse assigned to perform
patient visits to Patient 30 during the week of November 21-26, 2015, failed to make
those visits. CMS Ex. 44 at 12-13. Petitioner’s records report that Patient 30 or his or
er family refused visits during that week. I find this documentation not to be credible
given that Patient 30 denied canceling nursing visits during that week. CMS Ex. 38 at
10; CMS Ex. 44 at 2. Furthermore, if the patient had in fact canceled the visit scheduled
for that week, the staff was obligated to notify Petitioner’s management and the patient’s
physician of the cancellation. There is nothing in Petitioner’s record showing that such
notification was made. CMS Ex. 30 at 80; CMS Ex. 37 at 38-39; CMS Ex. 44 at 12.

The December survey also unearthed numerous failures by Petitioner to follow patient
plans of care and physicians’ orders. For example, Petitioner failed to update Patient 28’s
plan of care to show that the patient was receiving a new dosage of Coumadin. CMS Ex.
42 at 7-9; 27; 30. It also failed to provide physician-ordered education to Patient 28

10

regarding the urinary disease process. CMS Ex. 42 at 10, 13. As another example,
Petitioner failed to obtain orders from a physician for treatment of a wound sustained by
Patient 30. CMS Ex. 44 at 9-10; CMS Ex. 50 §§ 525-527. A nurse visited Patient 30 on
November 27, 2015. However, the nurse failed to assess the patients’ lower extremities
and to document the treatment (if any) that the nurse provided for the patient’s wound.
CMS Ex. 44 at 14.

I do not find that Petitioner persuasively rebutted CMS’s allegations of continued
immediate jeopardy-level noncompliance. Petitioner argues that only one nurse visited
Patient 31 and that the nurse observed the resident for signs of wound infection on each
visit. Petitioner suggests that there was no harm inherent in the nurse’s failure to
document her assessments because of the consistency of care: she would remember from
visit to visit whether the patient’s wounds were improving or deteriorating. P. Br. at 15.
But, this argument misses CMS’s point entirely. Petitioner was under a duty to document
the condition of its patients’ wounds. That duty was not some abstract or sterile
requirement. The safety of the patient depended on the condition of the wounds being
documented accurately and consistently. Human memory is imperfect and that is why
documentation is essential. A nurse — who presumably was assigned patients in addition
to Patient 31 — cannot reasonably be assumed to remember precisely what condition a
patient’s wounds are in from visit to visit. Furthermore, suppose the nurse had become ill
and a substitute was needed? How would the substitute know how the patient’s wounds
were progressing without a documentary record of the wounds? Finally, Petitioner’s staff
and nurses are not the only individuals who might need access to the patient’s record.

The patient’s physician, for example, needs documentation of the progress of wounds
towards healing.

As respects Patient 29, Petitioner effectively admits that its staff failed to perform
PT/INR testing timely. It argues, however, that the patient continued to use his own
PT/INR test machine. P. Br. at 13. That, apparently, is Petitioner’s excuse for its staff
not performing the test. I find that argument to be unpersuasive for several reasons.
First, Petitioner’s staff had a duty to perform PT/INR tests whether or not a patient was
performing tests on his own. The staff was obligated to do so pursuant to a physician’s
orders. Indeed, the staff had no way of knowing — if tests were being conducted in its
absence — whether those tests were properly conducted and accurate. Second, the
evidence establishes that Resident 29 suffered from an injury to his hand that made it
impossible for him to perform PT/INR testing personally. CMS Ex. 52 4 11-12.
Petitioner asserts that someone was always available to assist the patient. But, in fact,
Petitioner had no assurance that was the case and, even if that were true, that did not
excuse Petitioner from its obligation to perform PT/INR testing pursuant to a physician’s
order.
11

Concerning Patient 30, Petitioner offers nothing to rebut CMS’s evidence that
Petitioner’s staff failed to visit the resident between November 21-26, 2015. Petitioner’s
staff documented that Patient 30 refused nursing visits on November 24 and 25, but
Patient 30 told surveyors that she did not cancel those visits. See CMS Ex. 44 at 12-13;
CMS Ex. 50 § 523. The patient’s statement to surveyors is certainly more reliable that
Petitioner’s nursing notes, which have been proven to be inconsistent, haphazardly
completed, or incomplete. Petitioner also does not dispute the evidence offered by CMS
showing that the staff failed to update Patient 28’s plan of care to reflect a change in the
dosage of Coumadin being administered to the patient. Petitioner argues that the
administration of Coumadin to the resident was managed by another entity. P. Br. at 12.
This, according to Petitioner, excused it from having to do anything for the patient
relating to his anticoagulant therapy besides performing PT/INR testing. I disagree.
Petitioner was required to document all medications administered to the patient. That
documentation was inherent in its duty as a home health agency but it was also an
element of the plan of correction that it had offered to CMS.

Petitioner argues also, that with respect to Patient 28, it did provide physician ordered-
education concerning the urinary disease process. P. Br. at 12. It claims that its director
of nursing told surveyors during an interview that the staff had, in fact, provided that
training and documented it in clinical notes. P. Br. at 12. But, Petitioner never produced
those notes. I do not find the representation — if it was made — to be credible absence
documentation in the patient’s record that the training had been provided pursuant to a
physician’s order.°

3. CMS’s authority to impose remedies.

I have discussed above the legal authority by which CMS may impose the remedy of
termination of participation in Medicare. I will not revisit that analysis. Petitioner’s
immediate jeopardy-level noncompliance authorized termination of its participation
effective November 9, 2015. CMS gave Petitioner the opportunity correct its immediate
jeopardy-level noncompliance but if failed to do so by December 10, 2015. CMS
certainly had the authority to terminate Petitioner’s participation on or after that date.

> Petitioner asserts that one may infer from clinical notes that the training was provided
because it is generally referred to in the patient’s plan of care. P. Br. at 12; see CMS
Ex. 42 at 13-16. I have reviewed that document. There is nothing in there that recites
that the ordered training was provided to the resident.
12

As for the civil money penalties, they are amply justified in this case. Petitioner’s
noncompliance was particularly egregious. As I have found, not only did the
noncompliance cause patients to be put at immediate jeopardy but it actually harmed at
least one patient, Patient 4.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
True Medical and Foot Group, LLC
(NPI: 1134469349)
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-124
Decision No. CR4604
Date: May 6, 2016

DECISION

The Medicare enrollment application of Petitioner, True Medical and Foot Group, LLC,
is denied pursuant to 42 C.F.R. § 424.530(a)(3).

I. Background

National Government Services (NGS), the Medicare administrative contractor for the
Centers for Medicare & Medicaid Services (CMS), notified Petitioner by letter dated
May 15, 2015, that its application to enroll in Medicare was denied. NGS stated that the
denial was pursuant to 42 C.F.R. § 424.535(a)(3) and (4), based upon its owner Dr.
Atiyeh Salem’s (NPI: 1477561553) felony conviction of money laundering within ten
years of the application and his submission of false or misleading information on the
enrollment application.' NGS advised Petitioner that it imposed a ten-year bar to re-
enrollment effective the date of Dr. Salem’s felony conviction pursuant to 42 C.F.R.
§ 424.535(c). CMS Ex. | at 10-11; 8.

Petitioner requested reconsideration on June 23, 2015. CMS Ex. | at 5-202. On August
5, 2015, NGS upheld the denial of enrollment on reconsideration based on Dr. Salem’s
felony conviction and the alleged entry of false or misleading information on Petitioner’s
enrollment application. The reconsidered determination cited 42 C.F.R. § 424.535(a)(3)
and (4) and advised Petitioner that Dr. Salem was barred from enrolling in Medicare for
ten years from the date of his conviction. CMS Ex. | at 1-3.

The May 15, 2015 initial determination and the August 5, 2015 reconsidered
determination cited the wrong regulations as the legal authority for denial of enrollment.
The regulation applicable to denial of enrollment is 42 C.F.R. § 424.530 rather than 42
C.F.R. § 424.535, which was cited by the NGS notices. In the May 15, 2015 initial
determination letter, NGS erroneously cited 42 C.F.R. § 424.535(a)(3) and (a)(4) as the
basis for the enrollment denial rather than citing 42 C.F.R. § 424.530(a)(3) and (a)(4).
CMS Ex. | at 10; CMS Ex. 8. The initial determination also erroneously cited 42 C.F.R.
§ 424.535(c) as the basis for a ten-year bar to re-enrollment, instead of 42 C.F.R.

§ 424.530(a)(3)(ii), which makes Dr. Salem ineligible to enroll Petitioner for ten years
following the date of Dr. Salem’s most recent conviction. In the reconsidered
determination, NGS also erroneously cited 42 C.F.R. § 424.535(a)(3) and (a)(4), instead
of 42 C.F.R. § 424.530(a)(3) and (a)(4). CMS Ex. 1 at 1. Petitioner does not cite these
errors or argue that they amount to a denial of due process. Petitioner has not articulated
any prejudice due to the defective initial determination or reconsidered determination
letters. The regulations are clear that 42 C.F.R. § 424.530 applies to denials of
enrollment such as this case and 42 C.F.R. § 424.535 applies to revocations of Medicare
enrollment and billing privileges. I conclude, based on my review of Petitioner’s request
for hearing and briefs, that Petitioner was not confused by the incorrect citations to the
regulations or prevented from mounting a defense to the enrollment denial. Accordingly,
I conclude that the incorrect regulatory citations were harmless error that caused no
prejudice to Petitioner or its ability to defend.

The initial determination letter also incorrectly lists 2008 as the date of Dr. Salem’s
money laundering conviction. However, the court records pertaining to Dr. Salem’s
conviction show that a verdict of guilty was reached by a jury on August 3, 2006; Dr.

' Although the initial determination does not explicitly state the relationship between Dr.
Salem and Petitioner, the record shows, and Petitioner does not dispute, that Dr. Salem is
Petitioner’s owner. CMS Exhibit (Ex.) 2.
Salem was sentenced on August 16, 2007; and the judgment and order of commitment
was entered on August 20, 2007. CMS Ex. 9 at 13, 17-18, 25-26. The incorrect date of
Dr. Salem’s conviction in the initial determination letter caused no prejudice to
Petitioner” as it was clear that Petitioner was denied enrollment based on Dr. Salem’s
conviction rather than having a prior enrollment revoked due to his conviction.

On November 5, 2015, Petitioner filed a request for hearing (RFH) before an
administrative law judge (ALJ). On December 3, 2015, the case was assigned to me for
hearing and decision, and an Acknowledgement and Prehearing Order (Prehearing Order)
was issued at my direction.

On December 22, 2015, CMS filed a motion to dismiss Petitioner’s RFH on grounds that
it was not timely filed. CMS filed a motion for summary judgment and CMS Exs. 1
through 9 on January 4, 2016. On January 8, 2016, Petitioner filed a response in
opposition to the CMS motion to dismiss with Petitioner’s exhibits (P. Exs.) 1 through
18. On January 15, 2016, I denied CMS’s motion to dismiss. On January 27, 2016,
Petitioner filed a combined prehearing brief and opposition to CMS’s motion for
summary judgment (P. Br.) with P. Exs. 1 through 17.

On February 10, 2016, CMS filed a reply brief (CMS Reply). CMS objected to P. Exs. 1
through 13 and 15 through 17 on the grounds that Petitioner failed to show good cause
for submitting new documentary evidence for the first time at the ALJ level. CMS Reply
at 8-9. Petitioner filed a sur-reply on February 23, 2016 (P. Sur-reply).

Petitioner has not objected to my consideration of CMS Exs. | through 9, and they are
admitted as evidence. P. Exs. 1 through 3, 5, 9 through 11, and 13 through 17 are not
admitted as evidence and not considered. The only issue before me is whether CMS or
its contractor had a basis to deny Petitioner’s enrollment in the Medicare program. 42
C.F.R. § 498.5(1)(1)-(2). I may only admit evidence that is relevant and material. 42
C.F.R. § 498.60(b)(1). P. Exs. 1 through 3, 5, and 9 through 17, which contain
certificates, letters of reference or recommendation, various notes related to providing
evidence to NGS, and other materials with no tendency to show whether or not Dr. Salem
was convicted, are not relevant as to whether there is a basis for denial of Petitioner’s
enrollment due to Dr. Salem’s convictions. P. Exs. 4, 6, 7, and 8 are relevant as evidence
of Dr. Salem’s federal felony conviction in California. P. Ex. 12 is relevant as evidence,
in the form of the admissions of Dr. Salem of his August 2007 conviction in the federal
district court in California and his January 23, 2008 conviction of forgery in the

> However, the date of “conviction” may impact the running of the ten-year period
during which Dr. Salem is ineligible to enroll Petitioner in Medicare. 42 C.F.R.
§ 424.530(a)(3).
Eighteenth Judicial Circuit of DuPage County, Illinois. P. Ex. 12 at 3,21. P. Exs. 4, 6, 7,
8, and 12 are admitted as evidence and there is good cause to do so on summary
judgment as they establish that there is no dispute as to the material fact that Petitioner
was convicted of two felony offenses in two separate criminal proceedings, one state and
one federal.

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. Administration of the Part B program is through contractors, such as
NGS. Act § 1842(a) (42 U.S.C. § 1395u(a)). Payment under the program for services
rendered to Medicare-eligible beneficiaries may only be made to eligible providers of
services and suppliers.? Act §§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1) (42 U.S.C.
§ 1395u(h)(1)). Petitioner is a supplier under the Act.

The Act requires the Secretary of Health and Human Services (Secretary) to issue
regulations that establish a process for the enrollment in Medicare of providers and
suppliers, including the right to a hearing and judicial review of certain enrollment
determinations, such as denial of enrollment and revocation of enrollment and billing
privileges. Act § 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to 42 C.F.R. § 424.505, a
supplier such as Petitioner 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.

> A “supplier” furnishes services under Medicare and includes 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) (42 U.S.C.

§ 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(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.
The Secretary has delegated the authority to accept or deny enrollment applications to
CMS. Pursuant to the Secretary’s regulations, CMS may deny a provider’s or supplier’s
enrollment application for any of the reasons set out in 42 C.F.R. § 424.530(a). In this
case, CMS denied Petitioner’s application under 42 C.F.R. § 424.530(a)(3) and (4),
which provides in pertinent part:

(a) Reasons for denial. CMS may deny a provider’s or
supplier’s enrollment in the Medicare program for the
following reasons:

oe Rk

(3) Felonies. The provider, supplier, or any owner or
managing employee of the provider or supplier was, within
the preceding 10 years, convicted (as that term is defined in
42 CFR 1001.2) of a Federal or State felony offense that
CMS determines is detrimental to the best interests of the
Medicare program and its beneficiaries.

(i) Offenses include, but are not limited in scope or
severity to —

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(B) Financial crimes, such as extortion, embezzlement,
income tax evasion, insurance fraud and other similar
crimes for which the individual was convicted, including
guilty pleas and adjudicated pretrial diversions.

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(ii) Denials based on felony convictions are for a period
to be determined by the Secretary, but not less than 10
years from the date of conviction if the individual has
been convicted on one previous occasion for one or
more offenses.

(4) False or misleading information. The provider or supplier
has submitted false or misleading information on the
enrollment application to gain enrollment in the Medicare
program. (Offenders may be referred to the Office of
Inspector General for investigation and possible criminal,
civil, or administrative sanctions.)
6

42 C.F.R. § 424.530(a)(3) and (4) (emphasis added)*; Act §§ 1842(h)(8), 1866(b)(2)(D).
The initial determination indicates that NGS determined to impose a ten-year enrollment
bar, effective the date of Dr. Salem’s felony conviction. However, pursuant to 42 C.F.R.
§ 424.530(a)(3)(ii), a person convicted of felonies in more than one proceeding, is
ineligible to enroll in Medicare for a minimum period of ten years. The regulations grant
no right to review of the determination of the duration of the bar if CMS or its contractor
exercises discretion in determining the duration of ineligibility based on felony
convictions. 42 C.F.R. § 424.545.

A prospective supplier whose enrollment application has been denied may request
reconsideration and review as provided by 42 C.F.R. pt. 498. 42 C.F.R. § 424.545(a). A
prospective supplier submits a written request for reconsideration to CMS or its
contractor. 42 C.F.R. § 498.22(a), (b). CMS or its contractor must give notice of its
reconsidered determination to the prospective supplier, giving the reasons for its
determination, specifying the conditions or requirements the prospective supplier failed
to meet, and advising of the right to an ALJ hearing. 42 C.F.R. § 498.25. If the decision
on reconsideration is unfavorable to the prospective supplier, the prospective supplier has
the right to request a hearing by an ALJ and further review by the Departmental Appeals
Board (the Board). Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545,
498.3(b)(17), 498.5. A hearing on the record, also known as an oral hearing, is required
under the Act. Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir.
2004). The prospective supplier bears the burden to demonstrate that it meets enrollment
requirements with documents and records. 42 C.F.R. § 424.545(c).

B. Issues
Whether summary judgment is appropriate; and

Whether there was a basis for the denial of Petitioner’s application to enroll
in the Medicare program.

C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold text followed by my findings of fact and
analysis.

* The current version of 42 C.F.R. § 424.530(a)(3) has been in effect since February 3,
2015. 79 Fed. Reg. 72,500, 72,531-2 (Dec. 5, 2014).
1. Summary judgment is appropriate.

CMS requested summary judgment. As noted above, a supplier denied enrollment in
Medicare has a right to a hearing and judicial review, and a hearing on the record is
required under the Act. Act §§ 205(b), 1866(h)(1), (j); 42 C.F.R. §§ 498.3(b)(1), (5), (6),
(8), (15), (17), 498.5; Crestview, 373 F.3d at 748-51. A party may waive appearance at
an oral hearing but must do so affirmatively in writing. 42 C.F.R. § 498.66. In this case,
Petitioner has not waived the right to oral hearing or otherwise consented to a decision
based only upon the documentary evidence or pleadings. Accordingly, disposition on the
written record alone is not permissible, unless CMS’s motion for summary judgment has
merit.

Summary judgment is not automatic upon request but is limited to certain specific
conditions. The Secretary’s regulations at 42 C.F.R. pt. 498 that establish the procedure
to be followed in adjudicating Petitioner’s case do not establish a summary judgment
procedure or recognize such a procedure. However, the Board has long accepted that
summary judgment is an acceptable procedural device in cases adjudicated pursuant to 42
C.F.R. pt. 498. See, e.g., Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009);
Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No.
1628 at 3 (1997). The Board also has recognized that the Federal Rules of Civil
Procedure do not apply in administrative adjudications such as this, but the Board has
accepted that Fed. R. Civ. Pro. 56 and related cases provide useful guidance for
determining whether summary judgment is appropriate. Furthermore, a summary
judgment procedure was adopted as a matter of judicial economy within my authority to
regulate the course of proceedings and made available to the parties in the litigation of
this case by my Prehearing Order. The parties were given notice by the Prehearing Order
that summary judgment is an available procedural device and that the law as it has
developed related to Fed. R. Civ. Pro. 56 will be applied.

Summary judgment is appropriate when there is no genuine dispute as to any issue of
material fact for adjudication and/or the moving party is entitled to judgment as a matter
of law. In determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-moving party,
drawing all reasonable inferences in that party’s favor. The party requesting summary
judgment bears the burden of showing that there are no genuine issues of material fact for
trial and/or that it is entitled to judgment as a matter of law. Generally, the non-movant
may not defeat an adequately supported summary judgment motion by relying upon the
denials in its pleadings or briefs but must furnish evidence of a dispute concerning a
material fact, i.e., a fact that would affect the outcome of the case if proven. Mission
Hosp. Reg’! Med. Ctr., DAB No. 2459 at 4 (2012) (and cases cited therein); Experts Are
Us, Inc., DAB No. 2452 at 4 (2012) (and cases cited therein); Senior Rehab. & Skilled
Nursing Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein); see also Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The standard for deciding a case on summary judgment and an ALJ’s decision-making in
deciding a summary judgment motion differ from that used in resolving a case after a
hearing. On summary judgment, the ALJ does not make credibility determinations,
weigh the evidence, or decide which inferences to draw from the evidence, as would be
done when finding facts after a hearing on the record. Rather, on summary judgment, the
ALJ construes the evidence in a light most favorable to the non-movant and avoids
deciding which version of the facts is more likely true. Holy Cross Vill. at Notre Dame,
Inc., DAB No. 2291 at 5 (2009). The Board also has recognized that on summary
judgment it is appropriate for the ALJ to consider whether a rational trier of fact could
find that the party’s evidence would be sufficient to meet that party’s evidentiary burden.
Dumas Nursing & Rehab., L.P., DAB No. 2347 at 5 (2010). The Secretary has not
provided in 42 C.F.R. pt. 498 for the allocation of the burden of persuasion or the
quantum of evidence required to satisfy the burden. However, the Board has provided
some persuasive analysis regarding the allocation of the burden of persuasion in cases
subject to 42 C.F.R. pt. 498. Batavia Nursing & Convalescent Ctr., DAB No. 1904
(2004), aff'd, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 Fed. App’x 181
(6th Cir. 2005).

In this case, I conclude that there is no genuine dispute as to any material fact pertinent to
a denial of enrollment under 42 C.F.R. § 424.530(a)(3) that requires a trial. There is no
dispute that Petitioner’s owner, Dr. Salem, was convicted of two felonies before two
different tribunals within the ten years preceding his application to enroll Petitioner in
Medicare. CMS Ex. 2 at 15, 26-27. Petitioner admits that, on August 16, 2007, Dr.
Salem was convicted in the U.S. District Court, Central District of California, of one
count of conspiracy to commit money laundering and, on January 23, 2008, he was
convicted in Illinois state court of forgery. 5 PExs. 4, 6, 7, 8, 12. Petitioner does not
dispute that Dr. Salem’s convictions occurred within the ten years preceding the filing of
the enrollment application signed by Dr. Salem on November 3, 2014 and received by
NGS on November 7, 2014. CMS Ex. 2 at 1, 27. Based on these undisputed material
facts, there is a basis for the denial of Petitioner’s enrollment in Medicare under 42
C.F.R. § 424.530(a)(3). Accordingly, I conclude that summary judgment based on the
violation of 42 C.F.R. § 424.530(a)(3) is appropriate.

> The initial determination referred only to the money laundering conviction. CMS Ex. 1
at 10. The reconsidered determination referred only to a “felony conviction.” CMS Ex. 1
at 1. Before me, there is no dispute that Petitioner was, in fact, convicted of two different
felonies before two different tribunals. One felony is all that is required to deny
Petitioner enrollment under 42 C.F.R. § 424.530(a)(3). The conviction for forgery in
Illinois in January 2008 is only relevant in this proceeding to the extent that it triggers the
mandatory ten-year period of ineligibility to enroll in Medicare established by 42 C.F.R.
§ 424.530(a)(3)(ii).
However, summary judgment is not appropriate for deciding the issue of whether there is
a basis for the denial of Petitioner’s enrollment under 42 C.F.R. § 424.530(a)(4). In the
initial determination, 42 C.F.R. § 424.535(a)(4) (false or misleading information on an
application) was cited as one of the bases for denial and stated “Atiyeh Salem DPM
failed to provide documentation pertaining to the money laundering conviction in 2008.”
CMS Exs. | at 10; 8 at 1. In the reconsidered determination, NGS again cited 42 C.F.R.
§ 424.535(a)(4) as one of the bases for denial; however, it provided no further
information related to this basis for denial other than stating Petitioner had not provided
evidence of compliance with Medicare requirements. CMS Ex. 1 at 1-2. The factual
basis for the CMS determination is not clear from either the initial or reconsidered
determinations. Dr. Salem has not conceded that he failed to provide documentation
regarding his conviction and there is some evidence of an effort to disclose his prior
convictions. Petitioner alleges that information about Dr. Salem’s conviction was entered
on the enrollment applications and that Petitioner responded to CMS’s requests for
additional documentation related to his conviction. P. Br. at 4, 8-11, 15-16; P. Sur-reply
at 2, 5-6. A hearing would be needed to address what documentation Petitioner and Dr.
Salem were required to produce, what they failed to produce, how what was produced
was insufficient or inadequate, and how their conduct violated a regulatory requirement
and provided a basis for denial of enrollment. Drawing all favorable inferences for
Petitioner, as required in ruling on summary judgment, I conclude that there are genuine
disputes of material fact. Therefore, summary judgment will not lie for CMS on the issue
of whether there is a basis for denial under 42 C.F.R. § 424.530(a)(4). Because CMS
may deny enrollment for any one of the reasons listed in 42 C.F.R. § 424.530(a), I
conclude that a hearing is unnecessary to permit CMS an opportunity to attempt to prove
a basis under 42 C.F.R. § 424.530(a)(4).

2. Petitioner’s owner was convicted of two separate felony offenses in
separate criminal proceedings, one state and one federal.

3. The Secretary has determined and provided by regulation that
financial crimes or similar crimes are detrimental to the Medicare
program or its beneficiaries. 42 C.F.R. § 424.530(a)(3)(i)(B).

4. Petitioner’s owner was convicted in federal court of conspiracy to
commit money laundering and, in state court, of forgery, which are
financial crimes within the meaning of 42 C.F.R. § 424.530(a)(3)(i)(B).

5. There is a basis for denial of Petitioner’s enrollment in Medicare
pursuant to 42 C.F.R. § 424.530(a)(3).
10

6. The issue for hearing and decision is whether there is a basis for
denial of Petitioner’s Medicare enrollment and, if there is a basis for
denial, my jurisdiction does not extend to review of whether CMS
properly exercised its discretion to deny Petitioner’s Medicare
enrollment application.

7. Pursuant to 42 C.F.R. § 424.530(a)(3)(ii), the minimum period of
ineligibility for Petitioner to enroll in Medicare is ten years from the
date of Dr. Salem’s last conviction, January 23, 2008, due to the
existence of two felony convictions.

a. Facts

The facts material to the denial of Petitioner’s Medicare enrollment pursuant to 42 C.F.R.
§ 424.530(a)(3) are undisputed.

On or about August 3, 2006, Petitioner’s owner, Dr. Salem, was found guilty by a jury in
the U.S. District Court for the Central District of California, of one felony count of
conspiracy to commit money laundering in violation of 18 U.S.C. § 1956. CMS Ex. 9 at
13, 25, 32; P. Br. at 2, 6. Dr. Salem was sentenced on August 16, 2007, to 33 months in
prison, supervised release for three years upon release from imprisonment, and to pay a
fine of $10,000 and a special assessment of $100. CMS Ex. 9 at 2, 13, 17-18, 25-26, 32;
P. Br. at 6. On or about January 23, 2008, Dr. Salem was convicted of a felony count of
forgery in the Circuit Court for the Eighteenth Judicial Circuit, DuPage County, Illinois,
and sentenced to confinement to run concurrently with his federal sentence. CMS Ex. 1
at 159, 164, 169; CMS Ex. 7 at 9, P. Br. at 3-4, 8. Dr. Salem admits both of these felony
convictions. P. Br. at 1-4; 6-8, 11, 19; P. Reply at 1-3.

On or around November 3, 2014, Dr. Salem signed a CMS 8551 application to enroll
Petitioner, Dr. Salem’s podiatry practice. The application was received by NGS on
November 7, 2014. CMS Ex. 2 at 1,27. Dr. Salem also signed a CMS 855R application
on November 3, 2014 that was received by NGS on November 7, 2014, reassigning his
claims for services provided to Medicare-eligible beneficiaries to Petitioner. CMS Ex 3.
On the CMS 855], in the section “Final Adverse Legal Actions/Convictions,” Dr. Salem
disclosed that he had been convicted of “money laundering/forgery” in 2007 in California
and that his probation had been terminated.° CMS Ex. 2 at 14. It is undisputed that Dr.
Salem’s 2007 and 2008 convictions occurred within the ten years preceding the filing of
the CMS 8551 and CMS 855R enrollment applications in November 2014.

® Dr. Salem also listed another adverse legal action, which he described as “advertising
issue with name” which occurred in “20013[sic]” in Illinois. CMS Ex. 2 at 13.
11

b. Analysis

CMS may deny an enrollment application if it determines that the supplier, “was, within
the preceding 10 years, convicted . . . of a Federal or State felony offense that CMS
determines is detrimental to the best interests of the Medicare program and its
beneficiaries.” 42 C.F.R. § 424.530(a)(3). Among the types of felony offenses that CMS
considers to be detrimental to the best interests of the program and its beneficiaries are
“Tf]inancial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud
and other similar crimes for which the individual was convicted... .” 42 C.F.R.

§ 424.530(a)(3)(i)(B).

Petitioner disputes the characterization that the offenses of which Dr. Salem was
convicted were financial crimes that are detrimental to the best interests of the Medicare
program or its beneficiaries. P. Br. at 8, 12, 17; P. Reply at 1-3, 5-7. Petitioner argues
that Dr. Salem was innocent and offers a lengthy explanation of the circumstances that
resulted in Dr. Salem’s convictions. P. Br. at 1-4, 6-8, 12, 19; P. Reply at 1-3, 5, 6-7.

Petitioner’s arguments regarding whether or not Dr. Salem was actually guilty of the
offenses for which he was convicted carry no weight in this proceeding. Petitioner’s
arguments amount to a collateral attack on Dr. Salem’s convictions. I have no authority
to review Dr. Salem’s convictions. In this proceeding, Dr. Salem and Petitioner are
bound by the undisputed fact that he was convicted. Petitioner cites no legal authority to
the contrary.

Whether or not the offenses of which Dr. Salem was convicted were financial crimes
within the meaning of 42 C.F.R. § 424.530(a)(3)(i)(B) is, given the undisputed facts, an
issue of law that must be resolved against him. It is true that Dr. Salem’s crimes of
conspiracy to commit money laundering and forgery are not among the specific examples
of financial crimes listed in 42 C.F.R. § 424.530(a)(3)(i)(B). However, the use of the
words “such as” and “other similar crimes” in the regulation clearly indicate that the
crimes listed are not meant to be all-inclusive but, rather, that CMS intended the category
of “financial crimes” to encompass more than the enumerated felonies. Abdul Razzaque
Ahmed, M.D., DAB No. 2261 at 10 (2009), aff'd, Ahmed v. Sebelius, 710 F. Supp. 2d 167
(D. Mass. 2010).

Dr. Salem was convicted of violating the federal money laundering statute at 18 U.S.C.
§ 1956. The statute states:

(a)(1) Whoever, knowing that the property involved in a
financial transaction represents the proceeds of some form of
unlawful activity, conducts or attempts to conduct such a
financial transaction which in fact involves the proceeds of
specified unlawful activity—
12

(A)(i) with the intent to promote the carrying on of
specified unlawful activity; or

(ii) with intent to engage in conduct constituting a
violation of section 7201 or 7206 of the Internal
Revenue Code of 1986; or

(B) knowing that the transaction is designed in whole
or in part—

(i) to conceal or disguise the nature, the location,
the source, the ownership, or the control of the
proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting requirement
under State or Federal law,

shall be sentenced to a fine of not more than $500,000 or
twice the value of the property involved in the transaction,
whichever is greater, or imprisonment for not more than
twenty years, or both. For purposes of this paragraph, a
financial transaction shall be considered to be one involving
the proceeds of specified unlawful activity if it is part of a set
of parallel or dependent transactions, any one of which
involves the proceeds of specified unlawful activity, and all
of which are part of a single plan or arrangement.

18 U.S.C. § 1956(a). The record shows that Dr. Salem was a conspirator in a scheme
with others whereby he conducted numerous financial transactions “knowing that the
source of the funds used in those transactions was proceeds from the sale of
pseudoephedrine . . . to methamphetamine manufacturers.” CMS Ex. 9 at 33. There can
be no doubt that Dr. Salem engaged in unlawful financial transactions and that his
conviction for conspiracy to commit money laundering constitutes a financial crime
within the meaning of 42 C.F.R. § 424.530(a)(3)(i)(B).”

7 CMS also argues that Dr. Salem’s conviction for conspiracy to commit money
laundering could fall under 42 C.F.R. § 424.530(a)(3)(i)(D) (“Any felonies that would
result in mandatory exclusion under section 1128(a) of the [Social Security] Act.” CMS
Br. at 15 n.5. CMS argues that, pursuant to section 1128(a)(4) of the Act, the Secretary
must exclude any individual or entity from participation in any federal health care
program that has been convicted of a criminal offense consisting of a felony relating to

the unlawful manufacture, distribution, prescription, or dispensing of a controlled
(Continued next page.)
13

Similarly, I find that Dr. Salem’s felony conviction for forgery was also a financial crime
under 42 C.F.R. § 424.530(a)(3)(i)(B). The record reflects that Dr. Salem “was convicted
of Forgery, pursuant to 720 ILCS 5/17-3(a), a Class 3 felony.” CMS Ex. 1 at 159. The
Illinois state law provision of which he was convicted states:

§ 17-3. Forgery.

(a) A person commits forgery when, with intent to defraud, he
or she knowingly:

(1) makes a false document or alters any document to
make it false and that document is apparently capable
of defrauding another; or

(2) issues or delivers such document knowing it to
have been thus made or altered; or

(3) possesses, with intent to issue or deliver, any such
document knowing it to have been thus made or
altered; or

(4) unlawfully uses the digital signature, as defined in
the Financial Institutions Electronic Documents and
Digital Signature Act, of another; or

(5) unlawfully uses the signature device of another to
create an electronic signature of that person, as those
terms are defined in the Electronic Commerce Security
Act.

(Continued from preceding page.)

substance. CMS argues that Petitioner’s conviction for conspiracy to commit money
laundering relates to the unlawful manufacture or distribution of a controlled substance,
and would result in his exclusion under section 1128(a)(4), thereby establishing a basis
for denial under 42 C.F.R. § 424.530(a)(3)(i)(D). Because I conclude that Petitioner’s
convictions are financial crimes which fall under 42 C.F.R. § 424.530(a)(3)(i)(B), it is not
necessary for me to address CMS’s additional argument.
14

720 Ill. Comp. Stat. 5/17-3(a) (internal footnotes omitted). While the exact details of the
forgery offense are not clear from the record, Dr. Salem referred to forgery of a credit
card in his account of what occurred. P. Sur-reply at 2-3. The fact that a credit card was
involved further supports that Dr. Salem engaged in fraudulent financial activity and
supports my conclusion that his forgery offense constituted a financial crime.

The offenses of which Dr. Salem was convicted are financial crimes, one of the
categories of offenses the Secretary has determined to be detrimental to Medicare and its
beneficiaries. 42 C.F.R. § 424.530(a)(3)(i)(B). There is no dispute that his convictions
occurred within the ten years preceding the filing of the CMS 855I and CMS 855R
applications in November 2014. The Secretary has specifically provided that if a supplier
was, within the preceding ten years of filing an enrollment application, convicted of a
financial crime, then the application may be denied on that basis by CMS or its
contractor. 42 C.F.R. § 424.530(a)(3)(i)(B). Accordingly, I conclude that there is a basis
to deny Petitioner’s enrollment in Medicare pursuant to 42 C.F.R. § 424.530(a)(3)(i)(B).

Petitioner argues that NGS failed to exercise discretion not to deny its enrollment
application and it is unclear whether officials at NGS understood that they had discretion
not to deny in this case. P. Br. at 16-17. I have concluded that there was a basis for the
denial of Petitioner’s Medicare enrollment. NGS issued an initial determination to deny
Petitioner’s enrollment application. An NGS hearing officer subsequently upheld the
denial on reconsideration. Petitioner requested my de novo review and CMS has
advocated before me that there was a proper exercise of discretion to deny Petitioner’s
enrollment in Medicare. Given the facts, whether or not NGS understood its discretion is
not the issue before me. CMS, which is fully appraised of the facts, has elected to
proceed with the denial of enrollment. There is no question that CMS could have at any
time during the course of this proceeding reopened and revised the reconsidered
determination and withdrawn the denial. 42 C.F.R. § 498.30. CMS did not choose to do
so. Petitioner availed itself of the administrative review process in order to challenge
NGS’s determination, and I conclude that it has received the process due it under the Act
and the Secretary’s regulations. Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R.
§§ 424.545, 498.3(b)(17), 498.5, 498.22(a), and 498.25.

I have no authority to review the exercise of discretion by CMS or its contractor to deny
enrollment where there is a basis for such action. Abdul Razzaque Ahmed, M.D., DAB
No. 2261 at 19 (2009), aff’d, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010).
The scope of my authority is limited to determining whether there is a legal basis for the
denial of Petitioner’s Medicare enrollment. /d. I have concluded that there is a basis for
CMS to deny Petitioner’s Medicare enrollment pursuant to 42 C.F.R.

§ 424.530(a)(3)(i)(B). Thus, a regulatory basis for denial of enrollment exists.
15

Petitioner argues that Dr. Salem’s crimes are not detrimental to the best interests of the
Medicare program. P. Br. at 17-18. Petitioner asserts that I should consider the
following “mitigating” circumstances: Dr. Salem never harmed any patients; he is
rehabilitated; he has regained his medical license; and his patients wish to receive care
from him again. P. Br. at 17-19; P. Sur-reply at 4-5, 7-8. As discussed above, Dr. Salem
was convicted of offenses which CMS determined to be detrimental to the program and
its beneficiaries. I may not substitute my judgment for that of CMS and find his felony
convictions not to be detrimental. As for the allegedly mitigating factors Petitioner
argues, they are irrelevant to the issue of whether or not CMS or its contractor had a basis
to deny Petitioner’s enrollment application. To the extent that Dr. Salem’s assertions
may be construed as a request for equitable relief, I have no authority to grant equitable
relief. US Ultrasound, DAB No. 2302 at 8 (2010) (‘Neither the ALJ nor the Board is
authorized to provide equitable relief by reimbursing or enrolling a supplier who does not
meet statutory or regulatory requirements.”). Furthermore, I am bound to follow the Act
and regulations, and I have no authority to declare statutes or regulations invalid or ultra
vires. 18661CPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (noting that “[a]n ALJ is
bound by applicable laws and regulations and may not invalidate either a law or
regulation on any ground.”).

Petitioner seeks a reduction of the ten-year period during which Dr. Salem is ineligible to
enroll himself or an entity he owns or manages in Medicare. Petitioner argues that nine
years have passed since Dr. Salem was convicted. Under the regulations, a supplier
whose denial is based on a felony conviction is ineligible to enroll “for a period to be
determined by the Secretary, but not less than 10 years from the date of conviction if the
individual has been convicted on one previous occasion for one or more offenses.” 42
C.F.R. § 424.530(a)(3)(ii). There is no statutory or regulatory provision that provides
Petitioner ALJ review of the period of ineligibility and, in this case with two felony
convictions, the minimum authorized period is established by the regulation as ten years.
Act § 1866(j)(8); 42 C.F.R. §§ 424.530(a)(3)(ii); 424.545; 498.3(b); and 498.5.

III. Conclusion

For the foregoing reasons, I conclude that there was a basis to deny Petitioner’s
application to enroll in Medicare. Petitioner and Dr. Salem are ineligible to enroll in
Medicare for ten years, from January 23, 2008, the date of Dr. Salem’s most recent
felony conviction.

/s/
Keith W. Sickendick
Administrative Law Judge


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

Charles Brian Griffin,
(O.1. File Number H-15-40426-9),

Petitioner
Vv.

The Inspector General,
Department of Health & Human Services.

Docket No. C-15-3929
Decision No. CR4602
Date: May 5, 2016
DECISION

Petitioner, Charles Brian Griffin, is excluded from participating in Medicare, Medicaid,
and all federal health care programs pursuant to section 1128(a)(4) of the Social Security
Act (Act) (42 U.S.C. § 1320a-7(a)(4)), effective June 18, 2015. There is a proper basis
for exclusion. Petitioner’s exclusion for five years is required by section 1128(c)(3)(B)
of the Act (42 U.S.C. § 1320a-7(c)(3)(B)). An additional exclusion of five years, for a
total minimum exclusion of ten years,’ is not unreasonable based upon the presence of
two aggravating factors and the absence of any mitigating factors.

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

The Inspector General (I.G.) of the United States Department of Health and Human
Services (HHS) notified Petitioner by letter dated May 29, 2015, that he was being
excluded from participation in Medicare, Medicaid, and all federal health care programs
for a period of ten years. The LG. advised Petitioner that he was being excluded pursuant
to section 1128(a)(4) of the Act, based on his felony conviction in the United States
District Court for the Western District of Pennsylvania (district court), of a criminal
offense related to the unlawful manufacture, distribution, prescription, or dispensing of a
controlled substance. The I.G. further advised Petitioner that the mandatory five-year
exclusion was lengthened because Petitioner’s sentence included incarceration and he
was subject to another adverse action by a state or federal agency or board. I.G. Exhibit
(1.G. Ex.) 1.

Petitioner timely requested a hearing by letter dated July 29, 2015 and postmarked July
30, 2015. The case was assigned to me on October 22, 2015 to hear and decide. A
prehearing conference was convened by telephone on November 16, 2015, the substance
of which is memorialized in my order dated November 17, 2015. On December 16,
2015, the LG. filed a motion for summary judgment, a brief in support of summary
judgment (I.G. Br.), and I.G. exhibits 1 through 6. Petitioner filed a brief in opposition
on January 31, 2016, accompanied by 186 pages of exhibits that were not properly
marked.” The LG. filed a reply brief (I.G. Reply) on February 16, 2016, and I.G. Exs. 7
and 8. Petitioner filed a sur-reply on March 1, 2016, which is accepted (P. Sur-reply).
Petitioner did not object to my consideration of I.G. Exs. 1 through 8. The I.G. did not
object to my consideration of P. Exs. 1 through 3 and A through J. The offered exhibits
are admitted as evidence.

> Petitioner did not properly mark his exhibits in the manner required by the Civil
Remedies Division Procedures, a copy of which was provided to him when his request
for hearing was acknowledged. When Petitioner’s filing was received by my office, it
was uploaded as a single document to the Departmental Appeals Board’s Electronic
Filing System (DAB E-File) as # 7. The format of the uploaded document includes a
page counter. All references to the pages of Petitioner’s exchange (brief and exhibits)
will be to the page counter. Petitioner’s brief is pages 2 through 25 (P. Br.). Petitioner’s
exhibits (P. Exs.) 1 through 3 and A through J are pages 26 through 213.
IL. Discussion
A. Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to an
Administrative Law Judge (ALJ) hearing and judicial review of the final action of the
Secretary of HHS (Secretary). The right to hearing before an ALJ is set forth in 42
C.F.R. §§ 1001.2007(a) and 1005.2, and the rights of both the sanctioned party and the
1.G. to participate in a hearing are specified by 42 C.F.R. § 1005.3. Either or both parties
may choose to waive appearance at an oral hearing and to submit only documentary
evidence and written argument for my consideration. 42 C.F.R. § 1005.6(b)(5).

Pursuant to section 1128(a)(4) of the Act, the Secretary must exclude from participation
in the Medicare and Medicaid programs any individual convicted for an offense that
occurred after August 21, 1996, under federal or state law, of a criminal offense
consisting of a felony relating to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance. 42 C.F.R. § 1001.101(d). Pursuant to section
1128(i) of the Act (42 U.S.C. § 1320a-7(i)), an individual is convicted of a criminal
offense when: (1) a judgment of conviction has been entered against him or her in a
federal, state, or local court whether an appeal is pending or the record of the conviction
is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or no contest is
accepted by a court; or (4) the individual has entered into any arrangement or program
where judgment of conviction is withheld.

Exclusion for a minimum period of five years is mandatory for any individual or entity
convicted of a criminal offense for which exclusion is required by section 1128(a) of the
Act. Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)). Pursuant to 42 C.F.R.

§ 1001.102(b), an individual’s period of exclusion may be lengthened based on the
presence of specified aggravating factors. Only if the aggravating factors justify an
exclusion of longer than five years, however, are mitigating factors considered as a basis
for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

The standard of proof is a preponderance of the evidence, and there may be no collateral
attack of the conviction that provides the basis of the exclusion. 42 C.F.R.

§ 1001.2007(c), (d). Petitioner bears the burden of proof and the burden of persuasion on
any affirmative defenses or mitigating factors, and the I.G. bears the burden on all other
issues. 42 C.F.R. § 1005.15(b).

B. Issue

The Secretary has by regulation limited my scope of review to two issues:

Whether there is a basis for the imposition of the exclusion; and
Whether the length of the exclusion is unreasonable.
42 CFR. § 1001.2007(a)(1).
C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold followed by the pertinent findings of fact and
analysis.

1. Petitioner’s request for hearing was timely and I have jurisdiction.
2. Summary judgment is appropriate in this case.

There is no dispute that Petitioner timely requested a hearing and that I have jurisdiction
pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005.

Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to
reasonable notice and an opportunity for a hearing. The Secretary has provided by
regulation that a sanctioned party has the right to hearing before an ALJ, and both the
sanctioned party and the LG. have a right to participate in the hearing. 42 C.F.R.

§§ 1005.2-.3. Either or both parties may choose to waive appearance at an oral hearing
and to submit only documentary evidence and written argument for my consideration.
42 C.F.R. § 1005.6(b)(5). An ALJ may also resolve a case, in whole or in part, by
summary judgment. 42 C.F.R. § 1005.4(b)(12).

Summary judgment is appropriate when the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.
Fed. R. Civ. Pro. 56; Tanya A. Chuoke, R.N., DAB No. 1721 (2000); David A. Barrett,
DAB No. 1461 (1994); Robert C. Greenwood, DAB No. 1423 (1993); Thelma Walley,
DAB No. 1367 (1992); Catherine L. Dodd, R.N., DAB No. 1345 (1992); John W.
Foderick, M.D., DAB No. 1125 (1990). In opposing a properly-supported motion for
summary judgment, the nonmovant must show that there are material facts that remain in
dispute and that those facts are material, in that, they either rebut the proponent’s prima
facie case or establish a defense. Garden City Medical Clinic, DAB No. 1763 (2001);
Everett Rehab. and Med. Ctr., DAB No. 1628 (1997). It is insufficient for the
nonmovant to rely upon mere allegations or denials to defeat the motion and proceed to
hearing. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).

There are no genuine disputes as to any material fact in this case. The facts that trigger
exclusion under section 1128(a)(4) of the Act are conceded, undisputed, or not subject to
dispute. Petitioner argues that there are material facts in dispute. Petitioner asserts that
because he was not convicted of fraud or any offense related to a federally funded
program, the I.G. does not have the authority to exclude him. Petitioner argues that the
1.G. failed to consider a mitigating factor. Petitioner also argues that the date of his
federal exclusion should be retroactive to the date that the Pennsylvania Board of
Pharmacy revoked his license to practice as a pharmacist. P. Sur-reply at 18-20.
Petitioner’s arguments must be resolved against him as a matter of law. The L.G. is
entitled to judgment as a matter of law. Accordingly, summary judgment is appropriate.

3. There is a basis to exclude Petitioner pursuant to section 1128(a)(4)
of the Act.

Petitioner did not deny in his request for hearing that he was convicted as alleged by the
1.G. but argued that the period of exclusion was unreasonable. In his brief, Petitioner
concedes that there is a basis for his exclusion and that he contests only the length of the
exclusion. He also argued that the exclusion should have begun on December 12, 2013.
P. Br. at 1. In his sur-reply, Petitioner argues that the I.G. has no jurisdiction or authority
to exclude him because he was convicted of conspiracy not fraud. Petitioner argues that
summary judgment should be issued in his favor. Petitioner further argues that, even if I
conclude that the I.G. has the authority and a basis for excluding him, the ten-year
exclusion is unreasonable. He argued that his exclusion should have begun on December
12, 2013, the date he lost his license in Pennsylvania. P. Sur-reply at 2-4, 6, 18-19.
Petitioner’s arguments must be resolved against him as a matter of law. Petitioner admits
that he was, in fact, sentenced to 40 months in a federal prison camp and that the
Pennsylvania Board of Pharmacy revoked his license to practice pharmacy for five years.
But he argues that the district court considered during sentencing that he had a gambling
addiction and imposed a reduced sentence on that basis. He argues that the reduced
sentence is evidence that the judge found him less culpable and that is a mitigating factor
recognized under 42 C.F.R. § 1001.102(c)(2). P. Sur-reply at 16-19.

The LG. cites section 1128(a)(4) of the Act as the basis for Petitioner’s mandatory
exclusion. The statute provides:

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

... (4) FELONY CONVICTION RELATING TO
CONTROLLED SUBSTANCE.—Any individual or
entity that has been convicted for an offense which
occurred after the date of the enactment of the Health
Insurance Portability and Accountability Act of 1996,
under Federal or State law, of a criminal offense
consisting of a felony relating to the unlawful
manufacture, distribution, prescription, or dispensing
of a controlled substance.

The statute requires that the Secretary exclude from participation in Medicare or
Medicaid any individual or entity: (1) convicted of a felony criminal offense under
federal or state law; (2) where the offense occurred after August 21, 1996, the date of
enactment of the Health Insurance Portability and Accountability Act of 1996; and (3) the
criminal offense relates to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance.

There is a basis for Petitioner’s exclusion. Petitioner does not dispute that: on December
4, 2013, the district court accepted his guilty plea to one count of conspiracy to possess
with the intent to distribute and distribute oxycodone, a Schedule II controlled substance,
from in or around March 2011 and continuing thereafter to in or around February 2012;
that a judgment of conviction and sentence was entered by the district court on December
4, 2013; and that the offense of which he was convicted was a felony. There is no dispute
that the acceptance of Petitioner’s guilty plea and the entry of a judgment of conviction
was a conviction within the meaning of section 1128(i) of the Act. RFH; I.G. Exs. 2-5;

P. Br. at 1.

I conclude that the elements of section 1128(a)(4) of the Act are satisfied and the LG. is
required to exclude Petitioner.

Petitioner argues that the effective date of his exclusion should begin on December 12,
2013, the date that the Pennsylvania State Board of Pharmacy revoked his pharmacy
license. P. Br. at 2; LG. Ex. 6 at 14. Petitioner’s argument is unavailing and must be
resolved against him as a matter of law. The regulations provide that the effective date of
exclusion is 20 days after the date on the notice of exclusion. 42 C.F.R. § 1001.2002(b).

I have no authority to review the timeliness of the I.G.’s imposition of the exclusion or to
adjust the effective date of the exclusion. Randall Dean Hopp, DAB No. 2166 at 2-4
(2008).

Petitioner argues in his sur-reply that the I.G. has no jurisdiction or authority to impose
exclusion. Petitioner argues that the offense of which he was convicted has nothing to do
with fraud or federally funded programs; rather, he points out that he was convicted of
conspiracy. Petitioner asserts that because the I.G. has no authority to exclude him,
summary judgment should be granted in his favor. P. Sur-reply at 2-4. Petitioner’s
arguments must be resolved against him as a matter of law. Congress was clear in
drafting section 1128(a)(4) of the Act that the Secretary must exclude anyone from
participation in Medicare, Medicaid, or other federal health care program who is
convicted of a felony committed after August 21, 1996, if the offense is related “to the
unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”
Act § 1128(a)(4). Unlike other provisions in which Congress mandated exclusion under

section 1128(a), section 1128(a)(4) does not require that the offense be related to the
delivery of an item or service under a federal health care program. There is also no
requirement that there be an allegation, evidence, or a judicial finding of fraud or any loss
of or threat to federal funds. Congress not only gave the Secretary the authority to
exclude but mandated the exclusions of individuals convicted of a drug related offense
committed after August 21, 1996. I further conclude, as a matter of law, that conspiracy
to possess and distribute a controlled substance, the offense for which Petitioner was
convicted, falls squarely within the scope of section 1128(a)(4) as the offense is related
“to the unlawful manufacture, distribution, prescription, or dispensing of a controlled
substance.” Act § 1128(a)(4); 21 U.S.C. §§ 841(a)(1), (b)(1)(C), 846.

4. Pursuant to section 1128(c)(3)(B) of the Act, a five-year period of
exclusion is mandatory.

I have concluded that a basis exists to exclude Petitioner pursuant to section 1128(a)(4)
of the Act. Therefore, the I.G. must exclude Petitioner for a minimum period of five
years pursuant to section 1128(c)(3)(B) of the Act. The I.G. has no discretion to impose
a lesser period and I may not reduce the period of exclusion below five years. The
remaining issue is whether it is unreasonable to lengthen Petitioner’s exclusion by an
additional five years.

My determination of whether the exclusionary period in this case is unreasonable turns
on whether: (1) the I.G. has proven that there are aggravating factors; (2) that Petitioner
has proven that the I.G. considered an aggravating factor that does not exist or that there
are mitigating factors that the LG. failed to consider; and (3) the period of exclusion is
within a reasonable range.

5. Two aggravating factors are present that justify lengthening the
minimum period of exclusion to ten years.

The LG. notified Petitioner that two aggravating factors are present in this case that
justify an exclusion of more than five years: (1) the sentence imposed by the court
included incarceration of 40 months; and (2) Petitioner has been subject to an adverse
action by a federal, state, or local government agency or board, and the adverse action is
based on the same set of circumstances that served as the basis for the imposition of the
exclusion because the Pennsylvania Board of Pharmacy revoked his license to practice as
a pharmacist as a result of his conviction. I.G. Ex. 1 at 1-2.

Petitioner does not dispute that the district court sentenced him to a period of
incarceration, or that the Pennsylvania Board of Pharmacy revoked his license to practice
as a pharmacist based on his conviction. P. Br. at 1-2, 4-5, 7, 16-17; P. Sur-reply at 5;

P. Ex. J at 211-12; 1G. Exs. 5, 6. I conclude that the aggravating factors that the I.G.
cites are established by the evidence before me and are undisputed. The aggravating
factors are a basis for the I.G. to extend the period of exclusion beyond the minimum
exclusion of five years. 42 C.F.R. § 1001.102(b)(5), (b)(9).

6. Petitioner has not shown that there is any genuine dispute of
material fact as to the existence of a mitigating factor that could be
proved by a preponderance of the evidence.

If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) justify an
exclusion of longer than five years, then mitigating factors may be considered as a basis
for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).
The only authorized mitigating factors that I may consider are established by 42 C.F.R.
§ 1001.102(c):

(1) The individual or entity was convicted of 3 or fewer
misdemeanor offenses, and the entire amount of financial loss
(both actual loss and intended loss) to Medicare or any other
Federal, State or local governmental health care program due
to the acts that resulted in the conviction, and similar acts, is
less than $1,500;

(2) The record in the criminal proceedings, including
sentencing documents, demonstrates that the court determined
that the individual had a mental, emotional or physical
condition before or during the commission of the offense that
reduced the individual’s culpability; or

(3) The individual’s or entity’s cooperation with Federal or
State officials resulted in —

(i) Others being convicted or excluded from Medicare,
Medicaid and all other Federal health care programs,

(ii) Additional cases being investigated or reports
being issued by the appropriate law enforcement
agency identifying program vulnerabilities or
weaknesses, or

(iii) The imposition against anyone of a civil money
penalty or assessment under part 1003 of this chapter.

Petitioner has the burden to prove by a preponderance of the evidence that there is a
mitigating factor for me to consider. 42 C.F.R. § 1005.15(b)(1). Petitioner was
convicted of a felony offense not misdemeanors and, accordingly, the mitigating factor
established by 42 C.F.R. § 1001.102(c)(1) does not apply. Similarly, Petitioner makes no
allegation and there is no evidence that he cooperated with federal or state officials in a
manner to trigger the mitigating factor established by 42 C.F.R. § 1002.102(c)(3).

Petitioner urges me to find that the I.G. failed to consider the mitigating factor established
by 42 C.F.R. § 1001.102(b), that is, the district court considered him to be less culpable
due to his gambling addiction. RFH; P. Br. at 16-19; P. Sur-reply at 7-11. There is no
dispute that the district court imposed a sentence of incarceration that was less than
authorized. There is also no dispute by the I.G. that the district court was aware of
Petitioner’s diagnosed gambling addiction and attention deficit hyperactivity disorder
(ADHD). P. Exs. B at 112-39, C at 141-46. The fact that Petitioner was suffering from a
gambling addiction at the time he committed the crime of which he was convicted is not,
standing alone, evidence sufficient to establish a mitigating factor. Petitioner’s
psychiatric diagnoses are relevant as a mitigating factor, only if the record from the
criminal proceedings demonstrates that the district court determined the condition existed
and that the condition reduced Petitioner’s culpability. 42 C.F.R. § 1001.102(c)(2).
Evidence of this mitigating factor will be considered only if “[t]he record in the criminal
proceedings, including sentencing documents, demonstrates that the court determined
that the individual had a mental, emotional, or physical condition . . . that reduced the
individual’s culpability.” Patel v. Shalala, 17 F. Supp. 2d 662, 667 (W.D. Ky. 1998).

The district court sentenced Petitioner to 40 months imprisonment, rather than 70 to 87
months as authorized under the federal sentencing guideline and requested by the
prosecution. While it is clear that the district court chose to downwardly depart from the
sentencing guidelines, it is not clear why. Petitioner’s wants me to infer from the court’s
imposition of the lesser sentence that the district court found Petitioner less culpable.
Generally, the nonmovant on summary judgment is entitled to all favorable inferences.
However, an inference must be based on more than mere conjecture. The mere fact that a
judge imposed less than the maximum sentence is an insufficient basis for inferring that
the judge found the accused to be of reduced culpability. There are many factors that a
judge may consider in imposing a sentence other than an accused’s mental status.
Petitioner points to no evidence from the criminal proceedings that suggests the district
court found Petitioner less culpable for his crime due to his gambling addiction. Neither
the I.G.’s evidence nor that of Petitioner suggests that the district court considered
Petitioner less culpable for his crime because he was trying to pay off his gambling debts.
Accordingly, I conclude that Petitioner has not established the mitigating factor
established by 42 C.F.R. § 1001.102(c)(2).

Petitioner argues that his conspiracy “wasn’t some sophisticated, international gang
related, cartel operation, or... comprised of a network selling drugs to high school
ids.” P. Sur-reply at 12. Petitioner asserts that he individually did not sell the drugs
directly to end users and had “no victims.” P. Br. at 25. Neither of the arguments are a
recognized mitigating factor. Petitioner’s arguments, however, show a lack of

10

understanding of the potential harm involved in this crime and a true lack of

remorse. Although the conspiracy may not have been Petitioner’s original idea, a fact I
accept as true on summary judgment, he was a necessary player in the scheme. Petitioner
knowingly abused his trusted position as a pharmacist by participating in the conspiracy.

Petitioner points to other evidence, including letters of support submitted to the district
court. However, none of the additional evidence he argues as mitigation is recognized
under 42 C.F.R. § 1001.102(c) and is not relevant in this proceeding.

I conclude that Petitioner has failed to establish an enumerated mitigating factor that the
1.G. failed to consider in extending his exclusion to ten years.

7. Exclusion for ten years is not unreasonable in this case.

The regulation states that the ALJ must determine whether the length of exclusion
imposed is “unreasonable.” 42 C.F.R. § 1001.2007(a)(1). The Board, however, has
made clear that the role of the ALJ in exclusion cases is to conduct a de novo review of
the facts related to the basis for the exclusion and the existence of aggravating and
mitigating factors identified at 42 C.F.R. § 1001.102 and to determine whether the period
of exclusion imposed by the LG. falls within a reasonable range. Juan De Leon, Jr.,
DAB No. 2533 at 3 (2013); Craig Richard Wilder, M.D., DAB No. 2416 at 8 (2011);
Joann Fletcher Cash, DAB No. 1725 at 17, n.9 (2000). The Board explained that, in
determining whether a period of exclusion is “unreasonable,” the ALJ is to consider
whether such period falls “within a reasonable range.” Cash, DAB No. 1725 at 17, n.9.
The Board cautions that whether the ALJ thinks the period of exclusion too long or too
short is not the issue. The ALJ may not substitute his or her judgment for that of the LG.
and may only change the period of exclusion in limited circumstances.

In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the I.G.
considers an aggravating factor to extend the period of exclusion and that factor is not
later shown to exist on appeal, or if the I.G. fails to consider a mitigating factor that is
shown to exist, then the ALJ may make a decision as to the appropriate extension of the
period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842
(2002), the Board suggests that, when it is found that an aggravating factor considered by
the I.G. is not proved before the ALJ, then some downward adjustment of the period of
exclusion should be expected absent some circumstances that indicate no such adjustment
is appropriate. Thus, the Board has by these various prior decisions significantly limited
my authority under the applicable regulation to judge the reasonableness of the period of
exclusion.

Based on my de novo review, I conclude that a basis for exclusion exists and that the
undisputed evidence establishes the two aggravating factors that the LG. relied on to
impose the ten-year exclusion. Petitioner has not shown any genuine dispute of material
11

fact or presented any evidence that would establish that the I.G. failed to consider any
mitigating factor or considered an aggravating factor that did not exist. I conclude that a
period of exclusion of ten years is in a reasonable range and not unreasonable considering
the existence of two aggravating factors and the absence of any mitigating factors. No
basis exists for me to reassess the period of exclusion.

III. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all other federal health care programs for a minimum of ten years,
effective June 18, 2015.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
San Francisco Health Care,
(CCN: 05-6272),
Petitioner,
v.
Centers for Medicare & Medicaid Services
Docket No. C-16-116
ALJ Ruling No. 2016-10

Date: May 3, 2016

RULING

For the reasons set forth below, I conclude that Petitioner, San Francisco Health Care, is
not entitled to Administrative Law Judge (ALJ) review of determinations made by the
Centers for Medicare & Medicaid Services (CMS) following an August 21, 2015 survey.
I therefore dismiss its hearing request pursuant to 42 C.F.R. § 498.70(b).

Discussion
Petitioner has no right to a hearing because CMS did not impose a remedy."

Petitioner is a skilled nursing facility located in San Francisco, California, that
participates in the Medicare program as a provider of services. On August 21, 2015, the
California Department of Public Health (state agency) completed a survey of the facility
and found that it was not in substantial compliance with federal requirements. CMS

Ex. 1. By letter dated September 4, 2015, the state agency (as authorized by CMS)
advised Petitioner that, based on the survey findings, the facility was not in substantial
compliance with program requirements, and directed it to submit a plan of correction

' [make this one finding of fact/conclusion of law.
within ten days. The letter warned that, unless the facility achieved substantial
compliance by September 20, 2015, the state agency would recommend that CMS impose
penalties (civil money penalties and termination). If the facility did not achieve
substantial compliance by November 21, 2015, the state agency would deny payments for
new admissions. CMS Ex. 2.

Based on the facility’s acceptable plan of corrections, the state agency subsequently
determined that the facility had returned to substantial compliance with program
requirements, and CMS imposed no penalties. CMS Ex. 3. Nevertheless, by letter dated
October 26, 2015, Petitioner requested a hearing to challenge one of the August 21
survey findings. CMS Ex. 4.

CMS now moves to dismiss Petitioner’s hearing request. Petitioner opposes.

The hearing rights of a long-term care facility are established by federal regulations at
42 C.F.R. Part 498. A provider dissatisfied with an initial determination is entitled to
further review, but administrative actions that are not initial determinations are not
subject to appeal. 42 C.F.R. § 498.3(a). The regulations specify which actions are
“initial determinations” and set forth examples of actions that are not. A finding of
noncompliance that results in the imposition of a remedy specified in 42 C.F.R.

§ 488.406 (except the state monitoring remedy) is an initial determination for which a
facility may request an ALJ hearing. 42 C.F.R. § 498.3(b)(13). Buta facility has no
right to a hearing unless CMS imposes one of the specified remedies. Lutheran Home —
Caledonia, DAB No. 1753 (2000); Schowalter Villa, DAB No. 1688 (1999); Arcadia
Acres, Inc., DAB No. 1607 (1997); see San Fernando Post Acute Hosp., DAB No. 2492
at 7-8 (2012). The remedy, not the citation of a deficiency, triggers the right to a hearing.
Schowalter Villa, DAB No. 1688; Arcadia Acres, Inc., DAB No. 1607. Where CMS
does not impose a remedy, Petitioner has no hearing right. See Fountain Lake Health &
Rehab., Inc., DAB No. 1985 (2005).

Petitioner argues that CMS has, in fact, imposed a remedy: a directed plan of correction.
If true, the facility would be entitled to a hearing because a “directed plan of correction”
is among the remedies specified in section 488.406. 42 C.F.R. § 488.406(a)(7); see

42 C.F.R. § 498.3(b)(13). But Petitioner is mistaken. Like all facilities with deficiencies,
it was required to submit a plan of correction for approval by CMS or the state agency.
42 C.F.R. § 488.402(d)(1). That its initial submissions were not approved does not
transform Petitioner’s plan of correction into a directed plan of correction. A directed
plan of correction is defined by regulation as a plan developed by CMS, the state agency,
or the facility’s temporary manager,” that requires the facility to act within a specified

> One of the remedies available, but not imposed here, is appointment of temporary
management to oversee the facility. 42 C.F.R. § 488.406(a)(1).
timeframe. 42 C.F.R. § 488.424. As CMS points out, the state agency did not dictate any
specific corrective actions. Rather, it advised the facility, generally, that required
elements were missing from its submitted plans. P. Exs. B, D.

Petitioner also presents equitable arguments. I am bound by the Act and regulations and
have no authority to grant relief based solely on equitable considerations.

Conclusion

Because CMS has imposed no remedies, Petitioner has no right to an ALJ hearing, and
this matter must be dismissed. 42 C.F.R. § 498.70(b). I therefore grant CMS’s motion
and dismiss Petitioner’s hearing request.

/s/
Carolyn Cozad Hughes
Administrative Law Judge