Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Khaja Aliuddin, M.D.,
Khaja Aliuddin, M.D.S.C.,

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-978
Decision No. CR3021

Date: December 4, 2013

DECISION

Wisconsin Physicians Service (WPS), an administrative contractor acting on behalf of the
Centers for Medicare & Medicaid Services (CMS), determined that the effective date for
reactivation of Medicare billing privileges for Khaja Aliuddin, M.D. and Khaja Aliuddin,
M.D.S.C. (Petitioner) was December 25, 2012. Petitioner appealed. Because Petitioner
filed his enrollment application seeking reactivation of billing privileges on December
25, 2012, and that application was ultimately approved, I affirm CMS’s determination as
to the effective date of the reactivation of Petitioner’s Medicare billing privileges.

I. Background and Procedural History

Petitioner is a physician who was enrolled in the Medicare program as a supplier.
Petitioner Exhibit (P. Ex.) 1; CMS Ex. 1. On September 14, 2011, WPS sent Petitioner a
request to revalidate (i.e., update and certify) his Medicare enrollment information with
WPS within 60 days. CMS Ex. 1. WPS’s notice stated in bold that a failure to submit a
timely and complete revalidation enrollment application may result in the deactivation of
Petitioner’s Medicare billing privileges. CMS Ex. 1, at 2.
On November 16, 2011, WPS received Petitioner’s revalidation enrollment application
through the Provider Enrollment, Chain, Ownership System (PECOS) internet-based
system. In a letter dated November 29, 2011, WPS informed Petitioner that he had 30
days to provide additional information so that his application could be approved. The
letter stated in bold that a failure to timely submit the required information “will result in
the deactivation of your Medicare billing privileges.” CMS Ex. 2.

On January 4, 2012, WPS informed Petitioner that it deactivated Petitioner’s Medicare
billing privileges (Provider Transaction Access Number (PTAN) 751940) effective
immediately because Petitioner failed to provide the information required in WPS’s
November 29, 2011 letter. WPS informed Petitioner that he could reactivate his billing
privileges by filing a revalidation enrollment application along with all supporting
information. CMS Ex. 3.

Petitioner continued to provide services to Medicare beneficiaries in 2012. P. Ex. 2.
However, it was not until December 25, 2012, that Petitioner submitted a new enrollment
application (Form CMS-855I) for revalidation through PECOS; Petitioner also sent a
ard copy of the application by mail on December 26, 2012. CMS Ex. 4. On January 7,
2013, WPS notified Petitioner that it received Petitioner’s enrollment application on
December 25, 2012; however, WPS requested additional information from Petitioner.
CMS Ex. 5. Petitioner apparently provided the required documentation and, on January
17, 2013, WPS approved Petitioner’s enrollment application to reactivate his billing
privileges with an effective date of December 25, 2012. CMS Ex. 6, at 1. WPS also
indicated that it assigned Petitioner a new PTAN and that his previous PTAN was still
deactivated. CMS Ex. 6, at 1.

By letter dated January 27, 2013, Petitioner requested that WPS reconsider its
determination as to the effective date of reactivation of billing privileges. Petitioner
stated that “[d]Jue to a misunderstanding and miscommunication, I was not able to
revalidate my billing privileges for the period of January 4, 2012 to December 24, 2012.”
CMS Ex. 7. Petitioner requested retroactive billing privileges commencing January 4,
2012. CMS Ex. 7.

On April 26, 2013, a WPS hearing officer issued a reconsidered determination upholding
WP%S’s determination that Petitioner’s effective date for Medicare billing privileges was
December 25, 2012. The hearing officer found that WPS had properly rejected
Petitioner’s incomplete November 16, 2011 revalidation enrollment application and
deactivated Petitioner for failing to provide requested information needed to complete the
revalidation application. The hearing officer stated that following deactivation,
Petitioner’s December 25, 2012 enrollment application was the one that had been
approved. The hearing officer concluded that WPS had properly determined that
December 25, 2012, was the effective date for Medicare billing privileges under the new
PTAN that was issued. CMS Ex. 9.
On June 26, 2013, Petitioner, represented by counsel, filed a request for hearing (RFH)
with the Departmental Appeals Board, Civil Remedies Division (CRD). The CRD
Director assigned this case to me. In response to my July 8, 2013 Acknowledgment and
Pre-hearing Order (Order), CMS filed a brief (CMS Br.) and nine exhibits. On
September 10, 2013, Petitioner filed a motion to compel discovery. As explained in my
September 13, 2013 Order Denying Motion to Compel, Petitioner did not have a right to
discovery because the applicable statute and regulations did not provide such a right.
Oaks of Mid City Nursing & Rehabilitation Ctr., DAB No. 2375, at 32 (2011); see also
42 U.S.C. §§ 405(b), 1395cec(h)(1)(A), (j)(8); 42 C.F.R. pt. 498; CRD Procedures § 13.
On September 16, 2013, Petitioner timely filed his pre-hearing brief (P. Br.) and two
exhibits.

In the absence of an objection, I admit CMS Exs. 1-9 and P. Exs. 1-2 into the record.
Because neither party submitted written direct testimony and both parties have sought
summary disposition of this case, I will not hold an in-person hearing in this matter. The
record is closed and I issue this decision based on the written record. Order § 11.

II. Discussion
A. Issue

Whether CMS had a legitimate basis for determining that December 25, 2012, is the
effective date for Petitioner’s Medicare billing privileges.

B. Jurisdiction
I have jurisdiction to decide this issue. 42 C.F.R. §§ 498.3(b)(15), 498.5(1)(2).
C. Findings of Fact, Conclusions of Law, and Analysis’

The Social Security Act authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations governing the enrollment process for suppliers.”
42 U.S.C. §§ 1302, 1395cc(j). The Secretary’s regulations provide that suppliers must
submit enrollment applications to revalidate their enrollment and to reactivate their
enrollment when the supplier’s billing privileges were deactivated for any reason other
than a failure to submit a claim within 12 months. 42 C.F.R. §§ 424.515, 424.540(b).
For suppliers that are physicians or non-physician practitioners, or physician or non-

' My findings of fact and conclusions of law are set forth in italics and bold font.

> Petitioner, as a physician, is considered a “supplier” for purposes of the Social Security
Act and the regulations. See 42 U.S.C. §§ 1395x(d), 1395x(u); 42 C.F.R. § 498.2.
physician practitioner organizations, the effective date for Medicare billing privileges is
the later date on which the supplier files an enrollment application that is subsequently
approved or first began providing services at a new location. 42 C.F.R. § 424.520(d).

1. WPS received Petitioner’s Medicare enrollment application seeking
reactivation of billing privileges on December 25, 2012, and WPS
approved this application.

Petitioner filed an enrollment application in response to a request from WPS to revalidate
his enrollment information. CMS Ex. 1. WPS deactivated Petitioner’s Medicare billing
privileges on January 4, 2012, because Petitioner failed to provide additional information
that WPS requested so that it could process the revalidation enrollment application. CMS
Ex. 3. WPS informed Petitioner that he had to file an enrollment application to reactivate
his Medicare billing privileges. CMS Ex. 3. On December 25, 2012, WPS received
Petitioner’s enrollment application via PECOS. CMS Exs. 4; 5; 9. Petitioner does not
dispute this date of receipt. P. Br. at 2. WPS approved this application on January 17,
2013. CMS Exs. 6; 9. Therefore, I find that WPS received Petitioner’s application on
December 25, 2012, and that this application was subsequently approved.

2. WPS properly concluded that the reactivation of Petitioner’s Medicare
billing privileges was effective December 25, 2012.

WPS deactivated Petitioner’s Medicare billing privileges on January 4, 2012, because
Petitioner failed to provide information necessary to process the revalidation enrollment
application Petitioner submitted to WPS on November 16, 2011. CMS Ex. 3. Once WPS
deactivated Petitioner for any reason other than failing to submit a claim during a 12-
month period,’ Petitioner had to “complete and submit a new enrollment application to
reactivate [his] Medicare billing privileges or, when deemed appropriate, at a minimum,
recertify that the enrollment information currently on file with Medicare is correct.”

42 C.F.R. § 424.540(b)(1). In the present case, WPS’s January 4, 2012 letter deactivating
Petitioner made it clear that he needed to file “a complete revalidation application,” in

> In its January 17, 2013 letter reactivating Petitioner’s Medicare billing privileges, WPS
indicated that it assigned Petitioner a new PTAN and that PTAN 751940 (Petitioner’s
original PTAN) was “End-dated on 01/04/2012 for 12 consecutive months of non-
billing.” CMS Ex. 6, at 1. Both CMS and Petitioner dispute that this was the basis for
the deactivation of Medicare billing privileges, and a review of WPS’s deactivation letter
from January 4, 2012, shows that the basis given for deactivation was a failure to provide
requested information in relation to Petitioner’s revalidation enrollment application.
CMS Br. at 5 n.2; RFH at 4; CMS Ex. 3.

order for WPS to reactivate Petitioner’s Medicare billing privileges.* CMS Ex. 3. The
fact that Petitioner was required to submit a new revalidation enrollment application is
significant because the date of filing an enrollment application directly impacts the
effective date for Medicare billing privileges. As stated in the regulations:

The effective date for billing privileges for physicians, nonphysician
practitioners, and physician and nonphysician practitioner organizations is
the later of the date of filing of a Medicare enrollment application that was
subsequently approved by a Medicare contractor or the date an enrolled
physician or nonphysician practitioner first began furnishing services at a
new practice location.

42 C.F.R. § 424.520(d). The “date of filing” is the date that the Medicare contractor
“receives” a signed enrollment application that the Medicare contractor is able to process
to approval. Caroline Lott Douglas, PA, DAB CR2406, at 5-7 (2011).° Even ifa
Medicare contractor has to request additional information from a supplier, as long as the
supplier timely submits that information and the Medicare contractor is able to approve
the application, the effective date for enrollment is the date the enrollment application
was received. See Tri-Valley Family Medicine, Inc., DAB No. 2358, at 7 (2010).

Petitioner filed his enrollment application for reactivation of his Medicare billing
privileges on December 25, 2012. Petitioner complied with WPS’s January 7, 2013
request for additional information and WPS approved the enrollment application on
January 17, 2013. See CMS Exs. 5; 6. Therefore, WPS properly determined that
Petitioner’s effective date for the reactivation of his Medicare billing privileges was
December 25, 2012.

3. The enrollment application received by WPS on November 16, 2011, is
not relevant to the determination of the effective date of the
reactivation of Petitioner’s Medicare billing privileges.

Petitioner disputes that his December 25, 2012 application was ultimately approved.
Instead, Petitioner argues that his original revalidation enrollment application, received
by WPS on November 16, 2011, was the application that was approved. Petitioner’s
theory is that WPS’s January 4, 2012 letter deactivating his Medicare billing privileges

+ A “revalidation application” is an “enrollment application” for Medicare billing
privileges. See 42 C.F.R. § 424.515 (introductory text); see also 42 C.F.R. § 424.515(a)
(applications for revalidation must meet all of the requirements for enrollment
applications in 42 C.F.R. § 424.510).

> Administrative decisions and rulings cited in this decision are accessible on the internet
at: http://www.hhs.gov/dab/decisions/index.html.
simply instructed Petitioner to submit missing information from his revalidation
application to reactivate the billing privileges. He asserts that WPS never officially
rejected his November 16, 2011 revalidation enrollment application; therefore, Petitioner
had an indefinite amount of time to provide the requested information. Petitioner states
that he eventually complied with the request for additional information in December 2012
and January 2013. Petitioner, therefore, argues that the correct effective date for the
reactivation of his Medicare billing privileges should be November 16, 2011, the date of
receipt of the original revalidation enrollment application. Petitioner supports this
argument by citing the reactivation provision in the regulations for suppliers deactivated
for non-billing for more than 12 months. Petitioner further asserts that WPS never had
the authority to convert Petitioner’s revalidation enrollment application into an
enrollment for a new PTAN, and that WPS violated Petitioner’s due process rights by
doing so. Petitioner argues that WPS should have reactivated Petitioner’s original PTAN
rather than assigning a new PTAN. But for WPS assigning a new PTAN, Petitioner
asserts, he would have been eligible to retroactively bill for services provided since
November 16, 2011. RFH at 4-5; P. Br. at 5-9.

Petitioner’s arguments are flawed. The record is clear that WPS deactivated Petitioner
for a reason other than a failure to bill Medicare for 12 months, and WPS informed
Petitioner that he must file a new revalidation enrollment application in order for WPS to
reactivate Petitioner’s billing privileges. CMS Ex. 3. Although suppliers deactivated for
failing to bill Medicare for 12 months are not required to submit an enrollment
application to obtain reactivation of billing privileges (thus permitting them to bill for
previous services provided to Medicare beneficiaries), suppliers deactivated for any other
reason must submit an enrollment application to reactivate billing privileges. See

42 CFR. § 424.540(b); John Heverin, Ph.D., ALJ Ruling 2013-6, at 6-7 (HHS CRD
March 19, 2013). The requirement to file an enrollment application subjected Petitioner
to the effective date provisions in 42 C.F.R. § 424.520(d).

Although Petitioner accepts that WPS deactivated his billing privileges, Petitioner argues
that because WPS did not formally reject Petitioner’s November 2011 revalidation
enrollment application, the application was still pending and subject to approval when
Petitioner provided the information that WPS requested in 2012 and 2013. As indicated
above, the fact that WPS deactivated Petitioner for a reason other than failing to bill
Medicare for 12 months and required the submission of a new revalidation enrollment
application to reactivate Medicare billing privileges is sufficient for WPS to apply the
effective date provisions in 42 C.F.R. § 424.520(d). However, to the extent that
Petitioner argues that WPS’s failure to formally reject his revalidation enrollment
application, received from Petitioner on November 16, 2011, is relevant, I conclude that
WPS did reject his application.

Under the regulations, CMS may reject an enrollment application if a supplier “fails to
furnish complete information on the provider/supplier enrollment application within 30
calendar days from the date of the [Medicare] contractor request for the missing
information.” 42 C.F.R. § 424.525(a)(1); see also 42 C.F.R. § 424.502 (definition of
Reject/Rejected). In the present case, on November 29, 2011, WPS requested additional
information in order to process the revalidation enrollment application that had been filed
on November 16, 2011. CMS Ex. 2, at 1. On January 4, 2012, WPS sent a notice

that stated: “Because you have not provided a complete revalidation enrollment
application(s) and all supporting documentation within 30 days of our 11/29/2011 letter,
your Medicare billing privileges are being deactivated, effective immediately.” CMS Ex.
3. Although CMS did not expressly state that it rejected Petitioner’s revalidation
enrollment application, there is no doubt from WPS’s letters that it followed the
provisions of 42 C.F.R. § 424.525 to reject Petitioner’s application. In fact, WPS’s
reconsidered determination indicates that WPS had rejected Petitioner’s application.
CMS Ex. 9. Section 424.525 does not require WPS to expressly state that the application
ad been rejected and, because suppliers have no right to appeal the rejection of an
application, there is no prejudice to Petitioner that the January 4, 2012 letter did not
expressly state that the application had been rejected. 42 C.F.R. § 424.525(d).

Finally, Petitioner argues that WPS’s assignment of a new PTAN following reactivation
of his billing privileges is tantamount to revoking his PTAN without notice or due
process. P. Br. at 8-9. Although WPS deactivated Petitioner’s Medicare billing
privileges and did not revoke them, it is significant that WPS deactivated those billing
privileges for a reason that required Petitioner to submit a new enrollment application.
Because Petitioner must essentially reenroll as a Medicare supplier in order to reactivate
is billing privileges, he cannot bill Medicare for services from the date of deactivation
until he is reactivated with a new effective date for Medicare billing privileges.
42 C.F.R. § 424.520(d). The issuance of a new PTAN reflects this. See Shalbhadra
Bafna, M.D., DAB No. 2449, at 2 n.3 (2012) (indicating that under 42 C.F.R. § 424.505,
CMS issues PTANs to suppliers when they are granted billing privileges). Petitioner
cannot bill for services provided from January 4, 2012, until December 25, 2012, unless
Petitioner is granted a limited period of retrospective billing.

4. I decline to determine whether Petitioner is entitled to a retrospective
billing period under 42 C.F.R. § 424.521(a)(1).

Petitioner requests that, if I affirm CMS’s determination concerning the effective date of
Petitioner’s Medicare billing privileges, I grant him a 30-day retrospective billing period
under 42 C.F.R. § 424.521(a)(1). Petitioner argues that he should receive retroactive
billing due to: 1) the errors WPS made in deactivating his billing privileges;

2) Petitioner’s confusion concerning the effect of the deactivation; and 3) the high quality
of services Petitioner provided to his patients during the period of deactivation. RFH at
6; P. Br. at 10.

The regulations at 42 C.F.R. § 424.521(a) state a limited retrospective period may be
permitted as follows:

Physicians, nonphysician practitioners and physician and
nonphysician practitioner organizations may retrospectively
bill for services when a physician or nonphysician
practitioner or a physician or a nonphysician organization
have met all program requirements, including State licensure
requirements, and services were provided at the enrolled
practice location for up to—

(1) 30 days prior to their effective date if circumstances precluded enrollment in
advance of providing services to Medicare beneficiaries, or

(2) 90 days [in certain emergencies not applicable to this case.]

The circumstances in the present case are similar to those in the Bafna case cited above,
and I adopt that case’s reasoning regarding this issue:

We decline to address this issue because even if denials of retrospective
billing are appealable (an issue that we do not reach), Petitioner has not
alleged that he met all of the conditions for retrospective billing, and
because nothing in the record shows that CMS or WPS denied Petitioner a
retrospective billing period when it issued its initial and reconsideration
determinations.

Bafna, DAB No. 2449, at 5. To the extent that Petitioner requests that I consider the
equities of his situation to grant retrospective billing, I am unable to do so since I have no
authority to grant equitable relief or an exemption to applicable regulations discussed
above. See US Ultrasound, DAB No. 2302, at 8 (2010); 18661CPayday.com, L.L.C.,
DAB No. 2289, at 14 (2009) (“[a]n ALJ is bound by applicable laws and regulations and
may not invalidate either a law or regulation on any ground... .”).

III. Conclusion

For the reasons explained above, I affirm CMS’s determination that Petitioner’s effective
date for Medicare billing privileges is December 25, 2012.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Sundance Inn Health Center
(CCN: 67-6191),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-12-1279
Decision No. CR3020
Date: December 11, 2013
DECISION

Petitioner, Sundance Inn Health Center (Petitioner or the facility), is a long term care
facility in New Braunfels, Texas, that participates in the Medicare program. Based on a
survey completed on July 5, 2012, the Centers for Medicare & Medicaid Services (CMS)
determined that Petitioner was not in substantial compliance with Medicare participation
requirements. CMS imposed against Petitioner a civil money penalty (CMP) of $7,000
per day effective June 10, 2012 through June 12, 2012 ($21,000), and a CMP of $500 per
day effective June 13, 2012 through July 5, 2012 ($11,500), for a total CMP of $32,500.
Petitioner appealed, and CMS moves for summary judgment.
For the reasons set forth below, I grant summary judgment in favor of CMS. The
undisputed evidence establishes that the facility was not in substantial compliance with
Medicare requirements, and CMS’s determinations of immediate jeopardy were not
clearly erroneous. | also find that the CMP that CMS imposed is reasonable.

I. Background

The Social Security Act (Act) sets forth requirements for nursing facilities’ participation
in the Medicare program and authorizes the Secretary of the U.S. Department of Health

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

The Secretary contracts with state agencies to conduct periodic surveys to determine
whether skilled nursing facilities are in substantial compliance. Act § 1864(a); 42 C.F.R.
§ 488.10. Each facility must be surveyed once every 12 months, and more often if
necessary, to ensure that identified deficiencies are corrected. Act § 1819(g)(2)(A); 42
CFR. §§ 488.20(a), 488.308.

Surveyors from the Texas Department of Aging and Disability Services (state survey
agency) conducted a survey of Petitioner that ended on July 5, 2012. Based on their
findings, CMS determined that the facility was not in substantial compliance with 42
C.F.R. §§ 483.10(b)(11) (notification of changes-physical consultation), 483.13(c)
(prevention of abuse and neglect), and 483.25 (quality of care). CMS also determined
that the facility’s noncompliance posed immediate jeopardy to resident health and safety.
CMS imposed against the facility a CMP of $7,000 per day effective June 10, 2012
through June 12, 2012, and a CMP of $500 per day effective June 13, 2012 through July
5, 2012. CMS found that the facility returned to substantial compliance on July 6, 2012.

On September 13, 2012, Petitioner timely requested a hearing contesting all findings of
noncompliance and related remedies set forth in the CMS notices issued on July 31, 2012
and August 24, 2012. The case was assigned to me for hearing and decision. On October
3, 2012, Lissued an Acknowledgment and Initial Pre-hearing Order (Pre-hearing Order)
establishing a briefing schedule. In accordance with the schedule, on January 2, 2013,
CMS submitted its prehearing exchange, consisting of its prehearing brief (CMS
Prehearing Br.), exhibit and witness lists, and 16 exhibits (CMS Exs. 1-16). On February
6, 2013, Petitioner timely submitted its prehearing exchange, consisting of its prehearing
brief (P. Prehearing Br.), exhibit and witness lists, and three exhibits (P. Exs. 1-3). On
February 14, 2013, CMS filed a motion for summary judgment and memorandum (CMS
Br.). On March 15, 2013, Petitioner filed a response in opposition to CMS’s motion for
summary judgment (P. Response).

IL. Issues
Whether the undisputed evidence establishes that:

e Petitioner was not in substantial compliance with Medicare requirements;
e If Petitioner was not in substantial compliance, whether CMS’s
determination that the deficiencies posed immediate jeopardy to resident
health and safety was clearly erroneous; and

e The penalties CMS imposed are reasonable in amount and duration.
Ill. Findings of Fact and Conclusions of Law
A, Summary judgment is appropriate.

CMS moves for summary judgment relying on the following facts, which are undisputed
unless otherwise noted. Resident 1 (R1), a 70-year-old female with diagnoses that
included atrial fibrillation, chronic obstructive pulmonary disease, and hypertension (P.
Ex. 1, at 2, 49; CMS Ex. 8, at 1, 5-7), had blood pressure readings, over the period June
10-12, 2012, that Petitioner reported as significantly low.' On June 10, Petitioner’s staff
noted that R1 had a blood pressure of 97/56 mm/Hg. On June 11, Petitioner’s staff noted
R1’s blood pressure was 100/50 mm/Hg. On June 12, Petitioner’s staff noted R1 had
blood pressures of 94/52 mm/Hg, 85/52 mm/Hg, and 67/45 mm/Hg. CMS Ex. 8, at 1, 9,
11, 16, 18.

On June 10, 2012, Petitioner’s staff responded to R1’s low blood pressure by withholding
R1’s blood pressure medication. CMS Ex. 8, at 9. Petitioner’s staff did not consult with
R1’s physician regarding R1’s low blood pressure or the decision to withhold her
medication. On June 11, 2012, Petitioner’s nursing staff responded to R1’s low blood
pressure by again withholding her blood pressure medication. CMS Ex. 8, at 11.
Petitioner’s nursing staff again did not immediately consult R1’s physician. On June 12,
2012, nursing staff on the day and evening shifts again did not immediately consult with
R1’s physician regarding low blood pressure readings. After noting that R1’s blood
pressure was 67/45 mm/Hg around 5:45 p.m., nursing staff left a voice mail message for
R1’s physician’s nurse practitioner. Neither the Physician nor the Nurse Practitioner
returned the call. Around 10:00 p.m., R1 experienced symptoms of troubled breathing,
tingling in her left arm, numbness in her tongue, and blurred vision. Staff found her
unresponsive and called for emergency assistance. R1 was transported to the hospital,
where she was pronounced dead at 11:05 p.m. CMS Ex. 7, at 1, 4, 5; CMS Ex. 8, at 18,
19, 21, 32.

Summary judgment is appropriate when a case presents no issue of material fact, and its
resolution turns on questions of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986); Livingston Care Ctr. v. United States Dep't of Health and Human Servs.,

' According to MedlinePlus Medical Encyclopedia, “[m]ost normal blood pressures fall
in the range of 90/60 millimeters of mercury (mm Hg) to 130/80 mm Hg.” See CMS Ex.
13, at 1.
388 F.3d 168, 173 (6th Cir. 2004). See also Illinois Knights Templar Home, DAB No.
2274, at 3-4 (2009) (citing Kingsville Nursing Ctr., DAB No. 2234, at 3-4 (2009)). The
moving party may show the absence of a genuine factual dispute by presenting evidence
so one-sided that it must prevail as a matter of law, or by showing that the non-moving
party has presented no evidence “sufficient to establish the existence of an element
essential to [that party’s] case, and on which [that party] will bear the burden of proof at
trial.” Livingston Care Ctr., 388 F.3d 168, 173 (quoting Celotex Corp. v. Catrett, 477
USS. 317, 322 (1986)). To avoid summary judgment, the non-moving party must then act
affirmatively by tendering evidence of specific facts showing that a dispute exists. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see
also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehab. Ctr., DAB No.
1918 (2004). To defeat an adequately supported summary judgment motion, the non-
moving party may not rely on the denials in its pleadings or briefs, but it must furnish
evidence of a dispute concerning a material fact. I/linois Knights Templar Home, DAB
No. 2274, at 4; Livingston Care Ctr., DAB No. 1871, at 5 (2003).

In examining the evidence for purposes of determining the appropriateness of summary
judgment, I must draw all reasonable inferences in the light most favorable to the non-
moving party. Brightview Care Ctr., DAB No. 2132, at 2, 9, 10 (2007); Livingston Care
Ctr., 388 F.3d at 168, 172; Guardian Health Care Ctr., DAB No. 1943, at 8 (2004); but
see Cedar Lake, DAB No. 2344, at 7 (2010). However, drawing factual inferences in the
light most favorable to the non-moving party does not require that I accept the non-
moving party’s legal conclusions. Cedar Lake, DAB No. 2344, at 7; Guardian Health
Care Ctr., DAB No. 1943, at 11 (“A dispute over the conclusion to be drawn from
applying relevant legal criteria to undisputed facts does not preclude summary judgment
if the record is sufficiently developed and there is only one reasonable conclusion that
can be drawn from those facts.”).

CMS alleges that Petitioner violated the following participation requirements: 42 C.F.R.
§ 483.10(b)(11); 42 C.F.R. § 483.13(c); and 42 C.F.R. § 483.25. It is not disputed that
the principal violation at issue is whether Petitioner failed to immediately consult with
R1’s physician when she had a significant change in medical condition, in violation of 42
C.F.R. § 483.10(b)(11), and the other deficiencies are derivative violations. See P.
Response at 8.

My Pre-hearing Order required each party to present all arguments and evidence at the
time it filed its pre-hearing exchange. I instructed the parties that “I may exclude an
argument and evidence that relates to such argument if a party fails to address it in its
pre-hearing brief.” Pre-hearing Order, § 7. As stated above, both parties submitted
prehearing briefs as part of their pre-hearing exchanges. However, Petitioner tendered no
evidence challenging any of the citied deficiencies. Petitioner’s prehearing brief also did
not present any arguments addressing the factual allegations reported in the Statement of
Deficiencies (SOD) that formed the basis of CMS’s determination of substantial
noncompliance.

Instead, Petitioner now claims in its response to CMS’s motion that “CMS relies heavily
on subjective opinion such as what constitutes a change in condition for a newly-admitted
resident that is unfamiliar to the facility staff.” P. Response at 15. According to
Petitioner, “[e]ven objective evidence cited, such as blood pressure readings, is subject to
interpretations of meaning due to multiple variables.” P. Response at 15. Petitioner also
suggests, based on the surveyor’s notes of an interview with R1’s nurse practitioner, that
R1 died from an enlarged heart and that her death was unavoidable, regardless of whether
she had a significant change in condition that required immediate physician consultation.
P. Response at 9. However, as discussed below, drawing all reasonable inferences in
Petitioner’s favor, I find that the undisputed facts lead to only one reasonable conclusion
— Petitioner failed to immediately consult R1’s physician on several occasions when
Petitioner determined R1 exhibited low blood pressure readings and also failed to consult
the physician before withholding R1’s blood pressure medications.

Petitioner further alleges that the surveyor’s “inconsistent findings and findings
inconsistent with the final initial determinations are a question of unresolved
contradictory facts.” P. Response at 10. According to Petitioner, the surveyor cited non-
immediate jeopardy level deficiencies at the exit of the survey, only to then reopen the
survey the next day, citing immediate jeopardy level deficiencies. P. Response at 9-10;
see P. Prehearing Br. at 13.

In support of some of its contentions, Petitioner has submitted a written declaration from
Petitioner’s Administrator during the relevant time period. P. Ex. 3 (Administrator Decl).
I find the Administrator’s declaration does not create any genuine dispute of material fact
regarding R1 and her condition on June 10-12, 2012. Rather, it merely gives a “timeline”
of the survey events and also describes the remedial actions the Administrator
implemented after he was notified of the incident involving R1 on June 12, 2012.

Alleged inadequacies in the survey process also do not relieve Petitioner from meeting
all the requirements of program participation and do not invalidate adequately
documented deficiencies. 42 C.F.R. § 488.318(b); Beechwood Sanitarium, DAB No.
1824 (2002) (finding inadequacies or irregularities in the survey process do not
invalidate adequately documented deficiencies or relieve a facility of its obligations to
meet all requirements for participation in Medicare and Medicaid). Petitioner’s
challenges that surveyors did not follow survey protocol or that there were irregularities
in the survey process, even if substantiated, do not create a genuine issue of material fact
that would preclude granting summary judgment to CMS here where the deficiencies are
undisputed.
B. The undisputed evidence establishes, in contravention of Medicare
requirements, Petitioner’s staff did not immediately consult R1’s physician when
they determined that R1 had low blood pressure readings.

A facility must immediately inform the resident, consult the resident’s physician, and (if
known) notify the resident’s legal representative or interested family member when there
is a significant change in the resident’s physical, mental or psychosocial status (i.e., a
deterioration in health, mental or psychosocial status in either life-threatening conditions
or clinical complications) or a need to alter treatment significantly (i.e., a need to
discontinue an existing form of treatment due to adverse consequences or to commence a
new form of treatment). 42 C.F.R. § 483.10(b)(11). “Immediately” means “as soon as
the change... is detected, without any intervening interval of time.” Magnolia Estates
Skilled Care, DAB No. 2228, at 8 (2009); The Laurels at Forest Glen, DAB No. 2182 at
13 (2008).

CMS alleges that Petitioner violated 42 C.F.R. § 483.10(b)(11) because Petitioner failed
to immediately consult with a physician when R1 had low blood pressure readings over a
three-day period. CMS Br. at 9-10; CMS Ex. 1, at 1-4.

R1, a 70-year-old female, was admitted to the facility from the hospital on June 9, 2012.
See P. Ex. 1, at 57-59, 64. Her diagnoses included atrial fibrillation, chronic obstructive
pulmonary disease, hypertension, and hyperlipidemia. P. Ex. 1, at 2,49; CMS Ex. 8, at 1,
5-7. R1’s blood pressure medications included Metoprolol Tartrate twice a day,
Amlodipine/Benazepril daily, and Lisinopril daily. P. Ex. 1, at 55-56, 60; CMS Ex. 8, at
8, 10.

R1’s care plan was dated and signed on June 16, 2012, which was four days after R1’s
death. Staff noted that, due to R1’s diagnosis of atrial fibrillation, R1 “may experience
fluctuating/unstable blood pressures related to multiple diagnosis [sic]” and that she was
“at risk for decreased cardiac output and experiencing hypo/hypertension.” P. Ex. 1, at
88-89; CMS Ex. 8, at 5-6. Regarding R1’s hypertension, the care plan noted that R1 “has
the potential for change in blood pressure and fluid volume, dehydration, fluctuations in
weight and complications [related to] hypertension.” P. Ex. 1, at 90; CMS Ex. 8, at 7.
The care plan approaches for R1’s atrial fibrillation and hypertension diagnoses included:
administer antihypertensive medication as ordered; obtain and evaluate blood pressure
every shift and daily; monitor for headaches and dizziness; monitor for signs and
symptoms of exacerbation of tachycardia, irregular heart rate, vertigo, hypotension,
altered mental status; monitor vital signs per facility protocol; and notify the physician of
significant changes in blood pressures. P. Ex. 1, at 88-90; CMS Ex. 8, at 5-7.

On June 10, 2012, at 8:00 a.m., Petitioner’s staff recorded that R1’s blood pressure was
125/86 mm/Hg. Staff administered R1’s morning doses of Amlodipine/Benazepril for
high blood pressure and Lisinopril for high blood pressure and heart failure. P. Ex. 1, at
70, 78; CMS Ex. 8, at 10, 12; CMS Ex. 12, at 3. Around 8:00 p.m. on June 10, 2012,
however, staff documented that R1’s blood pressure was 97/56 mm/Hg. Staff also
documented that they withheld R1’s blood pressure pills. P. Ex. 1, at 81; CMS Ex. 8, at
9.

On the morning of June 11, 2012, R1’s blood pressure was 100/50 mm/Hg. P. Ex. 1, at
78,79; CMS Ex. 8, at 10, 11. Again, staff responded by withholding R1’s blood pressure
medication. P. Ex. 1, at 79; CMS Ex. 8, at 11.

On June 12, 2012, around 8:00 a.m., R1’s blood pressure was 120/72 mm/Hg.
Petitioner’s staff administered R1 her blood pressure medication. P. Ex. 1, at 78; CMS
Ex. 8, at 10; see CMS Ex 12, at 3. (The record also contains a “Daily Skilled Nurse’s
Note,” dated June 12, 2012, which shows that, under day shift, R1’s blood pressure was
94/52 mm/Hg; under evening shift, R1’s blood pressure was 85/52 mm/Hg; and under
night shift, R1’s blood pressure was 134/59 mm/Hg. There is no time given for any of
these readings. P. Ex. 1, at 74; CMS Ex. 8, at 16).

A late entry in the nurse’s notes, made at 1:35 p.m. on June 13, 2012, documents that
around 5:45 p.m. on June 12, 2012, R1 had complaints of dizziness and said her legs
were “shaky” and she felt “woozy.” P. Ex. 1, at 76; CMS Ex. 8, at 18; see P. Ex. 1, at 54;
CMS Ex. 8, at 23, 24, 26. A nurse took R1’s vital signs and noted that her blood pressure
was 67/45 mm/Hg. P. Ex. 1, at 75; CMS Ex. 8, at 17, 20, 24. The nurse called R1’s
attending physician’s nurse practitioner around 5:45 p.m. and left a voice mail message.
P. Ex. 1, at 53; CMS Ex. 8, at 18. Neither the Physician nor the Nurse Practitioner
returned the voice mail. The nurse stated that she rechecked R1’s vitals approximately
every 30 minutes for the next two hours. She stated that R1 “was drinking a lot of water”
and her blood pressure went up to 102/70 mm/Hg, then up to168/87 mm/Hg. P. Ex. 1, at
75; CMS Ex. 8, at 17, 20. R1 told the nurse that she was not feeling as dizzy, but she was
seeing spots. The nurse checked R1’s pupils and found they were equal and reactive.
The nurse noted that R1 did not exhibit any weakness on one side and that R1 continued
to drink water. P. Ex. 1, at 76; CMS Ex. 8, at 18, 20. According to the nurse’s notes,
around 7:35 p.m., R1 said she was “feeling okay” and her vitals were “still around the
same.” P. Ex. 1, at 76-77; CMS Ex. 8, at 18-19.

Around 8:30 p.m., R1 wanted to use the restroom but felt faint when staff placed her in
her wheelchair. The nurse and an aide put R1 back in bed. R1’s blood pressure reading
was 168/87 mm/Hg. P. Ex. 1, at 77; CMS Ex. 8, at 19. The nurse stated that R1 “drank a
little water and said she felt better.” The nurse gave R1 her scheduled blood pressure
medicine as well as her scheduled inhaler. Around 10:00 p.m., according to a nurse aide,
R1 had complaints of not being able to breathe, tingling in her arms, a numb tongue, and
blurred vision. CMS Ex. 7, at 3,4. Around 10:20 p.m., an aide reported that R1 said she
was dizzy, and, when staff went to her room, they found that the head of R1’s bed was
elevated, she had labored breathing, and she was unresponsive. P. Ex. 1, at 77; CMS Ex.
8, at 19, 20-21. She appeared to have vomited on herself. CMS Ex. 7, at 5. The staff
called the Nurse Practitioner, 911, and initiated CPR. EMS arrived and transported R1 to
the hospital. P. Ex. 1, at 77; CMS Ex. 8, at 19, 20-21. R1 was declared dead at 11:05
p.m. CMS Ex. 8, at 32.

Petitioner suggests, based on the Nurse Practitioner’s statement to a surveyor, that RI
died from an enlarged heart and that her death was unavoidable. P. Response at 9.
Petitioner also contends that it is only speculation on the surveyors’ part “that a delay in
calling the physician made a difference or likely would have made a difference.” P. Brief
at 15. For purposes of summary judgment, I will infer that R1 died from an enlarged
heart that was separate from blood pressure complications. I will also accept that
Petitioner’s delay in calling R1’s physician did not ultimately affect R1’s condition.
However, Petitioner’s assertions, even when interpreted in a light most favorable to
Petitioner, do not detract from the regulatory requirements. Regardless of how R1 died,
and whether or not consulting with R1’s physician would have ultimately affected R1’s
outcome, Petitioner was still required, under 42 C.F.R. § 483.10(b)(1 1), to immediately
consult her physician when she exhibited low blood pressure readings.

Although Petitioner also suggests that blood pressure readings can have “interpretations
of meaning due to multiple variables” (P. Response at 15), Petitioner has not disputed
that staff withheld blood pressure medication based on their interpretation of R1’s blood
pressure readings. Further, Petitioner has not come forward with any evidence, such as
an affidavit from a medical professional, that raises a challenge to the interpretation of
any of the specific blood pressure readings which appear in the facility’s own documents.
The uncontroverted evidence leads to only one reasonable conclusion — when R1
repeatedly exhibited low blood pressure readings over a three-day period, there was a
significant change in condition that should have prompted immediate physician
consultation. Given R1’s serious cardiac impairments, which were documented in her
care plan, it was imperative that staff monitor her vital signs and consult her physician
when she exhibited any alarming symptoms, such as abnormal changes in blood pressure.

In response to R1’s complaints of dizziness and her blood pressure reading of 67/45
mm/Hg around 5:45 p.m. on June 12, 2012, Petitioner’s staff eventually did leave a
voicemail message for the Nurse Practitioner of R1’s physician. However, neither the
Nurse Practitioner nor the Physician ever returned the message. Instead of acting
diligently to follow-up and contact the Physician to advise him of R1’s condition,
Petitioner’s staff made no further attempts to contact him and only called the Nurse
Practitioner again around 10:20 p.m., when R1 was found unresponsive in her bed.

As well as not qualifying as an “immediate” communication of a significant change of
condition, I find that the voice mail message Petitioner’s staff left for the Nurse
Practitioner also clearly fails to qualify as a physician consultation within the meaning of
42 C.F.R. § 483.10(b)(11). As the Board held in Magnolia Estates, “consultation”
involves more than just informing or notifying a physician. The Board stated:

Consultation . . . requires a dialogue with and a responsive directive from
the resident’s physician as to what actions are needed; it is not enough to
merely notify the physician of the resident’s change in condition. Nor is it
enough to leave just a message for the physician.

Magnolia Estates, DAB No. 2228, at 9.

In sum, over a three-day period, Petitioner’s staff believed R1 exhibited low blood
pressure readings, which constituted a significant change in condition requiring
immediate medical consultation. There is no dispute that Petitioner’s staff did not notify
R1’s physician on June 10 or 11, 2012, regarding R1’s blood pressure readings. There is
no dispute that Petitioner’s staff only left a message for the Nurse Practitioner on June 12,
2012. Because Petitioner’s staff failed on multiple occasions to immediately consult
R1’s physician regarding R1’s repeated low blood pressure readings, I find that Petitioner
was not in substantial compliance with 42 C.F.R. § 483.10(b)(11).

C. The undisputed evidence establishes, in contravention of Medicare
requirements, Petitioner failed to immediately consult R1’s physician before
withholding R1’s blood pressure medication.

A facility must immediately consult a resident’s physician when there is a need to alter
treatment significantly (i.e., a need to discontinue an existing form of treatment due to
adverse consequences or to commence a new form of treatment). 42 C.F.R.

§ 483.10(b)(11). The undisputed evidence shows that Petitioner’s staff responded to R1’s
low blood pressure readings by withholding R1’s physician-ordered blood pressure
medication on June 10 and 11.

Petitioner has pointed to nothing in the record to indicate that R1’s physician had given
orders to withhold R1’s blood pressure medications in the event her blood pressure fell to
a certain range. Petitioner’s staff thus had no physician authorization to deviate from
R1’s medication regimen. Before Petitioner’s staff decided on any course of action
regarding R1’s medication, they were required to immediately consult R1’s physician
concerning the need to alter R1’s treatment significantly, and their withholding of her
blood pressure medications, in contravention of physician orders, constitutes another
violation of Medicare requirements.

10

D. The undisputed evidence demonstrates that Petitioner did not follow its
policy, in contravention of Medicare requirements.

The opening provision of 42 C.F.R. § 483.25 (quality of care), which implements
section 1819(b)(2) (Medicare) of the Act, states:

Each resident must receive and the facility must provide the necessary care and
services to attain or maintain the highest practicable physical, mental, and
psychosocial well-being, in accordance with the comprehensive assessment and
plan of care.

The quality of care legislation and regulatory requirements are “‘based on the premise that
the facility has (or can contract for) the expertise to first assess what each resident’s
needs are (in order to attain or maintain the resident’s highest practicable functional
level) and then to plan for and provide care and services to meet the goal.” Spring
Meadows Health Care Ctr., DAB No. 1966, at 16 (2005). The regulation thus “imposes
on facilities an affirmative duty designed to achieve favorable outcomes to the highest
practicable degree.” Windsor Health Care Ctr., DAB No. 1902, at 16-17 (2003), aff'd,
Windsor Health Care Ctr. v. Leavitt, No. 04-3018 (6th Cir. 2005). The facility must take
“reasonable steps” and “ ‘practicable’ measures to achieve that regulatory end.”
Clermont Nursing & Convalescent Ctr., DAB No. 1923, at 21 (2004), aff’d, Clermont
Nursing & Convalescent Ctr. v. Leavitt, 142 F. App’x 900 (6th Cir. 2005).

Accordingly, the Board has held that the language of section 483.25 requires skilled
nursing facilities to furnish the care and services set forth in a resident’s care plan, to
implement doctors’ orders, to monitor and document the resident’s condition, and to
follow its own policies. See, e.g., Alexandria Place, DAB No. 2245 (2009) (failing to
provide care in accordance with the doctor’s order); Kenton Healthcare, LLC, DAB No.
2186 (2008) (failing to follow standards in the care plan for supervision); Spring
Meadows, DAB No. 1966, at 17 (“the clearest case of failure to meet [section 483.25] is
failure to provide one of the specific services outlined in the subsections or failure
otherwise to follow the plan of care based on the comprehensive resident assessment”);
and St. Catherine’s of Findley, DAB No. 1964, at 13 n.9 (2005) (facility admission that it
failed to follow its own supervision care plan may make summary judgment appropriate).
Further, a SNF “must develop and implement written policies and procedures that
prohibit . . . neglect” (and other types of mistreatment). 42 C.F.R. § 483.13(c).

“Neglect” means a “failure to provide goods and services necessary to avoid physical
harm, mental anguish, or mental illness.” 42 C.F.R. § 488.301.

Petitioner’s policy pertaining to a significant change in resident status states, inter alia:

A significant change in a resident’s status is defined as
deterioration or marked improvement in the health, mental, or
11

psychosocial status of the resident in either life-threatening
conditions, or in incidents of clinical complications.
Depending on the scope and severity, examples of life-
threatening conditions include, but are not limited to: 1.
Cardiovascular or respiratory changes. 2. Fractures. 3. Semi-
comatose or comatose state. 4. Choking. 5. Infection. 6.
Dehydration.

CMS Ex. 6, at 1. Petitioner’s policy goes on to state, “As a significant change in the
resident’s condition occurs, the charge nurse will notify the physician, family, or other
appropriate person/agency, of the significant change immediately. If a question about the
seriousness of any significant change in condition exists, the operating philosophy of this
facility is always to notify appropriate persons immediately.” CMS Ex. 6, at 2. Under
Petitioner’s own policy, its staff had a similar reporting responsibility to that found under
42 C.F.R. § 483.10(b)(11) when a resident experiences a significant change in condition.
As previously discussed, considering the undisputed evidence establishes that Petitioner’s
staff withheld blood pressure medication in response to R1’s blood pressure readings,
without immediately consulting R1’s physician, I find Petitioner did not follow its policy,
in addition to failing to follow R1’s care plan instructions and her physician’s medication
orders. It follows, therefore, that Petitioner was not in substantial compliance with 42
C.F.R. §§ 483.25 and 483.13(c).

E. The undisputed evidence establishes that CMS’s determination of immediate
jeopardy to resident health and safety is not clearly erroneous.

CMS alleges that Petitioner’s violations constituted “immediate jeopardy.” Immediate
jeopardy exists if a facility’s noncompliance has caused or is likely to cause “serious
injury, harm, impairment, or death to a resident.” 42 C.F.R. § 488.301. CMS’s
determination as to the level of a facility’s noncompliance (which would include an
immediate jeopardy finding) must be upheld unless it is “clearly erroneous.” 42 C.F.R.
§ 498.60(c). The Board has observed repeatedly that the “clearly erroneous” standard
imposes on facilities a “heavy burden” to show no immediate jeopardy and has sustained
determinations of immediate jeopardy where CMS presented evidence “from which
‘[o]ne could reasonably conclude’ that immediate jeopardy exists.” Barbourville Nursing
Home, DAB No. 1962, at 27-28 (2004), citing Florence Park Care Ctr., DAB No. 1931
(2004), citing Koester Pavilion, DAB No. 1750 (2000); Daughters of Miriam Ctr., DAB
No. 2067, at 7, 9 (2007).

Here, R1, a resident who was diagnosed with atrial fibrillation, chronic obstructive
pulmonary disease, and hypertension, exhibited significantly low blood pressure readings
during the period June 10-12, 2012. In response, Petitioner’s staff undisputedly withheld
12

R1’s ordered blood pressure medication on June 10 and 11 without physician
authorization and failed to consult with her physician immediately regarding her
significant change in condition.

In an affidavit of direct testimony that Petitioner does not challenge, a surveyor explained
that R1’s diagnoses of “irregular heartbeat, heart failure, and high cholesterol . . .
typically cause low blood pressure, possible formation of blood clots, kidney damage,
liver damage, heart attacks, and/or strokes.” CMS Ex. 16, at 3 (Surveyor Decl. 6). The
surveyor explained that “[l]ow blood pressure could be a sign of a heart attack, which
could be fatal.” CMS Ex. 16, at 3-4 (Surveyor Decl. 4 6).

Petitioner also did not challenge the testimony of CMS’s nurse consultant, who
explained:

Resident 1’s low blood pressures, as well as her complaints of
dizziness and feeling “woozy,” can also be signs of low
cardiac output. Because the atria and the ventricles are not
synchronized in a patient with atrial fibrillation, the cardiac
output is low which, if left untreated, can lead to heart failure.
The resident already had a diagnosis of heart failure;
therefore, the resident was at higher risk of cardiac arrest.
Thus, it was imperative for the nurse to consult with the
physician regarding the low blood pressure readings and the
symptoms of dizziness.

CMS Ex. 12, at 3 (Nurse Consultant Decl.).

Petitioner claims that there is no evidence that Petitioner’s action caused actual harm or
constituted a likelihood of serious harm for R1. P. Prehearing Br at 14. However, CMS
was not required to prove actual harm here, and Petitioner has not created an issue of
material fact that would preclude summary judgment. Specifically, Petitioner did not
come forward with evidence to refute that not alerting her physician to significant drops
in R1’s blood pressure, or withholding her ordered medications, would likely cause her
serious harm or death.
13

F. The penalty CMS imposed is reasonable.

Petitioner asserts that there is an issue concerning the date when it attained substantial
compliance, claiming that the surveyor’s declaration failed to contain any information on
this issue. P. Response at 10-11. However, the burden rests entirely on a facility to
prove that it has attained compliance by a particular date. Texan Nursing & Rehab. of
Amarillo, LLC, DAB No. 2323 (2010). Where noncompliance is determined, a remedy
will remain in effect until:

The facility has achieved substantial compliance, as determined by CMS or
the State based upon a revisit or after an examination of credible written
evidence that it can verify without an on-site visit; . . 7

42 C.F.R. § 488.454(a)(1); see 42 C.F.R. § 488.440(h)(1) (governing duration of civil
money penalties). Thus, once a facility has been found to be out of substantial
compliance, it remains so until it affirmatively demonstrates that it has achieved
substantial compliance once again. Premier Living and Rehab. Ctr., DAB No. 2146, at
23 (2008); Lake City Extended Care, DAB No. 1658, at 12-15 (1998). The burden is on
the facility to prove that it has resumed complying with program requirements, not on
CMS to prove that deficiencies continued to exist after they were discovered. Asbury
Ctr. at Johnson City, DAB No. 1815, at 19-20 (2002).

According to Petitioner’s Administrator, Petitioner submitted a plan of correction to the
state survey agency on July 30, 2012. P. Ex. 3, at 2 (Administrator Decl). In the right-
hand column of its plan of correction, Petitioner stated the “completion date” for
correcting all deficiencies as “7/6/12.” CMS Ex. 1; see P. Ex. 3, at 2 (Administrator
Decl.); see P. Response at 10-11.

The surveyors conducted a revisit on August 20, 2012, at which time they determined
that Petitioner returned to substantial compliance as of the date of its plan of correction —
July 6, 2012. CMS Ex. 5, at 1; P. Ex. 3, at 2 (Administrator Decl.). Petitioner was
required to come forward with evidence to establish it was in compliance at an earlier
date. However, Petitioner has not come forward with any evidence to suggest that it
returned to substantial compliance prior to July 6, 2012. Thus, contrary to what
Petitioner argues, there is no genuine issue of material fact suggesting an earlier
compliance date, and I summarily sustain CMS’s determinations as to the duration of the
periods of immediate jeopardy and substantial noncompliance.

> The timing of a revisit survey is wholly within the discretion of the state and CMS and
not reviewable in this forum. 42 C.F.R. § 488.308(c); Cal Turner Extended Care
Pavilion, DAB No. 2030, at 13 (2006).
14

The CMP range for immediate jeopardy level noncompliance is from $3,050 to $10,000
per day. 42 C.F.R. § 488.438(a)(1)(i). The lower range of CMP, from $50 per day to
$3,000 per day, is reserved for deficiencies that do not constitute immediate jeopardy, but
they either cause actual harm to residents or cause no actual harm but have the potential
for causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii). Here CMS imposed
a penalty of $7,000 per day, effective June 10, 2012 through June 12, 2012, during the
period of immediate jeopardy, and $500 per day, effective June 13, 2012 through July 5,
2012, during the period of substantial noncompliance not at the immediate jeopardy level.

In considering whether the CMP amounts imposed against Petitioner are reasonable, I
apply the factors listed in 42 C.F.R. § 488.438(f): 1) the facility’s history of
noncompliance, including repeated deficiencies; 2) the facility’s financial condition; 3)
factors specified in 42 C.F.R. § 488.404; and 4) the facility’s degree of culpability, which
includes neglect, indifference, or disregard for resident care, comfort, or safety. The
absence of culpability is not a mitigating factor. The factors in 42 C.F.R. § 488.404
include: 1) the scope and severity of the deficiency; 2) the relationship of the deficiency
to other deficiencies resulting in noncompliance; and 3) the facility’s prior history of
noncompliance in general and specifically with reference to the cited deficiencies.

lalso consider whether the evidence supports a finding that the amount of the CMP is at
a level reasonably related to an effort to produce corrective action by a provider with the
kind of deficiencies found, and in light of the section 488.438(f) factors. I am neither
bound to defer to CMS’s factual assertions, nor free to make a wholly independent choice
of remedies without regard for CMS’s discretion. Barn Hill Care Ctr., DAB No. 1848, at
21 (2002); Cmty. Nursing Home, DAB No. 1807, at 22 et seg. (2002); Emerald Oaks,
DAB No. 1800, at 9 (2001); CarePlex of Silver Spring, DAB No. 1683, at 8 (1999).

In its prehearing brief, Petitioner contends that a CMP in the amount of $32,500 is
unreasonable and suggests that the factors specified in 42 C.F.R. Part 488 are “arbitrary
and capricious” because CMS had originally imposed a CMP in the amount of $8,000,
then increased it to $32,500, almost fifty days after substantial compliance was achieved.
P. Prehearing Br. at 13. Petitioner argues that if any CMP is imposed, that it be imposed
“at the lowest possible rate under the rules.” P. Prehearing Br. at 15. In its response in
opposition to CMS’s motion for summary judgment, Petitioner contends further that
“[t]he reasonableness of the civil money penalty is subject to unresolved factual issues.”
P. Response at 16.

Although Petitioner argues that the regulatory factors specified in 42 C.F.R. Part 488 are
“arbitrary and capricious” and do not support the CMP imposed by CMS, Petitioner has
submitted no evidence of its own to show that the regulatory factors, either individually
or collectively, warranted a reduction in the CMP amount. In discussing the burden of
proof regarding the regulatory factors, the Board has repeatedly held that “an ALJ or the
Board properly presumes that CMS considered the regulatory factors and that those
15

factors support the amount imposed.” See, e.g., Pinecrest Nursing and Rehab. Ctr., DAB
No. 2446, at 23 (2012) (emphasis in original; citations omitted). Thus, CMS is not
required to present evidence regarding each regulatory factor. Instead, the burden is on
Petitioner “to demonstrate, through argument and the submission of evidence addressing
the regulatory factors, that a reduction is necessary to make the CMP amount
reasonable.” Jd., quoting Oaks of Mid City Nursing and Rehab. Ctr., DAB No. 2375, at
26-27 (2011). Petitioner has not properly contested any of the factors set forth in the
regulations that would affect my consideration of the amount of the penalty.

I find that Petitioner’s violations were extremely serious. Petitioner’s staff failed, on
multiple occasions, to consult immediately with R1’s physician when R1 exhibited a
significant change in condition manifested by low blood pressure readings, and they
withheld her ordered blood pressure medication without consulting R1’s physician.
Petitioner’s staff’s actions clearly put R1 at risk for serious injury, and I find that
Petitioner thus has a high degree of culpability for its noncompliance.

Petitioner also has an undisputed history of noncompliance. According to a report titled
“Facility Visit History” generated by the state survey agency, various surveys conducted
in September 2009, October 2009, March 2010, May 2010, September 2010, October
2010, and October 2011 resulted in numerous instances of noncompliance with both
Medicare participation requirements and the Life Safety Code. CMS Ex. 11, at 1-3, 5, 6,
7-9, 13-14. The facility’s history thus justifies a significant penalty. Lastly, although
Petitioner states that it requests a CMP at the lowest possible rate if one is imposed, it
does not come forward with evidence that its financial condition affects its ability to pay
the $32,500 CMP.

The undisputed evidence establishes that Petitioner was in violation of Medicare
requirements beginning on June 10, 2012. Petitioner has not effectively challenged that
the immediate jeopardy determination was clearly erroneous. Given the seriousness of
Petitioner’s noncompliance, its culpability, and its history of noncompliance, I find that a
CMP of $7,000 per day for the period June 10, 2012 through June 12, 2012, is a
reasonable remedy for Petitioner’s failure to comply substantially with Medicare
requirements at the immediate jeopardy level. Moreover, I find reasonable a CMP of
$500 per day for Petitioner’s continued noncompliance at less than an immediate
jeopardy level, from June 13, 2012 through July 5, 2012.
16

IV. Conclusion

For the reasons set forth above, I grant summary judgment in favor of CMS and find that
the remedy CMS imposed is reasonable.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Pranam, LLC,
d/b/a Norwich Mini Market,

Respondent.

Docket No. C-14-16
FDA Docket No. FDA-2013-H-1217

Decision No. CR3019
Date: December 4, 2013
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Pranam, LLC, d/b/a Norwich Mini Market, that
alleges facts and legal authority sufficient to justify the imposition of a civil
money penalty of $500. Respondent did not answer the Complaint, nor did
Respondent request an extension of time within which to file an answer.
Therefore, I enter a default judgment against Respondent and assess a civil money
penalty of $500.

CTP began this case by serving the Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The Complaint alleges that Respondent impermissibly sold
cigarettes to minors and failed to verify that cigarette purchasers were 18 years of
age or older, thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21
U.S.C. § 301 et seq., and its implementing regulations, Cigarettes and Smokeless
Tobacco, 21 C.F.R. Part 1140 (2012). CTP seeks a civil money penalty of $500.
On October 18, 2013, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days, Respondent should
pay the proposed penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that if it failed to take one of
these actions within 30 days, an Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering Respondent to pay the full
amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor
has it requested an extension. Pursuant to 21 C.F.R. § 17.11(a), 1am required to
“assume the facts alleged in the [C]omplaint to be true” and, if those facts
establish liability under the Act, issue a default judgment and impose a civil
money penalty. Accordingly, I must determine whether the allegations in the
Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns Norwich Mini Market, an establishment that sells
tobacco products and is located at 340 Franklin Street, Norwich,
Connecticut 06360. Complaint § 3.

e On May 16, 2012, an FDA-commissioned inspector observed two
violations of 21 C.F.R. Part 1140 at Respondent’s establishment. The
inspector observed a violation of 21 C.F.R. § 1140.14(a) when “a person
younger than 18 years of age was able to purchase a package of Rave Box
100’s cigarettes . . . at approximately 10:29 AM ET[.]” The inspector
observed a violation of 21 C.F.R. § 1140.14(b)(1) when “the minor’s
identification was not verified before the sale... .” Complaint ¥ 10.

e On July 12, 2012, CTP issued a Warning Letter to Respondent regarding
the inspector’s observations from May 16, 2012. The letter explained that
the observations constituted violations of regulations found at 21 C.F.R.

§ 1140.14(a) and (b)(1), and that the named violations were not necessarily
intended to be an exhaustive list of all violations at the establishment. The
Warning Letter went on to state that if Respondent failed to correct the
violations, regulatory action by the FDA or a civil money penalty action
could occur and that Respondent is responsible for complying with the law.
Complaint § 10.

e FDA received no response to the Warning Letter from Respondent, though
United Parcel Service records demonstrate that an individual named “Patel”
received the Warning Letter on July 13, 2012. Complaint 4 11.

e¢ On April 12, 2013, FDA-commissioned inspectors documented two
additional violations of 21 C.F.R. Part 1140 at Respondent’s establishment.
The inspectors documented a violation of 21 C.F.R. § 1140.14(a) when “a
person younger than 18 years of age was able to purchase a package of
Maverick Box 100s cigarettes . . . at approximately 1:21 PM[.]” The
inspectors also documented a violation of 21 C.F.R. § 1140. 14()) when
“the minor’s identification was not verified before the sale... .
Complaint § 1.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if distributed or offered for sale in any state in violation of regulations
issued under section 906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R

§ 1140.1(b). The Secretary issued the regulations at 21 C.F.R. Part 1140 under
section 906(d) of the Act. 21 U.S.C. § 387(a); 21 U.S.C. § 387f(d)(1); 75 Fed.
Reg. 13,229 (Mar. 10, 2010). The regulations prohibit the sale of cigarettes to any
person younger than 18 years of age. 21 C.F.R. § 1140.14(a). The regulations
also require retailers to verify, by means of photo identification containing a
purchaser’s date of birth, that no cigarette purchasers are younger than 18 years of
age. 21 C.F.R. § 1140.14(b)(1).

Taking the above alleged facts as true, Respondent had four violations of
regulations contained in 21 C.F.R. Part 1140 within an eleven-month period.
Specifically, Respondent had two violations on May 16, 2012, and two violations
on April 12, 2013. Respondent’s actions on both dates violated the prohibition
against selling cigarettes to persons younger than 18 years of age. 21 C.F.R.

§ 1140.14(a). Respondent’s actions on both dates also violated the requirement
that retailers verify, by means of photo identification containing a purchaser’s date
of birth, that no cigarette purchasers are younger than 18 years of age. 21 C.F.R.
§ 1140.14(b)(1). Therefore, Respondent’s actions constitute violations of law that
merit a civil money penalty.

The regulations require me to impose a civil money penalty in an amount that is
either the maximum provided for by law or the amount sought in the Complaint,
whichever is smaller. 21 C.F.R. § 17.11(a)(1)-(2). The regulations currently
allow a maximum penalty of $2,000 for a fourth violation within an eleven-month
period. 21 C.F.R. § 17.2. CTP, however, has requested a fine of $500. Therefore,
I find that a civil money penalty of $500 is warranted and so order one imposed.
/s/

Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Shree Pharmacy, Inc.
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-711
Decision No. CR3015

Date: November 27, 2013

DECISION

Palmetto GBA National Supplier Clearinghouse (NSC), an administrative contractor
acting on behalf of the Centers for Medicare & Medicaid Services (CMS), revoked the
Medicare supplier number and billing privileges of Petitioner, Shree Pharmacy, Inc., a
supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).
NSC determined that Petitioner was not in compliance with 42 C.F.R. § 424.57(c)(7),
which requires suppliers to maintain an operational physical location that is accessible to
the public, Medicare beneficiaries, the government, and its inspectors. Petitioner
appealed. CMS argues the revocation was proper and requests summary judgment to
affirm it. For the reasons stated below, I grant CMS’s motion for summary judgment.

I. Background and Procedural History

Petitioner was enrolled in the Medicare program as a DMEPOS supplier. During the fall
of 2012, it is undisputed that Petitioner’s physical address of record was 1624 W.
Montrose Ave., Chicago, Illinois. CMS Exhibit (Ex.) 1, at 2; Petitioner’s Exhibit (P. Ex.)
1, at 8. An NSC compliance inspector working on behalf of CMS attempted to conduct
site inspections at Petitioner’s location on Monday, September 24, 2012, at
approximately 12:10 p.m., and on Friday, October 19, 2012, at approximately 12:47 p.m.
CMS Ex. I, at 2.

According to CMS, at the time of the first site inspection, the NSC inspector observed the
words “Pharmacy” and “Medical Center” on the entrance door to Petitioner’s location.
CMS Exs. 2, 8. On the left of the entrance door, closer to the word “Pharmacy” than
“Medical Center,” there was a sign that posted hours of operation as 12:00-6:00 p.m.
Monday and Tuesday, closed on Wednesday, 12:00-7:00 p.m. on Thursday and Friday,
and 12:00-5:30 p.m. on Saturday. CMS Br. at 3; CMS Ex. 1, at 3. There were no other
operating hours posted on the entrance door or any other observable indication that the
pharmacy and the medical center had separate hours of operation. The door to the
building was locked and no person answered when the NSC inspector knocked, and no
person answered the phone when the NSC inspector called. CMS Ex. 1, at 7; CMS Ex. 8.
The NSC inspector returned on Friday, October 19, 2012, to attempt a site inspection and
was again unable to complete the site inspection because the building was closed. CMS
Ex. 8.

On November 5, 2012, NSC sent a letter notifying Petitioner that its supplier number was
revoked, retroactive to October 19, 2012, the date of the second attempted site inspection,
when CMS determined that Petitioner’s practice location was not operational. CMS Ex.
4, at 1. NSC barred Petitioner from re-enrolling in the Medicare program for two years
from October 19, 2012. CMS Ex. 4, at 1. The notice letter explained that the basis for
Petitioner’s revocation was because Petitioner was closed during its posted hours of
operation on September 24, 2012, and October 19, 2012, when a NSC inspector
attempted to complete site inspections to verify Petitioner’s compliance with supplier
standards. CMS Ex. 4, at 2. The notice letter further informed Petitioner of its right to
request reconsideration of the revocation determination within 60 days of the postmark of
the notice. CMS Ex. 4, at 2.

On December 4, 2012, Petitioner requested that NSC reconsider its revocation decision.
Petitioner disagreed with CMS’s revocation determination and asserted:

That on both occasions, September 24, 2012 and October 19, 2012 the
pharmacy was open to the public during its posted hours of operation.

Within the medical building that the pharmacy is located, there are two
separate hours posted in the building entryway, both for the clinic, and the
pharmacy. The hours of operation for both practices are different. The
pharmacy posted hours are 1:30 p.m. - 9:30 p.m. Monday, Tuesday, Thursday
and Friday and Saturday from 12:00 p.m.-8:00 p.m.

CMS Ex. 5, at 1-2.
Petitioner also included three affidavits from individuals who asserted that they were
present and working at the pharmacy on September 24, 2012 and October 19, 2012.
CMS Ex. 5, at 3-5.

On February 22, 2012, NSC issued a reconsideration decision affirming the revocation.
The hearing officer stated that NSC was authorized to perform revalidation site
inspections in order to verify the information that NSC had on file for suppliers and to
confirm compliance with all supplier standards. CMS Ex. 7, at 2. The hearing officer
observed that the NSC inspector’s photographs of the entrance to the building at 1624 W.
Montrose Ave., Chicago, Illinois, do not show separate hours of operation for the
pharmacy and the medical center and that the posted hours are closer to the sign for the
pharmacy than to the sign for the medical center. CMS Ex. 7, at 3. The hearing officer
also noted that because the door was locked at the time of both attempted site visits, there
was no method of determining if additional hours were posted inside of the building.
CMS Ex. 7, at 3. The hearing officer concluded that the pharmacy was closed during its
posted hours of operation on the dates of the attempted inspections and that the NSC
inspector was unable to verify compliance with supplier standards and, thus, affirmed the
revocation.

Petitioner filed a request for a hearing with the Departmental Appeals Board, Civil
Remedies Division, by letter dated April 15, 2013. The case was assigned to me, and I
issued an Acknowledgment and Pre-hearing Order (Pre-hearing Order). In accordance
with my May 2, 2013 Pre-hearing Order, CMS timely filed its pre-hearing exchange,
consisting of a motion for summary judgment and brief (CMS Br.), along with eight
proposed exhibits, CMS Exs. 1-8. Petitioner then filed its pre-hearing exchange, which
included a response brief (P. Br.) and three proposed exhibits, P. Exs. 1-3. Because
neither party objected to any of the proposed exhibits, I admit them all to the record.

The Pre-hearing Order also advised the parties that they must submit written direct
testimony for each proposed witness and that an in-person hearing would only be
necessary if the opposing party requested an opportunity to cross-examine a witness.
Pre-hearing Order ff 8, 9, and 10; Vandalia Park, DAB No. 1940 (2004); Pacific
Regency Arvin, DAB No. 1823, at 8 (2002) (holding that the use of written direct
testimony for witnesses is permissible as long as the opposing party has the opportunity
to cross-examine those witnesses). CMS listed one witness and submitted an affidavit of
written direct testimony for this witness. CMS Ex. 8. Petitioner did not request cross
examination. Petitioner did not list any proposed witnesses and filed one affidavit of
Dilip N. Desai, RPh. P. Ex. 3. CMS did not request to cross-examine Mr. Desai. I find,
therefore, that an in-person hearing in this case is unnecessary.
IL. Applicable Law

To receive Medicare payments for items furnished to a Medicare-eligible beneficiary, the
Secretary of the U.S. Department of Health and Human Services must issue a supplier
billing number to a DMEPOS supplier.' Social Security Act (Act) § 1834(j)(1)(A); 42
U.S.C. § 1395m(j)(1)(A). To receive direct-billing privileges, a DMEPOS supplier must
also meet and maintain the Medicare application certification standards set forth in 42
C.F.R. § 424.57(c). Among other requirements, a DMEPOS supplier must permit CMS
or its agent to conduct on-site inspections to ascertain supplier compliance with the
Medicare enrollment standards. 42 C.F.R. § 424.57(c)(8). In addition, a DMEPOS
supplier must be in a location accessible to the public and CMS and must be accessible
and staffed during posted hours of operation. 42 C.F.R. § 424.57(c)(7)(i)(B),(C).
Moreover, the supplier must maintain a permanent visible sign in plain view, and, if the
supplier’s place of business is located within a building complex the sign must be visible
at the main entrance of the building, or the hours can be posted at the entrance of the
supplier. 42 C.F.R. § 424.57(c)(7)(i)(D). A supplier must also be “operational,” which
means it “has a qualified physical practice location, is open to the public for the purpose
of providing health care related services, is prepared to submit valid Medicare claims,
and is properly staffed, equipped, and stocked . . . to furnish these items or services.” 42
C.F.R. § 424.502.

CMS will revoke a currently-enrolled Medicare supplier’s billing privileges if CMS or its
agent determines that the supplier is not in compliance with any supplier enrollment
standard. See 42 C.F.R. § 424.57(d); A to Z DME, LLC, DAB No. 2303, at 3 (2010); see
also 18661CPayday.com, DAB No. 2289, at 13 (2009) (“[F]ailure to comply with even
one supplier standard is a sufficient basis for revoking a supplier’s billing privileges.”).
If an on-site inspection reveals that a supplier is no longer operational, or otherwise fails
to meet one of the supplier standards, CMS may revoke the supplier’s Medicare billing
privileges. 42 C.F.R. § 424.535(a)(5)(ii). Suppliers who have had their billing privileges
revoked “are barred from participating in the Medicare program from the effective date
of the revocation until the end of the re-enrollment bar,” which is “‘a minimum of 1| year,
but not greater than 3 years depending on the severity of the basis for revocation.” 42
C.F.R. § 424.535(c). The effective date of revocation is the date that CMS determined
the supplier was no longer operational. See 42 C.F.R. § 424.535(g).

' Petitioner, as a supplier of DMEPOS, is considered a “supplier” for Medicare purposes.
See 42 C.F.R. § 498.2 (definition of “Supplier’’).
II. Analysis
A. Issue

The issue in this case is whether CMS is entitled to summary judgment on the grounds
that the undisputed evidence establishes CMS had a legitimate basis to revoke
Petitioner’s Medicare enrollment and billing privileges, effective October 19, 2012.

B. Applicable Standard

Summary judgment is appropriate when a case presents no issue of material fact, and its
resolution turns on questions of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-
48 (1986); Livingston Care Ctr. v. U. S. Dep’t of Health and Human Servs., 388 F.3d
168, 173 (6th Cir. 2004); see also Illinois Knights Templar Home, DAB No. 2274, at 3-4
(2009) (citing Kingsville Nursing Ctr., DAB No. 2234, at 3-4 (2009)). The moving party
may show the absence of a genuine factual dispute by presenting evidence so one-sided
that it must prevail as a matter of law, or by showing that the non-moving party has
presented no evidence “sufficient to establish the existence of an element essential to
[that party’s] case, and on which [that party] will bear the burden of proof at trial.”
Livingston Care Ctr., 388 F.3d at 173 (quoting Celotex Corp. v. Catrett, 477 U.S. 317,
323-24 (1986)). To avoid summary judgment, the non-moving party must then act
affirmatively by tendering evidence of specific facts showing that a dispute exists.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see
also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehab. Ctr., DAB No.
1918 (2004).

To defeat an adequately supported summary judgment motion, the non-moving party may
not rely on the denials in its pleadings or briefs but must furnish evidence of a dispute
concerning a material fact. I/linois Knights Templar, DAB No. 2274, at 4; Livingston
Care Ctr., DAB No. 1871, at 5 (2003). In examining the evidence to determine the
appropriateness of summary judgment, I must draw all reasonable inferences in the light
most favorable to the non-moving party. See Brightview Care Ctr., DAB No. 2132, at 2,
9 (2007); Livingston Care Ctr., 388 F.3d at 168, 172; Guardian Health Care Ctr., DAB
No. 1943, at 8 (2004); but see Cedar Lake, DAB No. 2344, at 7 (2010); Brightview, DAB
No. 2132, at 10 (noting entry of summary judgment upheld where inferences and views
of non-moving party are not reasonable). Also, the role of an administrative law judge
(ALJ) in deciding a summary judgment motion differs from the ALJ’s role in resolving a
case after a hearing. The ALJ should not assess credibility or evaluate the weight of
conflicting evidence. Holy Cross Vill. at Notre Dame, DAB No. 2291, at 4-5 (2009).
C. Findings of Fact and Conclusion of Law

I. CMS had legitimate basis to revoke Petitioner’s Medicare enrollment
because an NSC inspector was not able to access Petitioner’s location, on
September 24, 2012 and October 19, 2012, during the sole posted hours of
operation.

In summary, CMS contends that Petitioner was not open and accessible during the sole
posted business hours outside of Petitioner’s entrance door, which were 12:00-6:00 p.m.
on Monday, September 24, 2012 and 12:00-7:00 p.m. on Friday, October 19, 2012. CMS
argues that while Petitioner asserts that different hours were posted inside of the building,
Petitioner’s business could not be accessed for the NSC inspector to see whether a sign
was posted, as the outside door was locked, when NSC attempted a site inspection. CMS
argues that the signage on the exterior of the building at 1624 W. Montrose Avenue,
Chicago, Illinois, suggests that the posted hours are Petitioner’s hours and it was
reasonable for the NSC inspector and the public to reach this conclusion. CMS Br. at 6.
CMS believes the site inspector reasonably concluded, based upon available evidence,
that Petitioner was not open to the public and accessible during its posted hours of
operation. Thus, CMS argues that Petitioner’s Medicare billing privileges were properly
revoked and summary judgment is appropriate.

Petitioner argues it has come forward with specific facts to overcome the CMS motion
and summary judgment should be denied and Petitioner’s revoked Medicare supplier
number should be reinstated. P. Br. at 1-2. Petitioner does not dispute that on Monday,
September 24, 2012, at approximately 12:10 p.m., and on Friday, October 19, 2012, at
approximately 12:47 p.m., the pharmacy was closed and locked, with no staff on site
when the NSC inspector visited the premises. P. Br. at 3. However, Petitioner argues the
NSC inspector improperly inferred that the posted hours outside of the building at 1624
W. Montrose Avenue reflected Petitioner’s actual hours of operation. Instead, Petitioner
states that the hours posted outside reflect the hours of operation for only the medical
clinic which is also located inside the building. P. Br. at 2. Petitioner states that it posted
separate hours outside of its entrance within the clinic building, which the inspector could
not access on September 24" at 12:10 p.m. and October 19" at 12:47 p.m. P. Br. at 2; P.
Exs. 2, 3; CMS Ex. 5, at 2. Petitioner further argues that on August 1, 2011, Petitioner’s
authorized official signed and submitted to CMS a Medicare enrollment application
indicating hours of operation of Monday 1:30-8:30 p.m., Tuesday 1:30-8:30 p.m.,
Wednesday Closed, Thursday 1:30-8:30 p.m., Friday 1:30-8:30 p.m., and Saturday 1:30-
8:00 p.m. P. Ex. 1, at 16. Petitioner believes that the NSC inspector’s reliance on a sign
posted on the entrance to 1624 W. Montrose Ave., Chicago, Illinois, rather than the hours
of operation stated on Petitioner’s previously submitted Medicare enrollment application,
was not reasonable and Petitioner’s Medicare enrollment was erroneously revoked.
On summary judgment, I will 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, I will construe the evidence in a light most
favorable to the non-movant and avoid deciding which version of the facts is more likely
true. Holy Cross Vill. at Notre Dame, Inc., DAB No. 2291, at 5. Moreover, I will apply
the plain meaning of the regulatory text to the facts in this case. The regulation at 42
C.F.R. § 424.57(c)(7)(i)(D) states that the supplier must maintain “a permanent visible
sign in plain view” and post hours of operation. If the supplier’s place of business is
located within a building complex, the sign must be visible at the main entrance of the
building or the hours can be posted at the entrance of the supplier. 42 C.F.R.

§ 424.57(c)(7)(i)(D). In addition, a DMEPOS supplier must be in a location accessible to
the public, Medicare beneficiaries, CMS, NSC, and its agents, and must be accessible and
staffed during posted hours of operation. 42 C.F.R. § 424.57(c)(7)(i)(B),(C). The
regulation also notes that the location must not be in a gated community or other area
where access is restricted. 42 C.F.R. § 424.57(c)(7)(i)(B). Petitioner does not dispute
that the only hours posted outside the entrance door near the word “pharmacy” at 1624
W. Montrose Avenue in Chicago were 12:00-6:00 p.m. Monday and Tuesday, closed on
Wednesday, 12:00-7:00 p.m. on Thursday and Friday, and 12:00-5:30 on Saturday. CMS
Ex. 1, at 3; P. Br. at 2. Petitioner also does not dispute that on Monday, September 24,
2012, at approximately 12:10 p.m., and on Friday, October 19, 2012, at approximately
12:47 p.m., the entrance door to 1624 W. Montrose Avenue was closed and locked and
no staff was present on site. P. Br. at 2-3. Further, Petitioner does not dispute that the
NSC inspector was “denied access” to the “clinic building” on both of the dates the NSC
inspector attempted to conduct a site inspection at Petitioner’s business. P. Br. at 2.

For purposes of summary judgment, I will infer that Petitioner posted separate hours of
operation outside of a door within the clinic building and disclosed these hours of
operation to CMS, as Petitioner alleges. However, the fact remains that the “permanent
visible sign in plain view” near the entrance door which could be accessed by the public,
Medicare beneficiaries, CMS, and NSC listed hours of operation of 12:00-6:00 p.m. on
Mondays and 12:00-7:00 p.m. on Fridays. CMS Exs. 2, 8. Although Petitioner contends
that the pharmacy had different hours of operation, Petitioner undisputedly did not post
these hours outside the main entrance door near the exterior signage for the business, and
the NSC inspector could not gain access to the pharmacy to ascertain whether Petitioner
had posted separate hours of operation, or whether Petitioner was in fact operational.
Additionally, any Medicare beneficiary who may have tried to access Petitioner’s
business at the same times as the inspector would not have had any notice of a different
set of hours for the pharmacy posted beyond the locked doors of the medical center.

I find Petitioner did not maintain all the Medicare supplier standards set forth in 42
C.F.R. § 424.57(c) because Petitioner was not accessible to the public, Medicare
beneficiaries, and NSC, and it was not staffed during its posted hours of operation on two
separate occasions. On Monday, September 24, 2012, and on Friday, October 19, 2012,
during the posted hours of operation, NSC was unable to conduct an on-site inspection, in
accordance with 42 C.F.R. § 424.57(c)(8), of Petitioner because the main entrance door at
1624 W. Montrose Avenue in Chicago was locked and no staff was present. After
evaluating the submissions of both parties, I determine that this case presents no genuine
issues of material fact and grant CMS’s motion for summary judgment on the grounds
that Petitioner was not operational within the meaning of 42 C.F.R. §§ 424.57(c)(7),(8)
and 424.502 and that CMS had the authority to revoke Petitioner’s Medicare supplier
number and billing privileges pursuant to 42 C.F.R. §424.535(a)(5)(ii) effective October
19, 2012.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2013-H-1060)

Complainant
v.
JNC Mini Market 2, Inc.
Respondent.
Docket No. C-13-1254
Decision No. CR3012

Date: November 26, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an
administrative complaint on Respondent, JNC Mini Market 2, Inc., at 661 South
18" Street, Newark, New Jersey, 07103, and by filing a copy of the complaint with
the Food and Drug Administration's (FDA) Division of Dockets Management.
The complaint alleges that JNC Mini Market 2 impermissibly sold cigarettes to a
minor on two separate occasions, failed to verify a tobacco purchaser’s age by
means of photo identification containing a date of birth on two separate occasions,
and sold individual cigarettes, violating the Federal Food, Drug, and Cosmetic Act
(Act), 21 U.S.C. § 301 et seq., and its implementing regulations, 21 C.F.R. Part
1140. CTP seeks to impose a $2000 civil money penalty against Respondent JNC
Mini Market 2.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on September 25, 2013, CTP
served the complaint on Respondent JNC Mini Market 2 by United Parcel Service.
In the complaint and accompanying cover letter, CTP explained that, within 30
days, Respondent should pay the penalty, file an answer, or request an extension
of time in which to file an answer. CTP warned Respondent that, if it failed to
take one of these actions within 30 days, the Administrative Law Judge could,
pursuant to 21 C.F.R. § 17.11, issue an initial decision ordering it to pay the full
amount of the proposed penalty.

Respondent JNC Mini Market 2 has neither filed an answer within the time
prescribed, nor requested an extension of time within which to file an answer.
Pursuant to 21 C.F.R. § 17.11, Lassume that the facts alleged in the complaint (but
not its conclusory statements) are true. Specifically:

e At Respondent's business establishment, 661 South 18th Street, Newark,
New Jersey 07103, on December 22, 2012, at approximately 3:46 PM, an
FDA-commissioned inspector observed Respondent’s staff sell a package
of Newport Box 100s cigarettes to a person younger than 18 years of age,
and that staff failed to verify, by means of photo identification containing
the bearer's date of birth, that no purchaser of cigarettes or smokeless
tobacco is younger than 18 years of age;

e CTP issued a Notice of Compliance Check Inspection (Notice) to JNC Mini
Market 2 on December 27, 2012, informing Respondent that an inspection
had been conducted on December 22, 2012, and that during this inspection
a minor was able to enter the establishment and purchase a regulated
tobacco product at approximately 3:46 PM;

e Ina warning letter dated January 17, 2013, CTP informed Respondent of
the inspector's December 22, 2012 observations, and that such actions
violate federal law, 21 C.F.R. §§ 1140.14(a) and 1140.14(b)(1). The letter
further warned that a civil money penalty or other regulatory action could
result if Respondent failed to correct its violations;

e At approximately 11:49 AM on May 26, 2013, at Respondent's business
establishment, 661 South 18th Street, Newark, New Jersey 07103, FDA-
commissioned inspectors observed Respondent’s staff sell an individual
cigarette to a person younger than 18 years of age, and that staff failed to
verify, by means of photo identification containing the bearer's date of
birth, the purchaser’s age.

These facts establish that Respondent JNC Mini Market 2 is liable under the Act.
The Act prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A
tobacco product is misbranded if sold or distributed in violation of regulations
issued under section 906(d) of the Act. 21 U.S.C. § 387f(d); see 21 U.S.C.

§ 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). The Secretary issued the regulations at 21
C.F.R. Part 1140 under section 906(d) of the Act. 21 U.S.C. 387(a); see 21 U.S.C.
§ 387f(d)(1); 75 Fed. Reg. 13,229 (Mar. 10, 2010). Under 21 C.F.R. § 1140.14(a),
no retailer may sell cigarettes or smokeless tobacco to any person younger than 18
years of age. Under 21 C.F.R. § 1140.14(b)(1), a retailer must verify, by means of
photo identification containing the bearer's date of birth, that no person purchasing
cigarettes or smokeless tobacco is younger than 18 years of age. Finally, the
regulations prohibit retailers from opening packages of cigarettes in order to sell
individual cigarettes. 21 C.F.R. § 1140.14(d).

A $2000 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $2000 against
Respondent JNJ Mini Market 2, Inc. Pursuant to 21 C.F.R. § 17.11 (b), this order
becomes final and binding upon both parties after 30 days of the date of its
issuance.

/s/
Carolyn Cozad Hughes
Administrative Law Judge