Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Bartley Healthcare Nursing and Rehabilitation,
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-644
Decision No. CR2684

Date: January 11, 2012

DECISION

I grant summary judgment to the Centers for Medicare and Medicaid Services (CMS) and
find Petitioner, Bartley Nursing and Rehabilitation, was not in substantial compliance
with federal Medicare requirements. The undisputed evidence shows that Petitioner
discharged a resident without the required preparation and orientation and without a
legitimate post-discharge plan of care that was developed with the participation of the
resident’s family. Further, I find that a per-instance civil money penalty (PICMP) of
$6,200 is reasonable.

I. Procedural History

Petitioner, also referenced as “the facility” in this decision, is a nursing home located in
Jackson, New Jersey. On October 25, 2010, the New Jersey State Department of Health
and Senior Services (state agency) conducted a complaint survey to determine whether
Petitioner was in compliance with federal participation requirements. The surveyors
determined that Petitioner was not in compliance, at an immediate jeopardy level, with 42
C.F.R. § 483.12(a)(7), relating to preparation for a safe and orderly resident discharge,
and 42 C.F.R. § 483.25, relating to quality of resident care. By notice letter dated
November 15, 2010, CMS imposed a PICMP of $6,200 against the facility.
Petitioner filed a request for hearing by letter dated January 17, 2011, which was received
by the Departmental Appeals Board on July 30, 2011. This case was assigned to me for
hearing and decision. On August 1, 2011, I issued an Acknowledgment, Initial Pre-
Hearing Order, and Order to Show Cause because my review of Petitioner’s hearing
request raised questions about the timeliness of its hearing request. On August 8, 2011,
Petitioner filed its response to my Order to Show Cause and established good cause for
the late receipt of its hearing request by showing it sent a timely request directly to CMS.

On October 31, 2011, CMS filed its Prehearing Brief and Motion for Summary Judgment
(CMS Br.) accompanied by 52 exhibits (CMS Exs. 1-52). In its motion, CMS further
alleged that Petitioner was also not in substantial compliance with 42 C.F.R. 483.20(1)
requiring a discharged resident to have a discharge summary that includes a “post-
discharge plan of care that is developed with the participation of the resident and his or
her family, which will assist the resident to adjust to his new living environment.”! 42
C.F.R. § 483.20(1)(3). CMS claimed this further supported the CMP it imposed upon
Petitioner. Petitioner requested, and was granted, an extension of time to file its
exchange. On January 17, 2012, Petitioner filed its Prehearing Brief and Opposition to
Motion for Summary Judgment (P. Br.) accompanied by 13 exhibits (P. Exs. 1-13). I
admit all exhibits to the record absent any objection from the parties.

II. Case Background

The following background facts are not disputed. This case revolves around issues
related to the discharge one of Petitioner’s residents, who is identified in the state survey
and in this decision as “Resident 3” for privacy reasons. At the time of his discharge,
Resident 3 was a 76-year-old insulin-dependent, 204-pound man on numerous
medications, who was paralyzed on the left side of his body with weakness on the right
side of his body. Resident 3 needed total assistance with almost all activities of daily
living (ADL) and was at risk for aspiration.

Petitioner discharged Resident 3 at approximately 5:00 p.m. one evening to the house he
shared only with his 77-year-old wife, who herself was recently discharged from
Petitioner’s facility after rehabilitation for a broken femur. There was no nursing or other
professional medical assistance awaiting his arrival at home and no outside nursing or
other professional medical assistance arrived at his home the next day. When he tried to
enter his home, his wheelchair could not fit through the doorway, and he needed to wait
in his garage approximately one hour until a wheelchair that could fit into his house was
brought to him. On his person, Resident 3 brought a discharge summary that contained 8

' CMS may allege additional violations not included in its original notice letter if CMS
provides sufficient notice to a petitioner during the pre-hearing process. See, e.g., Alden
Town Manor Rehab. & HCC, DAB No. 2054, at 17-19 (2006).
prescriptions for 11 different medications that Resident 3 took on a regular basis, all
which needed to be expeditiously filled because Petitioner sent no medication home with
him.

The discharge summary also contained medical notes for Resident 3 to be catheterized
every eight hours as needed, to receive an insulin injection for his diabetes each evening,
and to be transferred to his bed via a sling lift, just delivered to his house at 4:00 p.m.,
which required the assistance of at least two people.

Resident 3 remained at his home for approximately 22 hours before Petitioner readmitted
him back to its facility. He did not receive his insulin injection nor any of his other
medications during this period of discharge. The only medical care he received was from
Petitioner’s staff who came to his house the day after his discharge at the request of
Resident 3’s family and state workers and not as part of his discharge planning or post-
discharge plan of care.

III. Issues
a. Whether Petitioner was in substantial compliance with:
42 C.F.R. § 483.12(a)(7), or
42 CFR. § 483.20(1)(3)’; and, if so,
b. Whether the $6,200 CMP that CMS imposed is reasonable.

“Substantial compliance means a level of compliance with the requirements of
participation such that any identified deficiencies pose no greater risk to resident health
or safety than the potential for causing minimal harm.” 42 C.F.R. § 488.301 (italics in
original).

CMS bases the level of seriousness of a violation on an assessment of scope (whether the
deficiency is isolated, a pattern, or widespread) and severity (the degree of harm, or
potential harm, to resident health and safety posed by the deficiency). The highest level
of severity is “immediate jeopardy,” defined as “a situation in which the provider’s
noncompliance . . . has caused, or is likely to cause, serious injury, harm, impairment, or
death to a resident.” 42 C.F.R. § 488.301. Here, I have no authority to review CMS’s
determination that Petitioner’s noncompliance constituted immediate jeopardy. See, e.g.,

> T do not find it necessary to decide CMS’s allegation of substantial noncompliance
under 42 C.F.R. § 483.25 considering I am finding violations of these other regulations
more than adequately support the CMP that CMS imposed. See, e.g., Claiborne-Hughes
Health Center v. Sebelius, et al., 609 F.3d 839, 847 (6m Cir. 2010).
Oaks of Mid City Nursing & Rehab Ctr., DAB No. 2375, at 23-24 (2011) (explaining
how an Administrative Law Judge (ALJ) may not review CMS’s scope and severity
determination in cases involving the imposition of PICMPs and no substandard quality of
care findings); see also Hanover Hill Health Care Ctr., DAB CR 2617, at 3-4 (2012)
(explaining that when CMS imposes a penalty of $5,000 or more, a state agency cannot
approve a nurse aid training program regardless of any immediate jeopardy finding,
which ultimately precludes ALJ review of CMS’s immediate jeopardy finding involving
a PICMP).

IV. Discussion
a. Summary judgment is appropriate.

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 & Human Servs., 388 F.3d 168,
173 (6" Cir. 2004); see also Ill. 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 & 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... .

Ill. Knights Templar, 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 (2007); Livingston Care
Ctr., 388 F.3d at 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 (entry of
summary judgment upheld where inferences and views of non-moving party are not
reasonable). 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, 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.”’).

Drawing all reasonable inferences in Petitioner’s favor, I find the undisputed facts lead to
the reasonable conclusion that the facility was not in substantial compliance with
program requirements. My findings of fact and conclusions of law are summarized in the
bold, italicized headings of this decision.

b. Petitioner was not in substantial compliance with 42 C.F.R. § 483.12(a)(7)
because the undisputed evidence shows Petitioner released Resident 3 to his
home without proper preparation and orientation to ensure a safe and orderly
discharge.

The regulation at 42 C.F.R. § 483.12(a)(7) requires:

Orientation for transfer or discharge. A facility must provide sufficient
preparation and orientation to residents to ensure safe and orderly transfer or
discharge from the facility.

1. Petitioner did not confirm, before releasing Resident 3, that nursing and aide
services were awaiting Resident 3 at his house.

It is undisputed that Resident 3 was not able to care for himself at home. He was
originally admitted to Petitioner’s facility on March 13, 2010 from a rehabilitation
hospital after a stroke. He was diagnosed with cerebral vascular disease (a prior stoke),
hemiplegia (paralysis on left side of his body), hemiparesis (right sided weakness),
hypertension, diabetes mellitus, and depression. CMS Ex. 50, 7. His Minimum Data
Set (MDS) completed on October 23, 2010, the day after his return to the facility,
indicates that Resident 3 needed extensive assistance with almost all ADLs, including
transfer, dressing, personal hygiene, and locomotion in a wheelchair. CMS Ex. 22, at 10-
11. For bed mobility, transfer, and toilet use, Resident 3 was assessed as requiring
“twot+” persons to physically assist him. Id. Resident 3’s care plan identified Resident 3
to be at risk for aspiration due to prior stoke with left side hemiparesis, dysphagia, past
aspiration pneumonia, and respiratory failure. CMS Ex. 23, at 16.

CMS alleges Petitioner’s Assistant Director of Nursing and Social Worker informed a
state worker that arrangements had been made for skilled nursing services with the
Visiting Nurse Association of Central New Jersey (VNACJ) to begin within 48 hours of
Resident 3’s discharge. CMS Ex. 47, J 13. Petitioner also alleges that its Social Worker
made phone calls, two days in advance of Resident 3’s discharge, to arrange for services
of a nurse aide obtained from a home health agency to be available to Resident 3 starting
on the day of his discharge.

For purposes of summary judgment, I will accept as true that Petitioner made these phone
calls and that the Social Worker believed the outside services would be available two
days later at Resident 3’s home. It is undisputed that Petitioner was relying on these
outside services to educate Resident 3’s family, after discharge to his home, on how to
assist in testing Resident 3’s glucose levels, injecting his insulin, and operating a sling lift
that required the assistance of at least two persons. However there is no dispute that
Petitioner released Resident 3 without confirming that nursing or aide services were
standing by, in place, to assist Resident 3 with his medical needs when he arrived home.

The effect of discharging Resident 3 to his home without confirming the presence of
professional care services resulted in Resident 3’s untrained family members assuming
the responsibility to provide him the medical care he needed. The regulation requires the
Petitioner to “ensure a safe and orderly discharge from the facility.” This would require
that Petitioner confirm services were in place at the time of Resident 3’s discharge to care
for his many medical needs, especially considering Petitioner arranged for those
particular nursing services only two days prior. To do otherwise meant discharging a
resident to untrained caretakers who could cause more than minimal harm by not
administering medication, injecting the medication incorrectly, or causing the resident to
fall and hurt himself through an untrained transfer using the sling lift which had just
arrived the day of Resident 3’s discharge.

2. Petitioner discharged Resident 3 to family members who were either unable
or unwilling to provide care to Resident 3.

Petitioner was aware that Resident 3, prior to his stoke, was previously the primary care
giver for his wife, who had alcohol dementia. P. Ex. 12, at 9, 15. Petitioner was also
aware that Resident 3’s 77-year-old wife was the only person living in Resident 3’s home
and was recently discharged from Petitioner’s facility after rehabilitation for a broken
femur. It was also undisputed Resident 3’s daughter did not reside in Resident 3’s home,
she returned to her home on the evening of the discharge at 7:00 p.m., and she did not
arrive again to Resident 3’s home until the next morning. It is further undisputed that no
other family member was involved with regard to Resident 3’s discharge planning.

CMS claims that Resident 3’s family immediately complained to state officials about his
discharge. On October 19, 2010, the state agency allegedly received a telephone
complaint from Resident 3’s daughter in which she stated that Petitioner, for the first time
that morning, discussed Resident 3’s October 21* discharge home. Resident 3’s daughter
stated that Resident 3 had a catheter, required a sling lift for transfers, had a prior stroke,
had no use of his legs or left hand, and had limited use of his right hand. CMS Ex. 9;
CMS Ex. 51, ff 10-11. Resident 3’s daughter allegedly stated that all previous

conversations with Petitioner’s staff focused on the discharge of her father to another
facility, and no training had been provided to the family regarding Resident 3’s care.
CMS Ex. 47, § 11; CMS Ex. 10, at 3.

During this time, CMS claims that Resident 3’s daughter called both Petitioner’s facility
and the state agency. Resident 3’s daughter allegedly told the state agency that neither
she, her father, nor her mother had been instructed on how to administer insulin by
injection,* and Petitioner sent no medications home with her father. CMS Ex. 47, § 21;
CMS Ex. 48, § 12. No one was available from the nursing services organization that
Petitioner arranged to come the evening of Resident 3’s discharge. CMS Ex. 51, § 24.
No nurse aide from any other nurse aide agency could be located to come to Resident 3’s
home. Id. at § 26. A nurse from a service came the following day to do an evaluation of
Resident 3, not provide services, and it allegedly took five days after an evaluation to
arrange for a visit from a nurse. Resident 3’s daughter allegedly attempted to contact the
doctor who prescribed her father’s insulin, but the doctor’s clinic was closed for the
evening. Resident 3’s daughter allegedly complained that the family had not been trained
on how to use a sling lift. The state agency representatives allegedly informed Resident
3’s daughter not to use the sling lift because it was dangerous without proper training on
its use. CMS Ex. 47, § 32; CMS Ex. 48, § 21.

Petitioner argues Resident 3’s daughter and wife were “sabotaging family member[s]”
because they did not cooperate with the recommendations of the discharge plan and never
filled the prescriptions attached to the discharge plan. P. Br. at 2, 9-10, 24. However, if I
draw the inference, for summary judgment purposes, that Resident 3’s family was able,
but simply not willing to administer his medical care, Petitioner was still not in
substantial compliance with this requirement. To prepare for a safe discharge, Petitioner
had a duty, during the discharge planning process, to interact with Resident 3’s family to
ascertain whether they were willing to provide medical care to him once it discharged
him. It is unreasonable to infer that Petitioner had no idea that Resident 3’s family
members would not provide his medical care (which included the undisputed
requirements of insulin injections and “two +” assistance with bed transfers, mobility,
and toileting) before Resident 3’s discharge, and I accordingly do not make that
inference. Petitioner clearly had the ability to ascertain unequivocally whether
Petitioner’s family was willing to provide Resident 3’s care before it discharged Resident
3, especially if Petitioner was not going to confirm the presence of nursing services at
Resident 3’s house at the time of discharge. I find that Petitioner did not do so.

Petitioner does not dispute that it did not train Resident 3’s family to administer his
insulin and argues that Carehouse Convalescent Hospital, DAB No. 1799 (2001), and
Ontario Care Center, DAB CR713 (2000), provide that Petitioner has no affirmative duty

> Prior to his stroke, Resident 3 was receiving oral diabetic medications and not insulin.
P. Ex. 8, at 13.
to establish care for a resident outside of its premises because it is an environment that is
outside the control of the facility. P. Br. at 21.

Petitioner relies on Carehouse as a factually indistinguishable case where the Board
upheld an ALJ’s finding of compliance with discharge requirements. Petitioner points to
the facts that the facility’s staff in Carehouse discussed discharge plans with the resident
and his wife prior to the day of discharge, and, on the day of discharge, the facility
provided teaching with respect the resident’s medications, and the resident verbalized
understanding that his wife would help him. P. Br. at 19-20. However, I find Carehouse
factually distinguishable considering the ALJ also relied on evidence that the facility
provided additional teaching to the resident’s wife when she arrived to pick up her
husband. Carehouse, DAB No. 1799, at 46. Here, there is no dispute that Petitioner did
not provide Resident 3’s wife with teaching for the post-discharge care of her husband.
This is a critical fact considering it is also undisputed that Resident 3 was not able to
administer his own medical care and his wife was the only family member living with
him.

Petitioner relies on Ontario for the premise that, in a “strikingly similar set of facts,” an

ALJ concluded that a discharge was safe and properly planned for despite problems that
followed the discharge. P. Br. at 18. Petitioner further argues this case established that

Petitioner had no affirmative duty to train a caregiver to administer insulin for a resident
once outside of its premises. Id.

In Ontario, the ALJ’s finding had to do with requirements of a different deficiency, 42
C.F.R. § 483.15(g), relating to providing medically related social services to residents so
that residents may attain their highest practicable levels of physical, mental, and
psychosocial well-being. The ALJ reached his conclusion with the understanding that it
was reasonable for the petitioner not to discharge the resident until petitioner had
assurances that the resident’s family had approved the resident’s discharge. Ontario,
DAB CR713, at 11. Here, Petitioner did not get this assurance from Resident 3’s family
and did not confirm that professional caregivers were in place at the time of Resident 3’s
discharge. It was totally unacceptable under the requirements of 483.12(a)(7) to
discharge Resident 3 to his family, without confirming that professional care services
were in place, and expect Resident 3’s family to inject his insulin and safely use a sling
lift with no training.

3. Petitioner did not provide any medications to Resident 3 upon his discharge.

It is undisputed that Resident 3 was on multiple medications including Plavix (an
anticoagulant), Norvasc (an antianginal used to treat high blood pressure and chest pain),
Simvastin (to control high cholesterol), Lyrica (to relieve neuropathic pain from
diabetes), Flomax (to treat hyperplasia or enlarged prostate), Remeron (an
antidepressant), a transdermal patch of Lidoderm (painkiller), and had a standing order
for 14 units Lantus (insulin), by subcutaneous injection at bedtime (9:00 p.m.). During
his stay in the facility, staff monitored Resident 3’s diabetes by a fingerstick every
morning before breakfast, had orders for transfers by sling lift, aspiration precautions,
diabetic diet, and thin liquids. CMS Ex. 24, at 1-3.

Petitioner discharged Resident 3 to his home and, just a few hours later, he required an
injection of insulin, even though Petitioner had not trained anyone in his family on how
to do so and provided no medication upon discharge. I find this failure of the facility to
provide at least minimal amounts of critical medications for Resident 3, such as his
insulin, puts him in jeopardy and is a violation of the regulations. See, e.g., Sorrento
Care Ctr., DAB CR2511, at 23 (2012) (“[S]ending a diabetic away without the means for
testing his blood and without critical medications puts him in jeopardy.”)

In addition to not receiving his insulin, there is no dispute that during the 22 hours that
Resident 3 was home, he received no medications at all. Based on Resident 3’s
prescriptions, he should have received Lantus, Lyrica, Norvasc, Remeron, and
Simvastatin the night of his discharge. CMS Ex. 20, at 8-9; CMS Ex. 25, at 13-17. It
was foreseeable that these prescriptions would not be filled the same day of Resident 3’s
discharge considering the late hour of the discharge and considering Resident 3’s family
was also tasked with figuring out how to move Resident 3 using a two-person assist sling
lift that Petitioner had just had delivered that same afternoon. The risk of untreated
medical conditions such as diabetes, pain, high blood pressure, high blood cholesterol,
and depression, had the potential for more than minimal harm to Resident 3’s health and
safety.

4. Petitioner did not provide any physical home assessment prior to his
discharge.

Petitioner acknowledges guidelines for sufficient preparation before a discharge require a
facility to take steps under its control to assure safe transportation. P. Br. at 12.

Petitioner also acknowledged that an example of an appropriate orientation would include
trial visits to the resident home, if possible. Id.

It is undisputed that Resident 3 arrived at his home about 5:00 p.m. with a single
ambulance driver. Due to steep stairs and the fact that Resident 3’s wheelchair was too
wide, the single driver could not get Resident 3 into his home. Resident 3 remained in
his garage for an additional hour until two more drivers arrived with a different
wheelchair to fit within the doors of his home and finally assisted Resident 3 inside.

Ata minimum, a home evaluation, had it been conducted, would also have determined
that Resident 3 needed a narrower wheelchair to enter his home and two ambulance
attendants to deal with the steep steps. More importantly, considering it was undisputed
that Resident 3 would not be receiving 24-hour nursing services, Petitioner performed no
10

home evaluations to even assess whether Resident 3’s elderly and frail wife was actually
capable to care for her husband during the time that a nurse or aide was not on duty.

c. Petitioner was not in substantial compliance with 42 C.F.R. § 483.20(1)(3)
because Petitioner did not develop a post-discharge plan of care with Resident
3’s family that assisted the resident to adjust to his new home environment.

The regulation at 42 C.F.R. § 483.20(l) requires:

Discharge summary. When a facility anticipates discharge a resident must have a
discharge summary that includes...

(3) A post-discharge plan of care that is developed with the
participation of the resident and his or her family, which will
assist the resident to adjust to his or her new living
environment.

(emphasis added).

Attached to Resident 3’s discharge plan were four pages of Resident 3’s electronic
medical record (EMR) that contained detailed lists of physician orders and medications
and two pages that included prescriptions for 11 different medications and a prescription
for the visiting nurse association to do diabetic training. CMS Ex. 39, at 3-8. Petitioner
asserts the EMR was a clear document that was understandable to a layperson and does
not dispute that these were required instructions for Resident 3’s post discharge care. P.
Br. at 7. As discussed previously, Petitioner sent no medications or supplies for insulin
administration home with Resident 3. Petitioner also concedes it did not include all
documentation of family care discussions leading up to the discharge in the written plan.
P. Br. 23-24.

I find Petitioner did not develop Resident 3’s post-discharge plan of care with the
participation of his family. Although Petitioner had Resident 3 sign off on the plan, it is
undisputed that Resident 3’s family members did not see his post-discharge plan of care
until he arrived home with it.

I further find Petitioner did not develop a post-discharge plan of care that assisted the
resident to adjust to his new home environment. There was no contact information on
Resident 3’s discharge plan for his family to call about medical assistance. The first two
pages of Resident 3’s post-discharge plan of care were almost completely blank except
for a note that visiting nurse services were to be obtained through “VNACJ.” CMS Ex.
39, at 1-2. The discharge summary did not include a telephone number or any other
contact information for these nursing services. The discharge summary also did not
include the name of the aide service company that was supposed to provide supplemental
11

care to Resident 3 after discharge or a telephone number or other contact information for
this company.

The post-discharge plan of care also contained an order relating to the catheterization of
Resident 3. CMS claims Resident 3’s daughter, in the midst of a lot of confusion,
contacted the state agency about this order, and the state agency representative called
Petitioner. Petitioner’s charge nurse reportedly explained that Resident 3 was currently
not on a catheter, he was utilizing diapers, and that the straight catheter order was an old
order. CMS Ex. 47, § 26; CMS Ex. 48, § 17. Petitioner does not dispute that Resident 3
did not need a catheter at the time of his discharge.

The order specifically called for “Straight cath resident every 8 hrs prn for abdominal
discomfort and/or urinary retention using 14 fr catheter, schedule: every 8 hours (PRN)”
which was an order for Resident 3 to use a catheter every 8 hours as needed. There was
no indication that this order had been discontinued before Resident 3’s discharge.
Therefore, the EMR on the post-discharge plan of care was not only confusing to a
layperson, but it was also inaccurate.

The post-discharge plan of care did not fully explain aspiration precautions. In the EMR,
there was an order for “Aspiration precautions/Head of Bed elevated at all times.”
However, nothing defines what ,,aspiration precautions” are, or what aspirations
precautions should be taken, other than that the head of the bed should be elevated. The
EMR does list that Resident 3 needed a chopped/thin liquid diet but did not make clear
that this diet was part of the “aspiration precautions” needed. CMS Ex. 20, at 7.

In sum, the undisputed evidence shows Petitioner did not develop a written
comprehensive post-discharge plan of care with proper participation of Resident 3’s
family members that assisted his adjustment home. Instead it sent Resident 3 home with
written instructions that were, in part, outdated, confusing, and missing important
information.

d. The $6,200 PICMP that CMS imposed is reasonable.

A $6,200 PICMP is in the middle range of PICMP that CMS may impose for an instance
of noncompliance. In determining whether the PICMP imposed is reasonable, I apply the
factors listed in 42 C.F.R. § 488.438(f): 1) the facility’s history of non-compliance; 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 at 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 non-compliance;
and 3) the facility’s prior history of non-compliance in general and specifically with
reference to the cited deficiencies.

12

“Unless a facility contends that a particular regulatory factor does not support that CMP
amount, the ALJ must sustain it.” Coquina Ctr., DAB No. 1860 (2002). Petitioner does
not contend that its financial condition or compliance history should affect the CMP

amount, and therefore I do not consider these factors in my finding.

Although I need not address whether the deficiencies rose to the level of immediate
jeopardy, I find that the deficiencies are clearly serious. Petitioner’s nurse and certified
nursing assistant came to Resident 3’s home the day following his discharge to oversee
the situation and to provide care to Resident 3, not as part of the discharge process, but
because no outside nurse or nurse aide from a home health agency had ever shown up at
Resident 3’s home on the day of his discharge, or the next day for that matter. Petitioner
decided to readmit Resident 3 to the facility less than 24 hours after it had discharged
him.

Petitioner asserts that Resident 3 returned to its facility on October 22 in the same
condition as when he left. However, it is undisputed that during the hours that Resident 3
was at home without medical care, Resident 3 received no medication, including his
insulin injection, and his clothes (including his diaper) had not been changed. I will
assume for purposes of summary judgment that Resident 3 did not suffer actual harm to
his health. However, the fact that Resident 3 did not suffer actual harm is not attributable
to an appropriate or adequately planned discharge process. Petitioner did not ensure that
nursing and home aide care awaited Resident 3 at his home, or that his family was willing
to care for him or was trained in the use of a sling lift or insulin administration as
required by his care plan and physician order. Improper use of the sling lift could have
easily resulted in a serious fall for Resident 3. Petitioner did not adequately explain the
aspirations precautions necessary for this resident, which also could have had serious,
even deadly, consequences. Further, Petitioner discharged Resident 3 without providing
any supply of medications to treat his serious medical impairments.

It is clear that Petitioner made multiple attempts to find Resident 3 another nursing home
placement but was unable to do so, in part, because of problems with his Medicaid
enrollment. P. Br. at 5. Petitioner then seems to have rushed to discharge Resident 3 to
his home. The situation at Resident 3’s home was nothing less than chaotic after his
discharge. Petitioner’s rush to discharge Resident 3 to his home without properly
developing a post discharge plan, providing training to Resident 3’s family, or ensuring
nurse home health and aide services were in place at the time of discharge demonstrates a
high degree of indifference and disregard for Resident 3’s care, comfort and safety.
Therefore, given the totality of circumstances surrounding Resident 3’s discharge,
including the facility’s high degree of culpability, I find the amount of the PICMP that
CMS imposed is reasonable.
13

V. Conclusion

Medicare requirements mandate nothing less than a careful, comprehensive, and
compassionate process for each resident discharge to make the adjustment safe and
orderly. The undisputed evidence shows the facility fell short of these requirements. I
grant CMS’s motion for summary disposition finding the undisputed evidence supports
that Petitioner was not in substantial compliance with federal Medicare requirements
relating to a discharge of one of its residents. Further I find the undisputed evidence
supports that the $6,200 PICMP that 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.
Ali Mart LLC,
Respondent.

Docket No. C-13-140
FDA Docket No. FDA-2012-H-1159

Decision No. CR2683

Date: January 8, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an administrative complaint against
Respondent Ali Mart LLC alleging facts and legal authority sufficient to justify
the imposition of a civil money penalty of $250. Respondent did not timely
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 $250.

CTP began this case by serving a 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
tobacco products to a minor, 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 $250.
On November 27, 2012, CTP served an Administrative 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 timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), lam
required to “assume the facts alleged in the complaint 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 Ali Mart, an establishment that sells tobacco products
and is located at 5820 North 43rd Avenue, Glendale, AZ 85301. Complaint
q2.

e¢ On November 17, 2011, an FDA-commissioned inspector observed
Respondent violating 21 C.F.R. § 1140.14(a), a regulation prohibiting the
sale of cigarettes or smokeless tobacco to a person younger than 18 years of
age at the establishment. Complaint ¥ 9.

e On January 12, 2012, CTP issued a Warning Letter to Respondent
regarding the inspector’s observations from November 17, 2011. The letter
explained that the observations constituted a violation of a regulation found
at 21 C.F.R. § 1140.14(a), that this regulation prohibits the sale of tobacco
products to individuals under the age of 18, and that the named violation
was not necessarily intended to be an exhaustive list of all violations at the
establishment. The Warning Letter went on to state that failure to correct
the violation could result in the imposition of a civil money penalty or other
regulatory action by the FDA and that Respondent is responsible for
complying with the law. Jd.

e FDA received no response to the Warning Letter from Respondent, though
United Parcel Service records demonstrate that an individual named
“Yagudayera” received the Warning Letter on January 13, 2012.
Complaint § 10.
e On November 2, 2012, CTP issued a Notice of Compliance Check
Inspection to Ali Mart due to a minor’s purchase of a regulated tobacco
product on October 25, 2012 at 12:52 p.m. The Notice stated that the
violation described was not necessarily the only violation reported and that
CTP could either issue a Warning Letter in response to the named violation
or seek a civil money penalty. Complaint 4 9.

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 (March 10, 2010). The regulations prohibit the sale of cigarettes or
smokeless tobacco to any person younger than 18 years of age. 21 C.F.R. §
1140.14(a).

Taking the above alleged facts as true, Respondent had two violations of
regulations contained in 21 C.F.R. Part 1140 within a 12 month period.
Specifically, Respondent had a violation on November 17, 2011, and a violation
on October 25, 2012. Respondent’s actions on both occasions violated the
prohibition on the sale of cigarettes or smokeless tobacco to any person younger
than 18 years of age. 21 C.F.R. § 1140.14(a). Therefore, Respondent’s actions
constitute violations of law for which a civil money penalty is merited. The
regulations require the imposition of a civil money penalty in the 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). Therefore, I find that a civil
money penalty of $250 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
Armin Aalami Harandi, M.D.,
(NPI: 1700010287)
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-1125
Decision No. CR2682

Date: January 4, 2013

DECISION

Otsego Memorial Hospital Medical Group Physician Services (OMH) on behalf of
Petitioner Armin Aalami Harandi, M.D. appeals the effective date assigned to his
enrollment as a Medicare provider with OMH. For the reasons explained below, I grant
the Centers for Medicare and Medicaid Services’ (CMS’s) Motion for Summary
Disposition and uphold the March 15, 2012 effective date.

I. Background

On July 16, 2012, Petitioner filed a hearing request, challenging the effective date
determination made by Wisconsin Physicians Services (WPS), a Medicare contractor.
CMS submitted a Motion for Summary Disposition and a brief in support of its motion
(CMS Br.), along with seven exhibits identified as CMS Exs. 1-7. Petitioner filed his
opposition to the CMS Motion (P. Br.), to which he attached one exhibit (P. Ex. 1). In
the absence of objection, I admit CMS Exs. 1-7 and P. Ex. | into the record.
II. Applicable Law

The Social Security Act (Act) authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations governing the enrollment process for providers and
suppliers. Act §§ 1102, 1866(j); (42 U.S.C. §§ 1302, 1395ce(j)). Under the Secretary’s
regulations, a provider or supplier that seeks billing privileges under Medicare must
“submit enrollment information on the applicable enrollment application. Once the
provider or supplier successfully completes the enrollment process . . . CMS enrolls the
provider or supplier into the Medicare program.” 42 C.F.R. § 424.510(a).

Also, a “provider or supplier must submit a complete enrollment application and
supporting documentation to the designated Medicare fee-for-service contractor,” and the
application must include “complete . . . responses to all information requested within
each section as applicable to the provider or supplier type.” 42 C.F.R. § 424.510(d)(1)-
(2).

The effective date of enrollment for physicians and nonphysician practitioners is set as
follows:

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).
II. Issue

The issue in this case is whether CMS’s contractor and CMS properly determined
Petitioner’s effective date of Medicare enrollment.

IV. Analysis

My findings of fact and conclusions of law are set forth in italics and bold in the
discussion captions of this decision.

A. This case is appropriate for summary judgment.

CMS argues that it is entitled to summary disposition in the nature of summary judgment.
The Departmental Appeals Board (Board) stated the standard for summary judgment:
Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. ... The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of

law. ... 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 — a fact that, if
proven, would affect the outcome of the case under governing law. ... In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehabilitation & Skilled Nursing Center, DAB No. 2300, at 3 (2010) (citations
omitted).

The Board has further explained that the role of an Administrative Law Judge (ALJ) in
deciding a summary judgment motion differs from its role in resolving a case after a
hearing. The ALJ should not assess credibility or evaluate the weight of conflicting
evidence. Holy Cross Village at Notre Dame, Inc., DAB No. 2291, at 5 (2009).

I have accepted all of Petitioner’s factual assertions as true and drawn all reasonable
inferences in Petitioner’s favor. Therefore, I accept Petitioner’s claim that Petitioner
mailed a Medicare enrollment application around October 19, 2011. Hearing Request
(AR); P. Br. at 1. I further accept Petitioner’s concession that this application was not
submitted by certified mail and was not received by WPS. HR; P. Br. at 1. Finally, I
accept Petitioner’s assertion that a new Medicare enrollment application was submitted in
March of 2012, after Petitioner spoke with a WPS representative and learned the
documents sent around October 19, 2011 had not been received. HR; P. Br. at 1. For the
purposes of summary judgment, I accept Petitioner’s description of these events as true.
However, this depiction remains unsupportive of a favorable outcome for Petitioner.
Petitioner has not disputed any fact material to my resolution of the case. Accordingly, I
agree with CMS that summary judgment is appropriate in this case.

B. CMS correctly determined the effective date of Petitioner’s Medicare
enrollment.

Petitioner is an orthopedic surgeon employed by OMH, a medical practice located in
Gaylord, Michigan. On October 17, 2011, Petitioner signed a Medicare enrollment
application (Form CMS-855R) for participation as an OMH group member, and he began
seeing Medicare beneficiaries. P. Br at 2; P. Ex. 1. Petitioner claims that after the
enrollment application was signed by the authorized official, Tom Lemon, CEO of OMH,
this document was mailed on October 19, 2011 to WPS, the CMS contractor. P. Br. at 1.
Petitioner did not send this Medicare enrollment application by certified registered mail
and cannot provide proof showing that Petitioner mailed a completed, approvable
enrollment application to WPS on October 19, 2011. Petitioner argues there is no “CMS
requirement to mail enrollment applications using certified registered mail” and
Petitioner “mailed the enrollment documents to CMS in good faith, and relied on the U.S.
Mail and the CMS credentialing process.” P. Br. at 1-2.

On February 9, 2012, Petitioner called WPS to check the status of the application. P. Br.
at 2. A WPS representative returned the call and informed Petitioner that the enrollment
application could not be found. P. Br. at 2. Petitioner began preparing another
application for submission following this conversation. P. Br. at 2.

Subsequently, on February 20, 2012, Petitioner signed a Medicare enrollment application
(Form CMS-855R and the Certification Statement from the Form CMS-855]) and noted
on this application that he reassigned his benefits to OMH effective October 15, 2011.
CMS Ex. 1, at 10. The authorized official for OMH signed this application on March 8,
2012 and it was then mailed to WPS. CMS Ex. 1, at 16. WPS received the enrollment
application on March 15, 2012. CMS Ex. 1, at 1-2, 10, 22, 26-27, 33. By letter dated
May 23, 2012, WPS notified Petitioner that his application was approved and his
enrollment would be effective March 15, 2012.' CMS Ex. 3.

The determination of the effective date of Medicare enrollment is governed by 42 C.F.R.
§ 424.520. Section 424.520(d) provides that the effective date for enrollment for
nonphysicians, among others, 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.” The “date of filing” is the date that the Medicare contractor “receives”
a signed provider enrollment application that the Medicare contractor is able to process to
approval. 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008). It is well settled that the date of
filing is the date the Medicare contractor receives an approvable application. Caroline
Lott Douglas, PA, DAB CR2406 (2011); Rizwan Sadiq, M.D., DAB CR2401 (2011);
Jennifer Tarr, M.D., DAB CR2299 (2010); Michael Majette, D.C., DAB CR2142 (2010);
Roland J. Pua, M.D., DAB CR2163 (2010).

' After WPS received Petitioner’s application on March 15, 2012, it sent a letter dated
March 31, 2012, requesting additional information. This information was provided to
WPS in April and May of 2012, and Petitioner’s enrollment was approved by letter dated
May 23, 2012, effective March 15, 2012. The effective date of February 14, 2012, listed
in this letter was in error as the contractor determination was that the effective date of
Petitioner’s Medicare enrollment was March 15, 2012, the date Petitioner’s enrollment
application was received by WPS. However, Petitioner was authorized to file claims for
services retrospective to February 14, 2012. See CMS Br. at 4; CMS Ex. 3; CMS Ex. 5.
Petitioner essentially requests that I hold the date that he asserts he first submitted an
application to be controlling; even though there is no evidence that this application was
received by WPS. Even though Petitioner wishes to have his billing privileges adjusted
to the date that Petitioner alleges he initially sent an application, Petitioner has pointed to
no authority that would allow this departure from settled principles. Petitioner presents
no evidence that would support his assertion that he mailed an enrollment application on
October 19, 2011. Moreover, the regulations are clear that an application must be
received and subsequently approved by a Medicare contractor before an effective date
can be established. It is undisputed that the contractor did not receive an application from
Petitioner until March 15, 2012. Therefore, the correct effective date of Petitioner’s
enrollment remains March 15, 2012. 42 C.F.R. § 424.520(d).

Petitioner’s argument is essentially that the effective date should be adjusted because the
CMS contractor lost the application Petitioner maintains that he sent in October of 2011.
However, this is not a basis to adjust Petitioner’s enrollment date. Petitioner’s argument
amounts to a claim of equitable estoppel. It is well-established by federal case law, and
in Board precedent, that: (1) estoppel cannot be the basis to require payment of funds
from the federal government; (2) estoppel can lie against the government, if at all, only
on a showing of affirmative misconduct, such as fraud; and (3) I am not authorized to
order payment contrary to law based on equitable grounds. See, e.g., Oklahoma Heart
Hospital, DAB No. 2183, at 16 (2008); Wade Pediatrics, DAB No. 2153, at 22 n.9
(2008), aff'd, 567 F.3d 1202 (10th Cir. 2009); Office of Personnel Management v.
Richmond, 496 U.S. 414 (1990); Heckler v. Community Health Services of Crawford
County, Inc., 467 U.S. 51 (1984). Petitioner alleges no affirmative misconduct against
the government, and it is simply the case that the regulations governing this situation
were promulgated with the understanding that these stricter requirements for enrolling
and maintaining enrollment would have possible effects on providers and suppliers. Yet
the stricter Medicare enrollment requirements — such as those that guide this decision —
were understood as a necessary means to further program integrity. See 73 Fed. Reg.
69725, 69768 (November 19, 2008).

V. Conclusion

For the reasons explained above, and based on the undisputed fact that WPS did not
receive a completed enrollment application from Petitioner until March 15, 2012, I
conclude that Petitioner’s effective date of enrollment was correctly assessed at March
15, 2012.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Rajashakher P. Reddy, M.D.
(OI File No. 4-08-40429-9),

Petitioner,
v.
The Inspector General.
Docket No. C-12-1081
Decision No. CR2681

Date: January 3, 2013

DECISION

The Inspector General (1.G.) of the Department of Health and Human Services notified
Rajashakher P. Reddy, M.D. (Petitioner) that he was being excluded from participation in
Medicare, Medicaid, and all other federal health care programs for 13 years. The I.G.
based the length of exclusion on the presence of three aggravating factors. I find that
Petitioner is subject to a mandatory exclusion; however, because the I.G. only proved the
existence of two aggravating factors, the period of exclusion is reduced to 12 years.

I. Background

Petitioner is a radiologist who was found guilty after a jury trial in the United States
District Court, Northern District of Georgia, Atlanta Division (District Court), of 20
counts of wire fraud, seven counts of mail fraud, four counts of health care fraud, and one
count of falsification of records in a federal investigation. In a letter dated May 31, 2012,
the I.G. notified Petitioner that he was being excluded from participation in Medicare,
Medicaid, and all federal health care programs for a period of 13 years under 42 U.S.C.

§ 1320a-7(a)(1) and (a)(3). The basis cited for Petitioner’s exclusion under section
1320a-7(a)(1) was his conviction in the District Court of a criminal offense related to the
delivery of an item or service under Medicare or a state health care program. The basis
cited for Petitioner’s exclusion under section 1320a-7(a)(3) was his felony conviction, in
the District Court, of a criminal offense related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct in connection with the delivery of
a health care item or service.

Petitioner, through counsel, appealed the I.G.’s exclusion and this case was assigned to
me for hearing and decision. On August 21, 2012, I convened a prehearing conference
by telephone, the substance of which is summarized in my Order and Schedule for Filing
Briefs and Documentary Evidence (Order), dated August 22, 2012. See 42 C.F.R.
§ 1005.6. Pursuant to the Order, the LG. filed a brief (I.G. Br.) on September 21, 2012,
with I.G.’s exhibits (I.G. Exs.) 1 through 3. Petitioner filed a response (P. Br.) on
October 19, 2012, with Petitioner’s exhibits (P. Exs.) 1 and 2. The L.G. filed a reply brief
(LG. Reply) on November 5, 2012. I admit CMS Exs. 1-3 and P. Exs. 1-2 into the record
because neither party objected to any of the exhibits. Furthermore, both parties indicated
that an in-person hearing was unnecessary (I.G. Br. at 7; P. Br. at 8); therefore, I issue
this decision on the basis of the written record.

II. Issues
Under 42 C.F.R. § 1001.2007(a)(1), the scope of my review is limited to two issues:

1. Whether the LG. has a basis for excluding Petitioner from participating in Medicare,
Medicaid, and all other federal health care programs pursuant to 42 U.S.C. § 1320a-
7(a)(1) and/or (a)(3); and

2. Whether the length of the exclusion is unreasonable.
III. Findings of Fact, Conclusions of Law, and Analysis’
A. Petitioner was convicted of 32 counts of felonious conduct.

On July 13, 2010, a 37-count Superseding Indictment filed in the District Court charged
Petitioner with: Counts 1 through 25, Wire Fraud, in violation of 18 U.S.C. § 1343;
Counts 26 through 32, Mail Fraud, in violation of 18 U.S.C. § 1341; Counts 33 through
36, Health Care Fraud, in violation of 18 U.S.C. §1347; and Count 37, Falsification of
Records in Federal Investigation, in violation of 18 U.S.C. § 1519. 1.G. Ex. 3.

According to the indictment, Petitioner, a Board-certified radiologist, owned a
teleradiology company, Reddy Solutions, Inc. (RSI) and served as one of the radiologists
who submitted signed reports to client hospitals and other providers. I.G. Ex. 3, at 1-2.

' My findings of fact and conclusions of law are set forth in italics and bold font.
The indictment charged that Petitioner “fraudulently signed and submitted radiology
reports for tens of thousands of patients to the hospitals and other providers who were
RSI clients, in cases where neither he nor any other RSI physician had ever reviewed and
analyzed the film.” I.G. Ex. 3, at 3. The indictment further charged that Petitioner knew
that “the hospital or other RSI client then submitted bills to Medicare and private
insurance companies for these tests, including for the supposed professional services of a
qualified radiologist that never in fact occurred.” I.G. Ex. 3, at 5. The indictment stated
that “RSI received over $1.5 million during this time for these specific, fraudulent,
reports, which were not actually reviewed by a physician.” IG. Ex. 3, at 3.

The wire fraud counts, Counts | through 25, charged that, beginning on or about June 14,
2007, and continuing through December 31, 2007, Petitioner knowingly and willfully
executed his scheme to defraud by causing to be transmitted to his hospital clients, in
interstate commerce, radiology reports bearing his electronic signature. The mail fraud
counts, Counts 6 through 32, charged that, for the purpose of executing and attempting to
execute the scheme to defraud and obtain money by false pretenses, Petitioner knowingly
caused mail (i.e. checks which represented payment for RSI invoices) to be sent to RSI
by the hospital clients. The health care fraud counts, Counts 33 through 36, charged that
Petitioner knowingly and willfully executed the health care fraud scheme by causing
client hospitals to submit claims to a health care benefit program for services that were
not provided. The Falsification of Records in Federal Investigation count, Count 37,
charged that, in or about February 2008, Petitioner “did knowingly alter, destroy,
conceal, cover up, falsify and make a false entry in a record, document, and tangible
object, with the intent to impede, obstruct, or influence the investigation or proper
administration of any matter within the jurisdiction of a department and agency of the
United States.” I.G. Ex. 3, at 10-11. The count describes how Petitioner directed an RSI
information technology employee to alter and falsify computer records known as “access
logs” before they were produced to the agencies. The count states further that after the
access logs were falsified, Petitioner directed another employee to produce the set of
falsified records to RSI’s lawyers who then produced the false materials to the agencies
in response to an investigative subpoena dated January 29, 2008. I.G. Ex. 3, at 11-12.

A jury found Petitioner guilty on Counts | through 4, 6 through 11, 13, 14, 16 through
19, and 22 through 25 of the Superseding Indictment. LG. Ex. 2, at 1. The court entered
judgment of conviction against Petitioner on December 13, 2011, finding Petitioner
guilty of Wire Fraud, Counts | through 4, 6 through 11, 13, 14, 16 through 19, and 22
through 25; Mail Fraud, Counts 26 through 32; Health Care Fraud, Counts 33 through 36;
and Falsification of Records in a Federal Investigation, Count 37. The court sentenced
Petitioner to: 54 months of incarceration; three years of supervised release upon release
from imprisonment; 300 hours of community service; and payment of a $3,200
assessment, a $15,000 fine, and $919,855.37 in restitution. I.G. Ex. 2.
B. Petitioner’s convictions require exclusion under 42 U.S.C. § 1320a-7(a)(1)
because his criminal conduct related to the delivery of an item or service
under Medicare and/or Medicaid.

An individual must be excluded from participation in any federal health care program if
the individual was convicted under federal or state law of a criminal offense related to the
delivery of an item or service under Medicare or a state health care program. 42 U.S.C.

§ 1320a-7(a)(1). Petitioner concedes that his convictions require exclusion under section
1320a-7(a)(1). P. Br. at 1 n.2. I conclude that the record fully supports Petitioner’s
mandatory exclusion. I.G. Exs. 1-3.

C. Petitioner’s convictions require exclusion under 42 U.S.C. § 1320a-7(a)(3)
because the convictions were felony-level and based on Petitioner’s
fraudulent conduct in connection with the delivery of a health care item or
service.

An individual must be excluded from participation in any federal health care program if
the individual was convicted of a felony offense under federal or state law that occurred
after August 21, 1996, if the offense was related to fraud, theft, embezzlement, breach of
fiduciary responsibility or other financial misconduct, and if the offense was in
connection with the delivery of a health care item or service or with respect to any act or
omission in a health care program other than Medicare or Medicaid and the program was
operated or financed in whole or in part by any governmental agency. 42 U.S.C.

§ 1320a-7(a)(3). Petitioner concedes that his felony convictions require exclusion under
section 1320a-7(a)(3). P. Br. at 1 n.2. I conclude that the record fully supports
Petitioner’s mandatory exclusion. LG. Exs. 1-3.

D. Petitioner must be excluded for a minimum of five years.

Because I have concluded that a basis exists to exclude Petitioner pursuant to 42 U.S.C.
§ 1320a-7(a)(1) and (a)(3), the Petitioner must be excluded for a minimum period of five
years. 42 U.S.C. § 1320a-7(c)(3)(B).

E. The 1G. proved that two aggravating factors exist in this case that justify
lengthening the period of exclusion beyond the five-year statutory minimum.

The remaining issue is whether it is unreasonable to extend his period of exclusion by an
additional eight years. My determination of whether the exclusionary period in this case
is unreasonable turns on whether: (1) the I.G. has proven that there are aggravating
factors; (2) Petitioner has proven that there are mitigating factors the I.G. failed to
consider or that the I.G. considered an aggravating factor that does not exist; and (3) the
period of exclusion is within a reasonable range.
The regulations establish aggravating factors that the I.G. may consider to lengthen the
period of exclusion beyond the five-year minimum for a mandatory exclusion. 42 C.F.R.
§ 1001.102(b). Only if an aggravating factor justifies an exclusion longer than five years
may mitigating factors be considered as a basis for reducing the period of exclusion to no
less than five years. 42 C.F.R. § 1001.102(c).

In this case, the I.G. advised Petitioner in the May 31, 2012 exclusion notice that there
were three aggravating factors that justify an exclusion of more than five years:

1. The acts resulting in the conviction, or similar acts, that caused, or were
intended to cause, a financial loss to a government program or to one or more
entities of $5,000 or more. 42 C.F.R. § 1001.102(b)(1). The I.G. stated that
the court ordered Petitioner to pay restitution of approximately $919,800.

2. The acts that resulted in the conviction, or similar acts, were committed over a
period of one year or more. 42 C.F.R. § 1001.102(b)(2). According to the
LG., Petitioner’s criminal acts occurred from about mid-2006 to about January
2008.

3. The sentence imposed by the court included incarceration. 42 C.F.R.
§ 1001.102(b)(5). The LG. stated that Petitioner was sentenced to 54 months
of incarceration.
LG. Ex. 1.

I. The aggravating factor at 42 C.F.R. § 1001.102(b)(1) (financial loss to
a government program of $5,000 or more) has been proven.

The record shows that Petitioner was sentenced to pay restitution totaling $919,855.37 to
public and private health care insurers. I note that, in listing the payees and amounts
owed, the sentencing document shows that Petitioner was ordered to pay $272,511.24 to
Medicare, $251,375.57 to Medicaid, and $22,930.35 to Tricare.” I.G. Ex. 2, at 6.

Although Petitioner concedes the existence of this aggravating factor, Petitioner argues
that the restitution amount was a “negotiated amount” in order to accommodate
sentencing calculations under federal sentencing guidelines and that there was no
accurate method to calculate the restitution amount. P. Br. at 6. Petitioner cites to the
sentencing hearing transcript to support this argument. Aside from conceding that the
loss is more than $5,000, Petitioner does not offer any argument or evidence as to the
amount I should consider as the loss to federal programs.

* Tricare is federal comprehensive managed care program that is part of the Military
Health System. 32 U.S.C. § 199.17
I am not persuaded that the ordered restitution amount should be disregarded when
determining the losses sustained by various programs and insurers under this aggravating
factor. As the prosecutor explained during the sentencing hearing, the restitution amount
was determined in a manner that only included the amount Petitioner billed for his
services and not for the total cost of the radiological services that were billed for each
patient (i.e., the billed amount for Petitioner’s professional services and not the cost of
creating the radiological images). P. Ex. 1, at 13-14. The prosecutor characterized this
approach as “appropriate and conservative” and that victim Blue Cross/Blue Shield’s
position that restitution should be based on the total amount billed (i.e., professional
services plus the creation of the radiological image) was “too aggressive.” P. Ex. 1, at
14. Although Petitioner’s attorney at the sentencing hearing indicated that the parties had
to “hash out some of the very complex loss and restitution figures here,” that same
attorney stated that “all sides I think did a good and professional job in reaching the
figures that we did.” P. Ex. 1, at 16.

Based on the sentencing hearing transcript, it appears that the amount ordered as
restitution is a conservative amount of the loss and that the parties made a good faith
effort to calculate the loss. The I.G. has relied on the ordered restitution amount to show
program loss. I agree with this approach because it is well established that restitution is
a recognized measure of program loss. E.g., Craig Richard Wilder, DAB No. 2416, at 9
(2011). The parties appear to have acted in good faith in calculating the restitution
amount. In any event, the fact that the parties agreed to an order of restitution in an
amount over $900,000 leaves no doubt that Petitioner’s crimes resulted in significant
financial losses to Medicare, Medicaid, and Tricare, well in excess of the $5,000
threshold needed to meet the aggravating factor at 42 C.F.R. § 1001.102(b)(1).

2. The aggravating factor at 42 C.F.R. § 1001.102(b)(5) (sentence
imposed by the court included incarceration) has been proven.

Petitioner does not dispute that he was sentenced to be imprisoned for 54 months. LG.
Ex. 2, at 2; P. Br. at 6. I conclude this aggravating factor cited by the I.G. is established.
42 C.F.R. § 1001.102(b)(5).

3. The aggravating factor at 42 C.F.R. § 1001.102(b)(2) (acts that
resulted in the conviction, or similar acts, were committed over a period
of one year or more) was not proven by the I.G.

The LG. alleges that Petitioner’s criminal acts or similar acts were committed over a
period of one year or more and that the aggravating factor at 42 C.F.R. § 1001.102(b)(2)
exists in this case. In support of its position, the I.G. asserts (I.G. Reply at 2) that the
Second Superseding Indictment alleges in Paragraph One:
From an unknown date, but at least as of mid-2006, through
in or about January 2008, . . . [Petitioner] knowingly devised
and intended to devise a scheme and artifice to defraud and to
obtain money and property by means of materially false and
fraudulent pretenses, representations, promises, and by
omissions of material facts, that is, by claiming to have
performed health care services when he did not in fact
perform such health care services, well knowing and having
reason to know that said materially false pretenses,
representations and promises were and would be false and
fraudulent when made and that said omissions were and
would be material.

LG. Ex. 3, at 1.

The LG. alleges further that Paragraph One of the indictment “is repeated and re-alleged
in the counts of which [Petitioner] was convicted.” I.G. Reply at 2.

Petitioner contends that the indictment shows that the duration of his criminal conduct
was less than a year. Petitioner argues that the specific counts in the indictment for
which he was found guilty included specific dates that amount to less than a year, with
the earliest date specified in the indictment as June 14, 2007, and the latest as “in or about
February 2008.” P. Br. at 4; I.G. Ex. 3, at 5-10.

I find that there is no evidence that the jury or court found Paragraph One of the
indictment, which alleged that Petitioner’s criminal acts spanned the time period “at least
as of mid-2006, through in or about January 2008,” to be proven. LG. Ex. 3, at 1. The
Judgment of Conviction only lists the specific counts in the indictment that the jury found
to be proven and not the facts generally alleged before the counts.’ I.G. Ex. 2, at 1. Had
the jury convicted Petitioner of all counts, I could infer that the jury found the entire
indictment proven. However, the jury did not convict Petitioner on all counts. Of the
counts proven, a review of the indictment indicates that the earliest specific date on
which Petitioner transmitted fraudulent information was June 14, 2007 (Count One), and
the latest was January 14, 2008 (Count 32). I.G. Ex. 3, at 5, 9. Ifthe date relating to
Petitioner’s falsification of records in a federal investigation is added into the time span,

> In some previous cases, the general allegations related to a span of dates for the
criminal conduct has been considered as sufficient evidence of the length of time that the
criminal conducted occurred. However, these cases involved plea arrangements where
the petitioner had pled guilty to all the allegations, sometimes in a revised charging
document. See e.g., Russell J. Ellicott, DPM, DAB CR1552, at 11 (2007) rev. declined
DAB No. 2075 (2007). Because the present case involves a jury verdict where all of the
counts were not proven, I must look to additional evidence of record to decide this issue.
then the longest period of time Petitioner’s adjudged misconduct lasted was through
February 2008. I.G. Ex. 3, at 10. A time span of criminal conduct from June 2007
through February 2008 is generally consistent with the prosecutor’s statements during the
sentencing hearing that Petitioner’s criminal misconduct took place over an “eight-month
period” and that Petitioner’s criminal activity was “months and months of repeated
conduct.” P. Ex. 1, at 4, 7. It is also consistent with the allegation in the indictment that
federal investigators subpoenaed records from Petitioner that ““cover[ed] specific periods
of time in 2007.” I.G. Ex. 3, at 11.

lam particularly persuaded by the prosecutor’s statements during sentencing that
Petitioner’s criminal activities occurred over a period of months. The prosecutor made
these statements when arguing for a long prison term and would not have understated the
duration of Petitioner’s proven criminal conduct. While Petitioner’s scheme to defraud
was complex and extensive, the record simply is not clear that the acts that led to his
conviction, or even similar acts, occurred over a period of time that is more than a year.
Therefore, I conclude that the I.G. did not prove the existence of the aggravating factor at
42 C.F.R. § 1001.102(b)(5) by a preponderance of the evidence.*

4. There are no mitigating factors in this case.

Because I found that aggravating factors are present in this case, I next consider whether
there are any mitigating factors under 42 C.F.R. § 1001.102(c)) to offset the aggravating
factors. Petitioner concedes that there are no mitigating factors in this case. P. Br. at 1
n.2, 3. Accordingly, I find that no mitigating factors exist which would justify reducing
the period of exclusion.

F. Because the I.G. has only proven that two aggravating factors exist in this
case, I find that 12-year exclusion, reduced from 13 years, is reasonable.

As discussed above, I found that the I.G. proved by a preponderance of the evidence the
existence of two aggravating factors, but did not prove the existence of a third
aggravating factor. Because I found that an aggravating factor considered by the I.G. in
its exclusion notice is not proved, then some downward adjustment of the period of
exclusion should be expected absent some circumstances that indicate no such adjustment
is appropriate. Gary Alan Katz, R. Ph., DAB No. 1842 (2002); Jason Hollady,M.D.,
a/k/a Jason Lynn Hollady, DAB No. 1855 (2002). Accordingly, given that the I.G. did
not prove one of the three aggravating factors on which the L.G. relied in imposing the
13-year exclusion, I must reassess the appropriate period of exclusion in this case. In
doing so, it is necessary that I weigh the aggravating factors that were proven by the I.G.
My evaluation does not follow a specific formula for weighing those factors, but rather

* Pursuant to 42 C.F.R. § 1005.15(c), I informed the parties at the prehearing conference
that the I.G. had the burden of proving the existence of aggravating factors. Order 5.
considers the weight to be accorded each factor based on the circumstances surrounding
them in this case. Sushil Aniruddh Sheth, M.D., DAB No. 2491 (2012).

As I discussed above, Petitioner was ordered to pay restitution in the total amount of
$919,855.37, and of this amount he was ordered to pay $272,511.24 to Medicare,
$251,375.57 to Medicaid, and $22,930.35 to Tricare. The record shows that one aspect
of Petitioner’s extensive health care fraud scheme involved client hospitals submitting
claims to health care benefit programs for services that were never provided. Petitioner’s
criminal misconduct thus directly impacted Medicare, Medicaid, and Tricare, and, based
on the restitution owed, it can be inferred that the financial losses to these programs
attributable to his fraud was nearly $550,000. Restitution in an amount so substantially
greater than the statutory standard is an “exceptional[ly] aggravating factor” that is
entitled to significant weight. Jeremy Robinson, DAB No. 1905 (2004); Donald A.
Burstein, Ph.D., DAB No. 1865 (2003).

The other evidence of aggravation relates to Petitioner’s sentence of 54 months
incarceration for his crimes. Petitioner’s sentence represents substantial jail time which
indicates the seriousness of his offenses.

I find that the two proven aggravating factors are entitled to significant weight. Petitioner
committed 31 felonies that had a substantial financial impact on Medicare, Medicaid,
Tricare, and private insurers. His crimes resulted in a lengthy term of imprisonment.
There is ample evidence that Petitioner is a highly untrustworthy individual who should
be excluded for a lengthy period. Petitioner’s lack of trustworthiness is exemplified by
his conviction for falsification of records during the federal investigation into his criminal
conduct. LG. Exs. 2, at 1, 3, at 10-12. However, in light of the fact that the I.G. did not
prove one of the aggravating factors, I will reduce the exclusion period to 12 years.

Iam only reducing the period of exclusion by one year because the two proven
aggravating factors are of such a significant nature that they provide a basis for an
exclusion lasting well in excess of the five-year minimum. I conclude that the fact that a
federal investigation forced Petitioner to terminate his extensive criminal scheme a few
months shy of an entire year does not provide a reason for a substantial reduction in
Petitioner’s exclusion. Petitioner is a threat to Medicare and excluding him from
participating in federal healthcare programs for less than 12 years is insufficient to
safeguard those programs.

Petitioner argues that his exclusion is excessive and should be reduced to ten years or
less. P. Br. at 6. In support of this argument, Petitioner urges me to consider the
following: Petitioner’s exclusion would effectively bar him from ever returning to the
practice of medicine, especially in his specialty of radiology; Petitioner voluntarily
relinquished his medical license in July 2011, almost eleven months before the I.G.’s
imposition of the exclusion; Petitioner’s 54-month prison term reflects the sentencing
10

judge’s sentiment that Petitioner will return to medical practice someday; Petitioner’s
criminal judgment does not prohibit him from practicing medicine during his supervised
release period; and Petitioner would like to repay the restitution amount but can only
repay it if he can once again earn a living.

The regulations specifically outline what factors may be considered mitigating and none
of Petitioner’s arguments relates to any of those mitigating factors. See 42 C.F.R.

§ 1001.102(c). Moreover, “the practical effect of a finite exclusion period on the
individual’s ability to participate in the Medicare program in the future is irrelevant to
determining a reasonable exclusion period.” Sheth, DAB No. 2491, at 18 (noting that the
Departmental Appeals Board “has repeatedly declined to consider an individual’s age or
financial or employment prospects in determining whether an exclusion period is
reasonable” (citing Jeremy Robinson, DAB No. 1905, at 7 (2004))). Thus, the negative
practical consequences to Petitioner’s medical career and financial situation are irrelevant
and immaterial to determining the reasonableness of the length of exclusion.

I find disingenuous Petitioner’s attempt to portray himself as a trustworthy individual.
The evidence shows that Petitioner exhibited a high degree of untrustworthiness. By
perpetrating a large scale scheme to defraud Medicare, Medicaid, Tricare, and private
health insurers, Petitioner demonstrated that he is a significant threat to the integrity of
health care programs. Petitioner has not shown sincere remorse for his conduct. To the
contrary, he destroyed and fabricated evidence to mislead a federal investigation into his
activities. I.G. Ex. 3, at 10-13.

* Petitioner also argues that Petitioner’s case is comparable to another case in which two
aggravating factors resulted in a 10-year exclusion. See Russell J. Ellicott, DPM, DAB
CR1552 (2007) rev. declined DAB No. 2075 (2007). Although I may consider
comparable cases in order “to inform a determination of the reasonableness of the
exclusion,” such comparisons are “not dispositive.” Sheth, DAB No. 2491, at 6.
Although two aggravating factors were proven in the present case and Ellicott, Ellicott
involved one aggravating factor that is the same as in the present case (42 C.F.R.

§ 1001.102(b)(1) - program loss of more than $5,000) and one that is different

(42 C.F.R. § 1001.102(b)(2) - length of criminal activity extending more than a year).
DAB CR1552, at 10-11. It is true that E//icott and the current case involve program
losses of more than $5,000, but Ellicott was only ordered to pay restitution in the amount
of $113,101, which is substantially less than the $919,855.37 in restitution Petitioner was
ordered to pay. Jd. Further, Petitioner was convicted of 32 felonies and sentenced to 54
months of incarceration, resulting in a finding of an aggravating factor under 42 C.F.R.

§ 1001.102(b)(5), but Ellicott only pled guilty to four misdemeanors and was sentenced
to probation. Jd. at 2. Due to the differences in the present case and Ellicott, a
comparison between them does not support a reduction in Petitioner’s period of
exclusion. The I.G. did not present any argument concerning comparable cases.
11

Further, Petitioner endangered as many as 70,000 patients by failing to read their
radiological films before the test reports were released. As summarized by the prosecutor
during the sentencing hearing:

The sheer risk that is placed here by a doctor who is lying about
whether he’s even doing the work and looking at the tests, the risk
that that [sic] is posing to the public and to the patients and the
uncertainty that this may create is itself something that I think
separates this from the normal healthcare case, a case that is usually
about billing codes and money.

P. Ex. 1, at 5.

The record shows that Petitioner is entirely untrustworthy. He has endangered his
patients for monetary gain. Based on the evidence of record and with consideration of
the I.G.’s original exclusion determination, I conclude that a 12-year period of exclusion
is reasonable.

IV. Conclusion

For the foregoing reasons, I sustain the I.G.’s determination to exclude Petitioner from
participating in Medicare, Medicaid, and all federal health care programs pursuant to

42 U.S.C. § 1320a-7(a)(1) and (a)(3). I hereby order Petitioner excluded for a period of
12 years commencing on the date that the I.G.’s exclusion originally took effect. See
42 CFR. § 1005.20(b).

/s/
Scott Anderson
Administrative Law Judge