Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Janalea Thomas, PA,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-486
Decision No. CR2917

Date: September 5, 2013

DECISION

This case is before me on the Centers for Medicare & Medicaid Services’ (CMS) motion
for summary judgment. Having reviewed the pleadings and exhibits carefully, I find that
no genuine issue of material fact remains in dispute and conclude that CMS’s position is
correct as a matter of law. I therefore grant CMS’s motion and affirm CMS’s
determination to approve Petitioner’s effective date of participation in the Medicare
program as September 27, 2012, with a retrospective billing date of August 28, 2012.

I. Background

Petitioner is a physician’s assistant in Florida. Petitioner’s Exhibit (P. Ex.) 1, at 6, 9;
CMS Ex. 1, at 9; CMS Ex. 3, at 10. On April 3, 2012, First Coast Service Options (First
Coast), a Medicare administrative contractor, received a CMS 855I Medicare enrollment
application (for “physicians and non-physician practitioners”) from Petitioner. CMS Ex.
1. By letter dated April 10, 2012, First Coast informed Petitioner that it had identified
“missing, incomplete, or inaccurate information needed to complete the process of
[Petitioner’s] application.” CMS Ex. 2, at 1. First Coast warned Petitioner that,
consistent with 42 C.F.R. § 424.525, First Coast might reject her application if she did
not furnish complete information within 30 days from April 10, 2012. First Coast then
identified the missing information:
Section 2A: Identifying Personal Information
License Number

State where issued

Effective Date (mm/dd/yyyy)
Expiration/Renewal Date (mm/dd/yyyy)

Section 15: Certification Statement
Name (full name)

Original Signature

Date of the application

Attachments:
Copy(s) of all professional school degrees or certificates, or evidence of qualifying
course work.

CMS Ex. 2, at 1.

On May 7, 2012, First Coast’s Provider Enrollment Tracking System (PETS) (which logs
and tracks all documents and phone calls submitted or made to the First Coast provider
enrollment department) shows that First Coast received sections 2A and 15 of Petitioner’s
CMS 855I, which is dated April 23, 2012. CMS Ex. 2, at 5-7; CMS Ex. 8, 997, 11. By
letter dated May 11, 2012, First Coast informed Petitioner that it was closing her
application because First Coast had not timely received “[c]opy(s) of all professional
school degrees or certificates, or evidence of qualifying course work.” CMS Ex. 2, at 8.
The May 11, 2012 letter was addressed to the contact person and address listed on
Petitioner’s CMS 8551, N. Babb. CMS Exs. 1, at 23; 2, at 8; 8, § 12.

On September 27, 2012, Petitioner submitted another CMS 855I. CMS Ex. 3. By letter
dated October 12, 2012, First Coast informed Petitioner that her application had been
processed and Petitioner had been assigned PTAN E2862W, associated with NPI
1396977419. Petitioner was also informed that the “effective date” of her billing
privileges was August 28, 2012.' CMS Ex. 4.

First Coast received Petitioner’s request for reconsideration of her effective date on
November 13, 2012. Petitioner stated as the reason she disagreed with First Coast’s
determination that: “This was given an effective date of 8/28/2012; but our original

' In its October 12, 2012 letter, First Coast stated that August 28, 2012, was the
“effective date” of Petitioner’s enrollment. However, as discussed below, September 27,
2012, is the effective date of Petitioner’s enrollment and August 28, 2012 is the start date
of Petitioner’s retrospective billing period.
application process was started on 3.30.12 under CCN: 921209484617-001. Please
reconsider the effective date of this PTAN.” CMS Ex. 5.

By letter dated January 29, 2013 First Coast upheld its effective date determination. First
Coast informed Petitioner that:

On April 03, 2012, a CMS 855-I was received to reassign” Janalea Thomas PA to
the group Lisa D Zack MD PA. Additional information was requested on April
10, 2012; while development was received on May 07, 2012, it was incomplete
and the application was subsequently rejected on May 11, 2012. A new CMS -
8551 application was not received until September 27, 2012, under CCN
921227184425. The application was approved and, in accordance with CFR
424.521(a)(1), an effective date of August 28, 2012 was issued.

Previously submitted applications that were rejected or returned cannot be taken
into account when establishing an effective date. Therefore, the effective date of
the reassignment was based on the receipt date of the first processable application,
CCN 921227184425. In accordance with CFR 424.521(a)(1), the correct effective
date was issued and will remain August 28, 2012.

CMS Ex. 6, at 3.

Petitioner requested a hearing before an administrative law judge by letter dated February
20, 2013. Petitioner argues that she did not receive any correspondence from First Coast
after April 10, 2012, implying that she did not receive First Coast’s May 11, 2012 letter.
Petitioner asserts that:
The information that was requested by May 10" was mailed to you on April 24,
2012, long before that due date. First Coast Service Options claims they never
received the information yet in the letter we received on January 29th, 2013 you
actually refer to the application received on April 3 and additional “development”
received on May 7th, 2012. You failed to notify us if there was anything else you
required. Only after we called several times (numerous attempts were made and
we were unable to get through), we were told the information was never received.
We then submitted another application dated 9/24/2013.

2 The form CMS 855R is the Medicare enrollment application for the reassignment of
Medicare benefits. The form CMS 855] is the Medicare enrollment application for
physicians and non-physician practitioners. Petitioner filed a CMS 855]. Neither party
addresses whether Petitioner filed a CMS 855R to reassign her benefits. However,
whether or not Petitioner sought to reassign her benefits is not material to my decision in
this case.
Petitioner asserts that she is entitled to an effective date of March 30, 2012, because she
rendered services to Medicare beneficiaries after that date.

The case was assigned to me for hearing and decision on March 6, 2013, and I issued my
“Acknowledgment and Initial Docketing Order” on that date. In response to my March 6
Order, CMS filed a motion for summary judgment (CMS Br.) and eight exhibits (CMS
Exs. 1-8) on April 5, 2013. On June 4, 2013, Petitioner filed her response to CMS’s
motion for summary judgment (P. Br.) and four exhibits (P. Exs. 1-4).° In response to
my request, CMS filed a reply (CMS Reply) on August 16, 2013. Petitioner filed a sur-
reply (P. Sur-Reply) on August 28, 2013, accompanied by one exhibit (P. Ex. 5). In the
absence of objection, I admit into evidence CMS Exs. 1-8 and P. Exs. 1-5.

II. Legal Authority

The Social Security Act (Act) authorizes the Secretary of Health and Human Services to
promulgate regulations governing the enrollment process for providers and suppliers.
Act §§ 1102, 1866(j) [42 U.S.C. §§ 1302, 1395cc(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).

The regulations specify that “a provider or supplier must submit a complete enrollment
application and supporting documentation to the designated Medicare fee-for-service
contractor,” and that the application 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). Signatures are required on enrollment applications. 42 C.F.R.

§ 424.10(d)(3)(i)(A), (C).

As a physician assistant, Petitioner is a Medicare “supplier” to the Medicare program.
42 C.F.R. § 498.2. Physician assistants must meet certain requirements to enroll in

* Petitioner failed to file a timely response to either my March 6 Order or to CMS’s
motion. I issued an Order to Show Cause on May 28, 2013, giving Petitioner until June
14, 2013, to explain her failure to file, and warning her that if she did not do so I would
dismiss the case for abandonment. On June 4, 2013, Petitioner filed a response to my
Order to Show Cause. Petitioner’s response asserts the delay was due to problems
Petitioner experienced using the DAB E-File system. I accept Petitioner’s explanation as
good cause for her untimely filing.

* Petitioner is considered a “supplier” for purposes of the Act and the regulations. See
42 U.S.C. §§ 1395x(d), 1395x(u); see also 42 C.F.R. § 498.2. A “supplier” furnishes
services under Medicare and the term applies to physicians or other practitioners that are
Medicare, including graduating from an accredited physician assistant educational
program; passing the national certification examination for physician assistants; and
licensing by their state to practice as a physician assistant. 42 C.F.R. § 424.74(c);
Medicare Program Integrity Manual (MPIM), Publication 100-08, Chapter 15

§ 15.4.4.11.

The “effective date for billing or enrollment 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); see also 73 Fed.
Reg. 69,726, 69,768-69, 69,773 (Nov. 19, 2008).

The regulations provide that physician and nonphysician practitioners and organizations
“may retrospectively bill for services when a physician or nonphysician practitioner or a
physician or 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
circumstances not applicable here). 42 C.F.R. § 424.521(a).

Section 17 of the CMS-855I form provides that a Medicare contractor such as First Coast
“may request, at any time during the enrollment process, documentation to support or
validate information reported on the application. In addition, the Medicare fee-for-
service contractor may also request documents from [an applicant], other than those
identified in this section . . . as are necessary to bill Medicare.” CMS Ex. 1, at 27; CMS
Ex. 6, at 27.

CMS may reject an enrollment application if a prospective supplier fails to furnish
complete information on the enrollment application within 30 days from the date the
contractor requests the missing information or fails to furnish all required supporting
documentation within 30 calendar days of submitting the enrollment application. 42
C.F.R. § 424.525(a). A rejected enrollment application means that the supplier’s
enrollment application was not processed due to incomplete information, or the failure to
receive additional or corrected information in a timely manner. 42 C.F.R. § 424.502. To
enroll in Medicare and obtain Medicare billing privileges after notification of a rejected
enrollment application, a supplier must complete and submit a new enrollment
application and all supporting documentation for CMS review and approval. 42 C.F.R.

not included within the definition of the phrase “provider of services.” 42 U.S.C.
§ 1395x(d).
§ 424.525(c). A supplier does not have the right to appeal a rejected application. 42
C.F.R. §424.525(d).

In this case, CMS has requested that I grant summary judgment in its favor.
The Board states 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 he 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 Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
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 hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Village at Notre
Dame, DAB No. 2291, at 4-5 (2009).

This case is appropriate for summary judgment. There is no genuine dispute as to any
material fact and I have drawn all inferences in favor of Petitioner, the non-movant. This
decision turns upon the interpretation of regulatory provisions and interpretive agency
rulings and their application to the undisputed material facts.

III. Issue

The sole issue before me is whether Petitioner is entitled to a Medicare enrollment
effective date prior to September 27, 2012 (the date First Coast received a CMS 8551
enrollment application on behalf of Petitioner that was processed to approval).

IV. Discussion

1. Summary judgment is appropriate.*

2. CMS received Petitioner’s complete CMS 8551 enrollment application on

* My findings of fact and conclusions of law are set forth in bold and italic font.
September 27, 2012.
3. September 27, 2012, is the effective date of Petitioner’s Medicare enrollment.
4. August 28, 2012, is the start date of Petitioner’s retrospective billing period.

In her June 4, 2013 response, Petitioner argues that she submitted all the information
requested by CMS’s April 10, 2012 letter in her submission of April 23, 2012, including
copies of Petitioner’s: physician’s assistant degree; AAPA membership receipt; NCCA
wallet card; Florida PA license; and section A and 15 of the CMS 855] re-signed and
dated. Petitioner stresses that she took a few days to “locate her college transcripts, or
this missing information would have been sent in immediately!” P. Response at 2.
Petitioner argues that she did not receive any other communication from First Coast after
submitting these documents on April 23, 2012. Petitioner argues:

Our office opens ALL mail daily and logs all correspondence. If we had received
the letter from CMS dated May 11, 2012 it would have been entered into our mail
log and we would have responded immediately and/or submitted a new
application. Janalea Thomas, PA-C would not have continued to see patients
knowing she was doing so without compensation. Janalea Thomas only works
one day per week and the Medicare claims submitted from March 30, 2012
through August 28, 2012 constitute approximately 80% of her income.

P. Response at 2. Petitioner requests that she be granted an effective date of March 30,
2012.°

Petitioner’s arguments may, at first blush, appear to raise an issue of material fact.
However, whether or not Petitioner submitted all the information required by First
Coast’s April 10, 2012 letter requesting additional information is not relevant to my
decision because I do not have the authority to consider its sufficiency. The fact is that
First Coast rejected the CMS 8551 enrollment application Petitioner filed on April 3,
2013. CMS Ex. 2, at 1, 8; CMS Ex. 8, at 13 (First Coast warned Petitioner that her
application could be rejected and then closed the application based on Petitioner’s failure
to submit “[c]opy(s) of all professional school degrees or certificates or evidence of
qualifying course work as requested by First Coast.”). Petitioner has no right to appeal
from a rejected application and thus I have no authority to consider her arguments
regarding a rejected application.’ 42 C.F.R. § 424.525(d). A supplier’s remedy after an

° Even if I were able to modify the effective date of Petitioner’s Medicare enrollment, I
could not modify it to March 30, 2012. First Coast did not receive Petitioner’s CMS 8551
enrollment application until April 3, 2012.

7 CMS, at its discretion, may extend the 30-day period for a prospective provider or
supplier to file requested information if it determines that the prospective provider or
enrollment application is rejected is to submit a new enrollment application and all
supporting documentation, which is what Petitioner did here. 42 C.F.R.
§ 424.525(c).

Under 42 C.F.R. § 424.520(d), Petitioner’s effective date is determined by the date of
filing of a Medicare enrollment application that is subsequently approved by a Medicare
contractor (italics added). First Coast did not approve the CMS 855I enrollment
application Petitioner submitted on April 3, 2012. The first CMS 8551 enrollment
application Petitioner submitted that was processed to approval was the CMS 8551
enrollment application First Coast received on September 27, 2012. Thus, the effective
date of Petitioner’s enrollment must be September 27, 2012. Pursuant to 42 C.F.R.

§ 424.521(a), and as determined by First Coast, Petitioner’s retrospective billing date is
August 28, 2012.

V. Conclusion

I find that no genuine issue of material fact is in dispute. I find and conclude that CMS’s
position is correct as a matter of law. I therefore grant CMS’s motion and affirm CMS’s
determination to approve Petitioner’s effective date of participation in the Medicare
program as September 27, 2012, with a retrospective billing date of August 28, 2012.

/s/
Richard J. Smith
Administrative Law Judge

supplier is “actively working” to resolve any outstanding issues. 42 C.F.R. § 424.525(b).
However, only CMS has the discretion to extend this 30-day period, not an administrative
law judge. Apparently, CMS did not choose to exercise its discretion in this case.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
Vv.

Habibco BP Inc.
d/b/a BP,

Respondent.

Docket No. C-13-993
FDA Docket No. FDA-2013-H-0819

Decision No. CR2916

Date: August 30, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Habibco BP Inc. d/b/a BP (Respondent), which alleges facts
and legal authority sufficient to justify imposing a $500 civil money penalty.
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 $500.

CTP initiated this case by filing a copy of the Complaint with the Food and Drug
Administration’s (FDA) Division of Dockets Management and serving the
Complaint on Respondent. The Complaint alleges that Respondent unlawfully
sold a tobacco product to a minor on two separate occasions and failed to verify
that a purchaser of a tobacco product was of sufficient age, thereby violating the
Federal Food, Drug, and Cosmetic Act (Act), codified at 21 U.S.C. §§ 301 — 399d,
and its implementing regulations found at 21 C.F.R. Part 1140. CTP seeks a civil
money penalty of $500 for these violations.

On July 12, 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 must
take one of the following three actions: pay the penalty, file an answer, or request
an extension of time within which to file an answer. CTP further stated that if
Respondent does not comply with one of the actions within 30 days, an
Administrative Law Judge may issue an initial decision ordering Respondent to
pay the full amount of the proposed penalty. 21 C.F.R. § 17.11.

Respondent has neither filed an Answer within the time provided by regulation,
nor timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), I am required
to “assume the facts alleged in the complaint to be true, and, if such facts establish
liability under [the Act],” issue an initial decision and impose a civil money
penalty. Accordingly, I must determine whether the allegations in the Complaint
establish violations of the Act.

Specifically, CTP alleges that:

e Respondent owns BP, an establishment that sells tobacco products and is
located at 9290 East 131st Street, Fishers, Indiana 46038. Complaint 3.

e On August 14, 2012, an FDA-commissioned inspector observed a violation
of 21 C.F.R. Part 1140 at BP. The inspector observed that “‘a person
younger than 18 years of age was able to purchase a package of Camel Blue
cigarettes . . . at approximately 3:02 PM.” Complaint § 10.

e “[O]n October 25, 2012, CTP issued a Warning Letter to BP.” The letter
informed Respondent of the violation the FDA-commissioned inspector
observed at the establishment on August 14, 2012, and explained that
Respondent’s failure to correct the violation “may result in a civil money
penalty . . . or other regulatory action by [the] FDA.” CTP further
explained that the Warning Letter was not intended to provide an
exhaustive list of violations and that Respondent was responsible for
complying with the law. Complaint § 10.

e “On November 1, 2012[,] by letter, Mike Isifian, the General Manager of
the Habibco BP Station, responded to the Warning Letter on behalf of
Respondent.” In his response, Mr. Isifian stated that “[E]mployees go
through an extensive training process and they are trained both to request
identification from anyone who appears to be younger than 30 years of age
and to check for proper forms of identification.” By letter, dated December
28, 2012, CTP responded to Mr. Isifian acknowledging receipt of his
response. Complaint § 11.

e¢ On January 20, 2013, FDA-commissioned inspectors observed two
additional violations at Respondent’s establishment. First, “a person
younger than 18 years of age was able to purchase a package of Grizzly
Premium Wintergreen Long Cut smokeless tobacco . . . at approximately

2:16 PM ET.” The inspector also documented that “the minor’s

identification was not verified before the sale... .” Complaint § 1.

e On January 25, 2013, CTP issued a Notice of Compliance Check Inspection
(Notice) informing Respondent that an inspection had been conducted on
anuary 20, 2013, and “that during the inspection a minor was able to enter
the establishment and purchase a regulated tobacco product ....” The
Notice also warned Respondent that other potential violations of the federal
tobacco law may have been observed and if CTP determined that there
were additional violations of federal law, the establishment may receive
urther notification from the FDA. Complaint § 2.

Taking these facts as true, I must find, pursuant to 21 C.F.R. § 17.11(a), 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 sold or
distributed in violation of regulations issued under section 906(d) of the Act,
codified at 21 U.S.C. § 387f(d); 21 U.S.C. § 387(a)(7)(B); 21 C.F.R. § 1140.1(b).
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). The regulations also
require retailers to verify, by means of photo identification containing the
purchaser’s date of birth, that no purchaser of cigarettes or smokeless tobacco is
younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1).

In the present case, Respondent violated 21 C.F.R. Part 1140 on three occasions
within a 24-month period. First, on August 14, 2012, Respondent unlawfully sold
a regulated tobacco product to a minor. Subsequently, on January 20, 2013,
Respondent again sold a regulated tobacco product to a minor and failed to verify,
by means of photo identification, that the purchaser was 18 years of age or older.
Therefore, Respondent’s actions on three separate occasions constitute violations
of law for which a civil money penalty is warranted.

The regulations require me to impose a civil money penalty that is either the
maximum amount provided for by law, or the amount sought in the Complaint,
whichever amount is smaller. 21 C.F.R. § 17.11(a)(1); 21 C.F.R. § 17.11(a)(2).
After the first violation, Respondent received a Warning Letter, and subsequently

committed two additional violations within a 24-month period. The regulations
provide that the maximum penalty for this action is $500. 21 C.F.R. § 17.2. In its
Complaint, CTP seeks a civil money penalty in the amount of $500. Because
Respondent failed to file a timely Answer or request an extension of time to file an
Answer, I impose a civil money penalty in the amount of $500.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Deryck D. Richardson, Ph.D., LLC,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-662
Decision No. CR2914
Date: September 4, 2013
DECISION
CGS Administrators, LLC (CGS), an administrative contractor acting on behalf of the
Centers for Medicare & Medicaid Services (CMS), determined that Deryck D.
Richardson, Ph.D., LLC, Petitioner, was not eligible for enrollment in the Medicare
program earlier than September 17, 2012, and that Petitioner could not submit claims for
payment of services performed or delivered earlier than August 18, 2012.’ Petitioner
appealed. For the reasons stated below, I affirm CGS’s determination.

I. Case Background and Procedural History

Petitioner had been previously enrolled in Medicare as a supplier. On September 27,
2011, CGS issued a revalidation request to Petitioner requiring him to resubmit complete

' CMS initially assigned August 19, 2012 as Petitioner’s retrospective billing date. I

note that 30 days prior to September 17, 2012 was actually August 18, 2012. CMS
acknowledges that CGS received Petitioner’s approvable reactivation application on
September 17, 2012 and granted him a 30-day period of retrospective billing prior to the
receipt of his application. I assume the assignment of August 19, 2012 for the
retrospective billing date was a clerical error. See CMS Br. at 3 n.1. Therefore, I correct
the date of retrospective billing from August 19 to August 18, 2012 without further
discussion. See Kate Paylo, DAB CR2232, at 3 n.4 (2010).
enrollment information within 60 days. CMS Ex. 1. On December 9, 2011, upon
receiving no response from Petitioner, CGS issued a “Do Not Forward” letter to
Petitioner warning that claims would not be forwarded for payment because of his failure
to respond to the revalidation request, and repeating the need for Petitioner to complete
the revalidation request. CMS Ex. 2. On December 28, 2011, CGS notified Petitioner
that Petitioner’s enrollment was deactivated because no revalidation application had been
received. CMS Ex. 3.

Nine months later, on September 17, 2012, CGS received Petitioner’s Medicare
reactivation enrollment application. CMS Ex. 4. CGS requested additional information
on September 27 and October 9, 2011. CMS Exs. 5, 6. On October 23, 2012, CGS
approved Petitioner’s Medicare enrollment application with an effective date of
September 17, 2012, and a retrospective billing date of August 19, 2012. CMS Ex. 7.

By letter dated October 29, 2012, Petitioner requested reconsideration of his effective
date. CMS Ex. 8. Ina February 13, 2013 reconsideration determination, CGS affirmed
its initial decision concerning Petitioner’s effective date and explained that Petitioner’s
valid approvable reactivation application was received on September 17, 2012, and that
August 19, 2012 was the retrospective billing date. CMS Ex. 9, at 2. By letter dated
April 16, 2013, Petitioner timely filed a request for a hearing with the Departmental
Appeals Board (Board), Civil Remedies Division.

Following my April 18, 2013 Acknowledgment and Initial Docketing Order, CMS filed a
Motion for Summary Disposition (CMS Br.) and ten exhibits (CMS Exs. 1-10).
Petitioner did not file a response. On June 11, 2013, I issued an Order to Show Cause.
Petitioner responded to the Order to Show Cause on June 17, 2013. Petitioner stated in
his response to the Order to Show Cause that it was not his intent to abandon the request

> CGS inaccurately characterized August 19, 2012 as Petitioner’s “effective date” rather
than Petitioner’s “retrospective billing date.” CMS Exs. 7, 9. In this case, the “effective
date” is the date a contractor receives a required enrollment application that it later is able
to process to approval. See 42 C.F.R. § 424.520(d). However, CMS and its contractors
may grant retrospective billing privileges up to 30 days prior to the effective date. See
42 C.F.R. § 424.521(a)(1). Here, CGS determined the date it received Petitioner’s
enrollment application was September 17, 2012, which is the date it should have properly
referenced as the effective date. Thus, the earliest date for retrospective billing privileges
that could be granted to Petitioner was 30 days prior to September 17, 2012, which is
August 18, 2012. To be consistent with the relevant regulations, this decision uses
“effective date” in later sections to refer to Petitioner’s effective date of enrollment, not
the date when Petitioner’s retrospective billing began and hereafter corrects the
retrospective billing date from August 19 to August 18, 2012.

for hearing but that he had “nothing further to add.” Petitioner’s Response to Order to
Show Cause. Since Petitioner did not object to CMS’s exhibits, I admit CMS Exs. 1-10.

II. General Authority

The Social Security Act (Act) authorizes the Secretary of the Department 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).

A “provider or supplier must submit a complete enrollment application and supporting
documentation to the designated Medicare fee-for-service contractor,” and the application
should 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 nonphysician practitioners is established as follows:

The effective date for billing privileges for . . . nonphysician practitioners

. .. 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 . . . nonphysician
practitioner first began furnishing services at a new practice location.

42 CFR. § 424.520(d).
In addition, CMS permits limited retrospective billing, such that:

[NJonphysician practitioners . . . and nonphysician practitioner
organizations may retrospectively bill for services when a. . . nonphysician
practitioner or . . . a nonphysician practitioner 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.]

42 CFR. § 424.521 (a).

A provider or supplier “deactivated for any reason other than nonsubmission of a claim”
is required to “complete and submit a new enrollment application to reactivate its
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).

II. Issue

Whether CMS had a legitimate basis for finding that September 17, 2012, was the
effective date for Petitioner’s Medicare enrollment and that Petitioner could
retrospectively bill for services rendered to Medicare beneficiaries on or after August 18,
2012.

IV. Discussion

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 judgment. The Board has explained 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 and Skilled Nursing Center, DAB No. 2300, at 3 (2010) (citations
omitted). An Administrative Law Judge’s (ALJ) role in deciding a summary judgment
motion differs from the ALJ’s role in resolving a case after a hearing. In the context of
summary judgment, 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). The Board has further stated, “[i]n addition, it is appropriate for the tribunal to
consider whether a rational trier of fact could regard the parties’ presentation as sufficient
to meet their evidentiary burden under the relevant substantive law.” Dumas Nursing and
Rehabilitation, L.P., DAB No. 2347, at 5 (2010).
CMS argues that it is entitled to summary judgment in this case “because the material
facts are undisputed.” CMS Br. at 5. Petitioner has not disputed the material fact in this
case, specifically, that CGS received an approvable reactivation application on September
17, 2012 and not before. Therefore, I agree with CMS that summary judgment is
appropriate.

b. CGS’s September 17, 2012 receipt of Petitioner’s reactivation enrollment
application necessarily determines Petitioner’s effective date and retrospective
billing date.

After a supplier is deactivated for any reason other than nonsubmission of claims, a new
application is required to reactivate the supplier’s participation in Medicare. 42 C.F.R.
§ 424.540(b)(1). For a reactivation application, the effective date and retrospective
billing privileges date are determined in accordance with 42 C.F.R. §§ 424.520(d) and
424.521(a)(1). Mobile Vision, Inc., DAB CR2124 (2010); Shalbhadra Bafna, M.D.,
DAB CR2419 (2011). “The regulation does not distinguish between ‘new enrollee’ and
‘reactivation’ applications, when determining the effective date of a... [supplier’s]
participation in Medicare. Shalbhadra Bafna, M.D., DAB CR2419, at 3.

The effective date for enrollment for nonphysician practitioners and nonphysician
practitioner organizations, among others, is “the /ater of the date of filing of a Medicare
enrollment application that was subsequently approved by a Medicare contractor or the
date an enrolled . . . nonphysician practitioner first began furnishing services at a new
practice location.” 42 C.F.R. § 424.520(d) (emphasis added). The “date of filing” is the
date that the Medicare contractor “receives” a signed provider or supplier enrollment
application that the Medicare contractor is able to process to approval. 73 Fed. Reg.
69,725, 69,769 (Nov. 19, 2008). It is undisputed that CGS received an approvable
enrollment application on September 17, 2012. Under the regulations, Petitioner’s
effective date is September 17, 2012, and his retrospective billing date is August 18,
2012, 30 days before his enrollment application was received. 42 C.F.R. §§ 424.520(d)
and 424.521(a)(1).

In Petitioner’s reconsideration request he states that he was ‘terminated on 12-09-2011
after I had not responded to a revalidation request on a timely basis . . . in early October
2012... mailed in the 8551 with supporting documents.” CMS Ex. 8, at 1-2 (referring to
CGS’s request for additional information in October of 2012 after receiving Petitioner’s
application of September 17, 2012). Petitioner admits that he was indeed terminated for
failure to respond to a revalidation request and Petitioner does not dispute the date that
his reactivation enrollment application was received. CMS Ex. 4. Therefore, I conclude
that Petitioner’s effective date of September 17, 2012 was correctly determined. I also
correct the date of retrospective billing from August 19 to August 18, 2012, as I
previously mentioned in this decision.
c. Tam unable to grant Petitioner’s request for an earlier effective date based
on equitable estoppel.

Petitioner admits in his hearing request that “my application was filed too late to have the
most favorable effective date.” CMS Ex. 10. Petitioner claims that he “‘anticipated” that
all billing privileges would be retroactively restored to the deactivation date. CMS Ex. 8.
In his hearing request, he claims that this belief was based on information obtained from
an unnamed person “in charge of applications.” CMS Ex. 10.’ Further, Petitioner claims
that the delay in filing the reactivation application was due to his need to care for his wife
due to her poor health and the complexity of the enrollment process. Finally, Petitioner
asserts that he continued seeing his Medicare clients and that he provided “thousands of
dollars of services” to them that have not been reimbursed. CMS Ex. 10.

Petitioner’s arguments amount to a claim of equitable estoppel or equitable relief. 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 fisc; (2) estoppel cannot lie against
the government, if at all, absent a showing of affirmative misconduct, such as fraud; and
(3) Lam not authorized to order payment contrary to law based on equitable grounds.
See, e.g., Armin Aalami Harandi, DAB CR2682 (2013); Office of Personnel Mgmt. v.
Richmond, 496 U.S. 414 (1990); Heckler v. Community Health Services of Crawford
County, Inc., 467 U.S. 51, 63 (1984); Oklahoma Heart Hosp., 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). Petitioner does not allege any affirmative misconduct here and I cannot grant
the relief that Petitioner requests.

lam not without sympathy for Petitioner’s predicament, but it must be noted that a good
portion of that predicament is of his own making. Entities that would participate in
Medicare as providers or suppliers are responsible for making themselves aware of, and
for complying promptly and carefully with, all the regulatory provisions that govern their
eligibility. Such entities may choose to ignore or disregard those provisions as trivial or
bothersome, but they do so at peril of that eligibility. Manor of Wayne Skilled Nursing
and Rehabilitation, DAB No. 2249, at 11 (2009); Cary Health and Rehabilitation Center,
DAB No. 1771, at 21 n.5 (2001); Kids Med (Delta Medical Branch), DAB CR2494
(2012); Brookside Rehabilitation and Care Center, DAB CR1541 (2006); The Heritage
Center, DAB CR1219 (2004).

Petitioner cannot argue, in any event, that he filed a complete application on an earlier
date than CMS determined or that the contractor or CMS incorrectly applied the

> A claim that a provider or supplier received incorrect information from an unidentified
Medicare contractor’s employee does not amount to a credible showing of affirmative
misconduct.
regulatory criteria. | am without authority to order either CGS or CMS to provide an
exemption to Petitioner under the regulations set forth at 42 C.F.R. §§ 424.520(d) and
424.521(a). Ihave no authority to extend the retrospective billing period for Petitioner in
this circumstance or ignore the clear requirements of the regulations governing his
enrollment in Medicare. See Kate E. Paylo, DAB CR2232, at 14-15. Even accepting all
of Petitioner’s assertions as true, Petitioner’s equitable arguments give me no grounds to
grant him an earlier effective date of enrollment. See US Ultrasound, DAB No. 2302, at
8 (2010) (“[n]either the ALJ nor the Board is authorized to provide equitable relief by
reimbursing or enrolling a supplier who does not meet statutory or regulatory
requirements.”).

V. Conclusion

I conclude that it is undisputed that CMS received Petitioner’s application on September
17, 2012. Iam thereby obliged to find Petitioner’s effective date of enrollment is
September 17, 2012, with a retrospective billing period starting 30 days prior, on August
18, 2012. Therefore, I grant CMS’s motion for summary judgment.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
Vv.

David & Sang Corp.
d/b/a Beltsville Sunoco,

Respondent.

Docket No. C-13-979
FDA Docket No. FDA-2013-H-0810

Decision No. CR2910

Date: August 29, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, David & Sang Corp., d/b/a Beltsville Sunoco,
that alleges facts and legal authority sufficient to justify the imposition of a civil
money penalty of $500. 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 $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 a cigarette purchaser was 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 July 10, 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 timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), lam
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 Beltsville Sunoco, an establishment that sells tobacco
products and is located at 10621 Baltimore Avenue, Beltsville, Maryland
20705. Complaint 3.

e On June 15, 2012, at approximately 11:55 AM ET, an FDA-commissioned
inspector observed a violation 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 Newport Box cigarettes ....” Complaint § 10.

© On August 16, 2012, CTP issued a Warning Letter to Respondent!
regarding the inspector’s observations from June 15, 2012. The letter
explained that the observations constituted a violation of a regulation found
at 21 C.F.R. § 1140.14(a), and that the named violation was not necessarily
the only violation at the establishment. The Warning Letter went on to
state that if Respondent failed to correct the violation, regulatory action by

"In the Complaint, CTP states that it issued the Warning Letter to “Sunoco.”
Complaint § 10. Although the Complaint does not specifically state that “Sunoco”
is also known as “Beltsville Sunoco,” I infer that the two names refer to the same
retail outlet.
the FDA or a civil money penalty action could occur and that Respondent is
responsible for complying with the law. Complaint § 10.

e Mr. David Chang, Respondent’s owner, responded to the Warning Letter
for Respondent. In an August 17, 2012 letter, Mr. Chang “stated that
Respondent will check the ID of anyone attempting to buy cigarettes,
reminded all of its employees of the seriousness of such federal violations
and posted warning signs about selling any tobacco products to minors.”
Complaint § 11.

¢ On November 29, 2012, at approximately 3:33 PM ET, FDA-
commissioned inspectors documented 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 Newport Box cigarettes... [.]”
The inspectors also documented a violation of 21 C.F.R. § 1140.14(b)(1)
when “the minor's identification was not verified before the sale... .”
Complaint § 1.

e CTP issued a Notice of Compliance Check Inspection to Beltsville Sunoco
on December 4, 2012, due the minor’s cigarette purchase on November 29,
2012, at approximately 3:33 PM ET. The Notice stated that the violation
described was not necessarily the only violation reported. Complaint § 2.

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 or
smokeless tobacco 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 the purchaser’s date of birth, that no purchasers of
cigarettes or smokeless tobacco are younger than 18 years of age. 21 C.F.R.

§ 1140.14(b)(1).

Taking the above alleged facts as true, Respondent had three violations of
regulations contained in 21 C.F.R. Part 1140 within a six-month period.
Specifically, Respondent had a violation on June 15, 2012, and two violations on
November 29, 2012. Respondent’s actions violated the prohibition against selling
cigarettes to persons younger than 18 years of age. 21 C.F.R. § 1140.14(a).
Respondent’s actions also violated the requirement that retailers verify, by means

of photo identification containing a purchaser’s date of birth, that no purchaser of
cigarettes or smokeless tobacco is younger than 18 years of age. 21 C.F.R.

§ 1140.14(b)(1). Therefore, Respondent’s actions constitute violations of law for
which a civil money penalty is merited.

The regulations require me to impose 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). The regulations currently
allow a maximum penalty of $500 for a third violation within a six-month period,
21 C.F.R. § 17.2, and CTP has requested a fine in that amount. 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

Vinod Patwardhan, M.D.,
(PTAN: 00A293180),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-502
Decision No. CR2909
Date: August 30, 2013
DECISION

There was a basis for the revocation of the Medicare enrollment and billing privileges of
Petitioner, Vinod Patwardhan, M.D. effective May 8, 2009.

I. Procedural History and Jurisdiction

Palmetto GBA (Palmetto), the Medicare administrative contractor, notified Petitioner’s
counsel by letter dated February 1, 2013, that the November 16, 2012 initial
determination to deny Petitioner enrollment in Medicare was upheld on reconsideration.
Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 1. The Palmetto
employee that prepared the reconsideration letter was clearly confused by the convoluted
history of this case.’ The reconsideration letter referred to a November 16, 2012 initial
determination by Palmetto. However, as discussed in more detail hereafter, the
November 16, 2012 Palmetto notice advised Petitioner that he was re-enrolled in
Medicare and that his billing privileges were effective December 20, 2011. CMS Ex. 10.
Petitioner’s reconsideration request, which was dated July 12, 2012, was actually

' However, remand is not necessary in this case because I am providing de novo review.
triggered by a Palmetto letter dated May 14, 2012, in which Palmetto stated that it had
learned that Petitioner may not have received a June 19, 2009 notice of an initial
determination that Petitioner’s enrollment and billing privileges were revoked effective
May 8, 2009 due to his felony conviction. Palmetto stated in its May 14, 2012 letter that
its purpose was to accord Petitioner appeal rights and the letter advised Petitioner of the
right to request reconsideration. CMS Ex. | at 10-11. Petitioner timely requested
reconsideration by letter dated July 12, 2012. CMS Ex. 1 at 4-9. Therefore, it is the June
19, 2009 initial determination to revoke Petitioner’s Medicare enrollment effective May
8, 2009, followed by the new notice of the initial determination dated May 14, 2012, and
the reconsideration decision of February 1, 2013, that are the subject of the case before
me.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
March 6, 2013 (RFH), seeking review of the revocation of his billing privileges. The
case was assigned to me for hearing and decision on March 15, 2013, and an
Acknowledgement and Prehearing Order (Prehearing Order) was issued at my direction.
No issue has been raised as to the timeliness of Petitioner’s request for hearing and
neither party alleges that I lack jurisdiction to decide this matter.

On April 15, 2013, CMS filed a motion for summary judgment (CMS Br.). CMS also
filed CMS Exs. | through 11. On May 14, 2013, Petitioner filed a response to the CMS
motion for summary judgment (P. Br.) with Petitioner’s exhibits (P. Exs.) 1 through 9,
and two declarations (one by Petitioner and one by Petitioner’s attorney) in support of his
opposition to the CMS motion. CMS filed a reply brief (CMS Reply) on May 29, 2013
with CMS Ex. 12. On June 6, 2013, Petitioner filed an objection to the admissibility of
CMS Ex. 12. On June 6, 2013, Petitioner also filed a motion for leave to file a sur-reply
(P. Reply) with his sur-reply, which is accepted and considered. The parties were
advised by the Prehearing Order § II.G that for purposes of summary judgment “a fact
alleged and not specifically denied, may be accepted as true . . . . [and] evidence will be
considered admissible and true unless specific objection is made to its admissibility and
accuracy.” The parties have not objected to my consideration of CMS Exs. | through 11
and P. Exs. | through 9, and all are admitted.

Petitioner objected to my consideration of CMS Ex. 12, the declaration of Timothy
Wachtman, on grounds that the declaration is not based on personal knowledge, but
rather upon speculation. Mr. Wachtman declares that his statements are based on
“personal knowledge and upon information available to [him] in [his] official capacity.”
CMS Ex. 12 at 1. However, the declaration of Mr. Wachtman does not lay an adequate
foundation for me to determine how he came to have the knowledge he shares in his
declaration, e.g., Mr. Wachtman does not state when he began his employment with
Palmetto; when he began the duties of his current position; why his duties require that he
have the knowledge which he purports to have; or whether he personally reviewed
current or historic records to learn the information he relates in his declaration.
Paragraph 4 of Mr. Wachtman’s declaration strongly suggests that the information in that
paragraph was obtained by communication with an unidentified person or persons at First
Coast Service Options (Palmetto’s subcontractor) and the information he relates is clearly
second or third-party hearsay. The second sentence of paragraph 5 of the declaration is
speculative and unsupported by evidence that shows a relationship between the presence
of a document in Palmettos files and the delivery of such documents to the intended
recipient. Relevant and authentic evidence is generally admissible even though the
evidence may not be admissible in court. 5 U.S.C. § 556(c)(3) and (d); 42 C.F.R.

§ 498.62. CMS Ex. 12 is admitted as it is relevant and authentic and Petitioner’s
objection to the admissibility of CMS Ex. 12 is treated as an argument that the exhibit
should be given little weight, a proposition with which I agree. Accordingly, all exhibits
are admitted.

IL. Discussion
A. Applicable Law

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

§§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)). Petitioner is
a physician and as such is a supplier under the Act. Administration of the Part B program
is through contractors such as Palmetto. Act § 1842(a) (42 U.S.C. § 1395u(a)).

Subject to some limitations, qualified physician services are covered by Medicare Part B
for those physicians enrolled in Medicare. Act §§ 1832(a) (42 U.S.C. § 1395k(a)),
1861(s)(1) (42 U.S.C. § 1395x(s)(1)); 42 C.F.R. § 410.20. “Physician’s services” are

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

> Citations are to the annual revision of the Code of Federal Regulations (C.F.R.) in
effect at the time of the pertinent agency action, unless otherwise indicated.
professional services performed by physicians, including surgery, consultation, and
home, office, and institutional calls also subject to some exceptions. Act § 1861(q)
(42 U.S.C. § 1395x(q)); 42 C.F.R. § 410.20.

The Act requires the Secretary of Health and Human Services (the Secretary) to issue
regulations that establish a process for the enrollment of providers and suppliers,
including the right to a hearing and judicial review of certain enrollment determinations.
Act § 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to 42 C.F.R. § 424.505, a provider or
supplier must be enrolled in the Medicare program and be issued a billing number to have
billing privileges and to be eligible to receive payment for services rendered to a
Medicare-eligible beneficiary. Enrollment requirements are established by 42 C.F.R.

§ 424.510. The effective date of a physician’s enrollment in Medicare is governed by
regulations at 42 C.F.R. § 424.520(d). The date of filing of the enrollment application is
the date when the complete enrollment application and supporting documentation is
received by the designated Medicare contractor. 42 C.F.R. § 424.510(d)(1); 73 Fed. Reg.
69,725, 69,769 (Nov. 19, 2008). An enrolled physician may bill Medicare for covered
services provided to Medicare-eligible beneficiaries up to 30 days prior to the effective
date of enrollment, if circumstances precluded enrollment before the services were
provided. Retroactive billing for up to 90 days prior to the effective date of enrollment is
permitted only in case of a Presidentially-declared disaster pursuant to 42 U.S.C.

§§ 5121-5206. 42 C.F.R. § 424.521. Requirements for reporting changes, updating, and
revalidating enrollment information are established by 42 C.F.R. §§ 424.515 and
424.516.

Section 1842(h)(8) of the Act (42 U.S.C. § 1395u(h)(8)) gives the Secretary discretion to
refuse to enter into an agreement or to terminate or refuse to renew an agreement with a
physician or supplier who “has been convicted of a felony under Federal or State law for
an offense which the Secretary determines is detrimental to the best interests of the
program or program beneficiaries.”

The Secretary has delegated the authority to revoke enrollment and billing privileges to
CMS. 42 C.F.R. § 424.535. Pursuant to 42 C.F.R. § 424.535(a), CMS is delegated
authority to revoke enrollment and billing privileges for the following reasons, among
others:

(a) Reasons for revocation. CMS may revoke a currently
enrolled provider or supplier's Medicare billing privileges and
any corresponding provider agreement or supplier agreement
for the following reasons:

2 OR
(3) Felonies. The provider, supplier, or any owner of the
provider or supplier, within the 10 years preceding enrollment
or revalidation of enrollment, was convicted of a Federal or
State felony offense that CMS has determined to be
detrimental to the best interests of the program and its
beneficiaries.

(i) Offenses include—

(A) Felony crimes against persons, such as murder,
rape, assault, and other similar crimes for which the
individual was convicted, including guilty pleas and
adjudicated pretrial diversions.

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

(C) Any felony that placed the Medicare program or
its beneficiaries at immediate risk, such as a
malpractice suit that results in a conviction of criminal
neglect or misconduct.

(D) Any felonies that would result in mandatory
exclusion under section 1128(a) of the Act.

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

Revocation is effective 30 days after CMS or its Medicare contractor mails notice of the
revocation except that when a felony conviction is the basis for the revocation, the
effective date of the revocation is the date of the conviction. 42 C.F.R. § 424.535(g);
73 Fed. Reg. 69,725, 69,782, 69,865, 69,940 (Nov. 19, 2008).* Any claims for services
provided before revocation, must be submitted within 60 days of the effective date of
revocation. 42 C.F.R. § 424.535(h).

* Section 424.535(g) of 42 C.F.R. was amended effective January 1, 2009, to provide
that in the case of a felony conviction the effective date of the revocation was the date of
the conviction. 73 Fed. Reg. at 69,726.
A supplier whose enrollment and billing privileges have been revoked or whose
enrollment has been denied, may request reconsideration and review as provided by

42 C.F.R. pt. 498. A supplier submits a written request for reconsideration to CMS or its
contractor. 42 C.F.R. § 498.22(a). CMS or its contractor must give notice of its
reconsidered determination to the supplier, giving the reasons for its determination and
specifying the conditions or requirements the supplier failed to meet, and the right to an
ALJ hearing. 42 C.F.R. § 498.25. Ifthe decision on reconsideration is unfavorable to the
supplier, the supplier has a right to request a hearing by an ALJ and further review by the
Departmental Appeals Board (Board). Act § 1866(j)(8) (42 U.S.C. § 1395ce(j)(8));

42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5. A hearing on the record, also known as an
oral hearing, is required under the Act. Crestview Parke Care Ctr. v. Thompson, 373
F.3d 743, 748-751 (6th Cir. 2004).

B. Issue

Whether Petitioner’s Medicare enrollment was properly revoked effective
May 8, 2009.

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

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

1. Summary judgment is appropriate.

CMS requested summary judgment. Summary judgment is not automatic upon request
but is limited to certain specific conditions. The Secretary’s regulations that establish the
procedure to be followed in adjudicating Petitioner’s case are at 42 C.F.R. pt. 498.

42 C.F.R. § 424.545(a)(1). The regulations do not establish or recognize a summary
judgment procedure. However, the Board has long accepted that summary judgment is
an acceptable procedural device in cases adjudicated pursuant to 42 C.F.R. pt. 498. See,
e.g., Ill. Knights Templar Home, DAB No. 2274, at 3-4 (2009); Garden City Med. Clinic,
DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628, at 3 (1997). The
Board also has recognized that the Federal Rules of Civil Procedure (Fed. R. Civ. Pro.)
do not apply in administrative adjudications such as this, but the Board has accepted that
Fed. R. Civ. Pro. 56 and related cases provide useful guidance for determining whether
summary judgment is appropriate. Furthermore, a summary judgment procedure was
adopted as a matter of judicial economy within my authority to regulate the course of
proceedings and made available to the parties in the litigation of this case by my
Prehearing Order dated March 15, 2013. The parties were given notice by the Prehearing
Order that summary judgment is an available procedural device and that the law as it has
developed related to Fed. R. Civ. Pro. 56 will be applied.
Summary judgment is appropriate when there is no genuine dispute as to any issue of
material fact for adjudication or the moving party is entitled to judgment as a matter of
law. In determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-moving party,
drawing all reasonable inferences in that party’s favor. The party requesting summary
judgment bears the burden of showing that there are no genuine issues of material fact for
trial or that it is entitled to judgment as a matter of law. Generally, the non-movant may
not defeat an adequately supported summary judgment motion by relying upon the
denials in its pleadings or briefs but must furnish evidence of a dispute concerning a
material fact, i.e., a fact that would affect the outcome of the case if proven. Mission
Hospital Reg’! Med. Ctr., DAB No. 2459, at 4 (2012) (and cases cited therein); Experts
Are Us, Inc., DAB No. 2452, at 4 (2012) (and cases cited therein); Senior Rehab. &
Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (and cases cited therein); see also,
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

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

Petitioner argues in his opposition to the CMS motion for summary judgment that
summary judgment must be denied because there are two issues of fact in dispute.
Petitioner argues “there is a question of fact as to whether CMS ever sent Petitioner
notice of revocation of his billing privileges by certified mail as required by 42 C.F.R.
§ 405.800(b).” P. Br. at 1. Petitioner argues that there is also a question of fact as to
when he was actually notified of the revocation. P. Br. at 1. Viewing the evidence in a
light most favorable to Petitioner, there are no genuine disputes as to the facts to which
Petitioner points, or any other material facts in this case. As discussed in more detail
hereafter, the undisputed evidence shows that CMS and Palmetto accepted Petitioner’s
assertion that he did not receive the original notice of revocation. Therefore, Palmetto
sent Petitioner a second notice so that Petitioner could exercise his due process rights to
request reconsideration and administrative review by an ALJ and the Board. The impact
of a notice of initial decision delayed by three years is a legal question to be resolved by
application of the law to the undisputed facts. Accordingly, I conclude that summary
judgment is appropriate.

2. Petitioner’s felony convictions are a basis for the revocation of
Petitioner’s enrollment in Medicare and his billing privilege.

3. Revocation effective May 8, 2009, the date of Petitioner’s conviction,
is permissible under the regulations in effect at the time.

4. The delayed notice of initial determination did not deprive
Petitioner of due process.

5. No equitable relief is available in this forum.
a. Background

Set forth here is a summary of Petitioner’s convoluted history with Medicare since May
2009, which is based on the evidence admitted to the record by the parties. This
summary is helpful to explain and understand that the only issue before me is whether or
not there was a proper basis for CMS to revoke Petitioner’s enrollment effective May 8,
2009.

i. Petitioner’s May 8, 2009 Conviction

Petitioner does not dispute that he was convicted of a felony offense, as alleged by CMS.
On May 8, 2009, Petitioner was convicted in the United States District Court, Central
District of California, of the following felony offenses: conspiracy; introducing
misbranded drugs into interstate commerce; smuggling drugs purchased in India into the
United States; and knowingly and intentionally aiding and abetting, counseling,
commanding, inducing, procuring and causing the fraudulent and knowing importation
into the United States of drugs purchased in Honduras. On September 21, 2009,
Petitioner was sentenced to pay a fine of $10,000; to pay restitution of $1,313,634.10 to
the United States Department of Health and Human Services and the California MediCal
program; five years of probation; 1,000 hours of community service; and forfeiture in the
amount of $1,313,634.10. CMS Ex. 3.

ii. June 19, 2009 Initial Revocation Determination and Three
Year Bar to Re-enrollment
CMS introduced a May 14, 2009 internal CMS email, which directed that Palmetto be
told to revoke Petitioner’s enrollment and billing privileges based on his conviction as
announced by a press release from the United State Attorney. CMS Ex. 2 at2. A
subsequent email states that Petitioner’s enrollment and billing privileges were revoked
on June 18, 2009, effective May 8, 2009, with a three-year enrollment bar and that
Petitioner had no pending or finalized claims for services delivered after May 8, 2009.
CMS Ex. 2 at 1.

CMS also introduced a letter dated June 19, 2009, from Palmetto to Petitioner notifying
Petitioner that his enrollment in Medicare and his Medicare billing privileges were
revoked effective May 8, 2009, pursuant to 42 C.F.R. § 424.535(a)(d) based on his

May 8, 2009 conviction. The notice advised Petitioner that he was barred from re-
enrolling for three years beginning on May 8, 2009. Thus, the re-enrollment bar
continued through May 7, 2012. The notice advised Petitioner of the right to request
reconsideration of the revocation within 60 days and that failure to make a timely request
would be deemed a waiver of the right to administrative review. CMS Ex. | at 12-13.

Petitioner asserts that he never received the June 19, 2009 Palmetto letter.
iii. Petitioner’s December 18, 2009 Application to Re-enroll

On December 18, 2009, roughly seven months after his conviction, Petitioner submitted
an application to re-enroll in Medicare. The cover letter that accompanied the application
admitted that Petitioner’s attorneys were advised on November 12, 2009 that Petitioner’s
status in Medicare was listed as inactive. Thus, Petitioner was aware at least as early as
November 12, 2009, that his enrollment and billing privileges were no longer active.
Petitioner’s counsel asserted in the December 18, 2009 cover letter that Petitioner had
never been notified of a reason for a change in his status in Medicare. The letter states
that Petitioner had unsuccessfully inquired as to the basis for the denial of his claims for
reimbursement from Medicare. Petitioner’s counsel asserted in the cover letter that there
were no grounds for revocation of Petitioner’s Medicare enrollment, but also disclosed
that Petitioner was convicted in federal court related to the importation of foreign
chemotherapy medicines. Petitioner’s counsel asserted in the letter that the application to
reenroll was submitted in an attempt to clarify Petitioner’s status in the absence of
meaningful information from Palmetto regarding his status. CMS Ex. 4 at 2-3.
Petitioner’s evidence shows that he was aware at least as early as November 9, 2009, that
his reimbursement claims had been denied since June 2009 and Petitioner admits in his
brief that he noticed the denial of his claims as early as October 2009. P. Exs. 1, 2, 3, 5,
6; P. Br. at 2.

Palmetto notified Petitioner by letter dated July 7, 2010, that Petitioner’s enrollment
application was denied based on his felony conviction which occurred within the ten
years preceding the application. The notice does not refer to the June 19, 2009 notice of
10

revocation or the three-year bar to re-enrolling. The notice did advise Petitioner of the
right to submit a corrective action plan within 30 days or to file a request for
reconsideration within 60 days. CMS Ex. 5. Counsel for Petitioner filed a request for
reconsideration on September 1, 2010. Petitioner admitted that he was convicted of six
counts related to importing foreign chemotherapy medicines and that he was sentenced
on about September 21, 2009. Petitioner advanced several arguments for why his
conviction should not be a basis for denying him enrollment. CMS Ex. 6. Petitioner was
notified by letter dated September 23, 2010, that it was determined on reconsideration
that he did not meet the conditions for enrollment due to his felony conviction with the
ten years preceding his application. The notice advised Petitioner of his right to request
review by an ALJ within 60 days. CMS Ex. 7. Petitioner requested a hearing before an
ALJ by letter dated November 23, 2010. CMS Ex. 9 at 11-13. However, by letter dated
February 7, 2011, Petitioner requested that his case be dismissed. CMS Ex. 9 at 17. An
ALJ dismissed the case on February 16, 2011. CMS Ex. 9 at 20. Therefore, Petitioner
waived further review of whether or not his May 8, 2009 conviction was a proper basis
for denying him enrollment. Administrative review related to this December 18, 2009
application was final 60 days after the ALJ dismissal and this application is not subject to
my review. 42 C.F.R. § 498.72-.74(b) (2010).

iv. Petitioner’s December 29, 2010 Application to Re-enroll

On December 29, 2010, while the denial of his December 2009 application was still
pending review by an ALJ, Petitioner filed another application to enroll using the on-line,
web-based, Provider Enrollment, Chain and Ownership System (PECOS). Petitioner
listed a business address in Upland, California. Palmetto advised Petitioner by letter
dated January 27, 2011 that the application was rejected as it was incomplete because it
did not have a certification page. Palmetto requested additional tax documents by letter
dated March 21, 2011. Petitioner submitted additional documentation on March 31,
2011. CMS Ex. 8. I note that Petitioner incorrectly marked on this application that he
had no adverse legal history, but this issue and this application are not before me. CMS
Ex. 8 at 21. Palmetto notified Petitioner by letter dated May 2, 2011, that he was re-
enrolled in Medicare with billing privileges effective April 27, 2011. CMS Ex. 1 at 21.

Palmetto’s action on this application is not before me for review.

v. July 20, 2011 Exclusion from Medicare, Medicaid, and All
Federal Health Care Programs for 23 Years

The Inspector General of the United States Department of Health and Human Services
(L.G.) notified Petitioner by letter dated June 30, 2011, that he was excluded from
participation in Medicare, Medicaid, and all federal health care programs for 23 years
pursuant to sections 1128(a)(1) and 1128(a)(3) of the Act, effective July 20, 2011. The
exclusion notice states that the exclusion was based on Petitioner’s felony conviction in
11

the United States District Court, Central District of California. However, the I.G. waived
the exclusion for oncology items and services that Petitioner provided in Upland,
California. CMS Ex. | at 14-16. Subsequently on December 20, 2011, the LG. expanded
the wavier to include oncology items and services that Petitioner provided in all of San
Bernardino County, California. CMS Ex. | at 19-20. An ALJ reduced the period of
exclusion to 12 years, but otherwise concluded that Petitioner’s conviction was a basis for
is exclusion, subject to the waiver granted by the IG. Vinod Chandrashekhar
Patwardhan, M.D., DAB CR2471 (2011). On April 10, 2012, the Board affirmed
Petitioner’s exclusion from all federal health care programs for 12 years, subject to the
waiver granted by the I.G. Vinod Chandrashekhar Patwardhan, M.D., DAB No. 2454
(2012).

The Board decision completed administrative review of the I.G. exclusion action and was
final and binding subject any review in the federal district court. 42 C.F.R. § 498.90.
The L.G. exclusion is not subject to my review.

vi. May 14, 2012 Palmetto Notice of the May 8, 2009
Revocation

Palmetto and CMS were apparently convinced by Petitioner that he did not receive the
June 19, 2009 notice from Palmetto that his enrollment and billing privileges were
revoked effective May 8, 2009. As a result, Palmetto notified Petitioner by letter dated
May 14, 2012, that Palmetto learned that Petitioner may not have received the June 19,
2009 notice of initial decision that his enrollment and billing privileges were revoked
effective May 8, 2009, based on his conviction and that he was subject to a three-year bar
to re-enrollment. Palmetto states in the May 14 letter that its purpose is to explain the
basis for the revocation and provide Petitioner appeal rights. The letter advises Petitioner
of the right to request reconsideration. CMS Ex. | at 10-11; P. Ex. 7. The May 14, 2012
Palmetto letter does not purport to change the May 8, 2009 effective date of Petitioner’s
revocation. Petitioner timely requested reconsideration by letter dated July 12, 2012.
CMS Ex. | at 4-9. Petitioner’s July 12, 2012 request for reconsideration led to the
February 1, 2013 reconsideration decision, which triggered Petitioner’s March 6, 2013
request for hearing. This is the case that is presently subject to my review.

vii. November 16, 2012 Enrollment Effective December 20,
2011

Palmetto notified Petitioner by letter dated November 16, 2012, that he was re-enrolled
and his billing privileges were effective December 20, 2011. CMS Ex. 10. There is no
evidence that Petitioner requested reconsideration of this decision. This action by
Palmetto is not pending before me.
12

b. Analysis

Petitioner has never denied that he was convicted as alleged by CMS. The evidence
shows that he was convicted on May 8, 2009, in the United States District Court, Central
District of California, of the following felony offenses: conspiracy; introducing
misbranded drugs into interstate commerce; smuggling drugs purchased in India into the
United States; and knowingly and intentionally aiding and abetting, counseling,
commanding, inducing, procuring and causing the fraudulent and knowing importation
into the United States of drugs purchased in Honduras. On September 21, 2009,
Petitioner was sentenced to pay a fine of $10,000; to pay restitution of $1,313,634.10 to
the United States Department of Health and Human Services and the California MediCal
program; five years of probation; 1,000 hours of community service; and forfeiture in the
amount of $1,313,634.10. CMS Ex. 3.

Section 1842(h)(8) of the Act (42 U.S.C. § 1395u(h)(8)) gives the Secretary discretion to
terminate a Medicare participation agreement with a physician or supplier who “has been
convicted of a felony under Federal or State law for an offense which the Secretary
determines is detrimental to the best interests of the program or program beneficiaries.”

The Secretary has delegated the authority to revoke enrollment and billing privileges to
CMS. 42 C.F.R. § 424.535. Pursuant to 42 C.F.R. § 424.535(a)(3), CMS is delegated
authority to revoke enrollment and billing privileges based on the conviction of a supplier
or provider for the following felonies:

(3) Felonies. The provider, supplier, or any owner of the
provider or supplier, within the 10 years preceding enrollment
or revalidation of enrollment, was convicted of a Federal or
State felony offense that CMS has determined to be
detrimental to the best interests of the program and its
beneficiaries.

(i) Offenses include—

(A) Felony crimes against persons, such as murder,
rape, assault, and other similar crimes for which the
individual was convicted, including guilty pleas and
adjudicated pretrial diversions.

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

(C) Any felony that placed the Medicare program or
13

its beneficiaries at immediate risk, such as a
malpractice suit that results in a conviction of criminal
neglect or misconduct.

(D) Any felonies that would result in mandatory
exclusion under section 1128(a) of the Act.

Section 1842(h)(8) of the Act and related regulations do not mandate revocation but,
rather, grant the Secretary and CMS discretion to revoke. Petitioner does not and cannot
dispute that he was convicted by a state court of felonies that fit within the felonies
described by 42 C.F.R. § 424.535(a)(3)(D). Petitioner does not dispute that his
conviction occurred on May 8, 2009, and the requirement that the conviction occur
within the 10 years preceding revalidation of enrollment is satisfied. The I.G. excluded
Petitioner for his felony conviction pursuant to section 1128(a)(1) and (3) of the Act, the
exclusion was upheld on ALJ and Board review, and is now binding upon Petitioner as a
matter of law. Pursuant to 42 C.F.R. § 424.535(a)(3)(i)(D) a felony conviction that
would result in mandatory exclusion pursuant to section 1128(a) of the Act, is per se
detrimental to the best interest of the program and its beneficiaries. Letantia Bussell,
M.D., DAB No. 2196, at 9 (2008). Accordingly, there is a basis for revocation. The
correct effective date of the revocation is established by regulation as the date on which
Petitioner was convicted, not the date of sentencing, or any other date such as completion
of appeals. 42 C.F.R. § 424.535(g); 73 Fed. Reg. 69,725, 69,782, 69,865, 69,940 (Nov.
19, 2008). I conclude that CMS has made a prima facie showing of an adequate basis for
the revocation of Petitioner’s enrollment effective May 8, 2009. Furthermore, when
CMS has established that a legal basis for revocation existed, the revocation action was a
reasonable and permissible exercise of the discretion granted to CMS by 42 C.F.R.

§ 424.535(a)(3). Letantia Bussell, M.D., DAB No. 2196, at 10.

Petitioner advances three arguments in his request for hearing for why the revocation
should not be upheld: (1) Palmetto and CMS failed to consider the extraordinary
circumstances of Petitioner’s conviction and Petitioner’s exclusion is inconsistent with
the primary purposes and policies underlying the Medicare program; (2) Petitioner did
not receive the June 2009 notice that his participation was revoked and he acted
reasonably in the absence of such notice rendering nearly $1 million of services to
Medicare beneficiaries between May 8, 2009 and May 2012, when Petitioner finally
received notice of the revocation; and (3) pursuant to 42 C.F.R. § 424.535 and section 19
of the CMS Program Integrity Manual the revocation was not effective until 30 days after
the May 14, 2012 notice of revocation. RFH at 1-2. Petitioner advances two arguments

> CMS argues that Petitioner’s felony convictions also fit within 42 C.F.R.
§ 424.535(a)(3)(i)(C), but I need not analyze that argument Petitioner’s convictions
clearly fit within 42 C.F.R. § 424.535(a)(3)(i)(D).
14

in his opposition to the CMS motion for summary judgment for why the revocation
should be set aside: (1) the notice of revocation was not mailed to him by certified mail
as required by law; and (2) he was denied his right to have a hearing within a reasonable
time of the revocation being imposed. P. Br. at 6-7. In his sur-reply, Petitioner argues
that I have the authority to set aside the revocation based on the violation of Petitioner’s
due process rights established by section 205(b) of the Act (42 U.S.C. § 405(b)).

P. Reply at 1. Petitioner’s arguments merit no relief.

Petitioner’s argument that Palmetto and CMS failed to consider the extraordinary
circumstances of Petitioner’s conviction and that the revocation of enrollment and billing
privileges is inconsistent with the purposes and polices underlying Medicare is not
persuasive. Petitioner was convicted of felonies that are per se detrimental to the
program and its beneficiaries and are a legal basis for CMS to revoke Petitioner’s
enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(3). There is no
statutory or regulatory requirement for CMS or its contractor to permit Petitioner to
participate in the revocation decision. There is also no authority that requires CMS or its
contractor to consider factors in addition to those specified by 42 C.F.R. § 424.535(a)(3)
when the revocation decision is made. Furthermore, there is no authority for me to
further review the exercise of discretion by CMS or its contractor to revoke enrollment
and billing privileges when there is a legal basis for revocation. Abdul Razzaque Ahmed,
M.D., DAB No. 2261, at 18 (2009), aff'd, Ahmed v. Sebelius, 710 F.Supp.2d 167

(D. Mass. 2010). If it were within my authority to review the exercise of discretion by
CMS, I would conclude that Petitioner’s revocation is certainly not inconsistent with the
purposes and policies underlying Medicare. Petitioner was convicted of serious felony
offenses for which the district court imposed a significant sentence. The Congressional
grant of authority to revoke enrollment and billing privileges is clearly intended to protect
both the Medicare Trust Fund and Medicare beneficiaries. The revocation of Petitioner’s
enrollment and billing privileges was entirely consistent with the Congressional purpose,
notwithstanding that the I.G. subsequently granted a limited waiver of Petitioner’s
exclusion from Medicare based on the request of a state official for a limited-waiver of
the exclusion.

15

Petitioner’s argument that he acted reasonably by continuing to deliver services to
Medicare beneficiaries between May 2009 and May 2012 and the implication that CMS
should be estopped from denying Petitioner’s alleged $1 million in claims® for services
he allegedly delivered during that period is also meritless.

It is well-established that “the government cannot be estopped
absent, at a minimum, a showing that the traditional
requirements for estoppel are present (i.e., a factual
misrepresentation by the government, reasonable reliance on
the misrepresentation by the party seeking estoppel, and harm
or detriment to that party as a result of the reliance) and that
the government’s employees or agents engaged in
“affirmative misconduct.” Oaks of Mid City Nursing and
Rehabilitation Center, DAB No. 2375, at 31 (2011), citing
Office of Personnel Management v. Richmond; see also
Rosewood Living Center, DAB No. 2019, at 13 (2006), citing
Schweiker v. Hansen, 450 U.S. 785, 788 (1981) and Heckler
v. Community Health Servs., 467 U.S. 51, 59 (1984). Thus,
even if the traditional requirements of estoppel were met here,
estoppel would not be available because there is no allegation
or evidence of any affirmative misconduct.

Southlake Emergency Care Center, DAB No. 2402, at 7 (2011). Just as in Southlake,
there is no allegation or evidence of affirmative misconduct by government agents in this
case. Petitioner alleges that he did not receive the June 19, 2009, from Palmetto notifying
him that his enrollment in Medicare and his Medicare billing privileges were revoked
effective May 8, 2009. Petitioner does not allege affirmative misconduct by Palmetto to
prevent him from learning of the revocation or that Palmetto affirmatively misrepresented
his status in Medicare. The evidence also shows that Petitioner was not acting reasonably
if, after his conviction, he continued delivering services to Medicare beneficiaries
expecting that he might be reimbursed by Medicare. Petitioner was certainly aware of his
felony conviction on May 8, 2009. Petitioner was participating in Medicare prior to his
conviction and as a condition of participation he agreed to comply with the law governing
Medicare participation. Act § 1866(a) and (b)(2); 42 C.F.R. §§ 424.500, 424.510(d)(3),

® Thave no jurisdiction to adjudicate Medicare claims by beneficiaries or suppliers and
Petitioner has no right to have such claims adjudicated by me. The only evidence of the
existence of such claims is Petitioner’s declaration. As I understand Petitioner’s
argument, he does not seek my approval of the alleged claims, rather he advocates for me
to find the revocation invalid so that his claims may be processed through the appropriate
channels.
16

424.516. It is not unreasonable to expect that Petitioner have some understanding of the
Act and regulations and that he knew or should have known that his felony convictions
could cause revocation of his enrollment and billing privileges. Waterfront Terrace, Inc.,
DAB No. 2320, at 7 (2010) (Board noted with approval the ALJ's observation that a
provider of Medicare services “should be expected to possess at least a rudimentary
understanding of program rules and terminology”), citing Heckler v. Community Health
Servs. of Crawford County, 467 U.S. 51, 63, 64 (1984) (participant in the Medicare
program had “duty to familiarize itself with the legal requirements” for cost
reimbursement); see also Thomas M. Horras and Christine Richards, DAB No. 2015, at
34 (2006) (officer and principal of provider had responsibility to be aware of and adhere
to applicable law and regulations), aff'd, Horras v. Leavitt, 495 F.3d 894 (8th Cir. 2007).
Therefore in October 2009, when Petitioner admits he became aware that his claims were
being denied, he should have recognized that the denials were likely related to his felony
conviction. Although Petitioner was apparently frustrated by Palmetto’s lack of
responsiveness to his inquiries, there is no evidence that he elevated his inquiry to CMS
which has responsibility over Palmetto for program administration. However, given the
facts known to Petitioner in October 2009, i.e. that he had been convicted of felonies and
that his claims were being denied, it was not reasonable for him to continue to bill
Medicare without first clarifying his status. As of November 12, 2009, Petitioner admits
that he and his attorneys knew that he was no longer considered to be in active status and
the continued delivery of services to Medicare beneficiaries with the expectation of filing
claims for reimbursement after November 12, 2009 was clearly unreasonable.

To the extent that Petitioner’s arguments may be construed to be a request for equitable
relief, such relief is clearly beyond my authority. US Ultrasound, DAB No. 2302, at 8
(2010) (“[n]either the ALJ nor the Board is authorized to provide equitable relief by
reimbursing or enrolling a supplier who does not meet statutory or regulatory
requirements.”); Pepper Hill Nursing & Rehab. Ctr., LLC, DAB No. 2395, at 9-10 (2011)
(the Board and the ALJs are bound by the applicable statute and regulations) citing
18661CPayday, DAB No. 2289, at 14 (2009) (“an ALJ is bound by applicable laws and
regulations and may not invalidate either a law or regulation on any ground”); and
Sentinel Medical Laboratories, Inc., DAB No. 1762, at 9 (2001), aff'd, Teitelbaum v.
Health Care Financing Admin., 32 F. App’x 865 (9th Cir. 2002), reh’g denied, No. 01-
70236 (9th Cir. May 22, 2002).

Petitioner argues that pursuant to 42 C.F.R. § 424.535 and section 19 of the CMS
Program Integrity Manual’ the revocation was not effective until 30 days after the May
14, 2012 notice of revocation. Petitioner overlooked the fact that 42 C.F.R. § 424.535(g)

7 The CMS Medicare Program Integrity Manual was not promulgated as a regulation and
is not enforceable as law. Rather, the regulation in effect controls.
17

was amended effective January 1, 2009, to provide that in the case of a felony conviction
the effective date of the revocation was the date of the conviction. 73 Fed. Reg. at
69,726. Petitioner was convicted May 8, 2009, after the effective date of the change, and
the initial revocation determination also occurred after the effective date. Therefore,
revocation of Petitioner’s Medicare enrollment and billing privileges effective May 8,
2009, the date of his conviction, was authorized.

Petitioner argues that he was denied due process because the June 19, 2009 notice of
revocation was not sent to him by certified mail. P. Br. at 6. For purposes of summary
judgment, I do not weigh the evidence related to this allegation of fact but accept it as
true. Petitioner cites 42 C.F.R. § 405.800(b) as the source of the requirement to use
certified mail. However, Petitioner’s citation to that authority is likely a clerical error as
there is no such subsection. Furthermore, 42 C.F.R. pt. 405, subpt. H, which includes

§§ 405.801-.877, establishes the procedures and requirements for appeals under Medicare
Part B rather than for provider and supplier enrollment cases such as this case. The
requirements and procedures for provider and supplier enrollment cases, including
revocations of enrollment and billing privileges are found in 42 C.F.R. pts. 424, 489, and
498. The requirements for notice of an initial determination established by 42 C.F.R.

§ 498.20, do not include a requirement that notice be sent by certified mail. While
sending official notices that trigger citizen rights by certified or registered mail with a
return receipt requested may be an advisable practice, it is not required by the Act or the
applicable regulations.

Petitioner argues that he was denied his right to have a hearing within a reasonable time
of the revocation and that I should set aside the revocation based on the violation of his
right to due process as provided by section 205(b) of the Act (42 U.S.C. § 405(b)). P. Br.
at 7; P. Reply at 1. Petitioner cites Ram v. Heckler, 792 F.2d 444, 447 (4th Cir. 1986) as
authority for the requirement for a prompt post-revocation hearing. P. Br. at 7. The court
in Ram found that a physician convicted of Medicare fraud was not entitled to an
administrative hearing before the suspension of his status as a Medicare provider.
However, the court concluded that a prompt post-suspension hearing was required to
satisfy due process due to the physician’s property interest in participating in Medicare.
The court in Ram did not define “prompt.” Furthermore, the argument that providers and
suppliers have a protected property interest in continued Medicare participation has been
consistently rejected since Ram. See, e.g., Gregory J. Salko, M.D., DAB No. 2437, at 6
(2012) and Robert T. Tzeng, M.D., DAB 2169 (2008) and cases cited therein. There is no
question that the Act and regulations grant Petitioner a right to a post-revocation hearing.
The Act and regulations do not specify how promptly such a hearing must be
accomplished. Certainly, it is desirable that such hearings occur as promptly as possible,
if for no other reasons than to ensure that the evidence is fresh and citizens feel that their
rights are being observed. However, when a hearing does not occur promptly, neither the
Act nor the regulations authorize a remedy such as setting aside a lawful revocation as
Petitioner advocates. Even if some remedy were authorized, Petitioner was not
18

prejudiced by the delay in this case. C.f’ Fady Fayad, M.D., DAB No 2266, at 9 (2009)
(Board will not find due process violation related to notice absent a showing of
prejudice). The revocation was effective May 8, 2009, the date of Petitioner’s
conviction, as authorized by 42 C.F.R. § 424.535(g). Laccept, for purposes of summary
judgment that Petitioner did not receive a copy of the June 19, 2009 Palmetto revocation
notice until it was provided to him by the United States Attorney on May 7, 2012. Thus,
there clearly has been a delay between the revocation and Petitioner’s receipt of the
notice of the revocation and a further delay between Petitioner’s receipt of notice and this
decision. The question of whether some remedy should be fashioned to attenuate any
prejudice due to the delay must be answered in the negative for two reasons: (1) no
remedy is authorized by the Act or regulation; and (2) Petitioner suffered no more than
minimal prejudice. The first reason is self-explanatory. Regarding the second reason,
Petitioner has argued that between roughly May 2009 and May 2012 he delivered
approximately $1 million in services to Medicare eligible beneficiaries for which desires
reimbursement. If after providing Petitioner de novo review I concluded that there was
no basis for revocation and there was no CMS appeal or the decision was upheld by the
Board, 42 C.F.R. § 424.545(a)(2) provides that Petitioner could resubmit all unpaid
claims for services delivered during the period, thus minimizing any prejudice. However,
because after de novo review I concluded that Petitioner was convicted of felonies that
are per se detrimental and are a basis for his exclusion effective May 8, 2009, Petitioner
as suffered no prejudice due to the delayed delivery of a copy of the June 9, 2009 notice.
Fady Fayad, M.D., DAB No 2266, at 10 (even if notice was inadequate at the
reconsideration stage, de novo review with adequate notice was sufficient due process).
Accordingly, if I had authority to fashion a remedy, I would conclude that no remedy is
warranted.

The Act and regulations accord Petitioner a right to notice and the opportunity to have the
decision to revoke his enrollment and billing privileges reconsidered and then
administratively reviewed by an ALJ and the Board, and then judicial review. Act

§ 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5,
498.22(a), and 498.25. Petitioner was notified of the revocation, albeit after a significant
delay; he exercised his right to reconsideration; he has received de novo review by an
ALJ; and there is no real dispute that there is a factual and legal basis for revocation of
his enrollment effective May 8, 2009, the date of his convictions. Petitioner has received
the process due him under the Act and the Secretary’s regulations.
19

III. Conclusion

For the foregoing reasons, I conclude that Petitioner’s enrollment and billing privileges
were properly revoked effective May 8, 2009.

/s/
Keith W. Sickendick
Administrative Law Judge