Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Wanda K. Lowther,
Petitioner
Vv.
The Inspector General.
Docket No. C-10-516
Decision No. CR2192

Date: July 22, 2010

DECISION

This matter is before me in review of the Inspector General’s (I.G.’s) determination to
exclude Petitioner pro se Wanda K. Lowther from participation in Medicare, Medicaid,
and all other federal health care programs for a period of five years. The I.G.’s
determination to exclude Petitioner is based on the terms of section 1128(a)(3) of the
Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(3). As the facts of this case mandate
the imposition of a five-year exclusion, I grant the 1.G.’s Motion for Summary
Disposition.

I. Procedural Background

Petitioner Wanda K. Lowther was a registered nurse in the state of Ohio. In 2007,
Petitioner worked at Pebble Creek Nursing Home and, in 2008, at Ascera Care Hospice.
On July 11, 2008, Petitioner was charged with three felony counts of theft of drugs in
violation of OHIO REVISED CODE § 2913.02(A)(1) and one felony count of aggravated
possession of drugs in violation of OHIO REVISED CODE § 2925.11(A)(C)(1). The four
count indictment contained the following allegations: that on January 2, 2008, Petitioner
stole the drug Roxinol from Ascera Care Hospice; that on May 19, 2007, Petitioner stole
the drug Percocet from Pebble Creek Nursing Home; that between October and
December 2007, Petitioner stole Roxinol from Pebble Creek Nursing Home; and that on
January 2, 2008, Petitioner knowingly obtained, possessed, or used the drug Roxinol,
committing the crime of aggravated possession of drugs.

On August 4, 2008, Petitioner filed a Motion for Intervention in Lieu of Conviction,
which the Summit County Court of Common Pleas accepted on August 25, 2008. In
granting Petitioner’s Motion, the County Court accepted Petitioner’s guilty pleas to all
counts of the indictment.

As required by the terms of section 1128(a) of the Act, 42 U.S.C. § 1320a-7(a), the I.G.

began the process of excluding Petitioner from participation in Medicare, Medicaid, and
all other federal health care programs. On January 29, 2010, the LG. notified Petitioner
that she would be excluded pursuant to the terms of section 1128(a)(3) of the Act for the
mandatory minimum period of five years.

Acting pro se, Petitioner timely sought review of the I.G.’s action by letter dated
February 24, 2010. I convened a telephonic prehearing conference on April 2, 2010,
pursuant to 42 C.F.R. § 1005.6, in order to discuss the issues presented by the case and
procedures for addressing those issues. By order of April 2, 2010, I established a
schedule for the submission of documents and briefs. All briefing is now complete, and
the record in this case closed on June 16, 2010.

The evidentiary record on which I decide the issues before me comprises nine exhibits.
The I.G. proffered six exhibits marked I.G. Exhibits 1-6 (I.G. Exs. 1-6). Petitioner
proffered three unmarked exhibits. I have designated them Petitioner’s Exhibits 1-3 (P.
Exs. 1-3). All proffered exhibits are admitted without objection.

IL. Issues

The issues before me are set out at 42 C.F.R. § 1001.2007(a)(1). In the specific context
of the record, they are:

1. Whether the I.G. had a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to section
1128(a)(3) of the Act; and

2. Whether the proposed five-year period of exclusion is unreasonable.

The long-settled law of this forum entitles the I.G. to summary judgment on both issues.
Section 1128(a)(3) of the Act mandates Petitioner’s exclusion, for her predicate
conviction has been established. Petitioner pleaded guilty to all counts, which qualifies
as a conviction under 42 U.S.C. § 1320a-7(i)(3) and (4). A five year period of exclusion
is reasonable as a matter of law because it is the minimum period established by section
1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B).
Ill. Controlling Statutes and Regulations

Section 1128(a)(3) of the Act, 42 U.S.C. § 1320a-7(a)(3), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of “[a]ny individual or entity that has been convicted of an offense which
occurred after [August 21, 1996], under Federal or State law, in connection with the
delivery of a health care item or service or with respect to any act or omission in a health
care program (other than those specifically described in [section 1128(a)(1)] operated by
or financed in whole or in part by any Federal, State, or local government agency, of a
criminal offense consisting of a felony related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct.” The regulation implementing
section 1128(a)(3) appears at 42 C.F.R. § 1001.101(c)(1).

Under the Act, a person is “convicted” within the meaning of section 1128(i) if:

(1) a judgment of conviction has been entered against the individual by a Federal,
State, or local court, regardless of whether there is an appeal pending or
whether the judgment of conviction or other record relating to criminal conduct
has been expunged;

(2) when there has been a finding of guilt against the individual by a
Federal, State, or local court;

(3) when a plea of guilty or nolo contendere by the individual has been
accepted by a Federal, State, or local court; or

(4) when the individual or entity has entered into participation in a first
offender, deferred adjudication, or other arrangement or program where
judgment of conviction has been withheld. 42 U.S.C. § 1320a-7(i).

An exclusion based on section 1128(a)(3) is mandatory: the I.G. must impose it for a
minimum period of five years. Act, section 1128(c)(3)(B), 42 U.S.C. § 1320a-7(c)(3)(B).
The regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory provision.

The Act provides that an exclusion pursuant to section 1128(a) “shall be effective at such
time and upon such reasonable notice to the public and to the individual or entity
excluded as may be specified by regulations .. . .” Act § 1128(c)(1). Congress granted
the Secretary essentially unfettered discretion through section 1128(c)(1) to establish the
effective date of exclusion by regulation. The regulation provides that an exclusion is
effective 20 days from the date of the notice of exclusion. 42 C.F.R. § 1001.2002(b).
IV. Findings and Conclusions
I find and conclude the following:

1. After Petitioner pleaded guilty to all four counts in the indictment on August 25,
2008, the County Court stayed all criminal proceedings against Petitioner and placed her
under the control of the Adult Probation Department and the Summit County Psycho-
Diagnostic Clinic. 1G. Ex. 3, at 1.

2. The accepted guilty pleas and Petitioner’s entrance into a treatment program where
judgment of conviction was withheld constitute a “conviction” within the meaning of
sections 1128(a)(3) and 1128(i)(3) and (4) of the Act, and 42 C.F.R. § 1001.2.

3. The felony criminal offenses to which Petitioner pleaded guilty were in connection
with the delivery of a health care item or service and occurred after August 21, 1996.
LG. Ex. 2.

4. On January 29, 2010, the LG. notified Petitioner that she was to be excluded from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years, based on the authority set out in section 1128(a)(3) of the Act. I.G.
Ex. 1.

5. Acting pro se, Petitioner perfected her appeal from the I.G.’s action by filing a
timely hearing request on February 24, 2010.

6. By reason of Petitioner’s conviction, a basis exists for the I.G.’s exercise of
authority, pursuant to section 1128(a)(3) of the Act, 42 U.S.C. § 1320a-7(a)(3), to
exclude Petitioner from participation in Medicare, Medicaid, and all other federal health
care programs.

7. By reason of her conviction, Petitioner was subject to, and the I.G. was required to
impose, the mandatory minimum five-year period of exclusion from Medicare, Medicaid,
and all other federal health care programs. Section 1128(c)(3)(B) of the Act; 42 C.F.R. §
1001.102(a).

8. Because the five-year period of Petitioner’s exclusion is the mandatory minimum
period provided by law, it is therefore not unreasonable. Section 1128(c)(3)(B) of the
Act; 42 C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).

9. Although the County Court accepted Petitioner’s guilty pleas on August 25, 2008,
the I.G. has broad discretion to impose the effective date of the exclusion and the
effective date of 20 days from the January 29, 2010 notice of exclusion is within that
broad discretion. Act § 1128(c)(1); 42 C.F.R. § 1001.2002(b).
10. There are no disputed issues of material fact before me and summary disposition
on the written submissions is appropriate in this matter. Michael J. Rosen, M.D., DAB
No. 2096 (2007); Thelma Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The four essential elements necessary to support an exclusion based on section

1128(a)(3) of the Act are: (1) the individual to be excluded must have been convicted of a
felony offense; (2) the felony offense must have been based on conduct relating to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct; (3)
the felony offense must have been for conduct in connection with the delivery of a health
care item or service, or the felony offense must have been with respect to any act or
omission in a health care program operated by or financed in whole or in part by any
federal, state, or local government agency; and (4) the felonious conduct must have
occurred after August 21, 1996. Andrew D. Goddard, DAB No. 2032 (2006); Kenneth
M. Behr, DAB No. 1997 (2005); Erik D. DeSimone, R.Ph., DAB No. 1932 (2004);
Jeremy Robinson, DAB No. 1905 (2004); Breton Lee Morgan, M.D., DAB CR1913
(2009); Wendi Mueller, DAB CR1478 (2006); Theresa A. Bass, DAB CR1397 (2006);
Michael Patrick Fryman, DAB CR1261 (2004); Golden G. Higgwe, D.P.M., DAB
CR1229 (2004); Thomas A. Oswald, R.Ph., DAB CR1216 (2004); Katherine Marie
Nielsen, DAB CR1181 (2004).

Petitioner does not deny that she pleaded guilty to three counts of felony theft of drugs
and one count of felony aggravated possession of drugs. I.G. Exs. 2 and 3. Petitioner
does not dispute that the felony offenses were based on conduct relating to theft in
connection with the delivery of a health care item or service or that the felonious conduct
occurred after August 21, 1996. The record refers to dates in May 2007 and January,
October and December 2008 for the four felony convictions, and all are after August 21,
1996. The second, third, and fourth essential elements are thus established without the
need for further discussion.

A. Petitioner was convicted as conviction is defined in the Act.

Petitioner contests the first element in disputing the I.G.’s use of her guilty pleas as
“convictions.” I.G. Ex. 3 shows that on August 25, 2008, Petitioner appeared with
counsel in the Summit County Court of Common Pleas and pleaded guilty to all four
felony charges. The County Court found that Petitioner’s drug dependence was a factor
leading to Petitioner’s criminal activity and ordered Petitioner to attend a controlled and
supervised rehabilitation program in lieu of conviction pursuant to OHIO REV. CODE
ANN. § 2951.041.

The Act defines “conviction” as including instances “when a plea of guilty or nolo
contendere by the individual or entity has been accepted by a Federal, State, or local
court” and “when the individual or entity has entered into participation in a first offender,
deferred adjudication, or other arrangement or program where judgment of conviction has
been withheld.” Act, section 1128(i)(3) and (4), 42 U.S.C. § 1320a-7(i). These
definitions are repeated at 42 C.F.R. § 1001.2.

Under Ohio law, when a court finds an offender eligible for intervention in lieu of
conviction and grants the offender’s request:

... the court shall accept the offender’s plea of guilty and waiver of the
defendant’s right to a speedy trial, the preliminary hearing, the time period
within which the grand jury may consider an indictment against the
offender. . . the court may then stall all criminal proceedings and order the
offender to comply with all terms and conditions imposed by the court . .
Successful completion of the intervention plan and period of abstinence
under this section shall be without adjudication of guilt and is not a
criminal conviction for purposes of any disqualification or disability
imposed by law and upon conviction of a crime . . .. OHIO REV. CODE
ANN. § 2951.041(C) and (E).

Although the language of OHIO REV. CODE ANN. § 2951.041 suggests that an offender’s
guilty pleas in exchange for an intervention in lieu of conviction will not qualify as
“conviction[s],” the plain language of the Act reveals that Ohio’s intervention in lieu of
conviction program fits precisely within the Act’s definition of conviction. Congress
amended the Act to specifically encompass the alternative programs devised by several
states within the definition of conviction, including first offenders and other arrangements
where judgment of conviction has been withheld. First, in this case, the Ohio County
Court had to accept Petitioner’s guilty pleas in order to enroll her in the intervention
program, which places her situation within section 1128(i)(3) of the Act. Michael J.
O'Brien, D.O., DAB CR1150, at 5 (2004). Second, Ohio’s intervention in lieu of
conviction clearly qualifies as an “other arrangement or program where judgment of
conviction has been withheld” under section 1128(i)(4) because Petitioner’s failure to
comply with the requirements of the statute would result in conviction. Under the plain
language of the Act, Petitioner was “convicted.”

Exclusion from all federal health care programs is governed by federal law based on the
Supremacy Clause of the United States Constitution. U.S. Const., art. VI, cl. 2. A state
cannot bar enforcement of a federal law in contravention of the Supremacy Clause. Thus,
the Act’s definition of “conviction” trumps Ohio’s statute defining “convictions” under
its intervention in lieu of conviction program.

B. Petitioner’s five-year period of exclusion is reasonable as a matter
of law.

The five-year period of exclusion proposed in this case is the absolute minimum required
by section 1128(c)(3)(B) of the Act. As a matter of law, it is not unreasonable, and
neither the Board nor I can reduce it. 42 C.F.R. § 1001.2007(a)(2); Mark K. Mileski,
DAB No. 1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002).

C. The LG. has broad discretion to set the effective date of the
exclusion.

Petitioner argues that her five-year exclusion should be applied retroactively to the day of
the actual guilty plea. In this case, Petitioner pleaded guilty to four felony counts on
August 25, 2008 and the LG. notified Petitioner of her exclusion on January 29, 2010.

The Act provides that an exclusion pursuant to section 1128(a) “shall be effective at such
time and upon such reasonable notice to the public and to the individual or entity
excluded as may be specified by regulations .. . .” Act § 1128(c)(1). Section 1128(c)(1)
of the Act provides that an exclusion is effective 20 days from the date of the notice of
exclusion. 42 C.F.R. § 1001.2002(b).

Under section 1128(a) of the Act and 42 C.F.R. § 1001.2002(b), the LG. has broad
discretion to impose an exclusion when it chooses. The Secretary’s regulations do not
give me discretion to change the effective date of Petitioner’s exclusion and I may not
refuse to follow the Secretary’s regulations. 42 C.F.R. § 1005.4(c)(1); Thomas Edward
Musial, DAB No. 1991 (2005); Aiad Saman, DAB No. CR2050 (2009). Thus, the I.G.’s
imposition of Petitioner’s exclusion 18 months after her guilty pleas and “conviction” is
valid.

Resolution of a case by summary disposition is particularly fitting when settled law can
be applied to undisputed material facts. Michael J. Rosen, M.D., DAB No. 2096 (2007);
Thelma Walley, DAB No. 1367 (1992). Summary disposition is authorized by the terms
of 42 C.F.R. § 1005.4(b)(12). This forum looks to FED. R. CIv. P. 56 for guidance in
applying that regulation. Robert C. Greenwood, DAB No. 1423 (1993). The material
acts in this case are undisputed and unambiguous. They support summary disposition as
a matter of settled law. This Decision issues accordingly.

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Wanda Lowther from
participation in Medicare, Medicaid, and all other federal health care programs for a term
of five years, pursuant to the terms of section 1128(a)(3) of the Act, is sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Presbyterian Imaging Centers, LLC,
(Reference Numbers 29072 and 29073),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket Nos. C-10-434, C-10-435
Decision No. CR2190

Date: July 22, 2010

DECISION

This case is before me on the Centers for Medicare and Medicaid Services’ (CMS)
Motion for Summary Disposition. I find and conclude that CMS properly denied
Petitioner Presbyterian Imaging Centers, LLC’s (Petitioner), applications for enrollment
in Medicare as an Independent Diagnostic Testing Facility IDTF) supplier, based on
Petitioner’s failure to enroll its mobile MRI unit separately. Accordingly, I grant CMS’s
Motion for Summary Disposition.

I. Procedural History

Petitioner submitted two applications to enroll as an IDTF to the Medicare contractor for
CMS, Cigna Government Services (Cigna). On August 28, 2009, Cigna denied
Petitioner’s applications, stating that Petitioner had failed to meet all of the performance
standards as set forth in 42 C.F.R. § 410.33. See CMS Ex. 1. On September 2 and
September 9, 2009, Petitioner requested reconsideration of Cigna’s decisions.

In two decisions dated January 27, 2010, the contractor’s Hearing Officer affirmed the
denial of Petitioner’s applications. The Hearing Officer found that the documentation
provided by Petitioner indicated that the unit housing the testing equipment was a mobile
unit that was shared by and moved between three different and separately enrolled
IDTFs. The Hearing Officer found that Petitioner had failed to enroll the mobile unit
separately from the fixed locations, and, therefore, failed to meet all the standards for
Medicare enrollment by an IDTF as set out in 42 C.F.R. § 410.33.

By letters dated February 9, 2010, Petitioner requested a hearing before an
Administrative Law Judge (ALJ). On February 22, 2010, the cases were docketed as
Nos. C-10-434 and C-10-435, and were assigned to me for hearing and decision.

I convened a prehearing telephone conference on March 16, 2010, the substance of which
is memorialized in my order dated March 17, 2010. During the prehearing conference,
based on Petitioner’s suggestion and for good cause shown, I ordered that the two cases
be consolidated under the instant docket number, C-10-434. I set a briefing schedule for
the parties.

CMS moved for summary disposition and submitted a brief and three exhibits. Petitioner
opposed the Motion and submitted a brief and five exhibits. CMS filed a reply brief. I
ave admitted all proffered exhibits into the evidentiary record before me.

II. Legal Background

Section 1866(j)(1) of the Act, 42 U.S.C. § 1395cc(j)(1), authorizes the Secretary of
Health and Human Services (Secretary) to establish a process for the enrollment in the
Medicare program of providers of services and suppliers. The Secretary published a final
rule governing the enrollment of providers and suppliers, with an effective date of June
20, 2006 (71 Fed. Reg. 20,754, 20,776 (April 21, 2006)). These regulations are found at
42 C.F.R. Part 424, subpart P, and establish requirements for enrollment:

To receive payment for covered Medicare items or services
from either Medicare (in the case of an assigned claim) or a
Medicare beneficiary (in the case of an unassigned claim), a
provider or supplier must be enrolled in the Medicare
program. Once enrolled, the provider or supplier receives
billing privileges and is issued a valid billing number
effective for the date a claim was submitted for an item that
was furnished or a service that was rendered.

42 C.F.R. § 424.505.

The Medicare enrollment process begins with submission of an enrollment application on
the form CMS-855. A prospective provider or supplier must provide all documentation
required by CMS to ascertain whether the provider or supplier is eligible to furnish
services. 42 C.F.R. § 424.510(d)(2). Prospective providers and suppliers may also be
subject to specific enrollment requirements relative to their particular specialization.
Applicable certification standards for IDTFs are found at 42 C.F.R. § 410.33(g).

Regulations define the circumstances in which CMS may reject the application of a
provider or supplier to participate in the Medicare program, or may revoke an enrollment
already granted. CMS may deny a provider or supplier’s enrollment in Medicare if “[t]he
provider or supplier at any time is found not to be in compliance with the Medicare
enrollment requirements described in this section or on the applicable enrollment
application to the type of provider or supplier enrolling, and has not submitted a plan of
corrective action as outlined in part 488 of this chapter.” 42 C.F.R. § 424.530(a)(1).

Section 1866(j)(2) of the Act, 42 U.S.C. § 1395cc(j)(2), gives providers and suppliers
appeal rights for certain determinations involving enrollment, using the procedures that
apply under section 1866(h)(1)(A) of the Act, 42 U.S.C. § 1395cc(h)(1)(A). These
procedures are set out at 42 C.F.R. Part 498, et seq., and provide for hearings before
ALJs of this forum, and for review of the resulting ALJ decisions by the Departmental
Appeals Board (Board).

In provider and supplier appeals under section 1866(j)(1) of the Act and 42 C.F.R. Part
498, CMS must make a prima facie showing that the provider or supplier has failed to
comply substantially with federal requirements. See Medisource Corp., DAB No. 2011
(2006). To prevail, the provider or supplier must overcome CMS’s prima facie showing
by a preponderance of the evidence. Batavia Nursing and Convalescent Ctr., DAB No.
1904 (2004), aff'd, Batavia Nursing and Convalescent Ctr. v. Thompson, 129 Fed. Appx.
181 (6th Cir. 2005).

III. Issue

The issue in this case is whether CMS is entitled to summary disposition on the ground
that Petitioner’s applications for enrollment in Medicare as an IDTF were properly denied
based on its failure to separately enroll its mobile MRI unit.

IV. Findings of fact and Conclusions of law
A. Applicable Standard
The Board has set out the standard for summary judgment as follows:

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. . .. While the Federal Rules of Civil
Procedure (FRCP) are not binding in this administrative appeal, we are
guided by those rules and by judicial decisions on summary judgment in
determining whether the ALJ properly granted summary judgment. . . . 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. . . . If the moving party carries its
initial burden, the non-moving party must “come forward with ‘specific
facts showing that there is a genuine issue for trial.”” Matsushita Elec.
Industrial Co. v. Zenith Radio, 475 U.S. 574, 587 (1986) (quoting FRCP
56(e)). 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 Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an ALJ in deciding a summary judgment motion differs from the ALJ’s role
in resolving a case after a hearing. The ALJ should not assess credibility or evaluate the
weight of conflicting evidence. Holy Cross Village at Notre Dame, Inc., DAB No. 2291,
at 4-5 (2009).

In this case the parties agree that there are no disputed issues of material fact. Their
disagreement lies in their views with regard to their position on the application of the law
to the facts. Thus, in this case, decision by summary disposition is appropriate.

B. Discussion

CMS is entitled to summary disposition because the undisputed evidence
establishes that Petitioner did not enroll its mobile MRI unit separately in
the Medicare program, as required by 42 C.F.R. § 410.33(g)(1 6).!

The pertinent regulations governing IDTF enrollment in the Medicare program are found
at 42 C.F.R. § 410.33. An IDTF may be a fixed location, a mobile entity, or an
individual non-physician practitioner. 42 C.F.R. § 410.33(a)(1). An IDTF applying to
Medicare must certify that it meets 17 application certification standards set forth in 42
C.F.R. § 410.33(g), or CMS will revoke its billing privileges. 42 C.F.R. § 410.33(h).
The standard listed at 42 C.F.R. § 410.33(g)(16) requires that an IDTF:

[e]nrolls for any diagnostic testing services that it furnishes to a Medicare
beneficiary, regardless of whether the service is furnished in a mobile or fixed

base location.

42 CFR. § 410.33(g)(16).

' [make this one finding of fact/conclusion of law.
CMS asserts that Petitioner’s enrollment application was properly denied because
Petitioner, an IDTF, failed to separately enroll its mobile MRI unit, as required by 42
C.F.R. § 410.33(g)(16). Petitioner concedes that it did not submit a separate application
for enrollment in Medicare for its mobile MRI unit; it argues, however, that the Medicare
contractor has incorrectly interpreted 42 C.F.R. § 410.33(g)(16) and (17).

Petitioner argues that the plain reading of 42 C.F.R. §§ 410.33(g)(16) and (g)(17)
contains no requirement that IDTFs are required to separately enroll a mobile unit, such
as an MRI. P. Brief at 6, 10. Petitioner, moreover, attempts to suggest that the term
“enrolls,” as it is used in 42 C.F.R. § 410.33(g)(16), does not mean “initial enrollment
only,” but also “includes updates made to an enrolled provider’s enrollment application.”
P. Brief at 6. Petitioner asserts that it was already enrolled in Medicare as an IDTF, and,
pursuant to 42 C.F.R. § 410.33(g)(4)(iii), submitted an update to its application, notifying
the contractor of the addition of an MRI unit, located in a mobile trailer.” P. Brief at 1, 6.
In Petitioner’s words, “[t]here is nothing in 42 C.F.R. § 410.33(g)(16), or for that matter
in 42 C.F.R. § 410.33(g)(4)(iii) that in any way speaks to [CMS’s] assertion that this
section calls for separate enrollment.” P. Brief at 7 (emphasis in original).

I find no support for Petitioner’s interpretation of the regulations. The language of 42
C.F.R. § 410.33(g)(16) on its face states that an IDTF must enroll in Medicare,
“regardless of whether the service is furnished in a mobile or fixed base location.”
Petitioner does not deny that the additional equipment in question is a mobile MRI unit.
Petitioner states that the MRI unit is located inside a trailer and travels from place to
place from one fixed IDTF location to another. P. Brief at 6, 8. Therefore, based on the
plain meaning of 42 C.F.R. § 410.33(g)(16), Petitioner was required to submit a separate
enrollment application for its mobile MRI unit. While Petitioner is correct that it is
required to update any changes to its equipment, its submission of an application update
to the contractor did not constitute a separate enrollment of its MRI unit, as required by
42 C.F.R. § 410.33(g)(16). There is nothing in the regulations to indicate that the term
“enroll” in 42 C.F.R. § 410.33(g)(16) also means to update enrollment information.

Moreover, a recent ALJ decision, DMS Imaging, Inc., DAB CR2040 (2009), and the
Board’s decision affirming it, DMS Imaging, Inc., DAB No. 2313 (2010), more than
amply support CMS’s position that Petitioner was required to separately enroll its mobile
unit. In DMS Imaging, Inc., the ALJ found that CMS had properly revoked the provider
enrollment of four of the petitioner’s mobile diagnostic imaging units because the
petitioner had combined them under a single Medicare enrollment number, in violation of
Medicare enrollment requirements governing IDTFs. In his discussion, the ALJ noted
that one approach CMS takes to maintain oversight of IDTFs is “by requiring that an

? An IDTF must “[mJaintain a current inventory of the diagnostic testing equipment,
including serial and registration numbers and provide this information to the designated
fee-for-service contractor upon request, and notify the contractor of any changes in
equipment within 90 days.” 42 C.F.R. § 410.33(g)(4)(iii).
IDTF with multiple practice locations separately enroll each practice location into the
Medicare program.” DMS Imaging, Inc., DAB CR2040, at 2.

Further, the ALJ in DMS Imaging quoted Section 4.19.1.C. of Chapter 10 of the
Medicare Program Integrity Manual (MPIM), which states:

The IDTFs must separately enroll each of their practice
locations (with the exception of locations that are used solely
as warehouses or repair facilities). This means that each
enrolling IDTF can only have one practice location on its
CMS-855B enrollment application; thus, if an IDTF is adding
a practice location to its existing enrollment, it must submit a
new, complete CMS-855B application for that location and
have that location undergo a separate site visit. Also, each of
the IDTF’s mobile units must enroll separately.
Consequently, if a fixed IDTF site also contains a mobile unit,
the mobile unit must enroll separately from the fixed location.

DMS Imaging, Inc., at 2-3, quoting MPIM, Ch. 10, Section 4.19.1.C. (emphasis added);
CMS Ex. 3, at 6.

I find the quoted section of the MPIM informative in further clarifying any doubts as to
the meaning of 42 C.F.R. § 410.33(g)(16). It is clear that the plain meaning of 42 C.F.R.
§ 410.33(g)(16) requires that an IDTF enroll a mobile unit separately in the Medicare
program. Petitioner was thus required to submit a separate Medicare application for its
mobile MRI unit, but failed to do so, in violation of Medicare enrollment requirements.

Petitioner also argues that it is exempt from having to separately enroll its mobile MRI
unit because the unit was leased to it. In support of this argument, Petitioner cites Section
4.19.1(E) of the March 13, 2009 MPIM, Transmittal 286, which provides:

For purposes of the provisions in 42 C.F.R.§ 410.33, a
“mobile IDTF” does not include entities that lease or contract
with a Medicare enrolled provider or supplier to provide: a)
diagnostic testing equipment; b) non-physician personnel
described in 42 C.F.R. § 410.33(c); or c) diagnostic testing
equipment and non-physician personnel described in 42
C.F.R. § 410.33(c). This is because the provider/supplier is
responsible for providing the appropriate level of physician
supervision for the diagnostic testing.

March 13, 2009 MPIM, Transmittal 286, 4.19.1(E). According to Petitioner, a company
called Jacksonville Diagnostic Imaging, Inc., leased the mobile MRI unit to Petitioner. P.
Brief at 12; CMS Ex. 1, at 71-84. Petitioner states that, as the equipment lessor,
Jacksonville Diagnostic Imaging, Inc. is not a Medicare-enrolled supplier and is not
required to enroll as an IDTF. P. Brief at 12. Petitioner asserts further that because it is
using the mobile MRI unit through a leasing arrangement, the above-quoted MPIM
language means that it was exempt from the requirement to separately enroll its mobile
unit.

Petitioner’s argument is without merit. Petitioner is correct that Jacksonville Diagnostic
Imaging, Inc., as the lessor, would not be considered a “mobile IDTF” and would not
have to enroll in the Medicare program as an IDTF. However, the fact that Petitioner is
leasing the mobile MRI unit does not create any special exception to the requirement set
forth in 42 C.F.R. § 410.33(g)(16) that a mobile MRI unit be enrolled separately by the
supplier. There is nothing in the language of 42 C.F.R. § 410.33(g)(16) that indicates that
a leasing arrangement exempts an IDTF from the requirement that a mobile unit must be
enrolled separately.

Petitioner also urges me to consider what it sees as the practical benefits of enrolling only
the IDTF facility with Medicare, and not the mobile unit. Petitioner claims, for instance,
that a Medicare beneficiary may be confused when he or she receives an explanation of
benefits listing two different provider names and sites of service, and this confusion
would be alleviated if only the IDTF was enrolled. P. Brief at 8-9. I find these
contentions to be irrelevant and immaterial. Petitioner simply has not pointed to anything
in the regulations or prior Board decisions in support of its position that separate
enrollment for its mobile MRI unit was not required.

As part of its case, Petitioner has submitted P. Exs. 4 and 5, claiming they are evidence
showing that it was allowed to add other mobile MRI units in the past, instead of having
to enroll them separately. P. Ex. 4 is a March 26, 2010 letter from Cigna to an IDTF
affiliated with Petitioner (Cape Fear Diagnostic Imaging LLC), acknowledging receipt of
an information change request and showing that a mobile MRI unit was added. P. Ex. 5
is a February 16, 2010 letter from Palmetto GBA to another IDTF affiliated with
Petitioner (MedQuest), which, according to Petitioner, indicates that a mobile MRI was
approved at the facility. CMS objects to P. Exs. 4 and 5 on the grounds that Petitioner
has not shown good cause for submitting these exhibits for the first time at the ALJ level.
42 C.F.R. § 498.56(e). CMS argues that Petitioner had the opportunity to submit this
evidence with its request for reconsideration but failed to do so. CMS argues that the
proffered exhibits are not relevant and should be excluded.

I find that P. Exs. 4 and 5 address different situations involving different IDTF facilities.
The facts and circumstances surrounding those situations do not play any role in my
consideration of the issue in this case. Moreover, both exhibits are dated after the
decision on reconsideration in this case, which was issued on January 26, 2010. Thus,
although I have admitted them to this record for purposes of discussion, I find both P.
Exs. 4 and 5 to be irrelevant. Contrary to what Petitioner argues, the exhibits do not
create an issue of material fact.
V. Conclusion

For the reasons set out above, CMS’s Motion for Summary Disposition must be, and it is,
GRANTED.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

E & I Medical Supply Services, Inc.
(PTAN: 5216250001)

Petitioner
Vv.
Centers for Medicare & Medicaid Services.
Docket No. C-10-393
Decision No. CR2189

Date: July 20, 2010

DECISION

E & I Medical Supply Services, Inc. (E & I, Petitioner) timely appealed the
December 15, 2009 reconsideration decision of the National Supplier
Clearinghouse (NSC), a Medicare contractor of the Centers for Medicare &
Medicaid Services (CMS), upholding the revocation of E & I’s Medicare supplier
number. The revocation was effective August 13, 2009, based on a determination
that E & I was not operational as of that date. I reverse the revocation, because I
find that the preponderance of the evidence supports E & I’s assertion that the
business was fully operational.

I. Background

It is not disputed that E & I has been a supplier of durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS) since approximately 2005 with its
primary place of business at 9898 Bissonnet Street, Suite 290, in Houston, Texas.
The directors of the business are Ms. Evangeline Ibeziako and Ms. Theresa
Anakor.

By letter dated September 8, 2009, NSC notified E & I that its supplier number
would be “revoked 30 days from the postmark” of the letter, but that the “effective
date of this revocation has been made retroactive to August 13, 2009, which is the
2

date that CMS determined [E & I’s] practice location is not operational.” CMS
Ex. 8, at 1. The notice explained that an NSC representative attempted to conduct
site visits to the facility on April 27 and 28 and August 4 and 13, 2009, but found
it “closed during posted hours of operation” and therefore concluded that the
“facility is not operational to furnish Medicare covered items and services” in
violation of 42 C.F.R. § 424.535(a)(5)(ii). Id. at 1-2.

E & I timely sought reconsideration of the revocation asserting that the business is
fully operational. E & I denied that any inspector came to its place of business on
the dates in question, because “someone is always in the office” during the posted
hours. Petitioner (P.) Ex. 1, at 1. An NSC hearing officer issued an unfavorable
decision on December 15, 2009. CMS Ex. 1, at 2-4. She concluded that the “fact
remains that the site inspector could not access” Petitioner’s office on October 12
or 13, 2009 to “verify that E & I Medical Supply Services was open and
operational and compliant with state and Medicare requirements.” Id.

By letter dated January 5, 2010, E & I sought review of the reconsideration
decision asserting that it was and had been fully operational. P. Ex. 1, at 4. On
March 18, 2010, CMS submitted a combined motion for summary judgment and
pre-hearing brief (CMS Br.). Petitioner responded to the motion for summary
judgment and supporting brief on April 9, 2010 (P. Br.).

The appeal was initially assigned to Administrative Law Judge Richard J. Smith
and subsequently transferred to me pursuant to 42 C.F.R. § 498.44, which permits
a Member of the Departmental Appeals Board (Board) to be designated to hear
appeals taken under Part 498. I conducted a telephone conference with the parties
on May 7, 2010. At that time, CMS indicated that, while it believed the evidence
supported its position, it did not disagree that material issues of fact were in
dispute. I therefore scheduled an in-person hearing, which was held on June 10,
2010.

CMS presented Mr. Mark Porter, the site investigator who reported on all the
unsuccessful visits to E & I’s premises, as its only witness at the hearing.
Petitioner presented both of E & I’s directors as witnesses. Petitioner also
presented testimony from two other individuals, Mr. Stanley U. Akujor and Ms.
Iris E. Linden, who both work in offices on the same floor as E & I.

Prior to the hearing, Petitioner submitted 11 exhibits, and CMS submitted 12
exhibits. Petitioner objected to the authenticity of the date and time stamps shown
on photographs in CMS Exhibit 11. Transcript of June 10, 2010 Hearing (Tr.) at
11. Ladmitted all of CMS’s exhibits, noting that I would receive testimony
concerning the credibility of the date and time stamps and consider it in deciding
how much weight to give to that exhibit. /d. at 11-12. CMS initially questioned
the identity of signatories shown in Petitioner’s Exhibit 9 but later withdrew any
3

objection to the admission of the exhibit. Jd. at 12,99. CMS did not object to any
of Petitioner’s other exhibits. I admitted all of Petitioner’s exhibits.

Although I did not anticipate a need for further briefing after the hearing, and
neither party requested further briefing, I determined to reopen the record on June
11, 2010 to permit both parties to comment on issues, which I discuss later in this
decision. Petitioner responded on June 17, 2010, and CMS responded on June 24,
2010.' By letter dated July 2, 2010, Petitioner replied to CMS’s response.

Il. Applicable Legal Authority

Regulations provide that CMS may revoke a currently enrolled Medicare supplier
for noncompliance when “CMS determines, upon on-site review, that

the . . . supplier is no longer operational to furnish Medicare covered items or
services ....” 42 C.F.R. § 424.535(a)(5). CMS has adopted a list of 26 supplier
standards, including operational requirements that DMEPOS suppliers must meet
on a continuing basis. Among these, the regulation provides that a supplier —

(7) Maintains a physical facility on an appropriate site. . . . ;

(8) Permits CMS, or its agents to conduct on-site inspections to
ascertain supplier compliance with the requirements of this section.
The supplier location must be accessible during reasonable business
hours to beneficiaries and to CMS, and must maintain a visible sign
and posted hours of operation . . . .

42 C.F.R. § 424.57(c). The term “operational” is defined in the regulations to
mean that a supplier —

has a qualified physical practice location, is open to the public for
the purpose of providing health care related services, is prepared to
submit valid Medicare claims, and is properly staffed, equipped, and
stocked (as applicable, based on the type of facility or organization,
provider or supplier specialty, or the services or items being
rendered), to furnish these items or services.

42 C.F.R. § 424.502.

III. Issues

' CMS also emailed a response on June 21, 2010. The copy of the CMS response
attached to the email is similar, but not identical, to the copy filed by mail. The
email was not addressed, or copied, to Petitioner. I therefore strike the email copy
and rely on the formal mail copy for my decision.
The issues before me are:
1. Whether CMS is entitled to summary disposition;

2. Whether E & I was “operational” within the meaning of 42 C.F.R.
§ 424.57(c) at the relevant times; and

3. Whether CMS had a basis to revoke E & I’s Medicare supplier number.

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

I set out my findings of fact and conclusions of law in the headings below,
followed by my supporting analysis.

A. CMS is not entitled to summary disposition.

The core issue in this case, the operational status of E & I as a Medicare DMEPOS
supplier, devolved into a question of credibility. CMS relied entirely on the
reports of Mr. Porter to the effect that E & I’s place of business was closed and
empty during posted business hours on six separate occasions. CMS Br. at 6-7;
CMS Exs. 9-12; Tr. at 24-55. I have no doubt that this evidence establishes a
prima facie case that CMS had a legal basis to revoke E & I’s supplier number.
That is to say, unchallenged by any contrary evidence, the site investigator’s
reports would suffice to show that E & I was not operational.

That evidence did not remain unchallenged, however. Petitioner presented
affirmative evidence that the business was operational at all relevant times. A
dispute of material fact thus lies at the heart of the dispute, as CMS conceded
during the telephone conference in this matter.

For that reason, I denied summary disposition and proceeded to hearing. I confirm
here that CMS was not entitled to summary disposition.

B. E & I was operational at the relevant time within the meaning of
the regulations.

1. The relevant date for determining whether E & I was
operational is August 13, 2009.

CMS’s contention that E & I was not operational rests on its claim that a site
inspector made multiple visits to E & I’s office during posted business hours on
six dates in April, August, and October 2009 and found it empty on each occasion.
Petitioner denies that a site inspector could have visited its location on the days
and times claimed and have found no one on the premises. P. Br. at 3-4
5

(unnumbered). As a preliminary matter, I consider whether, to uphold the
revocation, I need only find that the office was closed at any time when the site
inspector visited.

CMS argues in its motion for summary judgment that, if a facility is “found
closed” during an on-site review, “this becomes grounds for revocation because
the facility was found nonoperational.” CMS Br. at 7. It is not clear, however, if
CMS meant to assert that a single visit finding a facility closed creates an
irrebuttable presumption that the facility is not operational, since, in the next
sentence, CMS states that NSC was thus authorized to do “onsite inspections at
Petitioner’s place of business and deem it nonoperational upon finding the doors
locked (and no one present) on multiple occasions.” Jd. (emphasis added).

CMS relies on language in section 424.515, which provides as follows:

(c) On-site inspections. CMS reserves the right to perform on-site
inspections of a provider or supplier to verify that the information
submitted to CMS or its agents is accurate and to determine
compliance with Medicare enrollment requirements. ...

* * * *

(2) Medicare Part B suppliers. CMS determines, upon review
that the supplier is no longer operational to furnish Medicare
covered items or services, or the supplier has failed to satisfy any or
all of the Medicare enrollment requirements, or has failed to furnish
Medicare covered items or services as required by the statute or
regulations.

See also 42 C.F.R. § 424.535(a)(5). Nothing in these regulations provides any
tails about whether a single site visit finding a facility not open is per se grounds
for revocation or simply evidence as to whether the facility is actually operational.
Certainly, a contractor may reasonably conclude, absent evidence to the contrary,
at a closed facility is not operational. Where conflicting evidence suggests that
e facility is in fact in regular operation, however, it is less clear that a brief or
xplicable absence cannot be overcome by such evidence. This appears to be the
nterpretation that CMS adopted in guidance, which instructs its contractors that,
nless “obvious indications” are found on a first attempt “that the facility is non-
perational, a second attempt on a different day during posted hours of operation
ould be made.” Medicare Program Integrity Manual (MPIM), ch. 10, § 22.1.7

road

QZoet

? This interpretation is consistent with the Board’s recent decision in ta
Udeobong, d/b/a Midland Care Med. Supply & Equip., DAB No. 2324 (2010). In
that case, a facility was found on an initial visit not only closed but, with a letter
showing, that entry was denied to due to nonpayment of rent. Jd. at 3. After the
supplier submitted a corrective action plan, the contractor conducted two more site
(continued...)

6

The testimony in this case also suggests that CMS’s contractor here similarly did
not take the view that a single absence during a site visit is insurmountable
evidence of non-operational status. Thus, the site inspector, Mr. Porter, testified
that it was mandatory to conduct a second visit on a different day before
letermining that a facility is not operational, if the inspector did not gain entry on
a first visit but the supplier had a business sign and posted hours. Tr. at 75-77. As
explained below, NSC did not actually determine that E & I was not operational
until Mr. Porter’s fourth reported visit. I need not finally resolve the legal
question of whether a single unsuccessful site visit is sufficient to revoke in the
face of other evidence that a business is fully operational at a particular location,
however, because, as I explain below, I am not able to determine as a matter of
fact that the site inspector tried but failed to gain entry to E & I on any one of the
specific occasions alleged.

A second related legal question that arises in this matter is determining whic!
alleged visits are properly at issue before me. NSC initially notified Petitioner in a
letter dated September 8, 2009 that E & I’s Medicare supplier number would be
revoked, because, on “April 27, 2009, April 28, 2009, August 4, 2009 and August
13, 2009, a representative of the NSC attempted to conduct a visit of your facility;
however, the visit was unsuccessful because your facility was closed during posted
hours of operation.” CMS Ex. 8, at 1. The revocation was made retroactive only
to August 13, 2009, the date of the last reported visit. Regulations provide that a
revocation generally becomes effective 30 days after notice is sent to the supplier,
but that, where revocation is based on a determination that a supplier is not
operational, the revocation is effective on “the date that CMS or its contractor
determined that the provider or supplier was no longer operational.” 42 C.F.R.

§ 424.535 (g); MPIM, ch. 10, § 22.1 (“The Medicare contractor shall use either 42
CER § 424.535(a)(5)(i) or 42 CFR § 424.535(a)(5)(ii) as the legal basis for
revocation. Consistent with 42 CFR § 424.535(g), the date of revocation is the

2... continued)

visits. Both found the facility closed and locked at around 11 AM, with posted
business hours of 10 AM - 5 PM. Jd. The supplier admitted it was closed at those
times, but argued that it closed for lunch from 12-1 and claimed that a note was
posted stating that it was closed for lunch. /d. at 4-5. Both the ALJ and the Board
upheld the revocation concluding that a facility is not permitted to post hours from
which it knows it will “deviate from on a regular basis.” Jd. at 7. The situation of
a supplier locked out of its own facility for non-payment of rent, and then
admittedly closed during three site visits, and further admittedly deviating on a
daily basis from its posted hours, is entirely different from the scenario before me
in the present case.
7

date that CMS or the Medicare contractor determines that the provider or supplier
is no longer operational.”’). It thus appears that NSC determined that the earliest
date as of which NSC found E & I to be non-operational was August 13, 2009.
NSC apparently treated the site visits on prior dates as contributing to its
conclusion that finding the office closed on August 13, 2009 demonstrated that the
facility was not in operation.

During a telephone conference, I asked CMS counsel to clarify the selection of the
August 13, 2009 effective date in light of the usual 30-day notice provisions and
the indications that site visits occurred as early as April 27, 2009 and as late as
October 13, 2009. Order Following Telephone Conference at 2-3 (May 11, 2010).
CMS responded as follows:

NSC advised that after the unsuccessful ad hoc site inspections of
April 27, 2009 and April 28, 2009 it wanted to affirm that the
supplier was truly non-operational. A random call to the business
was made and personnel answered the phone with the business name
leading SACU [Supplier Audit and Compliance Unit] to believe that
the business was indeed operational. Because analyst believed that
the business was operational with activity confirmed at the business
with the follow-up call, another site inspection was ordered and it
was eventually confirmed that the business was non-operational on
August 13, 2009.

CMS Response Letter, Dated June 4, 2010, at 1-2. I would conclude from this
evidence that the crucial date for determining whether E & I was operational
within the meaning of 424.57(c) was August 13, 2010. That conclusion is,
however, undercut by a review of the reconsideration decision.

The December 15, 2009 reconsideration decision first lays out the following
information as “facts:”

1. On August 13, 2009, the Supplier Audit and Compliance Unit
(SACU) retroactively revoked the DMEPOS PTAN [provider
transaction access number] due to non-compliance with al [sic]
Medicare Supplier Standards because a site inspection could not be
completed. The effective date of revocation was made retroactive
due to the date CMS determined the business to be non-operational.

2. On November 4, 2009 the NSC received the reconsideration
request from the supplier.

CMS Ex. 1, at 2. This statement appears to confirm that the site visit of
August 13, 2009 was indeed the basis for the revocation action. The rationale that
the hearing officer gave for affirming the revocation, however, does not mention
8

the August 13, 2009 site visit, or any of the preceding site visits cited in the
revocation notice. The factual discussion in the rationale is as follows:

The attempted site visits occurred on October 12, 2009 at 10:10 am,
and October 13, 2009 at 9:15 am; however, the business was found
closed by the site inspector on both attempts. According to the time
and date stamped photographs taken by the site inspector, posted
hours of operation are Monday through Friday from 9:00 am to 5:00
pm. Photographs taken by the site inspector confirm that E & I
Medical Supply Services was listed on the business door. The site
inspector stated in his site investigation report that he knocked on
both attempted visits but there was no answer. According to the
photographs taken by the site investigator there was no after-hours
contact phone number on the office door, or [sic] was there a note
posted to explain why the office was not open.

Ms. Evangeline Ibeziako, director of E & I Medical Supply Services,
sent for review telephone records for the business phone to verify
that the office was open and operational. This information indicates
that a call was made on October 13, 2009 at 9:32 am. However, no
information was available to inform the site investigator why the
business was not open.

... The fact remains that the site inspector could not access the
office to verify that E & I Medical Supply Services was open and
operational and compliant with state and Medicare requirements. In
review of the case file to establish that E & I Medical Supply
Services was Operational, available for a site inspection, and
compliant with state and Medicare requirements, does not verify
compliance at the time of revocation.

CMS Ex. 1, at 3 (italics in original). Although the hearing officer speaks of
verifying compliance “at the time of revocation,” the rationale is based solely on
site visits that allegedly occurred two months after the effective date of the
revocation. The October site visits were, in fact, not even conducted at the time
that the notice of revocation was issued or at the time that Petitioner first requested
reconsideration.

Petitioner first requested reconsideration of the revocation decision (and offered a
corrective action plan) by letter dated September 11, 2009. P. Ex. 1, at 1-2. By
letter dated November 2, 2009, Petitioner again requested a reconsideration
hearing. P. Ex. 1, at 3. In that request, Petitioner references receiving a letter
9

from NSC on the same day, which apparently asserted that a site inspector came
out “twice again.” Jd. Petitioner responded with the following statement:

Honestly speaking I do not know where the inspector is visiting.
The facility was open and operational on the claimed two dates
(10/12 & 10/13) and there was no site inspector seen. I and another
employee were in the facility to assist our clients, any inspector that
may show up and the public but there was no inspector. Since the
last letter I wrote you regarding a corrective action plan, I have
always made sure that someone is in the facility as always from 9:00
am to 5:00 pm Monday — Friday. After hours and weekends we
work by appointments. Would you please reconsider your decision
as we are open during our operative hours and someone is always in
the facility.

Id. The record does not include the letter, which NSC wrote to Petitioner in
November 2009. The reconsideration decision, as quoted above, clearly reviews
the initial revocation notice imposing revocation retroactive to August 13, 2009,
but also refers only to the November 2009 reconsideration request rather than the
September 2009 reconsideration request.

The reconsideration thus rests on a completely different factual basis than the
initial revocation decision, i.e., on Petitioner’s operational status during the alleged
October 2009 site visits rather than on August 13, 2009.

The Board has generally permitted CMS to change the legal basis for an adverse
administrative action during the appeal process, where the party affected was
provided with sufficient notice of the revised basis to permit them to respond. See,
e.g., Fady Fayad, M.D., DAB No. 2266, at 10-11 (2009); Green Hills Enters.,
LLC, DAB No. 2199, at 8 (2008). The reasoning underlying these decisions is that
due process rights are adequately preserved, absent a showing of prejudice, so
long as the individual had a full opportunity to address the different basis during
the administrative appeals proceedings. The situation in the case before me is
distinguishable, however, in that the reconsideration decision does not simply rely
on different reasons for the revocation but relies on facts that were not in existence
at the time of the revocation action (i.e., site visits undertaken more than a month
after the revocation action).

In revocation cases, CMS has expressly chosen to restrict the reasons for
revocation on reconsideration to that set out in the initial revocation notice. Thus,
the MPIM provides the following guidance:

In reviewing an initial enrollment decision or a revocation, the HO
[hearing officer] should limit the scope of its review to the Medicare
contractor’s reason for imposing a denial or revocation at the time it
10

issued the action and whether the Medicare contractor made the
correct decision (i.e., denial/revocation). Medicare contractors
cannot introduce new denial or revocation reasons or change a
denial or revocation reason listed in the initial determination
during the reconsideration process. Ifa provider or supplier
provides evidence that demonstrates or proves that they met or
maintained compliance after the date of denial or revocation, the HO
shall exclude this information from the scope of its review.

MPIM, ch. 10, § 19 (emphasis added). This language is not directly binding on
me or the Board, but the underlying approach is entwined with regulatory
restrictions on the evidence which a provider or supplier may present on appeal
from a revocation.

In the preamble to the final rule at 42 C.F.R. § 405.874(e), CMS explained that the
only evidence admissible at reconsideration is that which shows compliance at the
time of the revocation notice.

When a Medicare contractor makes an adverse enrollment
determination (for example, enrollment denial or revocation of
billing privileges) . . . appeal rights are limited to provider or
supplier eligibility at the time the Medicare contractor made the
adverse determination. ... Accordingly, a provider or supplier is
required to furnish the evidence that demonstrates that the Medicare
contractor made an error at the time an adverse determination was
made, not that the provider or supplier is now in compliance.

See 73 Fed. Reg. 36,448, 36,452 (June 27, 2008); see also DMS Imaging, Inc.,
DAB No. 2313 (2010); 1866/CPayday.com, L.L.C., DAB No. 2289 (2009). If the
contractor were permitted during the appeal process to rely on later events as a
new basis for a revocation, it would clearly not be reasonable to restrict the
appellant to furnishing evidence of error at the time of the initial revocation
determination with no opportunity to respond to the new allegations.

Further, the regulations provide that new issues may be considered on appeal to an
ALJ, even if not part of an initial or reconsidered determination, “[e]xcept for
provider or supplier enrollment appeals which are addressed in § 498.56(e).” 42
C.F.R. § 498.56(a). Section 498.56(e) requires a showing of good cause, before
an ALJ may consider any new documentary evidence not presented at the
reconsideration level in provider or supplier enrollment appeals. I question
whether the regulations contemplate the kind of shifting factual basis for a
revocation action that appears to have occurred here.
ll

On June 11, 2010, I reopened the record after the hearing to allow the parties to
comment on the significance of the inconsistency of the revocation notice and the
reconsideration decision. CMS’s formal response asserts that I should read into
the reconsideration decision a reliance on the earlier site visits. CMS Response to
the Court’s Reopening the Record, Dated June 24, 2010. CMS points to the
hearing officer’s references to having reviewed the case file and suggests that, to
have known that the effective date was August 13, 2009, the hearing officer would
have to have relied on information from the case file. /d. at 1-2. The effective
date of revocation was apparent on the face of the revocation notice, so no
particular search of a case file was needed.*

CMS also argues that the revocation notice and the reconsideration request refer to
the dates of the prior inspections, and that, by mentioning these documents, the
hearing officer should be understood to have incorporated “by reference the prior
site inspections.” Jd. at 2. This argument is equally unavailing. The point is not
that the hearing officer was unaware of the dates of the earlier site visits. The
point is that the hearing officer did not make any of those site visits the basis for
her decision. The choice not to rely on, or even refer to, them in evaluating
whether NSC has a basis to find the Petitioner not operational is even more telling,
given that I agree with CMS that she must have been aware of the claims made
about them in the revocation notice.

CMS finally contends that Petitioner “did not present any evidence that NSC made
an error,” so it would “not be necessary for the HO to comment on the April and
August site inspections in the ‘Rationale’ section of her decision.” Jd. at 2.

CMS’s contention ignores the fact that Petitioner’s September 11, 2009 request for
reconsideration squarely challenges the claim that a site inspector came to the
correct location on the dates alleged in April and August 2009. P. Ex. 1, at 1. The
hearing officer nowhere responded to that challenge or suggested that she made
any finding that the earlier visits actually occurred.

I conclude that, under the circumstances of this case, permitting CMS to rely on
site visits that occurred after the revocation notice as the basis for determining
whether the revocation was justified would be prejudicial to Petitioner. Thus,
while Petitioner undoubtedly had notice that CMS alleged that the site inspector
made unsuccessful visits on six occasions in April, August, and October 2009, I

> The reconsideration decision does not identify any documents from the case file
other than the reconsideration request and telephone records submitted with a
letter from Petitioner in response to the hearing officer’s November 25, 2009
acknowledgment letter. CMS Ex. 1, at 2-3. Presumably, the file also included
reports and photographs from the October site visits, since these are mentioned in
the discussion. No indication exists that the hearing officer reviewed any
documentation relating to the earlier visits.
12

conclude that the actual basis for the revocation, if any, must rest on CMS’s
evidence that Petitioner was not operational as of August 13, 2009, as alleged in
the revocation notice.

I treat evidence relating to site visits on earlier and later dates as admissible in that
repeated findings that the office was closed would be probative in making it more
likely that E & I was non-operational on August 13, 2009, than it would be if no
other visits took place, but do not treat those visits as an independent basis for the
revocation.

2. CMS’s evidence relating to the alleged site visits is not
credible or persuasive.

All of the site visits in 2009 were conducted and reported by a single site
investigator, Mr. Porter, who testified that no one else accompanied him on any of
the visits. Tr. at 23, 25. For each alleged visit, Mr. Porter took photographs that
included the door to E & I’s office and prepared site visit report forms. CMS Exs.
9-12. The photographs show dates and times corresponding to those contained in
the site visit reports, although those affixed for the April and August site visits are
significantly different in appearance from those appearing on the October site visit
photographs, as I discuss below. It is not possible from the photographs to
ascertain whether the business is operational at the times identified. All that is
visible is the signage, the office door, and a side window. In some cases, the
blinds on the side window appear closed, while, in other cases, the blinds appear
open, and it is apparent that the lights are on in the office. Compare CMS Ex. 11,
at 9 and 11, and CMS Ex. 12, at 11, with CMS Ex. 10, at 1 and 4. Given that the
photographs cannot establish whether the office was open or whether the
investigator tried to enter or knock, the claim that Petitioner was not open for
business at the times and dates cited depends wholly on the personal credibility of
Mr. Porter. I therefore closely observed Mr. Porter during his testimony.

After observing Mr. Porter testify and respond to questions from the parties, I did
not find him believable. Mr. Porter testified that, while working at NSC as a site
investigator, he conducted 500 inspections a year.* Tr. at 23. In response to

* Mr. Porter testified that he began work as a health insurance specialist at CMS
just four days before the hearing. Counsel for CMS informed the staff attorney in
this case on May 25, 2010 that Mr. Porter might not be available to testify at the
hearing, because he had just advised counsel that he would no longer be employed
by NSC as of May 28, 2010. E-mail Correspondence from CMS Counsel, Dated
May 25, 2010. Counsel advised the staff attorney by telephone on the same date
that he had spoken with Petitioner’s representative. On June 3, 2010, counsel
advised that Mr. Porter would not be available and asked me to allow him to
testify at another time by telephone, a request that I denied, because “the witness’s
(continued...)
13

questions from CMS counsel about the October site visit report contained in CMS
Ex. 9, Mr. Porter testified that he —

noted that after two attempts were made during the posted hours of
operation, that I found the office door locked and the office closed
on two attempts. I indicate that on the first attempt when I went that
the lights were on, but no one answered the door when I knocked.
And on the second attempt, the lights were out and the facility was
not operational, and there was no one around to question regarding
the occupant and that no further attempts were necessary.

Tr. at 31-32. I then asked Mr. Porter, given that he appeared to be essentially
reading the exhibit, whether he had a present memory of the visits or whether he
was relying on his recorded notes. Tr. at 32. This colloquy followed:

THE WITNESS: No. Well, I remember going to conduct the
inspections. I remember being at the facility. So I do remember the
site inspection, but I am just referring to the site inspection to
validate that, what I wrote for the inspection.

ADMIN. LAW JUDGE SUSSAN: Okay, so you, at this time you
do remember the visits? I wonder --

THE WITNESS: Yes.

4(.. continued)

testimony is central to CMS’s establishment of a prima facie case in support of the
revocation, and the witness’ credibility has been questioned.” Staff Attorney
Email to CMS Counsel, Dated June 3, 2010. After the hearing, I requested that
CMS clarify why CMS had sought accommodations to present Mr. Porter by
telephone only, or to substitute another witness, since it appeared he was only
changing employers from NSC to work directly for CMS. Order Reopening the
Record, Dated June 11, 2010. CMS responded that, out of “an abundance of
caution,” counsel “notified the Judge and Ms. Ibeziako that there might be
difficulties” with Mr. Porter’s appearance but that “NSC and CMS were able to
resolve their administrative concerns” so that he could appear as scheduled. CMS
Response to the Court’s Reopening the Record at 2. Ms. Ibeziako denied that she
was notified of any issues around Mr. Porter’s appearance. Letter from Ms.
Ibeziako, Dated July 2, 2010, at 1. Iam concerned that the communications from
counsel prior to the hearing may have been less than clear and candid, but I do not
attribute any responsibility for that to the witness or consider his change of
employment in evaluating his credibility.
14

ADMIN. LAW JUDGE SUSSAN: -- because you said you did 500
in a year, whether you actually could remember this particular visit
at this point.

THE WITNESS: Yes, I'm, I'm, I remember addresses very well. So,
yeah, I remember pretty much all of my site visits.

Yet on cross-examination, Mr. Porter denied that he remembered a site visit on
June 25, 2008, when he found E & I compliant, because he had “made several
trips to E & I” and would need to “review his records.” Tr. at 63-64. He insisted
that he could remember a visit in April 2009, but not the one in June 2008 or any
other of the “numerous times throughout the years” when he visited the facility
while E & I was a Medicare applicant or provider. Tr. at 64.

I do not find credible Mr. Porter’s convenient claim to have a clear present
memory of each of the six visits in 2009, on which CMS relied (and “pretty much
all of [his] site visits”), while having no memory of any other “numerous,”
evidently successful, site visits to the same facility. He appeared to me to be
willing to overstate or exaggerate where his claims might serve to make him
appear more successful to his employers.

Mr. Porter acknowledged that he did not: (1) leave a business card on any of his
alleged attempts to enter E & I; (2) check with any of the neighboring offices; and
(3) carry a telephone or try to call to see if anyone was actually in the office. Tr.
at 69-71, 77. He pointed out that none of these measures was required of him in
conducting a site visit. Jd. I make no finding that he was required to do any of
these steps. Under most circumstances, the fact of an unsuccessful site visit is
either not questioned, or the documentation and statements of the site investigator
are sufficient to establish the fact. I note, however, that had he undertaken any of
them, the credibility of Mr. Porter’s claims to have sought access on the reported
dates might have been enhanced in the face of the questions raised in this case. A
neighbor might have corroborated that Mr. Porter could not find anyone in the E &
I office or at least corroborated seeing his cards posted on one or more occasions.
A telephone call from outside the door might have been corroborated on a
telephone log. As the record stands, no corroboration exists that the door was
locked or that Mr. Porter knocked on the door on any of the alleged occasions.

As mentioned, CMS offered photographs as contemporaneous evidence of Mr.
Porter’s site visits, but the testimony at the hearing about those photographs raised
further concerns in my mind. On direct examination, Mr. Porter testified that the
photographs in CMS Exhibit 10 accurately represented what he observed on his
site visits of October 12 and 13, 2009. Tr. at 35-36. The copies in the record
appear to be photocopies; however, Mr. Porter explained that no “original”
photographs existed, because they were taken by a digital camera and
“downloaded and printed onto photocopying paper.” Tr. at 38. He further
15

asserted that the dates and times that appear on those photographs were not added
by hand, through “any manual manipulation or labeling,” but, rather, “the way it
prints is exactly the way the software system prints it for me.” Tr. at 38-39. He
similarly testified that CMS Exhibits 11 and 12 accurately represented what he
observed on his April and August 2009 site visits. Tr. at 43-48.

Only on cross-examination did Mr. Porter acknowledge what is obvious to anyone
who compares the October photographs with those dated in April and August — the
earlier dates are not embedded in the photographs but rather appear in boxes
overlaid on the photographs. Tr. at 56-58. No direct testimony was offered on
this difference, even though the issue was identified as early as Petitioner’s Pre-
hearing brief dated April 9, 2010, which pointed to the April and August
photographs and stated that, “looking at the said picture dates, it appears that the
dates were pasted and were not imprinted by the camera.” P. Br. at 4. When
confronted, Mr. Porter offered the following explanation:

I used two different digital cameras. On the April 22 date, I had an
old digital camera, and . . . whenever I got to print, the photos, it was
a camera that would imprint a date directly onto the photo. So
whenever I printed from a software that I use, I would have to select
that the date to be implanted on top of the photo. So it was a
ifferent [camera] that I use for April 27th. And I received a new
camera by . . . the October visits, where I could imprint the photo
irectly onto the photo. But the April 27th and 28th photos, the

ates and times that you see there, those are generations from the
computer software due to the camera that I was using at the time.

Tr. at 57-58. I found this statement difficult to make sense of and not convincing
evidence that the dates and times shown on the earlier photographs were reliable
proof of when the camera shots were made. Mr. Porter later emphasized that he
“did not physically cut and paste anything to any photo on record.” Tr. at 60.
This statement, even assuming its veracity, leaves open in my mind several
possibilities — the boxes containing the typed dates and times may have been
inserted using word processing, or other software, rather than “physically” cut and
pasted. Alternatively, the dates may have been manipulated using the camera’s
software rather than retained as part of the photographs when they were taken.

Any effort to verify the source of the date and time inputs would be futile since
Mr. Porter further testified that the digital files were destroyed, “because we take
so many photos that what we have to do is print out the photos, and we’re not
required to maintain that digital copy of the photo.” Tr. at 78. When I inquired
about the existence of digital files, Mr. Porter went on to volunteer the following
16

further explanation of the peculiar typewritten appearance of the dates and times in
white boxes overlaid on the earlier photographs:

And like with the older camera that I used, because it was an older
camera and because it was hard for the software system itself to
emplace the date and time on the photo itself, that's why I was
issued, in mid-2009, the new camera that imprinted the photo
directly onto the picture, what went, is, immediately when I took the
photo. The photos taken in April would have been -- during the
software program, I would have to elect to put the date on the photo,
and so the software system itself laid the date on top of the photo.

Id. This testimony appeared to me be defensive, as if Mr. Porter recognized that
his prior statement was less than persuasive. It also raises further questions. The
date and hour entries on the August photographs have the same appearance as the
April photographs, yet Mr. Porter claims that he had the newer camera, provided
specifically to solve this problem, by mid-2009, but does not explain why he did
not use the new camera until late October. Mr. Porter acknowledged that he
personally set the date and time parameters in the digital cameras, which indicates
that he knew how to alter them. Tr. at 81. He denied, however, that he “changed
any dates and times on [Jany cameras for any photos of record.” Tr. at 90.

I do not make a finding that Mr. Porter in fact altered or manipulated the dates or
times on any particular photographs. I believe that Mr. Porter was at the correct
location on at least some occasions and took photographs of E & I’s office door
and surroundings. I do not, however, find Mr. Porter’s testimony sufficiently
credible that I can be sure that he was there on any specific date or time or that he
actually tried the doors and knocked but found no one present on any specific date
or time.

> It appears to me that NSC may have had doubts about Mr. Porter’s reports as
well, perhaps similar to mine. As mentioned earlier, after Mr. Porter submitted his
“paperwork” on the April 2009 site visits, the contractor decided to call to verify
the conclusion that E & I was not operational. Tr. at 50-51. The results of that
call led the contractor to conclude that “the business was indeed operational.”
CMS Response Letter, Dated June 4, 2010, at 1. Although NSC proceeded to
revocation after Mr. Porter reported negative results on his August return visits,
Mr. Porter was sent out again because of Petitioner’s September 11, 2009
reconsideration request. Tr. at 54. The fact that the reconsideration decision
upholding the revocation relied only on the October visits supports an inference
that the contractor’s hearing officer was not convinced that the facility was closed
on the earlier dates.
17

Petitioner presented a variety of documents to demonstrate that E & I was an
ongoing operational business and that it was open on the dates in question. This
evidence included a lease to occupy the premises beginning April 1, 2003 and
continuing through amendments until December 31, 2010, as well as current state
licenses, evidence of payment of state business taxes, and current business liability
insurance. P. Exs. 3, 4, 6, 8. Petitioner submitted invoices for equipment
purchased and tickets showing delivery to clients in 2009. P. Exs. 7, 9. Petitioner
also provided telephone records from April through December of 2009. P. Ex. 5.
These records show calls either incoming or outgoing from the office number.°
Petitioner points to calls recorded on each of the site visit dates. See, e.g., P. Ex.
5, at 22, 45, 48, 59, 61-62, 87, 89, 93; Tr. at 17, 130-32. It is true that none of the
calls for which a time is shown occurred at the precise moments at which Mr.
Porter claimed to have performed his site visits, the closest being an outgoing call
at 9:32 on October 13, 2009 from the location that Mr. Porter claims to have
visited at 9:23 the same day. CMS argues that Petitioner “[n]Jevertheless . . . failed
to explain why the business was closed.” CMS Br. at 2.

Evidence that calls were made and received at E & I’s place of business on the
dates in question cannot in itself prove that someone was present in the office at
the specific times that the site investigator arrived. Evidence that E & I was
current in paying rent, taxes, and insurance and that it was ordering suppliers and
delivering them to clients during the time frame in question cannot in itself prove
that the company was open for business at the specific times that the site
investigator arrived.

All of this evidence collectively, however, increases the likelihood that the
business was operational at the location during the relevant time period. Such
evidence could nevertheless be overcome by credible proof that the location was
closed during business hours on repeated visits. I have difficulty in finding the
evidence of such repeated visits credible and persuasive in light of the concerns I
have already expressed about Mr. Porter’s testimony and photographs.

In addition to its documentary evidence, Petitioner presented the testimony of four
witnesses — its two directors and two witnesses who work in neighboring office
suites. Both directors testified under oath that the office was open with one, or
both, of them present at all times during posted hours and specifically at the times

® The records do not purport to show all calls made to or from the business.
Instead, they include reports showing calls over 30 minutes in length or listing
long distance calls or the ten longest outgoing and incoming local calls during a
given period. See P. Ex. 5 passim. (It seems likely that the telephone company
offers reports likely to be of use to a business monitoring its employees’ telephone
use). A review of these records certainly suggests active business being conducted
throughout the period from April through October of 2009.
18

that Mr. Porter allegedly visited and found it vacant. Tr. at 124-26, 131-32, 139-
41, 150-52. Ms. Anakor, who appears to have been the one largely responsible for
daily staffing of the office, testified that she wrote a note and stuck it on the door
any time that she went down the hall to the restroom. Tr. at 125, 139, 152. Ms.
Ibeziako testified that she had a particularly vivid recollection of August 4, 2009.
Tr. at 150. She recalled Ms. Anakor teasing her for arriving at 8:30 am, when Ms.
Anakor had come into the office even earlier. Jd. She reported that they came in
early to respond to a request for help with photocopying materials for another
business, which was having a problem. Tr. at 150-51. She testified that she took
the copies to the other business, rejoined Ms. Anakor, and remained in the office
that entire day. Tr. at 151. The particularity of the detail with which Ms. Ibeziako
described that day made it particularly credible.

Since both directors testified that they have no other jobs and that their livelihood
depends on the continuation of this business, they are obviously motivated to save
the business. Tr. at 138, 149-50, 152-53. For that reason, although I found them
personally believable, I do not rely entirely on their testimony to prove that their
business was open on the days and times at which Mr. Porter claimed he found no
one present.

The testimony that I found most credible and persuasive was that of the two
disinterested witnesses who voluntarily took time from their own business
responsibilities to testify at the hearing in this matter. Stanley U. Akujor, a
practicing attorney, testified that he: worked on the same floor; passed the E & I
office every weekday; spoke with the directors every day; and could “tell you
categorically that they are open every day Monday through Friday.” Tr. at 93-95.
He stated that he was shocked at the allegations, because he knew “for a fact” that,
regardless of which dates the investigator claimed to have found the business
closed, the office was open every day. See Tr. at 96-97; see also P. Ex. 10, at 1.

Iris E. Linden testified that she was an administrative assistant for Treasure Health
Care with offices across the hall from E & I. Tr. at 103. She testified that she can
observe lights and motion through E & I’s office window from her own office. Tr.
at 104. She testified that E & I was open and operational from 9 AM to 5 PM,
Monday through Friday. Jd. Ina letter from Ms. Linden that Petitioner submitted
prior to the hearing, Ms. Linden stated that, from her knowledge, E & I was
“always open during business hours,” that she noticed Ms. Anakor “from time to
time . . . [passing] each other going to the bathroom or just passing through a
stairwell,” that they saw each other many times “when leaving at the end of the
day,” and that they sometimes borrowed copy paper from each other. P. Ex. 10, at
2. According to her testimony, Ms. Linden missed at most two or three days of
work during the time period at issue, was present on the days that the site visits
took place, and saw the lights on and activity in E & I’s office on all the days she
was herself at work. Tr. at 109-15. When asked if she could explain more

19

precisely what she meant by seeing Ms. Anakor “‘from time to time,” Ms. Linden
testified as follows:

THE WITNESS: Yes, I can. Bathroom breaks, three or four times a
day, we bump into each other going to the bathroom. Coming in, we
pass each other, coming into the office building. When I go out to
get something to eat, there's a, three or four times a day where I
could leave out of my office, and I'll pass over by, knock on the
door, say hello. So that it happened regularly, Your Honor, three or
four times a day, as far as the bathroom goes, and then, just going in
and out to get a snack or something from up, downstairs and come
back up, I could see her. When I walk past my desk, which is many
times in the course of the day, I could see her probably leaving out,
coming to the bathroom. There's times that she has even come over
and asked me for, to borrow the copier or makes some copies or
something of that nature.

ADMIN. LAW JUDGE SUSSAN: Okay, let me, let me be sure I
understand because you also testified that Mr. Goines’ question that
you will place your determination that the office is open and
operational simply on whether the lights are on or off. But now you
seem to also be saying that you, you actually physically observe or
interact with someone from that office multiple times every day. So
are both those statements correct? Have I understood your
testimony?

THE WITNESS: They are. And as well, in my letter that I stated
from time to time, those would be my time-to-times. I could see her
in the stairwell coming into the office building. I could be coming
from getting a snack. I could pass and she might be crossing by the
bathroom, but I'm actually heading back to my office.

Tr. at 116-17. I find no reason to disbelieve the testimony of these two witnesses
that they interacted with the directors of E & I multiple times every day and
observed activity and lights in the office during business hours, including on the
days when Mr. Porter allegedly found the lights off and no one present. While it is
not physically impossible that Mr. Porter arrived six times at intervals when
neither director was present at moments when Mr. Anakor and Ms. Linden did not
observe their absences, I find it more probable that Mr. Porter took photographs of
the site but did not actually verify that no one was present.

I conclude that CMS has not presented credible or persuasive evidence that E & I
was not operational on August 13, 2009.
20

Based on the evidence discussed above, I conclude that E & I was operational at
the relevant time within the meaning of the regulations.

C. CMS is not authorized to revoke E & I’s Medicare supplier
number.

The sole basis on which NSC revoked E & I’s Medicare supplier number was its

alleged failure to be “operational to furnish Medicare covered items or services,”

as required under section 424.535(a)(5). The evidence does not support a finding
that E & I was not operational as defined in section 424.502. It follows that CMS
lacks legal authority to revoke E & I’s Medicare supplier number.

V. Conclusion

For the reasons explained above, I reverse the revocation of E & I’s Medicare
supplier number.

/s/
Leslie A. Sussan
Board Member