Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Roger Lea Scherer
(OI File No.: H-15-42280-9),

Petitioner,
v.
The Inspector General.
Docket No. C-16-85
Decision No. CR4512

Date: January 21, 2016

DECISION

The Inspector General (IG) of the United States Department of Health and Human
Services excluded Petitioner, Roger Lea Scherer, from participation in Medicare,
Medicaid, and all other Federal health care programs pursuant to section 1128(a)(2) of
the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(2)) for a period of five years. For
the reasons discussed below, I conclude that the IG has a basis for excluding Petitioner,
and an exclusion for the minimum period of five years is mandatory pursuant to section
1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)).

I. Background

In a letter dated September 30, 2015, the IG excluded Petitioner from participation in
Medicare, Medicaid, and all Federal health care programs as defined in section 1128B(f)
of the Act, 42 U.S.C. § 1320a-7b(f), for a minimum period of 5 years, effective 20 days
from the date of the letter. IG Exhibit (Ex.) 1 at 1. The IG explained that Petitioner’s
exclusion was based on a “conviction as defined in section 1128(i)(42 U.S.C. [§] 1320a-
7(i)), in the Circuit Court for the Ninth Judicial Circuit in and for Orange County,
Florida, of a criminal offense related to neglect or abuse of patients in connection with
the delivery of a health care item or service... .” IG Ex. 1 at 1. The IG explained
Petitioner was excluded pursuant to section 1128(a)(2) of the Act, which mandates the
exclusion of any individual who is convicted under Federal or state law of a criminal
offense related to the neglect or abuse of patients while in connection with the delivery of
a health care item or service. The IG informed Petitioner that the exclusion was for the
“minimum statutory period of five years.” IG Ex. 1 at 1; see 42 U.S.C. § 1320a-
7(c)(3)(B).

Petitioner, who is currently not represented by counsel, submitted a timely request for
earing that was dated and received on November 4, 2015. On November 20, 2015,
pursuant to 42 C.F.R. § 1005.6, I presided over a telephonic pre-hearing conference, and
on that same date, I issued an Order and Schedule for Filing Briefs and Documentary
Evidence (Order).

Pursuant to my Order, the IG filed an informal brief and a reply brief, along with five
exhibits (IG Exs.) 1-5. Petitioner filed an informal brief (P. Br.) and did not file any
marked exhibits. I admit the parties’ submissions and exhibits into the record. Neither
party requested that I convene a hearing in person, and I am therefore deciding this case
based on the parties’ written filings.

IL. Issues

The issue in this case is whether there is a legal basis under section 1128(a)(2) of the Act
for the IG to exclude Petitioner from participation in Medicare, Medicaid, and other
Federal health care programs. If I find a legitimate basis for the exclusion, I am required
to uphold the mandatory five-year exclusion.

HI. Jurisdiction
I have jurisdiction to adjudicate this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.
IV. Findings of Fact, Conclusions of Law, and Analysis!
I. Petitioner was convicted of committing battery on a patient, which is
an offense, as defined in section 1128(i) of the Social Security Act,
that subjects him to a mandatory exclusion from all federal health

care programs for a minimum of five years.

Section 1128(a)(2) requires a mandatory exclusion from all federal health care programs
under certain conditions. Section 1128(2) states:

' My findings of fact and conclusions of law are set forth in italics and bold font.
(a) Mandatory exclusion

The Secretary shall exclude the following individuals and entities
from participation in any Federal health care program (as defined in
section 1320a-7b(f) of this title):

dete

(2) Conviction relating to patient abuse

Any individual or entity that has been convicted, under
Federal or State law, of a criminal offense relating to neglect
or abuse of patients in connection with the delivery of a
health care item or service.

The IG argues that Petitioner was properly excluded from all Federal health care
programs based on a conviction for an offense related to patient abuse. IG Br. at 2-3.
While Petitioner, in his informal brief, does not deny the underlying conduct to which he
pleaded guilty, he denies that he was actually convicted of a criminal offense. As
explained below, I find that Petitioner was convicted of a criminal offense, for purposes
of the Act, that mandates exclusion from all Federal healthcare programs.

On June 25, 2015, the State of Florida charged Petitioner with committing battery, as
stated in the information that was filed in court that same day:

ROGER LEA SCHERER, on or about the 19th day of
December, 2014, in said County and State, did knowingly or
willfully, in violation of Florida Statute 784.03(1)(a), actually
a[n]d intentionally touch or strike another person, to witt
[E.R.], against her will, or intentionally cause bodily harm to
another person, to witt [E.R.].

> Petitioner was initially charged with committing the third degree felony offense of
Abuse of a Disabled Adult, Fla. Stat. § 825.102(1)(b), docketed under complaint number
48-2015-CF-008403-O. IG Exs. 2, 4. In conjunction with Petitioner’s guilty plea, the
charge was amended to the offense of misdemeanor battery. IG Ex. 4.

> Petitioner asserts that the IG improperly disclosed the victim’s name in an exhibit it
submitted with its pre-hearing exchange and alleges, “I would have thought the federal
government would have protected her better.” Petitioner is mistaken, as the DAB
requires electronic filing of documents and does not impose any redaction requirement
because cases can only be accessed by the parties and their representatives. See Civil
Remedies Division Procedures, Rule 6(a)(viii)(2) (noting that “[a]ccess to cases on the

On June 25, 2015, Petitioner pleaded guilty in the County Court of Orange County,
Florida, to the misdemeanor offense of battery.

The aforementioned Florida statute, § 784.03, indicates that the offense of battery occurs
when a person “[a]ctually and intentionally strikes another person against the will of the
other” or “[i]ntentionally causes bodily harm to another person.” Fla. Stat. § 784.03. By
pleading guilty, Petitioner admitted that he committed a battery against E.R. on or about
December 19, 2014. A probable cause affidavit, dated June 22, 2015, reports that E.R.
was a 68 year old female hospital patient who was reported to have dementia. IG Ex. 2 at
3-4. E.R. wore special mittens on her hands “‘as a precaution to keep the patient from
scratching themselves or others.” IG Ex. 2 at 4. Petitioner was assigned the task of
changing E.R.’s diaper and clothing on December 19, 2014, and when he attempted this
task, E.R. “started to flail her arms” and struck Petitioner. In response, and according to
P.L., a nurse-in-training who observed the incident and reported it to her clinical
instructor, Petitioner “punched [E.R.] on the left side of her chest with a closed fist.” IG
Ex. 2 at 4. When interviewed by a law enforcement investigator employed by the Florida
Office of the Attorney General, Petitioner did “not recall striking the patient, but he heard
the patient scream so therefore he assumed something had happened.” IG Ex. 2 at 5. In
his November 4, 2015 request for hearing, Petitioner was somewhat more forthcoming in
acknowledging that he struck the victim, stating “[t]his event traumatized me so much
because this behavior is not who I am, nor what I desire or plan. It opposes everything I
stand for.” Petitioner further stated in his brief that he “voluntarily relinquished [his]
license because this isolated event traumatized me so much and feel I have paid my debt
to society.” P. Br. at 3.

I find that Petitioner has a conviction for a criminal offense. Petitioner denies he was
convicted of a criminal offense because the judge withheld the adjudication of guilt at the
time he accepted Petitioner’s guilty plea. However, pursuant to section 1128(i)(3) of the
Act, he is considered to have been convicted of a criminal offense “when a plea of guilty
or nolo contendere by the individual or entity has been accepted by a Federal, State, or
local court.” 42 U.S.C. § 1320a-7(i)(3). Section 1128(i)(4) of the Act states that an
individual has been convicted of a criminal offense “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)(4).
On June 25, 2015, Petitioner entered a plea of guilty to the charge of battery, at which

DAB E-File system is limited to the parties and their authorized representatives) and Rule
6(a)(viii)(3) (directing that exhibits be electronically uploaded to the E-File system).
While Civil Remedies Division administrative law judge decisions are posted on the
DAB’s website, documents uploaded by the parties to individual case dockets are not
viewable by the general public. In order to protect the victim’s privacy, I will refer to the
victim by only her initials, E.R., in this decision.
time the county judge indicated that the court “withholds adjudication of guilt.” IG Ex. 5
at 1; see IG Ex. 4. Petitioner was sentenced to two days of incarceration, with credit
given for two days of time already served.’ He was ordered to serve one year of
supervised probation, with supervision performed via telephone or mail, and ordered to
pay a fine and costs totaling $273.00. IG Ex. 5 at 1. The IG correctly determined that the
guilty plea to the offense of battery is properly considered to be a conviction for purposes
of the Act. In fact, Florida law specifically defines a “conviction” as including a
“determination of guilt that is the result of a plea or a trial, regardless of whether
adjudication is withheld.” Fla. Stat. § 921.0021(2). See Lorrie Laurel, PT, DAB No.
2524 at 5 (2013) (discussing that the Florida Supreme Court concluded that Fla. Stat.

§ 921.0021(2) “‘clearly indicates that the Legislature wanted to include all determinations
of guilt [in the definition of conviction] even where adjudication had been withheld.’
Montgomery v. State 897 So.2d 1282, 1287 (2005).”); see also Travers v. Shalala, 20
F.3d 993, 997 (9th Cir. 1994) (stating “[t]o determine whether state court proceedings
constituted a conviction under § 1320a-7(i), we look to the substance of the proceedings,
rather than any formal labels or characterizations used by the state or by the parties” and
that when judgment has been withheld, “the entry of judgment is a mere formality
because the defendant has irrevocably committed himself to a plea of guilty or no contest
which cannot be unilaterally withdrawn.”).

In addition to finding that Petitioner was convicted of committing the offense of battery, I
further find that the battery constituted abuse of an individual in connection with the
delivery of a health care item or service. See 42 U.S.C. § 1320a-7(a)(2). The victim of
the battery, E.R., was a hospital patient. Petitioner was the certified nurse assistant who
was attending to the victim at the time he committed the battery. IG Exs. 2 at 1-2; 3 at 1-
3. Petitioner’s conviction for abuse of this patient falls squarely within the parameters
outlined in section 1128(a)(2) of the Act.

Petitioner argues that the IG was unreasonable in his determination that an exclusion for a
minimum period of five years is mandated. Pursuant to section 1128(a) of the Act, the
minimum period of exclusion for such a conviction for a criminal offense is five years.
42 U.S.C. § 1320a-7(c)(3)(B). I agree with the IG that Petitioner’s criminal conviction
mandates exclusion. Petitioner argues that he has “paid [his] debt to society” and that
“[jJustice without mercy is not justice.” P. Br. at 3. Petitioner has already been afforded
considerable mercy by the criminal justice system, in that he served two days in prison
for a crime that could have potentially resulted in a sentence of up to one year in prison.
See Fla. Stat. § 775.082(4)(a). Petitioner pleaded guilty to striking an infirm woman with
a closed fist when he was supposed to be acting as her caregiver. While Petitioner
believes he paid his debt to society, his crime was not against society. Rather,

* According to Fla. Stat. § 784.03, “a person who commits battery commits a
misdemeanor of the first degree.” A first degree misdemeanor is punishable by “a
definite term of imprisonment not exceeding | year.” Fla. Stat. § 775.082(4)(a).
Petitioner’s crime affected a person, and the victim in this case was a vulnerable hospital
patient. Congress, through enactment of the Social Security Act, has determined that an
individual who has been convicted of an offense relating to the abuse of a patient in
connection with the delivery of a health care item or service must be excluded from
federal health care programs for no less than five years, and it has afforded neither the IG
nor an administrative law judge the discretion to impose an exclusion of a shorter
duration. 42 U.S.C. § 1320a-7(c)(3)(B). Congress, in setting forth a mandatory
minimum exclusion of five years in duration, has not contemplated that any “mercy” is
warranted in a situation where a health care provider was criminally convicted of
committing an act of violence on a patient.° Even if I were so inclined, I cannot shorten
the length of the exclusion because I do not have authority to “find invalid or refuse to
follow Federal statutes or regulations.” 42 C.F.R. § 1005.4(c)(1).

V. Effective Date of Exclusion

The effective date of the exclusion, October 20, 2015, is established by regulation, and I
am bound by that provision. 42 C.F.R. §§ 1001.2002(b); 1005.4(c)(1).

VI. Conclusion

For the foregoing reasons, I affirm the IG’s decision to exclude Petitioner from
participation in Medicare, Medicaid, and all federal health care programs for a minimum
period of five years.

/s/
Leslie C. Rogall
Administrative Law Judge

> The Departmental Appeals Board has discussed the congressional intent underlying the
IG exclusion statutes, explaining that “the rationale for the different treatment of the term
‘conviction’ under the federal exclusion law and state criminal law is based on
differences in their goals. The federal exclusion law aims to protect beneficiaries of
health care programs and the federal fisc through remedial actions such as exclusions,
whereas criminal law generally involves punishment, rehabilitation, and the deterrence of
future misconduct.” Henry L. Gupton, DAB No. 2058 at 7 (2007).


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Lake Shore Healthcare & Rehabilitation Center,
(CCN: 14-5244),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-1144
Decision No. CR4510

Date: January 21, 2016

DECISION

Lake Shore Healthcare & Rehabilitation Center (Petitioner or the facility) challenges the
determination of the Centers for Medicare & Medicaid Services (CMS) that it was not in
substantial compliance with Medicare program participation requirements. CMS
imposed against Petitioner a total civil money penalty (CMP) of $17,150.

For the reasons discussed below, I grant summary judgment to CMS. I find the
undisputed evidence shows that Petitioner was not in substantial compliance with
42 C.F.R. § 483.25(m)(2) (Tag F333, Medication Errors). I also find the undisputed
evidence shows that CMS’s determination of immediate jeopardy was not clearly
erroneous, and the CMP that CMS imposed is reasonable in amount and duration.

I. Background

The Social Security Act (Act) sets forth requirements for skilled nursing facility
participation in the Medicare program. The Act authorizes the Secretary of Health and
Human Services (Secretary) to promulgate regulations implementing those statutory
provisions. Act § 1819 (42 U.S.C. § 1395i-3). The Secretary’s regulations are found at
42 C.F.R. Part 483. To participate in the program, a facility must maintain substantial
compliance with program requirements. To be in substantial compliance, a facility’s
deficiencies may pose no greater risk to resident health and safety than “the potential for
causing minimal harm.” 42 C.F.R. § 488.301.

The Secretary contracts with state agencies to conduct periodic surveys to determine
whether skilled nursing facilities are in substantial compliance. Act § 1864(a) (42 U.S.C.
§ 1395aa(a)); 42 C.F.R. §§ 488.10, 488.20. The Act and regulations require that facilities
be surveyed on average every 12 months, and more often if necessary, to ensure that
identified deficiencies are corrected. Act § 1819(g)(2)(A) (42 U.S.C. § 1395i3(g)(2)(A));
42 CFR. §§ 488.20(a), 488.308.

Here, surveyors from the Illinois Department of Public Health (state agency) completed a
survey of Petitioner, a skilled nursing facility in Chicago, Illinois, on January 10, 2014.
Based on the findings of that survey, the state agency found that Petitioner was not in
substantial compliance with twenty-eight participation requirements and that Petitioner
returned to compliance by February 3, 2014. CMS informed Petitioner, by letters dated
March 7 and April 10, 2014, that it had imposed a CMP of $5,400 for immediate
jeopardy on December 17, 2013, and a $250 per day CMP, from December 18, 2013
through February 2, 2014, for a total penalty of $17,150.

Petitioner requested an Administrative Law Judge (ALJ) hearing to dispute the
determination that it was not in substantial compliance with program requirements,
CMS’s determination of immediate jeopardy, and the associated proposed remedies.
Petitioner’s request was received at the Civil Remedies Division, assigned to me for
hearing and decision, and on May 22, 2014, I issued an Acknowledgment and Initial Pre-
Hearing Order (Pre-Hearing Order), which consolidated previous hearing requests from
Petitioner relating to the same survey cycle.'

1 instructed the parties that their pre-hearing briefs must contain any argument that a party
intended to make and that I may exclude an argument and evidence that relates to such
argument if a party fails to address it in its pre-hearing brief without good cause.
Acknowledgement and Initial Pre-Hearing Order, March 12, 2014, §§ 3, 7. In
accordance with my Pre-Hearing Order, on August 11, 2014, CMS filed its pre-hearing
brief (CMS Br.) along with 95 proposed exhibits (CMS Exs. 1-95). On September 15,
2014, Petitioner filed its pre-hearing brief (P. Br.) along with three proposed exhibits

(P. Exs. 1-3). I admit all proposed exhibits into the record absent any objection from the
parties. After reviewing Petitioner’s pre-hearing exchange, CMS chose to file a motion

' The parties did not object to the consolidation of this case with C-14-772 and
C-14-811.
for summary judgment (CMS Motion) on October 23, 2014. Petitioner filed a brief
responding to the CMS Motion (P. Resp.) on November 11, 2014.

IL. Issues

Whether the undisputed evidence establishes:

1. Petitioner was in substantial compliance with 42 C.F.R. § 483.25(m) (Tag
F333, Medication Errors);

2. CMS’s determination of immediate jeopardy level noncompliance was clearly
erroneous; and

3. The CMPs that CMS imposed are reasonable in amount and duration.
Ill. Summary Judgment Standard

Summary judgment is appropriate when a case presents no issue of material fact, and its
resolution turns on questions of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986); Livingston Care Ctr. v. United States Dep't of Health & Human Servs.,
388 F.3d 168, 173 (6th Cir. 2004). See also Illinois Knights Templar Home, DAB No.
2274, at 3-4 (2009) (citing Kingsville Nursing Ctr., DAB No. 2234, at 3-4 (2009)). The
moving party may show the absence of a genuine factual dispute by presenting evidence
so one-sided that it must prevail as a matter of law, or by showing that the non-moving
party has presented no evidence “sufficient to establish the existence of an element
essential to [that party’s] case, and on which [that party] will bear the burden of proof at
trial.” Livingston Care Ctr., 388 F.3d 168, 173 (quoting Celotex Corp. v. Catrett, 477
U.S. 317, 323-24 (1986)).

To avoid summary judgment, the non-moving party must then act affirmatively by
tendering evidence of specific facts showing that a dispute exists. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see also Vandalia Park,
DAB No. 1939 (2004); Lebanon Nursing & Rehab. Ctr., DAB No. 1918 (2004). To
defeat an adequately supported summary judgment motion, the non-moving party may
not rely on the denials in its pleadings or briefs, but it must furnish evidence of a dispute
concerning a material fact. I/linois Knights Templar Home, DAB No. 2274, at 4;
Livingston Care Ctr., DAB No. 1871, at 5 (2003).

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

IV. Findings of Fact and Conclusions of Law

A, The undisputed evidence establishes that Petitioner was not in substantial
compliance with 42 C.F.R. § 483.25(m)(2) because Petitioner erred
significantly when administering medications to Residents 7 and 31.

A skilled nursing facility must ensure that it is free of any significant medication errors.
See 42 C.F.R. § 483(m)(2). A medication error may be considered significant if it
“jeopardizes” - that is, has the potential to harm - the resident's health. Life Care Ctr. of
Tullahoma, DAB No. 2304, at 44 (2010). No showing of actual harm to a resident is
necessary to conclude that an error is significant. Northern Montana Care Ctr., DAB No.
1930 (2004); Rosewood Care Ctr. of Peoria, DAB No. 1912 (2004).

In the preamble to the rule-making provision that adopted subsection 483.25(m), the
Secretary explained:

A significant medication error is judged by a surveyor, using factors which
have been described in interpretive guidelines since May 1984. The three
factors are: (1) Drug category. Did the error involve a drug that could
result in serious consequences for the resident[?;] (2) Resident condition.
Was the resident compromised in such a way that he or she could not easily
recover from the error[?;] (3) Frequency of error. Is there any evidence that
the error occurred more than once[?] Using these criteria, an example of a
significant medication error might be as follows: A resident received twice
the correct dose of digoxin, a potentially toxic drug. The resident already
had a slow pulse rate, which the drug would further lower. The error
occurred three times last week.

56 Fed. Reg. 48,826, at 48,853 (Sept. 26, 1991). These criteria are also reiterated
in CMS’s interpretive guidelines for section 483.25(m)(2) in the State Operations
Manual (SOM):

“Resident Condition” - The resident’s condition is an important factor to
take into consideration. For example, a fluid pill erroneously administered

to a dehydrated patient may have serious consequences, but if administered
to a resident with a normal fluid balance may not. If the resident’s
condition requires rigid control, a single missed or wrong dose can be
highly significant.

“Drug Category” - If the drug is from a category that usually requires the
patient to be titrated to a specific blood level, a single medication error
could alter that level and precipitate a reoccurrence of symptoms or
toxicity. This is especially important with a drug that has a Narrow
Therapeutic Index (NTI) (i.e., a drug in which the therapeutic dose is very
close to the toxic dose). Examples of drugs with NTI are as follows:

... Anticoagulants ....

“Frequency of Error” - If an error is occurring with any frequency, there
is more reason to classify the error as significant. For example, if a
resident’s drug was omitted several times . . . , classifying that error as
significant would be in order. This conclusion should be considered in
concert with the resident’s condition and the drug category.

SOM, App. PP (tag 333) (bold in original).

I. The undisputed evidence establishes that Petitioner significantly erred
because Petitioner did not provide Resident 7 with an anticoagulant
pursuant to doctor’s orders.

CMS has moved for summary judgment based on circumstances involving Resident 7, an
82-year-old man with undisputed diagnoses including diabetes, cardiomyopathy, chronic
subdural hematoma, and chronic venous stasis, whose physician ordered him to receive
the anticoagulant Heparin through subcutaneous injections. CMS Motion at 4-6; CMS
Ex. 31 at 5, 7; CMS Ex. 6 at 80-81. Resident 7’s physician initially ordered that he
receive | milliliter of Heparin every 12 hours, but as of December 11, 2013, the physician
halved that order to 0.5 milliliter every 12 hours. CMS Ex. 31 at 5, 7; CMS Ex. 6 at 80-
81.

A nurse surveyor, however, observed a facility nurse preparing to administer 1 milliliter
of Heparin to Resident 7 on December 17, 2013. CMS Ex. 92. A photograph of the
medication label that the facility nurse was relying upon provided for 1 milliliter of
Heparin every 12 hours, instead of the updated 0.5 milliliter amount the resident’s
physician ordered. CMS Ex. 31 at 14. CMS asserts that the nurse admitted during the
survey that the facility never revised the dosage and had been administering 1 milliliter of
Heparin instead of the prescribed 0.5 milliliter dosage for several days since December
11, 2013. CMS Motion at 5 (citing the survey’s Statement of Deficiencies (SOD), CMS
Ex. 6 at 81).
CMS argued that the frequency of Petitioner’s error, compounded with the drug type,
made the medication error significant. Specifically, the error occurred twice daily for
nearly a week, and Heparin is an anticoagulant, a type of medication for which the
prescribed amount is particularly important because the drug must be titrated to a specific
blood level. CMS Motion at 5; CMS Ex. 95 at 2. In response to the CMS Motion,
Petitioner comes forward with no specific evidence to contest CMS’s allegations in order
to identify a genuine issue of material fact I must decide. As a result, I do not find a
factual dispute with regard to Petitioner’s noncompliance with Medicare requirements
involving this significant medication error in administering Heparin to Resident 7.

2. The undisputed evidence establishes Petitioner erred significantly
when it did not comply with its policy and professional standards of
care when administering the anticoagulant to Resident 7.

CMS also argued that Petitioner did not comply with its own policy when administering
Resident 7’s medication. CMS Motion at 5. A facility’s failure to follow or implement
its own resident care policy may constitute a deficiency under 42 C.F.R. § 483.25. The
Laurels at Forest Glenn, DAB No. 2182, at 18 (2008). According to the facility’s policy,
Subcutaneous Injections, Petitioner instructed its employees to verify a physician’s
medication order for an injection and to verify the dose of the medication. CMS Ex. 78
at 87. Petitioner presents no specific evidence to suggest its nurse did this for Resident
7’s administration of Heparin.

A resident care policy “is also evidence of the standard of care the facility expect[s] its
staff to provide” and of professional standards of care. The Laurels at Forest Glenn,
DAB No. 2182, at 18. It is undisputed that Petitioner did not comply with its
Subcutaneous Injections policy. It follows that it therefore did not meet the standard of
care for its facility, which further supports the medication error deficiency.
3. The undisputed evidence establishes that Petitioner erred significantly
when it improperly administered a diuretic to Resident 31 without
accurately taking the resident’s blood pressure and not following
manufacturer instructions.

Resident 31 was a 64-year-old man with undisputed diagnoses including anemia,
hypertension, gastroesophageal reflux disease, diabetes mellitus, and a hip fracture. CMS
Ex. 46 at 18-19. On December 4, 2013, Resident 31’s physician prescribed the diuretic
Furosemide, 40 mg (4 ml) intravenously every 12 hours. Id. at 48, 58. On December 17,
2013, at 10:00 a.m., a nurse surveyor observed a facility LPN administer Furosemide
intravenously to Resident 31. CMS Ex. 6 at 75-79; CMS Ex. 18 at 2; CMS Ex. 90. The
nurse surveyor specifically observed the LPN test Resident 31’s blood pressure, flush the
intravenous line with saline, administer the total dosage of 4 ml of Furosemide within 30
seconds, and then again flush the intravenous line with saline. CMS Ex. 6 at 75-76.

CMS asserts that the LPN erred in administering the Furosemide because she did not take
an accurate blood pressure reading. Specifically, she did not properly calibrate the blood
pressure machine before taking the resident’s blood pressure prior to administering the
drug. CMS Motion at 6; CMS Ex. 6 at 75. CMS contends that the pointer of the dial was
set at 300 instead of being reset to 0 before the measurement. /d. Further, CMS asserts
that administering Furosemide without a proper blood pressure reading put the resident at
risk for hypotension. CMS Motion at 7; CMS Ex. 90 at 2-3.

In addition, CMS asserts that the LPN did not administer the diuretic in compliance with
the manufacturer’s instructions. CMS Motion at 7. Specifically, the nurse surveyor
observed the LPN administer the medication over a 30-second period, but the
manufacturer’s instruction for Furosemide directs that an intravenous dose of 40 mg
should be given slowly over 1-2 minutes. CMS Ex. 46 at 84. CMS also relied on the
manufacturer’s instruction to assert that rapid injections have been associated with cases
of tinnitus and reversible or irreversible hearing impairment, and this put Resident 31 at
significant risk of serious medical problems. CMS Motion at 7; CMS Ex. 46 at 84; CMS
Ex. 90 at 2. CMS also argued that the error may have been repeated because the same
LPN had administered Resident 31’s Furosemide eleven times from December 4, 2013
through the date of the observation at issue, December 17, 2013. CMS Motion at 7; P.
Ex. 1 (Declaration of LPN); CMS Ex. 46 at 58; CMS Ex. 95 at 2.

Petitioner does not come forward now with specific evidence to show there are any
material facts I need to resolve with regard to these particular issues. Therefore, I find as
a matter of law that Petitioner did not comply with Medicare requirements when it
improperly administered Resident 31’s diuretic and caused an additional significant
medication error. *

B. The undisputed evidence establishes that CMS’s determination of
immediate jeopardy was not clearly erroneous.

“Immediate jeopardy” exists if a facility’s noncompliance has caused, or is likely to
cause, serious injury, harm, impairment, or death to a resident. 42 C.F.R. § 488.301. The
regulation does not require that a resident actually be harmed. See Lakeport Skilled
Nursing Ctr., DAB No. 2435, at 8 (2012). An immediate jeopardy determination must be
upheld unless it is “clearly erroneous.” 42 C.F.R. § 498.60(c). “Under the clearly
erroneous standard, CMS’s immediate jeopardy finding is presumed to be correct, and the
[facility] has a heavy burden to overturn it.” Stone Cty. Nursing & Rehab. Ctr., DAB No.
2276, at 16 (2009).

The facility’s burden of demonstrating clear error in CMS’s immediate jeopardy
determination “extends to overcoming CMS’s determination as to how long the
noncompliance remained at the immediate jeopardy level.” Azalea Court, DAB No.
2352, at 17 (2010), citing Brian Ctr. Health & Rehab. Goldsboro, DAB No. 2336, at 7
(2010). As the Board concluded in Brian Center, “[a] determination by CMS that a
[facility’s] ongoing [noncompliance] remains at the level of immediate jeopardy during a
given period constitutes a determination about the ‘level of noncompliance’ and,
therefore, is subject to the clearly erroneous standard of review under section
498.60(c)(2).” Brian Ctr. at 7-8.

Here, CMS contends that Petitioner’s significant medication errors were likely to cause
serious injury and harm to Residents 7 and 31. Specifically, CMS contended Resident 7
was at serious risk for one of the many possible side effects of Heparin, the improperly
administered anticoagulant, which the SOM categorizes as a dangerous drug category
that requires titration to a specific blood level. CMS Motion at 8; CMS Ex. 95 at 2; see
also CMS Br. at 5-6, 23; CMS Ex. 6 at 80-81. Further CMS contended Resident 31 was
at serious risk for hypotension as well as tinnitus and hearing loss due to the facility’s
improper administration of Furosemide. CMS Motion at 6-9; CMS Ex. 46 at 84; CMS
Ex. 90; CMS Ex. 6 at 73-82; see also CMS Br. at 23.

Rather than coming forward with specific evidence to challenge the specific allegations
of CMS’s motion, Petitioner contends that I must deny summary judgment because, at

> CMS did not move for summary judgment on the specific grounds from its pre-hearing
brief that Petitioner was noncompliant with 42 C.F.R. § 483.25(m) due to the
administration of intravenous push medications by an unsupervised LPN, and I do not
consider the merits of that allegation in my ruling here.
the time of the survey, the state agency found that conditions posed immediate jeopardy
for one day based on different grounds. Specifically Petitioner contends the state agency
found immediate jeopardy for only one day related to its medication error involving RN
nursing supervision of LPNs when administering intravenous push medications, and
CMS has not moved for summary judgment based on those specific grounds. P. Resp at
2 (citing CMS Ex. 6 at 129). However, the SOD cited immediate jeopardy based on
significant medication errors including all aspects of the medication error noncompliance
with respect to Resident 7 and Resident 31. See CMS Ex. 6 at 73. Moreover, even if
CMS were to have asserted immediate jeopardy under different grounds than the
surveyors, my review of CMS’s determination of immediate jeopardy and its duration is
de novo. See Sunbridge Care & Rehab. for Penbroke, DAB No. 2170, at 37 (2008).

Petitioner also alleges the information on a website CMS cites does not suggest a
likelihood of serious harm, rather simply a potential for serious harm. P. Resp.at

6. However, CMS’s determination of immediate jeopardy is presumed to be correct, and
Petitioner has the burden to rebut the presumption with evidence and argument showing
that the harm or threatened harm did not meet any reasonable definition of seriousness.
See Daughters of Miriam Ctr., DAB No. 2067 at 9-11 (2007)(determining that it was not
CMS’s burden to make a prima facie showing of immediate jeopardy in a case involving
medication errors).

As I previously discussed, Petitioner has not demonstrated the existence of a genuine
issue of material fact because it has not come forward with any specific evidence to
dispute CMS’s contentions about CMS’s allegations including Resident 7’s diagnoses,
that Resident 7 received twice as much of the anticoagulant Heparin than the amount
Resident 7’s physician ordered him to receive, the recurring frequency of the error, the
drug category of the anticoagulant Heparin that requires the titration to a specific blood
level, or Petitioner’s noncompliance with its Subcutaneous Injections policy. Similarly,
Petitioner has not come forward with any specific evidence to dispute CMS’s contentions
about Resident 31’s diagnoses, the manner in which the surveyor observed Petitioner’s
staff’s administration of a diuretic to Resident 31, the severity of the alleged harm, or the
recurring frequency of the error. Compare, e.g., Innsbruck HealthCare Center, DAB No.
1948 at 6 (2004) (concluding there were genuine issues of material fact precluding
summary judgment when a petitioner presented evidence of expert testimony over the
assessment of the degree of risk to residents).

I am also not required to make unreasonable inferences in favor of Petitioner. See
Brightview Care Ctr., DAB No. 2132, at 10 (upholding summary judgment where
inferences and views of non-moving party are not reasonable). Based on the undisputed
evidence of the improper administration of medication to Residents 7 and 31, and the
evidence supporting the seriousness of them, and the lack of specific evidence that
Petitioner has proffered, it would be unreasonable to infer that Petitioner’s errors were
not likely to result in serious harm, injury, impairment, or death.
10

C. The undisputed evidence establishes the CMP that CMS imposed is
reasonable in amount and duration.

CMS imposed a $5,400 CMP for one day of immediate jeopardy on December 17, 2013, and a
$250 per day CMP for 15 days of noncompliance which is not immediate jeopardy from
December 18, 2013 through February 2, 2014. CMS must consider several factors when
determining the amount of a CMP, which an ALJ considers de novo when evaluating the
reasonableness of the CMP that CMS imposed: (1) the facility’s history of
noncompliance; (2) the facility’s financial condition, i.e., its ability to pay the CMP; (3)
the severity and scope of the noncompliance, the “relationship of the one deficiency to
other deficiencies resulting in noncompliance,” and the facility’s prior history of
noncompliance; and (4) the facility’s degree of culpability, which includes neglect,
indifference, or disregard for resident care, comfort or safety. 42 C.F.R. §§ 488.438(f),
488.404(b), (c).

The regulations leave the decision regarding the choice of remedy to CMS and the
amount of the remedy to CMS and the ALJ, requiring only that the regulatory factors at
42 C.F.R. §§ 488.438(f) and 488.404 be considered when determining the amount of a
CMP within a particular range. 42 C.F.R. §§ 488.408,(g)(2), 498.3(d)(11); see also

42 C.F.R. § 488.438(e)(2); Alexandria Place, DAB No. 2245, at 27 (2009); Kenton
Healthcare, LLC, DAB No. 2186, at 28-29.

Petitioner has the burden to introduce evidence or argument challenging the application
of the regulatory factors for determining the reasonableness of the CMP amount.
Ridgecrest Healthcare Ctr., DAB No. 2493, at 12 (2013), quoting The Windsor House,
DAB No. 1942, at 62 (2004). Moreover, there is “a presumption that CMS has
considered the regulatory factors” in setting the amount of the CMP “and that those
factors support” the CMP amount CMS imposed. /d. at 13, quoting Coquina Ctr., DAB
No. 1860, at 32 (2002). The Board has concluded that “[t]he burden is on the facility to
show that it timely completed the implementation of [its] plan [of correction] and in fact
abated the jeopardy (to reduce the applicable CMP range) or achieved substantial
compliance (to end the application of remedies).” Lake Mary Healthcare, DAB No.
2081, at 29 (2007), citing, e.g., Spring Meadows Health Care Ctr., DAB No. 1966
(2005); see also Brian Ctr. at 9; Azalea Court at 21 (both citing Lake Mary).

1 instructed the parties that their pre-hearing briefs must contain any argument that a party
intended to make and that I may exclude an argument and evidence that relates to such
argument if a party fails to address it in its pre-hearing brief without good cause.
Acknowledgement and Initial Pre-Hearing Order, March 12, 2014, § 3, 7. CMS
contends Petitioner, in its pre-hearing brief, did not challenge the application of any
regulatory factor in disputing the reasonableness of the CMP amount and therefore has

11

waived its right to contest the reasonableness of the CMP. I agree. Petitioner only
generally argued that:

A CMP of the amount imposed in this case would not have been assessed
but for the clearly erroneous “immediate jeopardy” determination under tag
F333. Furthermore, there is no basis for any CMP of any amount. Lake
Shore was in substantial compliance with all of the requirements cited on
the January 10 survey, which began before December 20, 2013 — the date
by with Lake Shore was promised that no remedies would be imposed if it
was substantial compliance. Therefore, the CMP in this case is
unreasonable and cannot be upheld.

P. Br. at 17. Petitioner also now argues that when it argued against CMS’s determination
of immediate jeopardy, it was also arguing, in effect, the factor of culpability. P. Resp. at
8-9 (citing P. Br. at 3-5, 17). Even if I were to equate the two arguments, as I discussed
previously I do not find that Petitioner has come forward with specific evidence to
demonstrate a genuine issue of material fact that I am obligated to resolve with regard to
CMS’s determination of immediate jeopardy. Therefore, Petitioner has similarly not
come forward with any specific argument and evidence to dispute the reasonableness of
the amount of the CMP imposed and its duration.

V. Conclusion

I grant CMS’s motion for summary judgment finding the undisputed evidence established
that Petitioner was not in compliance with Medicare requirements, CMS’s determination
of immediate jeopardy to residents’ health and safety was not clearly erroneous, and the
$17,150 penalty that CMS imposed is reasonable in amount and duration. Petitioner has
not come forward with any specific evidence to successfully demonstrate a genuine issue
of material fact, so I must decide these issues as a matter of law in favor of CMS.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.

M AZ Management LLC
d/b/a Tyrone Shell,

Respondent.

Docket No. C-15-2943
FDA No. FDA-2015-H-2157

Decision No. CR4509

Date: January 20, 2016

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) initiated a $500 civil money penalty (CMP)
action against Respondent for unlawfully selling cigarettes to minors, on two separate
occasions, and failing to verify, by means of photo identification containing a date of
birth, that the purchasers were 18 years of age or older, on one occasion, in violation of
the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140. During the hearing process, Respondent
failed to comply with a judicial direction regarding CTP’s discovery request. I therefore
strike Respondent’s answer and issue this decision of default judgment.

I. Procedural History

Respondent requested, and was granted, an extension of time to file an answer.
Respondent timely answered CTP’s complaint opposing the CMP and requested a
hearing. I issued an Acknowledgement and Prehearing Order (APHO) that set deadlines
for parties’ submissions, including the October 5, 2015 deadline to request that the
opposing party provide copies of documents relevant to this case. Additionally, the
APHO stated that a party receiving such a request must provide the requested documents
no later than 30 days after the request.

CTP served Respondent with its request for documents on October 5, 2015. On
November 17, 2015, CTP filed a motion to compel discovery indicating that Respondent
did not respond to its request for production of documents. See 21 C.F.R. § 17.23(a). On
November 17, 2015, CTP also filed a motion to extend the deadlines. Pursuant to my
direction, a November 18, 2015 letter allowed Respondent until December 3, 2015 to file
an objection to CTP’s motion to compel discovery. On November 18, 2015, I also issued
an Order that extended the parties’ pre-hearing exchange deadlines.

On December 11, 2015, CTP filed an updated status report stating that Respondent had
not filed a response to CTP’s motion to compel discovery or produced any documents.
CTP requested that I grant its motion to compel discovery and extend any of its

deadlines.

On December 15, 2015, I issued an Order that granted CTP’s motion to compel
discovery. I noted that Respondent had not filed a response to CTP’s motion to compel
discovery. In that Order, I stated that Respondent shall comply with CTP’s request for
production of documents by January 6, 2016. I further stated that:

Failure to do so may result in sanctions, including the issuance of an Initial
Decision and Default Judgment finding Respondent liable for the violations
listed in the Complaint and imposing a civil money penalty. Within five (5)
days of Respondent’s deadline to comply with discovery, CTP must file a
status report notifying me whether Respondent has complied with
discovery.

On January 11, 2016, CTP filed an updated status report advising me that Respondent
had not complied with my December 15, 2015 Order. On January 11, 2016, CTP also
filed a motion to impose sanctions that asked me to strike the Respondent’s answer and
issue a default judgment in this case.

Il. Striking Respondent’s Answer

Respondent failed to file a response to CTP’s motion to compel discovery, and to comply
with the December 15, 2015 Order compelling discovery responses to be provided by
January 6, 2016. Respondent did not comply with CTP’s discovery requests.
Respondent has not made any contact with this Court since August 26, 2015, the date
Respondent timely filed its answer. Respondent’s failure to effectively prosecute and
defend actions taken over the course of the proceedings have interfered with the orderly
and speedy processing of this case, further warranting imposition of sanctions. See
21 C.F.R. § 17.35(a) (1)(2) and (3).

Due to Respondent’s noncompliance with the December 15, 2015 Order compelling
discovery, I am striking Respondent’s Answer, issuing this default decision, and
assuming the facts alleged in CTP’s complaint to be true. See 21 C.F.R. § 17.35(c) (3),
17.11(a). The harshness of the sanctions I impose upon either party must relate to the
nature and severity of the misconduct or failure to comply, and I find the failure to
comply here sufficiently egregious to warrant striking the answer and issuing a decision
without further proceedings. See 21 C.F.R. § 17.35(b). Respondent failed to comply
with the December 15, 2015 Order, nor did it provide any adequate justification for not
doing so.

Ill. Default Decision

Striking Respondent’s answer leaves the Complaint unanswered. Therefore, I am
required to issue an initial decision by default if the complaint is sufficient to justify a
penalty. 21 C.F.R. § 17.11(a). Accordingly, I must determine whether the allegations in
the Complaint establish violations of the Act.

For purposes of this decision, I assume the facts alleged in the Complaint are true and
conclude that default judgment is merited based on the allegations of the Complaint and
the sanctions imposed on Respondent for failure to comply with my orders. 21 C.F.R.
§ 17.11. Specifically:

e Respondent owns Tyrone Shell, an establishment that sells tobacco products and is
located at 855 Tyrone Boulevard North, St. Petersburg, Florida 33710. Complaint

q3.

e During an inspection of Respondent’s establishment on October 20, 2014, at
approximately 10:54 AM, an FDA-commissioned inspector observed that “a
person younger than 18 years of age was able to purchase a package of Camel
Blue cigarettes . . . [.]” Complaint § 10.

¢ On December 11, 2014, CTP issued a Warning Letter to Respondent regarding the
inspector’s observation from October 20, 2014. The letter explained that the
observation constituted a violation of the regulation found at 21 C.F.R.
§ 1140.14(a), and that the named violation was not necessarily intended to be an
exhaustive list of all violations at the establishment. The Warning Letter went on
to state that if Respondent failed to correct the violation, regulatory action by the
FDA or a civil money penalty action could occur and that Respondent is
responsible for complying with the law. Complaint § 10.
e Angela Landrum responded to the Warning Letter in a December 15, 2014 letter.
“Ms. Landrum stated that the employee who sold the tobacco product to the minor
‘apologized over and over for not paying more attention that morning.’ She also
stated that she reminded all employees that they must verify the identification of
tobacco purchasers under the age of 30.” Complaint § 11.

e During a subsequent inspection of Respondent’s establishment on February 27,
2015, at approximately 1:23 PM, an FDA-commissioned inspector documented
that “a person younger than 18 years of age was able to purchase a package of
Camel Blue cigarettes . . . [.]” The inspector also observed that “the minor’s
identification was not verified before the sale... .” Complaint § 1.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is misbranded
if distributed or offered for sale in any state in violation of regulations issued under
section 906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). The
Secretary of the U.S. Department of Health and Human Services issued the regulations at
21 C.F.R. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1; see 21 U.S.C.

§ 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). The regulations prohibit the
sale of cigarettes to any person younger than 18 years of age. 21 C.F.R. § 1140.14(a).
The regulations also require retailers to verify, by means of photo identification
containing a purchaser’s date of birth, that no cigarette purchasers are younger than 18
years of age. 21 C.F.R. § 1140.14(b)(1).

Taking the above alleged facts as true, Respondent violated the prohibition against selling
tobacco to persons younger than 18 years of age, 21 C.F.R. § 1140.14(a), on October 20,
2014, and February 27, 2015. On February 27, 2015, Respondent also violated the
requirement that retailers verify, by means of photo identification containing a
purchaser’s date of birth, that no tobacco purchasers are younger than 18 years of age.

21 C.F.R. § 1140.14(b)(1). Therefore, Respondent’s actions constitute violations of law
that merit a civil money penalty.

CTP has requested a fine of $500, which is a permissible fine under the regulations.
21 C.F.R. § 17.2. 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

Center for Tobacco Products,
Complainant

Vv.

Joe Eideh
d/b/a 7-Eleven 34428,

Respondent.

Docket No. C-15-3153
FDA No. FDA-2015-H-2239

Decision No. CR4508

Date: January 15, 2016

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a civil money penalty
against Respondent, Joe Eideh d/b/a 7-Eleven 34428 for five violations of the
Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140, within a thirty-six month period.
Specifically, CTP alleges that 7-Eleven 34428 violated the Act by impermissibly
selling cigarettes to minors, and failing to verify, by means of photo identification
containing a date of birth, that the purchasers were 18 years of age or older.

Procedural History

CTP began this matter by serving an administrative complaint seeking a $5,000
civil money penalty on Respondent 7-Eleven 34428 and by filing a copy of the
complaint with the Food and Drug Administration’s (FDA) Division of Dockets
Management. Respondent timely answered CTP’s complaint. In its answer,
Respondent admitted to all of the allegations, but asserted that the civil money
penalty was too high. On August 24, 2015, I issued an Acknowledgement and
Prehearing Order (APHO) that set deadlines for the parties to file their pre-hearing
exchanges. CTP filed its pre-hearing exchange on November 10, 2015.
Respondent’s pre-hearing exchange was due on December 1, 2015, and to date
Respondent has not filed a pre-hearing exchange.

Decision on the Record

Pursuant to 21 C.F.R. § 17.37(b), all direct testimony of witnesses shall be
admitted in the form of a written declaration. In its pre-hearing exchange, CTP
submitted one witness declaration. Respondent 7-Eleven 34428 has not submitted
direct testimony. Because Respondent 7-Eleven 34428 has not submitted any
direct testimony, there is no one for CTP to request to cross-examine. And, since
Respondent 7-Eleven 34428 has admitted to all of the allegations, the witness
declaration that CTP has submitted is not relevant to the issue of the amount of the
civil money penalty. Therefore, I will decide this case on the basis of the written
record.

Analysis
I. Violations

In its Complaint, CTP alleges that Respondent 7-Eleven 34428 committed five

violations of the Act and its implementing regulations within a thirty-six month
period. 7-Eleven 34428 filed an answer to the Complaint that admitted to all of
the allegations, but asserted that the civil money penalty was too high. Answer.

The Complaint currently before me involves one prior complaint. The prior
complaint was settled by the parties and the Respondent’s representative admitted
the violations occurred, waived the ability to contest the violations in the future,
and stated that he understood that the violations may be counted in determining
the total number of violations for future enforcement actions. Complaint § 11.
The Complaint currently before me involves two new violations, impermissibly
selling cigarettes to a minor and failing to verify, by means of photo identification
containing a date of birth, that the purchaser was 18 years of age or older. In its
Answer, Respondent admitted to these violations. Therefore, Respondent
7-Eleven 34428 has admitted to all violations in the current Complaint.

CTP makes the following uncontested allegations:

e Respondent owns 7-Eleven 34428, an establishment that sells tobacco
products and is located at 73 Storey Avenue, Newburyport, Massachusetts
01950. Complaint § 3.
e CTP previously initiated a civil money penalty action, CRD Docket
Number C-15-482, FDA Docket Number FDA-2014-H-2008, against
Respondent for three violations of 21 C.F.R. pt. 1140 within a 24-month
period. Specifically, those violations included two violations on August 14,
2013, when Respondent sold cigarettes to a minor and failed to verify, by
means of photographic identification, that the purchaser was 18 years of
age or older;! and two violations on June 11, 2014, when Respondent sold
cigarettes to a minor, and failed to verify, by means of photographic
identification, that the purchaser was 18 years of age or older. Complaint
4 10; November 21, 2014 Complaint § 10.

e The previous civil money penalty action concluded when Joe Eideh,
Respondent’s authorized representative, settled the action with CTP on
Respondent’s behalf. Mr. Eideh signed an Acknowledgment Form, dated
January 27, 2015, in which he “admitt[ed] that the violations . . . occurred,
waiv[ed] his ability to contest the violations in the future, and stat[ed] that
he understood that the violations may be counted in determining the total
number of violations for purposes of future enforcement actions.” The
Administrative Law Judge closed the case on February 5, 2015. Complaint
ql.

e During a subsequent inspection of Respondent’s establishment conducted
on March 11, 2015, at approximately 3:36 PM, FDA-commissioned
inspectors documented that “a person younger than 18 years of age was
able to purchase a package of Newport Box cigarettes ... .” The inspectors
also documented that “the minor’s identification was not verified before the
sale... [.]” Complaint §

Respondent 7-Eleven 34428 does not dispute these allegations. Therefore, I find
that these facts establish Respondent Joe Eideh d/b/a 7-Eleven 34428’s liability
under the Act. The Act prohibits misbranding of a tobacco product. 21 U.S.C.

§ 331(k). A tobacco product is misbranded if sold or distributed in violation of
regulations issued under section 906(d) of the Act. 21 U.S.C. § 387f(d); see

21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). The Secretary of the U.S.
Department of Health and Human Services issued the regulations at 21 C.F.R. pt.
1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1; see 21 U.S.C.

§ 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). Under 21 C.F.R.

§ 1140.14(a), no retailer may sell tobacco products to any person younger than 18
years of age. Under 21 C.F.R. § 1140.14(b)(1), retailers must verify, by means of
photographic identification containing a purchaser’s date of birth, that no tobacco
purchasers are younger than 18 years of age.

' CTP counted the two violations on August 14, 2013, as one violation.
Taking the above alleged facts as true, Respondent violated the prohibition against
selling cigarettes to persons younger than 18 years of age, 21 C.F.R. § 1140.14(a),
on August 14, 2013, June 11, 2014, and March 11, 2015. On those same dates,
Respondent also violated the requirement that retailers verify, by means of photo
identification containing a purchaser’s date of birth, that no cigarette purchasers
are younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1). Therefore,
Respondent’s actions constitute violations of law that merit a civil money penalty.

A. II. Civil Money Penalty

Pursuant to 21 U.S.C. § 333(f)(9), Respondent 7-Eleven 34428 is liable for a civil
money penalty not to exceed the amounts listed in FDA’s civil money penalty
regulations at 21 C.F.R. § 17.2. In its Complaint, CTP sought to impose the
maximum penalty amount, $5,000, against Respondent for five violations of the
Act and its implementing regulations within a thirty-six month period. Complaint
4 13. In its Informal Brief, CTP continues to assert that a $5,000 civil money
penalty is appropriate. Informal Brief of Complainant at 8.

Respondent 7-Eleven 34428 states that: “I understand that my establishment was
involve[d] with this violation but the employee did do what [they were] supposed
to even though they had received the proper training.” Answer.

When determining the amount of a civil money penalty, I am required to take into
account “the nature, circumstances, extent and gravity of the violations and, with
respect to the violator, ability to pay, effect on ability to continue to do business,
any history of prior such violations, the degree of culpability, and such other
matters as justice may require.” 21 U.S.C. § 303(f)(5)(B).

i. Nature, Circumstances, Extent and Gravity of the Violations

Time and again, Respondent 7-Eleven 34428 has failed to comply with the Act
and its implementing regulations. Over the course of the six violations discussed
in this Complaint, Respondent has admitted to all six violations’; specifically
Respondent has admitted to: three violations of selling tobacco products to
minors, and three violations of failing to verify, by means of photo identification
containing a date of birth, that the purchasers were 18 years of age or older. The
repeated inability of Respondent to comply with federal tobacco regulations is
serious in nature and the civil money penalty amount should be set accordingly.

> Tnote that CTP’s requested civil money penalty is based upon 5 violations.
ii. Respondent’s Ability to Pay

CTP is seeking a $5,000 civil money penalty against Respondent 7-Eleven 34428.
CTP asserts that Respondent did not provide evidence that it was unable to pay. In
its Answer, Respondent does not assert that he is unable to pay a $5,000 civil
money penalty. CTP has not provided evidence of Respondent’s ability to pay and
Respondent has not provided evidence to show that it would be unable to pay a
$5,000 penalty.

iii. Effect on Ability to do Business

There is nothing in the evidentiary record that shows the effect a civil money
penalty will have on Respondent 7-Eleven 34428’s ability to do business. CTP
asserts that “Respondent may continue to sell tobacco products and other products
at the establishment.” Informal Brief of Complainant at 9. CTP also stated that
“Respondent did not provide any evidence that this penalty will prevent
Respondent from conducting business.” Jd. Respondent has not asserted that this
penalty will have an effect on its ability to do business. Neither party has
provided evidence of whether a $5,000 civil money penalty against Respondent
would have a substantial effect on Respondent’s ability to do business.

iv. History of Prior Violations

The current action is the second civil money penalty action brought against
Respondent 7-Eleven 34428 since December 1, 2014 for violations of the Act and
its implementing regulations. In the first civil money penalty action, CRD Docket
Number C-15-482, FDA Docket Number FDA-2014-H-2008, Respondent violated
the prohibition against selling tobacco products to persons younger than 18 years
of age, 21 C.F.R. § 1140.14(a), and violated the requirement that retailers verify,
by means of photo identification containing a purchaser’s date of birth, that no
tobacco purchasers are younger than 18 years of age, 21 C.F.R. § 1140.14(b)(1).
Respondent settled the prior complaint with CTP for an undisclosed penalty
amount.

I agree with CTP that “[t]hese repeat violations show an unwillingness or inability
to sell tobacco products in accordance with federal tobacco regulations.” Jd.
(emphasis in original). While Respondent has already paid a civil money penalty
for its previous violations, its continued inability to comply with the federal
tobacco regulations calls for a more severe penalty.
v. Degree of Culpability

Respondent 7-Eleven 34428 admitted to all violations. Based on Respondent
7-Eleven 34428’s own admissions, I hold it fully culpable for all six violations of
the Act and its implementing regulations.’

vi. Additional Mitigating Factors

Respondent 7-Eleven 34428 stated that the employee that committed the violation
no longer works for the Respondent and that the employee received the proper
training. Answer.

vii. Penalty

I note that the record lacks evidence of Respondent’s ability to pay a $5,000 civil
money penalty, and that the record does not contain evidence that shows the effect
that a $5,000 civil money penalty would have on Respondent’s ability to do
business. However, Respondent does not argue that he does not have the ability to
pay a $5,000 civil money penalty, nor does Respondent argue that such a penalty
would affect his ability to do business. I acknowledge that the employee that
committed the most recent violations no longer works for Respondent. However,
based on the foregoing reasoning, I find a penalty amount of $5,000 to be
appropriate under 21 U.S.C. §§ 303(f)(5)(B) and 333(f)(9).

Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $5,000 against
Respondent, Joe Eideh d/b/a 7-Eleven 34428, for five violations of the Federal
Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140, within a thirty-six month period.

/s/
Steven T. Kessel
Administrative Law Judge

> Tnote that CTP’s requested civil money penalty is based upon 5 violations.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2015-H-2674)

Complainant
v.

Floridan Foods, “LLC”
d/b/a The Green Store Food Mart 107,

Respondent.
Docket No. C-15-3487
Decision No. CR4507
Date: January 15, 2016
INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) initiated a $250 civil money penalty (CMP)
action against Respondent for unlawfully selling cigarettes to minors, on two separate
occasions, in violation of the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C.

§ 301 et seq., and its implementing regulations, 21 C.F.R. pt. 1140. During the hearing
process, Respondent has failed to comply with a judicial direction regarding CTP’s
discovery request. I therefore strike Respondent’s answer and issue this decision of
default judgment.

I. Procedural History

Respondent timely answered CTP’s complaint opposing the CMP and requested a
hearing. On August 28, 2015, I issued an Acknowledgment and Pre-Hearing Order that
explained to the parties what they must do to present evidence and arguments in this case.
l explained that the parties may request copies of documents relevant to this case and that
the requesting party must serve the request for documents no later than September 28,
2015. I further explained that a party receiving such a request must provide the requested
documents no later than 30 days after the request has been made. As part of the
discovery process, CTP served a Request for Production of Documents on Respondent on
September 28, 2015.

On November 6, 2015, CTP filed a motion to compel discovery indicating that CTP had
not received a response to its request for production of documents. See 21 C.F.R.

§ 17.23(a). On November 6, 2015, CTP also filed a motion to extend the deadlines.
Pursuant to my direction, a November 9, 2015 letter allowed Respondent until November
25, 2015 to file a response to CTP’s motion to compel discovery. On November 9, 2015,
Lalso issued an Order that extended the parties’ pre-hearing exchange deadlines.

On December 2, 2015, I issued an Order that granted CTP’s motion to compel discovery.
I noted that Respondent had not filed a response to CTP’s motion to compel discovery.
In that Order, I stated that Respondent shall comply with CTP’s request for production of
documents by December 21, 2015. I further stated that:

Failure to do so may result in sanctions, including the issuance of an Initial
Decision and Default Judgment finding Respondent liable for the violations
listed in the Complaint and imposing a civil money penalty. Within five (5)
days of Respondent’s deadline to comply with discovery, CTP must file a
status report notifying me whether Respondent has complied with
discovery.

The December 2, 2015 Order also further extended the parties’ pre-hearing exchange
deadlines.

On December 24, 2015, CTP filed an updated status report advising me that Respondent
had not complied with my December 2, 2015 Order. On December 24, 2015, CTP also
filed a motion to impose sanctions that asked me to strike the Respondent’s answer and
issue a default judgment in this case. The time for Respondent to respond to CTP’s
motion to impose sanctions has passed, and Respondent did not file a response.

Il. Striking Respondent’s Answer

Respondent failed to file a response to CTP’s motion to compel discovery, failed to
comply with the December 2, 2015 Order compelling discovery responses to be provided
by December 21, 2015, and failed to file a response to CTP’s motion to impose sanctions.
Respondent did not comply with any of CTP’s discovery requests. Respondent has not
made any contact with this Court since August 21, 2015, the date Respondent timely filed
its answer. Respondent’s failure to effectively prosecute and defend actions taken over
the course of the proceedings have interfered with the orderly and speedy processing of
this case, further warranting imposition of sanctions. See 21 C.F.R.

§ 17.35(a) (1)(2) and (3).
Due to Respondent’s noncompliance with the December 2, 2015 Order compelling
discovery, I am striking Respondent’s Answer, issuing this default decision, and
assuming the facts alleged in CTP’s complaint to be true. See 21 C.F.R. § 17.35(c) (3),
17.11(a). The harshness of the sanctions I impose upon either party must relate to the
nature and severity of the misconduct or failure to comply, and I find the failure to
comply here sufficiently egregious to warrant striking the answer and issuing a decision
without further proceedings. See 21 C.F.R. § 17.35(b). Respondent failed to comply
with the December 2, 2015 Order, nor did it provide any adequate justification for not
doing so.

Ill. Default Decision

Striking Respondent’s answer leaves the Complaint unanswered. Therefore, I am
required to issue an initial decision by default if the complaint is sufficient to justify a
penalty. 21 C.F.R. § 17.11(a). Accordingly, I must determine whether the allegations in
the Complaint establish violations of the Act.

For purposes of this decision, I assume the facts alleged in the Complaint are true and
conclude that default judgment is merited based on the allegations of the Complaint and
the sanctions imposed on Respondent for failure to comply with my orders. 21 C.F.R.
§ 17.11. Specifically:

e At approximately 3:14 p.m. on December 15, 2014, at Respondent’s business
establishment, 11339 Tamiami Trail East, Naples, Florida 34113, an
FDA-commissioned inspector observed Respondent’s staff selling a package of
Marlboro Gold Pack cigarettes to a person younger than 18 years of age;

e Ina warning letter dated January 22, 2015, CTP informed Respondent of the
inspector’s December 15, 2014 observation, and that such action violates federal
law, 21 C.F.R. § 1140.14(a). The letter further warned that Respondent’s failure
to correct its violation could result in a civil money penalty or other regulatory
action;

e At approximately 9:07 p.m. on April 2, 2015, at Respondent’s business
establishment, 11339 Tamiami Trail East, Naples, Florida 34113, an
FDA-commissioned inspector documented Respondent’s staff selling a package of
Marlboro cigarettes to a person younger than 18 years of age.

These facts establish Respondent The Green Store Food Mart 107’s liability under the
Act. The Act prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A
tobacco product is misbranded if sold or distributed in violation of regulations issued
under section 906(d) of the Act. 21 U.S.C. § 387f(d); see 21 U.S.C. § 387c(a)(7)(B);
21 C.F.R. § 1140.1(b). The Secretary of the U.S. Department of Health and Human
Services issued the regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act.
21 US.C. § 387a-1; see 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19,
2010). Under 21 C.F.R. § 1140.14(a), no retailer may sell cigarettes to any person
younger than 18 years of age.

A $250 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $250 against Respondent
Floridan Foods, “LLC” d/b/a The Green Store Food Mart 107. Pursuant to 21 C.F.R.

§ 17.11(b), this order becomes final and binding upon both parties after 30 days of the
date of its issuance.

/s/
Margaret G. Brakebusch
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

J. Jerry Rodos, D.O.
(NPI: 1568537017)
(PTANs: 201639, 35960001, 713160, 910390, 910391, IL1801001, K49969)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-100
Decision No. CR4506
Date: January 14, 2016
DECISION DISMISSING CASE

The request for hearing of Petitioner, J. Jerry Rodos, D.O., is dismissed pursuant to 42
C.F.R. § 498.70(a) and (b).

I. Procedural History

Wisconsin Physicians Service Insurance Corporation (WPS), a Medicare contractor,
mailed Petitioner a letter dated June 14, 2011, notifying Petitioner of the initial
determination to revoke his Medicare enrollment and billing privileges effective
September 29, 2008. WPS cited as grounds for the revocation that Petitioner was
terminated from participation in the Illinois Medicaid program due to healthcare fraud.
WPS imposed a three-year re-enrollment bar that ran from the effective date of
revocation. The notice informed Petitioner that he had a right to reconsideration by a
contractor hearing officer and that a written request for reconsideration had to be filed
within 60 calendar days of the postmark of the WPS initial determination letter. Centers
for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 1 at 6-7.

There is no dispute that Petitioner did not request reconsideration of the June 14, 2011
WPS initial determination within 60 days. Petitioner asserts that he did not receive the
initial determination until the end of 2014, and then it was received by Petitioner from an
unspecified third party. Request for Hearing (RFH) at 2-3, 5 (Petitioner’s Affidavit dated
October 30, 2015). Counsel for Petitioner admits that it was not until April 17, 2015, that
the request for reconsideration of the June 14, 2011 initial determination was filed. RFH
at 2; CMS Ex. | at 1-2. Petitioner admits that he received the June 14, 2011 initial
determination in late 2014, which would put the receipt date on or before December 31,
2014. Counsel admits that the request for reconsideration was not filed until April 17,
2015. Therefore, the request for hearing was filed at least 108 days after Petitioner
admitted he received the June 14, 2011 initial determination.

It is also undisputed that on June 3, 2015, National Government Services (NGS), the
current Medicare contractor, issued a reconsidered determination related to Petitioner’s
April 17, 2015 request for reconsideration. The June 3, 2015 reconsidered determination,
which was subsequently vacated, is mentioned by both parties but neither has offered the
document for my consideration as evidence.

NGS notified Petitioner by letter dated September 1, 2015, that it reopened its
reconsidered determination dated June 3, 2015, and that it was issuing a revised
reconsidered determination. NGS advised Petitioner that on reopening, it determined that
Petitioner’s April 17, 2015 request for reconsideration was untimely. Therefore, NGS
determined that the June 14, 2011 WPS initial determination was final and binding. NGS
vacated the June 3, 2015 reconsidered determination and denied reconsideration of the
initial determination because Petitioner’s request for reconsideration was untimely.'

On November 8, 2015, Petitioner requested review by an administrative law judge (ALJ).
The case was assigned to me for hearing and decision. I issued an Acknowledgment and
Prehearing Order on November 24, 2015.

On December 11, 2015, CMS filed a motion to dismiss with CMS Exs. 1 and 2.
Petitioner responded to the CMS motion on December 29, 2015. Petitioner did not object
to my consideration of CMS Exs. | and 2 and they are admitted as evidence.

II. Applicable Law

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

' A copy of this letter was also not offered as evidence by either party but a copy was
filed with the request for hearing and is part of the record for decision. Departmental
Appeals Board Electronic Filing system Item #1a.
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)).
Administration of the Part B program is through contractors such as WPS and NGS. Act
§ 1842(a) (42 U.S.C. § 1395u(a)).

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 sections 1866(h)(1) and (j)(8) of the
Act, a provider or supplier whose enrollment application or renewal application is denied
is entitled to an administrative hearing and judicial review. The Secretary has
promulgated regulations that provide for administrative and judicial review. Pursuant to
42 C.F.R. § 424.545(a), a provider or supplier denied enrollment in Medicare or whose
Medicare enrollment and billing privileges are revoked has the right to administrative and
judicial review in accordance with 42 C.F.R. pt. 498. Appeal and review rights are
specified by 42 C.F.R. § 498.5.

A prospective or existing provider or supplier dissatisfied with an initial determination or
revised initial determination to deny or revoke Medicare enrollment and billing privileges
—an “affected party” — is granted the right to request reconsideration. 42 C.F.R.

§§ 498.5(/), 498.22(a). The request for reconsideration must be filed with CMS, either
directly by the affected party or a designated representative, within 60 days of receipt of
the notice of the initial determination. 42 C.F.R. § 498.22(b). The regulation requires
that CMS extend the time for filing a request for reconsideration if the affected party
shows good cause for missing the 60-day deadline. 42 C.F.R. § 498.22(d). The date of
receipt of the initial determination is presumed to be five days after the date on the notice
from CMS or its contractor, unless there is a showing that it was received earlier or later.
42 C.F.R. § 498.22(b)(3). Ifa request for reconsideration is properly filed in accordance
with 42 C.F.R. § 498.22, CMS makes a reconsidered determination, affirming or

> Petitioner is a “supplier” under the Act and the regulations. 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.
modifying the initial determination. 42 C.F.R. § 498.24(c). CMS, a CMS contractor, or
an affected party who is dissatisfied with a reconsidered determination or a revised
reconsidered determination has a right to a hearing before an ALJ. 42 C.F.R.

§ 498.5((2).

III. Findings of Fact and Conclusions of Law

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

A. Petitioner has no right to a hearing before an ALJ because the June 3,
2015 reconsidered determination was reopened and vacated on September 1,
2015, and reconsideration of the initial determination was denied as untimely
requested.

B. Dismissal pursuant to 42 C.F.R. § 498.70(a) and (b) is appropriate.

CMS argues that Petitioner’s request for hearing should be dismissed pursuant to 42
C.F.R. § 498.70(a). The regulation provides that I may dismiss a request for hearing for
cause when a prior determination on the same issue has become final because the affected
party did not timely request reconsideration. 42 C.F.R. § 498.70(a). In this case, the
June 14, 2011 WPS initial determination became final and binding when Petitioner failed
to timely request reconsideration. The regulations provide that an initial determination is
binding, unless it is reconsidered or reopened and revised pursuant to 42 C.F.R. § 498.32.
42 C.F.R. § 498.20(b)(1), (3). CMS argues that the June 3, 2015 NGS reconsidered
determination had no effect because it was reopened and vacated by NGS on September
1, 2015.

CMS is authorized to reopen most initial or reconsidered determinations within 12
months of the date an affected party is notified of the initial or reconsidered
determination. 42 C.F.R. § 498.30. The NGS reconsidered determination was dated June
3, 2015, and pursuant to 42 C.F.R. §§ 498.22(b)(3) and 498.40(a)(2), that notice was
presumed to be delivered to Petitioner on or about June 8, 2015, five days after the date
on the notice. The September 1, 2015 NGS action to reopen and revise the June 3, 2015
reconsidered determination was well within the 12 months authorized for reopening
reconsidered determinations in a case such as Petitioner’s. Upon reopening, NGS
determined that Petitioner had not requested reconsideration within 60 days and had
failed to state good cause for missing the deadline to require CMS to extend the deadline.
42 C.F.R. § 498.22(d)(2). Therefore, NGS vacated the June 3, 2015 reconsidered
determination. The term “vacate” in a legal context such as this, means to “nullify or
cancel; make void; invalidate.” Black’s Law Dictionary 1584 (8th ed. 2004). NGS then
denied reconsideration because the request was untimely. The facts support a conclusion
that Petitioner’s request for reconsideration was not filed within 60 days, whether the 60-
day period began with presumed receipt of the notice of initial determination five days
after June 14, 2011 or December 31, 2014, which was about the time Petitioner admits
receiving a copy of the initial determination from a third party. Petitioner concedes that
he did not state good cause for failing to file a request for reconsideration before April
17, 2015. Petitioner states in his affidavit filed with his request for hearing that he
intentionally delayed requesting reconsideration after he received a copy of the June 14,
2011 initial determination on or before December 31, 2014. The vacation of the June 3,
2015 reconsidered determination and the denial of the request for reconsideration on
September 1, 2015 is, therefore, consistent with and supported by the facts and law. 42
CFR. § 498.32.

Petitioner argues in response to the motion to dismiss that there was good cause for an
extension of the 60-day period for Petitioner to request reconsideration. Petitioner’s
arguments are not grounds for relief, however, as Petitioner has no right to review based
on the vacated reconsidered determination or the NGS denial of reconsideration. The
regulations clearly provide Petitioner a right to ALJ review only when there is a
reconsidered determination or a revised reconsidered determination. 42 C.F.R.

§ 498.5(/)(2). In this case, the June 3, 2015 reconsidered determination was vacated and
the request for reconsideration was denied. Thus, there is no reconsidered determination
within the meaning of 42 C.F.R. §§ 498.5(/)(2) or 498.24, and no right to ALJ review.
Petitioner cites no statutory or regulatory provision that grants a right to ALJ review of a
determination of CMS or its contractor to deny reconsideration. Because Petitioner has
no right to review, I have no authority to review whether or not there was good cause to
extend the time to file a request for reconsideration. Furthermore, whether or not there
was good cause to extend the time for requesting reconsideration is solely a matter within
the discretion of CMS and its contractor under 42 C.F.R. § 498.22(d). Petitioner admits
in his brief in opposition to the motion for summary judgment that he failed to make his
arguments for an extension to CMS or its contractor.’ I conclude that dismissal is also
appropriate under 42 C.F.R. § 498.70(b) because Petitioner has no right to a hearing.

> Tf 1 concluded that I had authority to review whether there was good cause to extend the
period for filing a request for reconsideration, I would conclude in this case that good
cause has not been stated. Petitioner’s affidavit and the brief of his counsel suggest some
tactical decision not to file a timely request for reconsideration. Petitioner’s explanation
for not filing timely is nonsensical. Even though I fully credit Petitioner’s assertion that
he did not receive the June 14, 2011 initial determination until on or before December 31,
2014, Petitioner does not show good cause for not requesting reconsideration of that
clearly adverse determination within 60 days of his admitted receipt of that document.
Petitioner’s concern about the allegation of fraud in the 2011 initial determination and
delay in retaining counsel do not constitute good cause for failure to timely request
reconsideration.
If Petitioner’s arguments are viewed as requesting equitable relief, I have no authority to
grant such relief. ALJs and the Departmental Appeals Board (Board) are bound by and
may not ignore properly promulgated and applicable regulatory requirements. US
Ultrasound, DAB No. 2302 at 8 (2010) (“[nJeither 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.”). I am bound to follow the Act and regulations and
have no authority to declare statutes or regulations invalid. 1866/CPayday.com, L.L.C.,
DAB No. 2289 at 14 (2009) (“[aJn ALJ is bound by applicable laws and regulations and
may not invalidate either a law or regulation on any ground.”).

IV. Conclusion

For the foregoing reasons, Petitioner’s request for hearing is dismissed. I may vacate a
dismissal if either party files such a request within 60 days of receipt of this dismissal and
states good cause for such action. 42 C.F.R. § 498.72.

/s/
Keith W. Sickendick
Administrative Law Judge