Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Wendell Foo, M.D.
(NPI: 1164457511;
PTAN: H0000BDNKQ),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-50
Decision No. CR4580

Date: April 8, 2016

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its Medicare
administrative contractor, revoked the Medicare enrollment and billing privileges of
Wendell Foo, M.D. (herein Petitioner or Dr. Foo) because Petitioner was not operational
at a practice location on record with CMS. Specifically, the location on record with CMS
was a mailbox unit at a United Parcel Service (UPS) Store. For the reasons stated herein,
1 affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

I. Background

Petitioner is an anesthesiologist. Petitioner Exhibit (P. Ex.) at 20. Petitioner currently

serves as the Chief of Anesthesiology at an eye surgery center and as an assistant clinical
professor at a medical school. P. Ex. 20 at 2. Petitioner does not maintain his own office
that is open to the public, but rather, provides anesthesiology services at several locations,
including the eye surgery center referenced above.' CMS Exhibit (Ex.) 4 at 2. Petitioner

' Petitioner, who retired at the rank of Colonel from the United States Army Reserve, is
also affiliated with Tripler Army Medical Center. P. Ex. 20 at 1-2.
was enrolled as a Medicare supplier of anesthesiology services (CMS Ex. 10), and
submitted a revalidation application in May 2014. CMS Ex. 9 at 1-2. Petitioner reported
in his enrollment applications that his physical practice location was 4348 Waialae
Avenue, 5-311, in Honolulu, Hawaii. CMS Exs. 11 at 3, 10 at 1,9 at 1.

A Medicare site visit contractor conducted a visit to Petitioner’s reported address, 4348
Waialae Avenue, on March 5, 2015, at which time the contractor documented that the
location was a UPS Store. CMS Ex. 7 at 1-2. A subsequent contractor visit on May 8,
2015, confirmed that the location was a “one story building that has a UPS store,
Restaurant, and juice bar” and that “[t]here is no Dr [sic] office at this location.” CMS
Ex. 6 at 1.

On June 24, 2015, Noridian Healthcare Solutions (Noridian), a Medicare administrative
contractor, sent Petitioner an initial determination informing him that his Medicare
enrollment and billing privileges were being revoked retroactive to March 5, 2015, and
that he was barred from reenrollment for a period of two years. CMS Ex. 5 at 1-2. The
letter stated the following, in pertinent part:

42 CFR 424.535(a)(5) On-site review/Other Reliable
Evidence that Requirements Not Met

An Onsite visit was conducted on March 5, 2015 and on May
11, [2015] at the address listed above and this is not a practice
location.

CMS Ex. 5 at 1 (emphasis in original).

In a letter dated July 3, 2015, Petitioner requested reconsideration of the June 24, 2015
revocation determination. CMS Ex. 4. Petitioner explained that he performs
anesthesiology services wherever the surgeon requests his services and thus “those
facilities are [his] practice locations.” CMS Ex. 4 at 1 (emphasis omitted). Petitioner
stated that he had three current practice locations at the Hawaii Eye Center, Surgicare of
Hawaii, and the Hawaii Endoscopy Center, and that two of these facilities had been listed
in Section 4 of his most recent enrollment application.” CMS Ex. 4 at 2. Petitioner

> Section 4C of the enrollment application pertains to the physical practice location and
states that “[i]f you or your organization sees patients in more than one practice location,
copy and complete this Section 4C for each location.” CMS Ex. 14 at 17. Petitioner had
listed his UPS Store location under Section 4C. CMS Exs. 9 at 1, 11 at 3-4. A different
subsection of the application, Section 4G, requires applicants to list the location(s) where
patients’ medical records are stored. CMS Ex. 14 at 20. Petitioner, in Section 4G, listed
the addresses of several facilities housing his patients’ records, and two of the listed
indicated that he performed services at each facility at least two days per week, and he
provided the address and telephone number for each location. CMS Ex. 4 at 2. Petitioner
also acknowledged that he had been asked to report his practice locations by submitting
an updated Form CMS-855]I application, but he stated “it is not required for the appeal”
and that he had provided his practice location information in his July 3, 2015 letter. CMS
Ex. 4 at 2. D.W.°, on behalf of Petitioner, submitted follow-up email correspondence on
July 15, 2015 at which time he contended that the on-site visits to the UPS Store were
performed “without the on-site representative cross-referencing against Section 4
(Practice Locations — Medical Records Storage location).” CMS Ex. at 3 at | (emphasis
in original). Shortly thereafter, on or about July 18, 2015, Petitioner submitted an
updated application through the Provider Enrollment, Chain, and Ownership System
(PECOS) listing the Hawaii Eye Center, Surgicare of Hawaii, and the Hawaii Endoscopy
Center as practice locations. P. Ex. 17 at 1-3.

On August 27, 2015, Noridian issued an unfavorable reconsidered determination. CMS
Ex. 1. The reconsidered determination stated the following:

Revocation, Denial, or Effective date reason: 42 [C.F.R. §] 424.535(a)(5)
On-site Review/Other Reliable Evidence that Requirements Not
Met An On-Site visit was conducted on March 5, 2015 and on
May 11, 2015 at the address listed above and this is not a
practice location.

CMS Ex. | at 1 (emphasis in original). The reconsidered decision explained that
Petitioner “had not provided evidence to show full compliance with the standards for
which [he was] revoked.” CMS Ex. | at 1 (emphasis omitted).

Petitioner submitted a request for hearing on October 23, 2015. On October 28, 2015, I
issued an Acknowledgement and Pre-Hearing Order (Order), at which time I directed the
parties to each file a pre-hearing exchange consisting of a brief and any supporting
documents, and also set forth the deadlines for those filings. Order § 4. I also explained
that the parties should submit written direct testimony for any witnesses in lieu of in-
person direct testimony. Order § 8. In the Order, I explained that a hearing would only
be necessary for the purpose of cross-examination of witnesses. Order §§ 9, 10.

In response to my October 28, 2015 Order, CMS filed a brief and 15 exhibits (CMS Exs.
1-15). Petitioner, through counsel, filed a brief and five exhibits (P. Ex. 16-20). As

addresses correspond to the Hawaii Eye Center and the Hawaii Endoscopy Center. CMS
Exs. 11 at 3-4, 9 at 1; see CMS Ex. 4 at 2.

> To protect the privacy of the witnesses, I refer to them by their initials.
neither party has objected to any exhibits, I admit the parties’ briefs and exhibits into the
record.

CMS submitted the written direct testimony of C.F. (CMS Ex. 13), and Petitioner
submitted the written direct testimony of D.W. (P. Ex. 19). Neither party has requested
the opportunity to cross-examine either witness, and I consider the record to be closed
and the matter ready for a decision on the merits.*

II. Issue

Whether CMS has a legal basis to revoke Petitioner’s Medicare enrollment and billing
privileges because Petitioner was not operational at the practice location on file with
CMS.

Ill. Jurisdiction

I have jurisdiction to decide this case. 42 C.F.R. §§ 498.3(b)(17), 498.5()(2); see also 42
U.S.C. § 1395cec(j)(8).

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

As a physician, Petitioner is a “supplier” for purposes of the Medicare program. See

42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(1). In
order to participate in the Medicare program as a supplier, individuals must meet certain
criteria to enroll and receive billing privileges. 42 C.F.R. §§ 424.505, 424.510. CMS
may revoke the enrollment and billing privileges of a supplier for any reason stated in
42 C.F.R. § 424.535. When CMS revokes a supplier’s Medicare billing privileges, CMS
establishes a reenrollment bar for a period ranging from one to three years. 42 C.F.R.

§ 424.535(c). Generally, a revocation becomes effective 30 days after CMS mails the
initial determination revoking Medicare billing privileges, but if CMS finds a supplier to
be nonoperational, as it did here, the revocation is effective from the date that CMS
determines that the supplier was not operational. 42 C.F.R. § 424.535(g).

On-site review is addressed in 42 C.F.R. § 424.535(a)(5). Pursuant to subsection
424.535(a)(5)(ii), a supplier is non-operational if CMS determines upon on-site review
that it is “no longer operational to furnish Medicare covered items or services” or that it is
“not meeting Medicare enrollment requirements.”

+ As an in-person hearing to cross-examine witnesses is not necessary, it is unnecessary
to further address CMS’s motion for summary disposition.

> My numbered findings of fact and conclusions of law appear in bold and italics.
1. A CMS inspector was unable to conduct a site visit of Petitioner’s practice
location on file (4348 Waialae Ave, 5-311, in Honolulu, Hawaii, 96816-5767)
on March 5, 2015 and May 8, 2015, because there is a UPS Store, rather than a
medical office, at that physical location.

On or about February 4, 2010, Petitioner submitted an electronic Form CMS-8551
through PECOS in which he provided a “physical location” of 4348 Waialae Avenue 5-
311, Honolulu, HI, 96816-5765 and indicated that his practice was an “other health
facility” and a “[p]rivate [p]ractice.” CMS Ex. 11 at 3. Petitioner likewise reported his
correspondence address was the same address. CMS Ex. 11 at 2.

In a letter dated March 4, 2010, the Medicare administrative contractor, Palmetto GBA,
informed Petitioner that it received his enrollment application and “reviewed and
validated the information contained within and determined the changes have occurred.”
CMS Ex. 10 at 1. Palmetto GBA informed Petitioner that “[y]our physical address has
been changed to reflect 4348 Waialae Ave[.] 5-311 Honolulu, HI. 96816-5767.” CMS
Ex. 10 at 1.

On May 14, 2014, Petitioner submitted another application for purposes of revalidating
his enrollment. CMS Ex. 9; P. Ex. 19 at 8-10; see 42 C.F.R. § 424.515 (discussing
requirements for revalidation of Medicare enrollment information). The following
month, on June 24, 2014, Noridian contacted the telephone number listed on the
application, (808) 373-4007, and “verified that the phone number listed in Section 4 of
the application reaches the address” and that “it is the primary phone number used for
patients to set up appointments or ask questions.” CMS Ex. 8.

A “site verification survey” was attempted on March 5, 2015, at which time a Noridian
contractor visited the address reported as the practice location. CMS Ex. 7. The
contractor determined that the location was a UPS Store. CMS Ex. 7 at 1. At the time of
the attempted site verification, the contractor “made calls to the Dr’s office” and there
was no answer. CMS Ex. 7 at 1. The same contractor re-visited the location on May 8,
2015, and again determined that Petitioner did not have an office at that location. CMS
Ex. 6.

Following Noridian’s June 24, 2015 initial determination, Petitioner informed CMS in his
reconsideration request that the UPS Store was not his practice location but that he
provided anesthesiology services at several locations in Hawaii.° CMS Ex. 4 at 2.

® In written direct testimony dated November 17, 2015, D.W., Petitioner’s son, who has
“long helped Dr. Foo with the administrative aspects of his medical practice,” explained
that “[t]he nature of Dr. Foo’s specialty anesthesiology practice means that Dr. Foo’s

practice locations are always the facilities in which he is needed .. . by the surgeon.” P.
Petitioner explained that he would list the specific “practice location” where he provided
anesthesiology services whenever he submitted a claim form (Form CMS-1500) to be
reimbursed for services from Medicare. CMS Ex. 4 at 1; see P. Ex. 16 (a redacted Form
CMS- 1500 (Health Insurance Claim Form) that includes Block 32 (“Service Facility
Location Information”)).

Petitioner argues that when he completed his enrollment applications, the UPS Store
location was listed as a correspondence address because he does not maintain a private
office. P. Br. at 13. He further argues that he did not list the UPS Store as a practice
location, but rather, he listed the individual locations where he practices anesthesiology.
P. Br. at 15.

CMS has submitted sworn and written direct testimony of C.F., a project analyst for
Noridian. CMS Ex. 13. C.F. stated that “[t]he document marked as CMS Exhibit 9 is a
copy of the Application Record Data Report which details the information submitted on
May 14, 2014 to revalidate the enrollment of Dr. Foo via the online PECOS system.”
CMS Ex. 13 at 4. C.F. reported that “[a]s normal operation” the Application Record Data
Report shows the statement “no current records exist for practice location(s)/Base(s) of
Operations” for all sections of the application “in which the provider is not
changing/updating information.” CMS Ex. 13 at 4. C.F. added that “[i]f the provider
wanted to make any changes to information currently contained in PECOS during the
revalidation process, they would need to edit that section and add the new information.”
CMS Ex. 13 at 5. C.F. also explained that in Petitioner’s previous enrollment
application, dated May 4, 2010, “[uJnder “Practice Location” he listed a ‘Physical
Location’ of 4348 Waialae Ave. 5-311, Honolulu, Hawaii 96816-5767.” CMS Ex. 13 at
3-4. Thus, based on C.F.’s explanation of the Application Record Data Report in
PECOS, Petitioner did not enter a physical practice location address in PECOS in May
2014 because he did not change the physical location that was already of record; this is
evidenced by the message “no current records exist” that appears on the report. CMS
Exs. 9 at 1, 13 at 4-5; see CMS Ex. 15 (“screen shot” of PECOS showing that a supplier
can use the “Add” button to add a “new Practice Location Information” in Section 4).

Although Petitioner asserts that he listed other addresses as his practice locations on his
revalidation application, he did not report any physical practice locations, other than the
mailbox unit at the UPS Store, on the application. P. Br. at 15; CMS Ex. 11 at 3; see

CMS Ex. 9. While Petitioner reported the addresses for the Hawaii Eye Center and the

Ex. 19 at 2. D.W. reported that he “personally typed in the Hawaii Eye Center, Surgicare
of Hawaii, and Hawaii Endoscopy Center’s addresses as physical location addresses”
when he completed the May 2014 revalidation application, and he “[d]id not recall
having identified 4348 Waialae Avenue as a practice location of Dr. Foo’s.” P. Ex. 19 at
6. D.W. reported that “Dr. Foo’s office does not have a copy of the PECOS re-
enrollment application.” P. Ex. 19 at 6.
Hawaii Endoscopy Center as records storage locations in his May 2010 application and
did not revise that information in his May 2014 application, he did not report that those
addresses were physical practice locations in his applications. CMS Exs. 11 at 3-4, 9 at
1; see also CMS Ex. 13 at 4-5.

For the foregoing reasons, Petitioner identified the UPS Store mailbox location as his
physical practice location on his 2010 revalidation application and did not provide the
address for any of the surgical centers where he practiced as his physical practice location
in its place.

2. CMS has a legal basis to revoke Petitioner’s Medicare enrollment and billing
privileges because he was not operational under 42 C.F.R. § 424.535(a)(5) at
the practice location on file with CMS.

Petitioner admits that the 4348 Waialae Avenue location is a UPS Store and not a
practice location, but argues that he was nonetheless operational to see patients.

A supplier is “operational” when it:

has a qualified physical practice location, is open to the public
for the purpose of providing health care related services, is
prepared to submit valid Medicare claims, and is properly
staffed, equipped, and stocked (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. CMS may revoke a currently enrolled supplier’s Medicare billing
privileges in the following circumstance:

Upon on-site review, CMS determines that-

(i) A Medicare Part B 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
statute or regulations.

42 CFR. § 424.535(a)(5)(ii).

While Petitioner asserts that he saw patients at the Hawaii Eye Center, Surgicare of
Hawaii, and Hawaii Endoscopy Center, the address he provided as his physical practice
location was that of the UPS Store. The regulatory definition of the term “operational”
refers to the “qualified physical practice location” of a supplier. 42 C.F.R. § 424.502.
The enrollment and revalidation applications request the address of the supplier’s
physical practice location. CMS Ex. 11 at 3; see CMS Ex. 14. Additionally, a supplier
must be able to provide documentation of its “practice location” with its enrollment
application. 42 C.F.R. § 424.510(d)(2)(ii). CMS may perform on-site inspections to
verify that the enrollment information submitted by a supplier is accurate and to
determine compliance with Medicare requirements. 42 C.F.R. § 424.517(a). This means
that CMS will inspect the “qualified physical practice location” that has been provided by
the supplier and is currently on file with CMS. See, e.g., CompRehab Wellness Group,
Inc., DAB No. 2406 (2011).

Because the physical practice location on file with CMS was that of the UPS Store, and
because it is not disputed that Petitioner was not operational at the UPS Store location on
the dates of the attempted site visits, CMS had a legal basis to revoke Petitioner’s
enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5)(ii).

3. Petitioner has not demonstrated that CMS or its contractor lacked the authority
to revoke its Medicare enrollment and billing privileges.

Petitioner alleges that “Noridian appears to have taken an overly simplistic, result
oriented approach to evaluating Dr. Foo’s 2014 enrollment application” and “this is not
how the Medicare enrollment process is supposed to work.” P. Br. at 23-24. In fact,
Petitioner states “upon on-site inspection of the 4348 Waialae Avenue location and
‘discovering’ that it was a UPS store, rather than simply concluding that Dr. Foo was not
operational, Noridian should have made an effort to determine whether Dr. Foo was
providing services at other locations.” P. Br. at 21 (emphasis added). Petitioner adds
that “[h]ad Noridian made that effort, they would have determined that Dr. Foo was
indeed fully operational as a Medicare supplier.” P. Br. at 21.

Petitioner essentially contends that the administrative burden of demonstrating that a
physician practice is operational should be placed on the Medicare contractor. P. Br. at
21. I first note that CMS’s determination to revoke a provider or supplier’s enrollment is
discretionary, and my review is limited to deciding whether the CMS contractor had a
“legal basis” for its action. Letantia Bussell, M.D., DAB No. 2196 at 10 (2008); see
Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2008), aff'd, Ahmed v. Sebelius, 710 F.
Supp. 2nd 167 (D. Mass. 2010) (stating if CMS establishes that the regulatory elements
necessary for revocation are satisfied, an administrative law judge may not substitute his
or her “discretion for that of CMS in determining whether revocation is appropriate under
the circumstances”). While I am required to decide whether CMS had a legal basis for its
revocation of Petitioner’s enrollment, I am not required to assess whether CMS could
have made additional efforts to identify Petitioner’s practice location and Petitioner has
not cited any authority showing CMS had such an obligation.’ Likewise, it is
unreasonable to expect that, in the event of a failed site verification inspection, CMS and
its contractors will proactively search for physical locations that are not listed on an
enrollment application.* As Petitioner points out, a purpose of the Medicare site visit
verification process is “to reduce fraud and keep ‘bad’ providers and suppliers out of the
program.” P. Br. at 24. CMS and its contractors, to that end, place the burden on a
physician to correctly provide his or her practice location or locations when completing
an application for enrollment or revalidation purposes. The Form CMS-855]I clearly
instructs a physician to list his or her practice location, and if the physician has more than
one practice location, CMS instructs that “all locations disclosed on claims forms should
be identified in this section as practice locations.” CMS Ex. 14 at 16 (copy of Form
CMS-855I1). Physicians are further directed to “[c]omplete this section for each of your
practice locations where you render services to Medicare beneficiaries,” and that “[i]f
you render services in a hospital and/or other health care facility, furnish the name and
address of the hospital of facility.” CMS Ex. 14 at 16. The enrollment application
unambiguously informs physicians that it is necessary to identify all practice locations.
CMS Ex. 14 at 16. Finally, physicians are even afforded an opportunity, in Section 4H,
to “[e]xplain any unique circumstances concerning [their] practice locations.” CMS Ex.
14 at 20.

Petitioner also contends that “CMS resorts to introducing evidence from 2010 that
purportedly corroborates the agency’s contention that Dr. Foo identified the 4348
Waialae Avenue address as a practice location in his Medicare enrollment profile.” P.
Br. at 18. Petitioner argues that this enrollment application “was not considered during
reconsideration” and is contrary to Advance Group LLC, DAB CR4126 (2015). First, the
Advance Group decision is a non-precedential decision by a single administrative law
judge and has no binding effect on the instant case. Furthermore, in Advance Group the
reconsidered determination was based on two site visits that had been conducted in May
2014, and CMS had acknowledged the reconsidered decision was issued without

7 Petitioner argues that “Noridian did not appropriately follow” procedures listed in
chapter 15 of the Medicare Program Integrity Manual (MPIM). P. Br. at 22. Petitioner
cites to various provisions, but none mandate the contractor to further investigate possible
physical practice locations. Further, subsection 15.5.4.3.C (Practice Location
Information) of the MPIM states that “the contractor shall verify that the address is a
physical address” and specifies that “[p]ost office boxes and drop boxes are not
acceptable.”

® | take notice that there are more than a half million physicians enrolled as suppliers in
the Medicare program and these physicians are also subject to periodic site verification
visits. See 2013 CMS Statistics (https://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-Reports/CMS-Statistics-Reference-
Booklet/Downloads/CMS_Stats_2013_final.pdf, \ast visited March 30, 2016.)
10

knowledge of an earlier April 10, 2014 site visit and related evidence. Advance Group,
DAB CR4126 at 6. Therefore, the administrative law judge, citing to Neb Group of
Arizona LLC, DAB No. 2573 at 7 (2014), explained that he would not consider the April
2014 site visit and related evidence in determining whether CMS had a basis to revoke
Petitioner’s Medicare enrollment and billing privileges, since the April 2014 site visit had
not been considered at the time of the reconsidered decision. Jd.

The Advance Group decision relied upon by Petitioner is not instructive in this case.
Here, in May 2014, Petitioner submitted an application to revalidate his Medicare
enrollment. The regulation pertaining to revalidation, 42 C.F.R. § 424.515, clearly states
that “[t]o maintain Medicare billing privileges, a provider or supplier (other than a
DMEPOS supplier) must resubmit and recertify the accuracy of its enrollment
information every 5 years.” Based on this requirement, the contractor would look to the
information the supplier previously provided to verify the accuracy of the information on
file if the supplier did not provide new information at the time of revalidation. As
explained by C.F., if Petitioner did not update pertinent information that was included in
his previous enrollment application, the responses contained in the previous May 2010
application would remain in effect. CMS Ex. 13 at 4-5.

V. Conclusion

1 affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

/s/
Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.

132 Third, LLC
d/b/a Third Avenue Store,

Respondent.

Docket No. C-15-3886
FDA No. FDA-2015-H-3080

Decision No. CR4579

Date: April 8, 2016

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) initiated a $5,000 civil money penalty (CMP)
action against Respondent for unlawfully selling cigarettes to minors, on three 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 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 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. Administrative Law Judge Diane
Townsend-Anderson issued an Acknowledgement and Prehearing Order (APHO) that set
deadlines for parties’ submissions, including the November 25, 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 November 24, 2015. On
January 5, 2016, 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 January 5, 2016, CTP also filed a motion to extend the deadlines. On January 11,
2016, Judge Townsend-Anderson issued an Order that extended the parties’ pre-hearing
exchange deadlines.

On January 27, 2016, this case was reassigned from Judge Townsend-Anderson to me.
Pursuant to my direction, a February 12, 2016 letter allowed Respondent until February
29, 2016 to file a response to CTP’s motion to compel discovery. On February 12, 2016,
CTP filed a motion to further extend the deadlines. On February 16, 2016, I issued an
Order that further extended the parties’ pre-hearing exchange deadlines.

On March 8, 2016, CTP filed an updated status report requesting that I grant its motion to
compel and extend CTP’s deadlines. The status report stated that Respondent had not
filed an objection to the motion to compel and that Respondent had not produced any
documents in response to CTP’s request for production of documents.

On March 9, 2016, I issued an Order that granted CTP’s motion to compel discovery. In
that Order, I stated that Respondent shall comply with CTP’s request for production of
documents by March 29, 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.

The March 9, 2016 Order also further extended the parties’ pre-hearing exchange
deadlines.

On April 1, 2016, CTP filed a motion to extend deadlines. On April 1, 2016, CTP also
filed a status report and a motion to impose sanctions advising me that Respondent had
not complied with my March 9, 2016 Order and asking 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 March 9, 2016 Order compelling discovery responses to be provided by March
29,2016. Respondent has not made any contact with this Court since October 7, 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 March 9, 2016 Order, I am striking
Respondent’s Answer, issuing this default decision, and assuming the facts alleged in
CTP’s complaint to be true.’ See 21 CFR. § 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

March 9, 2016 Order, and did not provide any adequate justification for not doing so.

III. 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 Third Avenue Store, an establishment that sells tobacco
products and is located at 132 Third Avenue, Halethorpe, Maryland 21227.
Complaint § 3.

e¢ CTP previously initiated a civil money penalty action, CRD Docket Number
C-15-879, FDA Docket Number FDA-2015-H-0078, against Respondent for three
violations of 21 C.F.R. pt. 1140 within a 24-month period.’ Specifically, those
violations included one violation on February 7, 2014, when Respondent sold

' As 1am issuing a default decision, it is unnecessary to rule on CTP’s April 1, 2016
motion to extend deadlines.

> In the prior complaint, Respondent’s name was “132 Third, LLC / Gitaben Patel d/b/a
Third Ave Grocery / 132 Third Avenue.”
cigarettes to a minor; and two violations on June 29, 2014, when Respondent sold
cigarettes to a minor, and failed to verify, by means of photographic identification,
that the tobacco purchaser was 18 years of age or older. Complaint § 10; January
8, 2015 Complaint § 10.

The previous civil money penalty action concluded when an Initial Decision and
Default Judgment was entered on March 6, 2015 that found Respondent liable for
the alleged violations. The Initial Decision and Default Judgment became binding
on both parties on April 6, 2015. Complaint J 11.

During a subsequent inspection of Respondent’s establishment conducted on May
14, 2015, at approximately 4:53 PM, FDA-commissioned inspectors documented

that “‘a person younger than 18 years of age was able to purchase a package of

Newport Box 100s cigarettes ....” Complaint § 1.
documented that “the minor’s identification was not
sale... [.]” Complaint § 1.

The inspectors also
verified before the

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

FR. § 1140.1(b6). The

Secretary of the U.S. Department of Health and Human Services issued the regulations at

21 CFR. pt. 1140 under section 906(d) of the Act. 21 U.S
§ 387£(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010).
sale of cigarettes to any person younger than 18 years of ag:
The regulations also require retailers to verify, by means o:

C. § 387a-1; see 21 U.S.C.

The regulations prohibit the
e. 21 C.F.R. § 1140.14(a).
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 violate
selling tobacco to persons younger than 18 years of age, 21

the prohibition against
CFR. § 1140.14(a), on

February 7, 2014, June 29, 2014, and May 14, 2015. On June 29, 2014 and

May 14, 2015, Respondent also violated the requirement thi
of photo identification containing a purchaser’s date of birt!

at retailers verify, by means
, 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

CTP has requested a fine of $5,000, which is a permissible

penalty.

fine under the regulations.

21 CFR. § 17.2. Therefore, I find that a civil money penal
so order one imposed.

ty of $5,000 is warranted and

/s/

Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Shameika Washington
(OI File No. H-15-41791-9),
Petitioner,

v.

The Inspector General.
Docket No. C-15-4058
Decision No. CR4578

Date: April 7, 2016

DECISION

I sustain the determination of the Inspector General (I.G.), to exclude Petitioner,
Shameika Washington, from participating in Medicare, Medicaid, and all other federally
funded health care programs for a period of five years. Exclusion is mandated by section
1128(a)(2) of the Social Security Act (Act) and is for the minimum period required by
law. Act, § 1128(c)(3)(B).

I. Background

Petitioner requested a hearing in order to challenge the I.G.’s exclusion determination.
The L.G. filed a brief plus eight proposed exhibits (I.G Ex. 1-I.G. Ex. 8) to support the
determination. Petitioner filed no exhibits but filed a statement in opposition to the
determination. I receive the I.G.’s exhibits into the record. Neither the I.G. nor
Petitioner offered witness testimony. Consequently, I decide the case based on the
parties’ written exchanges.
IL. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether the LG. is required to exclude Petitioner.
B. Findings of Fact and Conclusions of Law

Section 1128(a)(2) of the Act mandates the exclusion of any individual who is convicted
of:

a criminal offense relating to neglect or abuse of patients in connection with
the delivery of a health care item or service.

Act, § 1128(a)(2).

The LG. offered undisputed proof that, on May 12, 2015, Petitioner was convicted of a
crime under Mississippi State law. Specifically, Petitioner pled guilty to violating section
41-10-1 of Mississippi’s Code of 1972. I.G. Exs. 2-3. This section makes it a crime for
an individual to willfully or recklessly place, or direct another individual to place, ina
patient’s medical record or chart misleading or inaccurate information regarding the
diagnosis, care, treatment or cause of a patient’s condition. /d. Petitioner was sentenced
to a suspended sentence of imprisonment and was ordered to pay criminal fines,
assessments, and costs. I.G. Exs. 5-6.

The conviction arose from Petitioner’s failure to provide proper care to a patient while
employed as a licensed practical nurse and her subsequent attempt to cover up that
misfeasance. I.G. Ex. 2. The evidence establishes that Petitioner failed to provide a
patient with appropriate wound care (changing the patient’s dressing) as was directed by
the patient’s treating physician and then, wrote in the patient’s chart that she had
provided the care when, in fact, she had not done so. Id.

These facts establish that Petitioner was convicted of a crime relating to patient neglect.
She was convicted of placing misleading or inaccurate information in a patient’s medical
record. That conviction, on its face, is a conviction for “neglect” — failure to provide
required care to a patient — within the common and ordinary meaning of the term.
Moreover, the underlying conduct that was the basis for the criminal charge, consisting of
failing to provide appropriate care as directed and then covering up that failure, is also
neglect. Consequently, Petitioner was convicted of a criminal offense as is described at
section 1128(a)(2) and exclusion is mandatory.
There is no issue here as to whether the length of the exclusion — five years — is
reasonable. The Act requires a minimum exclusion of five years where exclusion is
imposed pursuant to section 1128(a)(2), and the I.G. imposed the minimum exclusion
period here. Act, § 1128(c)(3)(B).

Petitioner argues that she was not convicted of patient neglect, but rather, of fraud. She
asserts that exclusion is not mandatory but, rather, is permissive.

It is unnecessary that the words “neglect” or “abuse” be contained in a criminal statute or
in a judgment of conviction in order for a conviction to fall within the reach of section
1128(a)(2). The Act mandates exclusion for convictions of crimes “relating to” patient
neglect or abuse (and, of course, actual neglect or abuse as well). Here, the crime
described by the section of Mississippi State law of which Petitioner was convicted —
willfully placing misleading or inaccurate information in a patient’s medical record —
would constitute neglect under any definition of the term even if it is also characterized
as fraudulent. Obviously, deliberately putting misleading or inaccurate information in a
patient’s medical record could endanger that patient and would therefore constitute
neglect or abuse. Moreover, the underlying conduct in this case, the conduct that was the
basis for Petitioner’s conviction, clearly was neglectful.

Petitioner also argues that the local district attorney and her own counsel effectively
misled her into entering a plea to the charges against her. She avers that she never would
have entered a guilty plea had she known the consequences of her action. This argument
is in the nature of a challenge to the fairness of the State proceeding against Petitioner. I
have no authority to consider that. 42 C.F.R. § 1001.2007(d). The authority to exclude
pursuant to section 1128(a)(2) derives from the official action taken at the State level. If
Petitioner believes that the State action is unfair she may challenge that action in the
appropriate forum. However, I must accept on its face what occurred at the State level
and I may not look behind the State criminal conviction to adjudicate its fairness.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Kamran Hamidi, M.D.,
(PTAN (Individual) — CB239543, WA85217A)
and
Sina Infectious Diseases Medical Associates, Inc.
(PIN: 1992815047 / PTAN (Group) — CB238262, CB238263, W19940),
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Respondent
Docket No. C-16-186
Decision No. CR4577
Date: April 8, 2016
DECISION REMANDING AND DISMISSING CASE
This case is remanded to the Centers for Medicare & Medicaid Services (CMS) pursuant
to 42 C.F.R. § 498.56(d).' This case is dismissed pursuant to 42 C.F.R. § 498.70(b) to
permit action by CMS in accordance with current regulations. This dismissal is without

prejudice to any right of Petitioner to request a hearing as to a determination by CMS on
remand that triggers such a right. Either party may request in writing that I vacate, for

' References are to the revision of the Code of Federal Regulations (C.F.R.) in effect at
the time of the initial and reconsideration determinations, unless otherwise stated for
processing of Petitioner’s application for reactivation of its billing privileges in
accordance with 42 C.F.R. § 424.540.
good cause, the dismissal within 60 days of the date of this Order. 42 C.F.R. § 498.72.
Any other objection to this Order must be filed within ten days of the date of this Order.

I. Procedural History and Findings of Fact

Noridian Healthcare Solutions (Noridian) is a Medicare contractor. Petitioner is Kamran
Hamidi, M.D., Sina Infectious Diseases Medical Associates, Inc. On July 7, 2014,
Noridian sent Petitioner a letter requesting that Petitioner revalidate its Medicare
enrollment information and stating that if Petitioner failed to submit a complete
enrollment application and all supporting documentation within 60 days, Petitioner’s
Medicare billing privileges may be deactivated. CMS Exhibit (Ex.) 1 at 5-7. On
February 11, 2015, Noridian notified Petitioner by letter that its Medicare billing
privileges were deactivated because Petitioner failed to timely submit a complete
Medicare enrollment application in response to the July 7, 2014 Noridian revalidation
request. CMS Ex. | at 8-9. The February 11, 2015 Noridian deactivation letter states:

The deactivation of Medicare billing privileges is considered
an action to protect from the misuse of your billing number
and to protect the Medicare Trust Funds from unnecessary
overpayments. This deactivation does not have any effect
on your participation agreement and/or any conditions of
participation.

CMS Ex. | at 9 (emphasis added).

On July 2, 2015, Noridian electronically received an enrollment application from
Petitioner. CMS Ex. | at 10-36. Noridian notified Petitioner by letter dated August 12,
2015, that Petitioner’s enrollment application was approved with a period for retroactive
filing of claims beginning July 2, 2015. CMS Ex. 1 at 37-39.

Petitioner requested reconsideration of Noridian’s initial determination and requested that
its enrollment be made retroactive to December 1, 2005. CMS Ex. | at 40-63. On
October 22, 2015, an unsigned reconsidered determination was issued by an unidentified
contractor hearing officer. The reconsidered determination stated that Petitioner’s
request for an earlier effective date was denied. The reconsidered determination cited
Medicare Program Integrity Manual (MPIM) section 15.27.1.2 and 42 C.F.R. § 424.520
as the basis for its decision and stated that Petitioner’s effective date of Medicare
enrollment could be no earlier than Noridian’s receipt on July 2, 2015, of Petitioner’s
application that could be processed to completion. CMS Ex. | at 1-4. The reconsidered
determination reflects that the unidentified contractor hearing officer recognized that
Petitioner submitted the CMS-855] application received by Noridian on July 2, 2015, not
for the purpose of enrollment as it was already enrolled in Medicare and its enrollment
was never revoked. Rather, the CMS-855I was submitted by Petitioner to reactivate its
billing privileges that had been deactivated by letter dated July 7, 2014. However, as
explained hereafter, the reconsidered determination is based on an error of law and
cannot be upheld or enforced.

Petitioner requested a hearing before an administrative law judge (ALJ) on November 30,
2015. The case was assigned to me for hearing and decision on December 28, 2015, and
an Acknowledgment and Prehearing Order (Prehearing Order) was issued at my
direction.

On January 27, 2016, CMS filed a motion for summary judgment with CMS exhibit
(CMS Ex.) 1. On February 26, 2016, Petitioner filed a response in opposition to the CMS
motion for summary judgment with Petitioner’s exhibits (P. Exs.) 1 through 2. On March
14, 2016, CMS filed a reply brief. The parties have not objected to my consideration of
the offered exhibits and all are admitted and considered.

IL. Discussion
A. 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 beneficiaries may only be made to eligible providers of services and
suppliers”. Administration of the Part B program is through contractors such as
Noridian. 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,

> 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. Act

§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)).

including the right to a hearing and judicial review of certain enrollment determinations.
Act § 1866(j) (42 U.S.C. § 1395ce(j)).

Pursuant to 42 C.F.R. § 424.505, a provider or supplier must be enrolled in the Medicare
program and be issued a billing number to have billing privileges and to be eligible to
receive payment for services rendered to a Medicare-eligible beneficiary. The effective
date of enrollment in Medicare of a physician, nonphysician practitioner, and physician
and nonphysician practitioner organizations is governed by 42 C.F.R. § 424.520(d). The
effective date of enrollment for a physician or nonphysician practitioner may only be the
later of two dates: the date when the physician filed an application for enrollment that
was subsequently approved by a Medicare contractor charged with reviewing the
application on behalf of CMS; or the date when the physician first began providing
services at a new practice location. /d. An enrolled physician or nonphysician
practitioner may retrospectively bill Medicare for services provided to Medicare-eligible
beneficiaries up to 30 days prior to the effective date of enrollment, if circumstances
precluded enrollment before the services were provided. Retrospective billing for up to
90 days prior to the effective date of enrollment is permitted only in case of a
Presidentially-declared disaster pursuant to 42 U.S.C. §§ 5121-5206. 42 C.F.R.

§ 424.521.

The Secretary has authorized CMS to deactivate a provider’s or supplier’s Medicare
billing privileges if the provider or supplier does not submit any Medicare claims for 12
consecutive calendar months. 42 C.F.R. § 424.540(a)(1). CMS may also deactivate a
provider’s or supplier’s billing privileges if the provider or supplier does not report
certain changes of information, such as a change in practice location or change of any
managing employee, within 90 calendar days of when the change occurred, or does not
provide complete and accurate information within 90 days of CMS’s request for such
information. 42 C.F.R. § 424.540(a)(2), (3). A provider or supplier “deactivated for any
reason other than nonsubmission of a claim” is required to “complete and submit a new
enrollment application to reactivate its Medicare billing privileges or, when deemed
appropriate, at a minimum, recertify that the enrollment information currently on file with
Medicare is correct.” 42 C.F.R. § 424.540(b)(1). A provider or supplier who is
“deactivated for nonsubmission of a claim” for 12 months is “required to recertify that
the enrollment information currently on file with Medicare is correct and furnish any
missing information as appropriate. The provider or supplier must meet all current
Medicare requirements in place at the time of reactivation, and be prepared to submit a
valid Medicare claim.” 42 C.F.R. § 424.540(b)(2). Deactivation of Medicare billing
privileges is to protect the provider or supplier from misuse of their billing privileges and
the Medicare Trust Funds. Deactivation does not have any effect upon the provider’s or
supplier’s participation in Medicare. 42 C.F.R. § 424.540(c).

B. Analysis

The CMS evidence shows that on about July 7, 2014, Noridian requested that the
Petitioner revalidate its Medicare enrollment. Noridian also advised Petitioner that if it
failed to submit the requested information in 60 days, its Medicare billing privileges may
be deactivated. CMS Ex. | at 5-7. Noridian then notified Petitioner by letter dated
February 11, 2015, that its billing privileges were deactivated on that date because
Petitioner had not submitted the requested revalidation information. CMS Ex. | at 8-9.
There is no evidence that Noridian advised Petitioner that its enrollment in Medicare
would be revoked if it failed to timely submit the requested information.

Petitioner submitted the information requested by Noridian using a CMS-8551, which
Noridian received on July 2, 2015. CMS Ex. | at 10-36. I infer from the fact that
Noridian requested Petitioner to revalidate its Medicare enrollment information in July
2014, that Petitioner was enrolled at that time and I find no evidence to support a contrary
inference. There is no evidence that CMS ever revoked Petitioner’s Medicare enrollment
or was authorized to do so under 42 C.F.R. § 424.535 or any other provision of the Act or
regulations. Because Petitioner’s enrollment and billing privileges were deactivated and
not revoked, the issue that must be decided is the effective date for the reactivation of
Petitioner’s billing privileges. The effective date of the reactivation of Petitioner’s billing
privileges must be determined in accordance with the Secretary’s regulation, 42 C.F.R.

§ 424.540(c), not a CMS policy contrary to the regulation.

CMS’s policy in effect at the time of Petitioner’s July 2, 2015 application for reactivation
provides that, if a CMS contractor such as Noridian approves a supplier’s reactivation
application, “the reactivation effective date shall be the date the contractor received the
application . . . that was processed to completion.” MPIM, ch. 15, § 15.27.1.2 (rev. 561,
iss’d Dec. 12, 2014, eff. Mar. 18, 2015).> On its face, CMS’s policy in effect at the time
of Petitioner’s July 2, 2015 application is inconsistent with and violates the Secretary’s
regulation, which provides that deactivation of Medicare billing privileges is to protect
the provider or supplier from misuse of their billing privileges and the Medicare Trust

> See also MPIM, ch. 15, § 15.29.4.3 (rev. 578, iss’d Feb. 25, 2015, eff. May 15, 2015)
(instruction that if a revalidation is received more than 120 days after deactivation, a new
effective date will be issued to the supplier consistent with the effective date
requirements of section 15.17 of chapter 15, which applies 42 C.F.R. § 424.520(d),
pertaining to the effective date of a new enrollment by a physician, nonphysician
practitioner, or organizations of either).
Funds and does not have any effect upon the provider’s or supplier’s participation in
Medicare. 42 C.F.R. § 424.540(c) (emphasis added). If the current version of MPIM,
ch. 15, § 15.27.1.2 is given effect, it potentially prevents the filing of claims for covered
services rendered to Medicare-eligible beneficiaries during the period of the deactivation
and before the contractor receives the CMS-855] filed for purposes of reactivation. This
effect is clearly contrary to the Secretary’s regulation that provides deactivation “does
not have any effect upon the provider’s or supplier’s participation in Medicare.”

42 C.F.R. § 424.540(c) (emphasis added).

The current version of MPIM, ch. 15, § 15.27.1.2 in effect at the time of Petitioner’s July
2, 2015 application for revalidation applied by Noridian may not be enforced to the
extent the policy is inconsistent with the Secretary’s regulation. CMS policy statements
such as those set forth in the MPIM do not have the force and effect of law, i.e., the
statutes or regulations. Perex v. Mortgage Bankers Ass’n,__U.S.__, 135 S.Ct. 1199 at
1204 (2015) (Convenience of issuing an interpretive rule or policy rather than a
legislative rule using the Administrative Procedure Act (APA) notice and comment
procedure “comes at a price: Interpretive rules ‘do not have the force and effect of law
and are not accorded that weight in the adjudicatory process.”” (citation omitted)
(emphasis in original)); Ind. Dep't. of Pub. Welfare v. Sullivan, 934 F.2d 853 (7th Cir.
1991) (substantive rules promulgated under the APA notice and comment rulemaking
procedures as regulations are enforceable as law; agency interpretative rules or policy
statements are not subject to notice and comment rulemaking requirements but are not
enforceable as law); Nw. Tissue Ctr. v. Shalala, | F.3d 522 (7th Cir. 1993). Furthermore,
as an ALJ I am bound to follow the Constitution, the Act, and the Secretary’s regulations,
and I give effect to the policies of the Secretary and CMS to the extent not inconsistent
with the law. 1866I/CPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (“[a]n ALJ is
bound by applicable laws and regulations and may not invalidate either a law or
regulation on any ground.”).

Pursuant to 42 C.F.R. § 498.56(d), I may remand a case to CMS for consideration of a
new issue and a new determination. In this case, the new CMS policy for determining the
effective date of a reactivation of Medicare billing privileges set forth in MPIM, ch. 15,

§ 15.27.1.2 is inconsistent with 42 C.F.R. § 424.540(c). The application of that policy by

* The prior CMS policy provided that if the contractor approves a provider or supplier’s
reactivation application, the reactivation effective date shall be the provider or supplier’s
date of deactivation. MPIM, ch. 15, § 15.27.1 (C) (rev. 462, iss’d May 16, 2013, eff.
Mar. 18, 2013); MPIM, ch. 15, § 15.27.1.2(D) (rev. 474, iss’d Jul. 5, 2013, eff. Oct. 8,
2013).
the contractor hearing officer was legal error. This case is remanded to permit a new
reconsidered determination that determines the effective date of the reactivation of
Petitioner’s Medicare billing privileges consistent with the Act and the Secretary’s
regulations.

Accordingly, this case is remanded to CMS and dismissed. The parties may request that
an order dismissing a case be vacated within 60 days for good cause shown pursuant to
42 C.F.R. § 498.72. If CMS completes its action on this case more than 60 days from
the date of this Order and Petitioner desires my further review, Petitioner will file a
request for hearing referring to this case with a copy of this Order attached.

III. Conclusion

For the foregoing reasons, this case is remanded and dismissed.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Alicia Chilito, M.D.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-3897
Decision No. CR4576

Date: April 7, 2016

DECISION

I sustain the determination of a Medicare contractor, as affirmed on reconsideration, to
revoke the Medicare enrollment and billing privileges of Petitioner, Alicia Chilito, M.D.,
with an associated bar on re-enrollment for a period of three years. Revocation is
authorized by 42 C.F.R. § 424.535(a)(12).

I. Background

Petitioner filed a request for hearing in order to challenge a reconsideration
determination, dated June 26, 2015, affirming the revocation of her Medicare
participation and billing privileges.' The Centers for Medicare & Medicaid Services
(CMS) filed a brief and 20 proposed exhibits (CMS Ex. | — CMS Ex. 20) supporting the
determination. Petitioner filed a brief and 13 proposed exhibits (P. Ex. 1 — P. Ex. 13) in
response. I receive both parties’ exhibits into the record.

' In its reconsideration determination, CMS cited 42 C.F.R. §§ 424.535(a)(2) and (a)(12)
as the bases for its action. Because I have upheld the revocation under 42 C.F.R.
§ 424.535(a)(12), I do not address the alternative basis.
CMS offered no witness testimony in support of its arguments. Petitioner offered her
own testimony, in affidavit form, as P. Ex. 13. CMS has not requested an in-person
hearing for the purpose of cross-examining Petitioner. Consequently, there is no need for
a hearing, and I decide the case based on the parties’ written exchanges.

IL. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether CMS is authorized to revoke Petitioner’s Medicare participation and
billing privileges under the authority of 42 C.F.R. § 424.535(a)(12).

B. Findings of Fact and Conclusions of Law

CMS may revoke a supplier’s Medicare participation and billing privileges in the
circumstance where a State Medicaid Agency has terminated that supplier’s privileges, so
long as the supplier has exhausted his or her appeal rights from the State action.

42 CFR. § 424.535(a)(12).

The evidence establishes unequivocally that the Florida Agency for Health Care
Administration (ACHA), the State Medicaid Agency, terminated Petitioner’s
participation in Florida’s Medicaid program on January 17, 2014. CMS Ex. 5;
Petitioner’s Request for Review at 3. ACHA issued a final termination order on March
26, 2014. Petitioner’s appeal rights to challenge that termination are exhausted. CMS
Ex. 6 at 1; Petitioner’s Request for Review at 3. These facts provide grounds for CMS
and its contractor to revoke Petitioner’s Medicare enrollment and billing privileges. Her
State Medicaid billing enrollment has been terminated and her appeal rights are
exhausted. That satisfies the criterion for revocation at 42 C.F.R. § 424.535(a)(12).

Petitioner argues, essentially, that the State termination action is unfair. She contends
that there has been a long history of communication failures between her and ACHA and
CMS, that adverse actions taken by these agencies were based on misunderstandings, and
that she has always acted in good faith. She contends that the 2014 revocation of her
Medicaid participation by ACHA was based on a 2011 termination of her Medicare
enrollment by CMS that she contends was improper. Petitioner’s brief at 5. She asserts
that CMS should not revoke her Medicare participation and billing privileges predicated
on what she contends are previous unfair actions by CMS or ACHA.

I find these arguments to be irrelevant. The undisputed facts are that ACHA terminated
Petitioner’s participation in Florida’s Medicaid program and that Petitioner’s appeal
rights to challenge the State action have been exhausted. Those facts are sufficient to
give CMS grounds for revoking Petitioner’s Medicare participation and billing privileges.
CMS’s authority derives from those actions, and I have no authority to look behind them
and to determine whether the State actions are proper or correct. Petitioner’s appeal
rights from the State actions lay in State appellate review procedures and not with me.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Diantha Miller

(O.L File No. H-15-40585-9),

Petitioner,
v.
The Inspector General.
Docket No. C-15-4190
Decision No. CR4575

Date: April 8, 2016

DECISION

The Inspector General (IG) of the U.S. Department of Health and Human Services (HHS)
notified Petitioner, Diantha Miller, that she was being excluded from participation in
Medicare, Medicaid, and all other federal health care programs for a minimum period of
10 years under 42 U.S.C. § 1320a-7(a)(3). Ms. Miller requested a hearing to dispute the

exclusion. For the reasons stated below, I conclude that t

e IG has a basis for excluding

Ms. Miller from program participation and that the 10-year exclusion is not unreasonable.

I. Background

By letter dated July 31, 2015, the IG notified Ms. Miller t

at she was being excluded

from Medicare, Medicaid, and all other federal health care programs for a period of 10
years under 42 U.S.C. § 1320a-7(a)(3). The IG advised Ms. Miller that the exclusion was
based on her felony conviction in the United States District Court for the Southern

District of Alabama (U.S. District Court) of a criminal of

fense related to fraud, theft,

embezzlement, breach of fiduciary responsibility, or other financial misconduct either: in

connection with the delivery of a health care item or servi

ice, including the performance

of management or administrative services relating to the d

lelivery of such items or
services; or with respect to any act or omission in a health care program (other than
Medicare and a state health care program) operated or financed by any federal, state, or
local government agency. The IG excluded Ms. Miller in excess of the minimum
statutory period of five years because of the following aggravating circumstances:

1. A federal court ordered Ms. Miller to pay approximately $347,800 in
restitution;

2. Ms. Miller committed criminal acts from about January 2007 to about
December 2011;

3. A federal court sentenced Ms. Miller to 12 months and | day of incarceration;
and

4. The Alabama State Medicaid Agency excluded Ms. Miller from participation in
the Medicaid program.

IG Exhibit (Ex.) 1.

Ms. Miller, through counsel, requested a hearing on September 24, 2015, to dispute the
exclusion. Hearing Request at 1. On November 16, 2015, I held a telephonic prehearing
conference, the substance of which is summarized in my November 19, 2015 Order and
Schedule for Filing Briefs and Documentary Evidence (Order). Pursuant to the Order,
the IG filed his brief (IG Br.) and four exhibits (IG Exs. 1-4). Ms. Miller filed her brief
(P. Br.) and two exhibits (P. Exs. 1-2)', The IG filed a reply brief.

II. Decision on the Record
In the absence of objection, I admit IG Exs. 1-4 and P. Exs. 1-2 into the record.

My Order informed the parties that I would issue a decision based on the written record
unless a party requested a hearing in its brief and explained why one was necessary.
Order § 3. The parties indicated on their short form briefs that they did not believe a
hearing was necessary and did not have any witness testimony to offer. IG Br. at 12;

P. Br. at 5. Therefore, I issue this decision on the basis of the written record.

' Ms. Miller filed both her brief and evidentiary documents on January 29, 2016. Ms.
Miller did not mark her exhibits in the manner required by my November 19, 2015 Order
and Civil Remedies Division Procedures § 14. Ms. Miller refiled properly marked
exhibits on February 12, 2016. All references to Ms. Miller’s exhibits in this decision are
to the subsequently filed properly marked exhibits.
III. Issues

The issues in this case are limited to determining if the IG has a basis for excluding Ms.
Miller from participating in Medicare, Medicaid, and all other federal health care
programs and, if so, whether the length of the exclusion imposed by the IG is
unreasonable. See 42 C.F.R. § 1001.2007(a)(1).

IV. Jurisdiction

I have jurisdiction to adjudicate this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.
V. Findings of Fact, Conclusions of Law, and Analysis

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

A, A jury convicted Ms. Miller of three felony offenses related to health care
fraud that she committed from January 2007 to about December 2011, and
the U.S. District Court sentenced Ms. Miller to imprisonment for 12-months
and one day, and ordered Ms. Miller to pay $347,868.26 in restitution to
Blue Cross/Blue Shield of Alabama.

Ms. Miller, a certified registered nurse practitioner, and her co-defendant, Lawrence
Carpenter, M.D., were co-owners of a dermatology clinic known as the Laser Skin Care
Center of Mobile. IG Ex. 2 at 1. On April 24, 2014, a federal grand jury indicted Ms.
Miller and Dr. Carpenter on one count of Conspiracy to Commit Healthcare Fraud in
violation of 18 U.S.C. § 1349 and two counts of Health Care Fraud and Aiding and
Abetting in violation of 18 U.S.C. § 1347. IG Ex. 2 at 2-5, 7. Specifically, the grand
jury charged Ms. Miller with fraudulently billing her services and those of other
physician extenders under Dr. Carpenter’s National Provider Identification (NPI) number
in order to increase reimbursement amounts from insurance providers, and fraudulently
altering billing codes when reimbursement had been denied, and then resubmitting the
altered bills for reimbursement. IG Ex. 2 at 3-5. The grand jury further charged that Ms.
Miller’s fraudulent insurance billing continued from about January 2007 to about
December 2011. IG Ex. 2 at 2-4.

On October 30, 2014, following a trial, a jury found Ms. Miller guilty of all three counts
outlined in the Indictment and the U.S. District Court convicted her of those felony
charges. IG Ex. 3 at 1; P. Ex. 2 at 1-2. The U.S. District Court sentenced Ms. Miller to
12 months and one day of incarceration for each count with the terms to be served
concurrently, followed by a three-year term of supervised release; assessed a $300 fee;
and ordered to pay $347,868.26 to Blue Cross/Blue Shield of Alabama, a private health
insurer. IG Ex. 3 at 2-6; P. Ex. 2 at 3-6. The U.S. District Court ordered that Ms. Miller
pay the $347,868.26 in restitution jointly and severely with Dr. Carpenter. IG Ex. 3 at 6;
P. Ex. 2 at 7.

On March 3, 2015, the U.S. District Court issued an Amended Judgment in a Criminal
Case in which Dr. Carpenter was convicted, following a guilty plea, to violating one
count of Misprison of a Felony in violation of 18 U.S.C. § 4. P. Ex. 1 at 1. Although the
U.S. District Court continued to order that Dr. Carpenter pay restitution in the amount of
$347,868.26 to Blue Cross/Blue Shield of Alabama, the court limited the amount of
restitution that Dr. Carpenter had to pay to $208,000.00. P. Ex. 1 at 2-3.

B. The IG proved each of the required elements under 42 U.S.C. 1320a-
7(a)(3); therefore, there is a basis to exclude Ms. Miller.

The IG is excluding Ms. Miller based on 42 U.S.C. § 1320a-7(a)(3), which requires the
IG to exclude

[a]ny individual or entity that has been convicted for 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 relating to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct.

The evidence in the present case establishes unequivocally that Ms. Miller was convicted
of a felony as is described in 42 U.S.C. § 1320a-7(a)(3). IG Exs. 2, 3. A jury found Ms.
Miller guilty of all three counts in the Indictment, which explicitly charged Ms. Miller
with the felony offenses of health care fraud that were committed between January 2007
and December 2011. IG Exs. 2, 3. The conduct underlying her conviction involved
“fraudulently billing” under a physician’s NPI number and “fraudulently altering billing
codes.” IG Ex. 2 at 3-5. It is well established that submission of false billing is related to
the delivery of health care items or services for purposes of exclusion. See Joann
Fletcher Cash, DAB No. 1724, at 3 (2000) (citing supporting cases); Jack W. Greene,
DAB No. 1078 (1989) aff'd, Green v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990)
(concluding that a conviction for submitting a false bill is “directly related to the delivery
of the item or service.”). Further, there is no doubt that the criminal acts for which Ms.
Miller was convicted occurred after August 21, 1996. IG Ex. 2 at 3-5. Finally, the crime

of Health Care Fraud and Aiding and Abetting in violation of 18 U.S.C. § 1347 and the
crime of Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. § 1349 are
felonies under federal law. IG Ex. 2 at 7; 18 U.S.C. § 3559(a)(4).

Ms. Miller does not dispute that she was convicted of offenses for which exclusion is
required (P. Br. at 2); that the conduct that formed the basis of her conviction occurred
after August 21, 1996 (P. Br. at 2); that the offenses for which she was convicted were in
connection with the delivery of a health care item or service (Conspiracy to Commit
Health Care Fraud; Health Care Fraud and Aiding and Abetting) (P. Br. at 2,3); and that
the offenses she was convicted of are felonies and relate to fraud (P. Br. at 2).

Therefore, I conclude that the IG has proved the essential elements required for exclusion
under 42 U.S.C. § 1320a-7(a)(3) and Ms. Miller is subject to mandatory exclusion.

C. The presence of four aggravating factors and the absence of any mitigating
factors justify excluding Ms. Miller for a period of 10 years.

The minimum mandatory period of exclusion under 42 U.S.C. § 1320a-7(a)(3) is five
years. 42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. § 1001.102(a). Because I have
concluded that a basis exists to exclude Ms. Miller pursuant to 42 U.S.C. § 1320a-7(a)(3),
Ms. Miller must be excluded for a minimum period of five years. 42 U.S.C. § 1320a-
7(c)(3)(B). The IG may lengthen that term if certain aggravating factors exist. See

42 C.F.R. § 1001.102. The IG added five years to Ms. Miller’s exclusion based on the
presence of four aggravating factors detailed at 42 C.F.R. § 1001.102(b)(1)-(9):

42 C.F.R. §§ 1001.102(b)(1) (the acts resulting in the conviction caused a financial loss
to an entity of $5,000 or more); (b)(2) (the acts resulting in the conviction were
committed over a period of one year or more); (b)(5) (the sentence imposed by the court
included incarceration); and (b)(9) (an adverse action taken by a state government agency
was based on the same circumstances that served as the basis for imposing the exclusion).
Ms. Miller argues that a 10-year exclusion is unreasonable, but that a five-year period
would be appropriate. P. Br. at 2, 4.

I must uphold the length of exclusion as long as it is not unreasonable. 42 C.F.R.

§ 1001.2007(a)(1)(ii). This means that: “So long as the amount of time chosen by the
[JIG is within a reasonable range, based on demonstrated criteria, the ALJ has no
authority to change it under this rule. We believe that the deference § 1001.2007(a)[]
grants to the [JIG is appropriate, given the []IG’s vast experience in implementing
exclusions under these authorities.” 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992).
I. Ms. Miller’s criminal conduct caused a financial loss of
$347,868.26 to Blue Cross/Blue Shield of Alabama.

The IG has shown that the acts resulting in Ms. Miller’s conviction caused a loss to an
entity of $5,000 or more. 42 C.F.R. § 1001.102(b)(1). The record shows that the U.S.
District court ordered Ms. Miller to pay $347,868.26 in restitution to a single insurance
company, Blue Cross/Blue Shield of Alabama. IG Ex. 3 at 5, 6; P. Ex. 2 at 6, 7. It is
well established that an amount ordered as restitution constitutes proof of the amount of
financial loss. See e.g., Juan de Leon, Jr., DAB No. 2533, at 5 (2013).

Ms. Miller disputes the IG’s claim that she was ordered to pay restitution that was 60
times greater than the statutory minimum for an aggravating factor to apply. Ms. Miller
asserts that the amended judgment in Dr. Carpenter’s criminal case shows that he was
ordered to pay $208,000.00 in restitution to Blue Cross/Blue Shield of Alabama, which
accounts for 60% of the total restitution amount jointly owed; therefore, Ms. Miller is
only responsible for the remaining $139,868.26. P. Br. at 3; P. Ex. 1.

I disagree with Ms. Miller’s argument. Although the U.S. District Court amended the
maximum amount of restitution Dr. Carpenter had to pay, Ms. Miller has not provided
evidence to establish the amount she was ordered to pay to Blue Cross/Blue Shield of
Alabama was reduced or that the loss to Blue Cross/Blue Shield was less than
$347,868.26. See IG Ex. 3 at 5, 6; P. Ex. 2 at 6, 7 (showing Ms. Miller was ordered to
pay $347,868.26 jointly and severally with her co-defendant). Regardless of whether the
restitution order for Dr. Carpenter is joint and several between Ms. Miller and Dr.
Carpenter, the U.S. District Court’s judgment pertaining to Ms. Miller plainly established
that she is responsible jointly for the total restitution amount. IG Ex. 3 at 5; see also
United States v. Ingles, 445 F.3d 830, 838-39 (Sth Cir. 2006) (affirming joint and several
restitution order where one co-defendant was ultimately responsible for more restitution
that other co-defendant). Additionally, Ms. Miller’s argument does not take into account
the fact that the regulations provide that the entire amount of restitution is what provides
a basis for an aggravating factor. See 42 C.F.R. 1001.102(b)(1) (‘the entire amount of
financial loss to . . . programs or entities . . . will be considered regardless of whether full
or partial restitution has been made.”).

I consider the size of the financial loss in the present case a significant aggravating factor
that compels a period of exclusion longer than the five-year minimum. Loss is an
“exceptional aggravating factor” when, as here, the loss is “very substantially greater than
the statutory standard.” Jeremy Robinson, DAB No. 1905 (2004); Donald A. Burstein,
Ph.D., DAB No. 1865 (2003). The financial loss in this case, which is substantially
greater than the minimum needed to support an increase to the exclusion period, strongly
supports a lengthy exclusion. See Anderson v. Thompson, 311 F.Supp.2d 1121, 1130 (D.
Kan. 2004) (considering a loss more than 40 times the amount of loss necessary to find
an aggravating factor as helping to justify a 15-year exclusion).
2. Ms. Miller committed her criminal acts from about January
2007 to about December 2011.

The IG has shown that the acts resulting in Ms. Miller’s conviction were committed over
a period of one year or more. 42 C.F.R. §§ 1001.102(b)(2). Ms. Miller challenges the
duration of her criminal conduct by arguing that the IG has not proven that her criminal
conduct occurred from January 27, 2007 through December 2011, as alleged in the
Indictment. She argues that outside of the Indictment and the conviction, the IG has not
presented any documents or other evidence that supports the time frame of her criminal
conduct. P. Br. at 3-4. Ms. Miller argues further that the judgment does not reference a
time frame and that the findings of the jury “simply states she was found guilty of the
three (3) charges as stated above.” P. Br. at 3 citing P. Ex. 2 at 1.

The Indictment described Ms. Miller’s conduct as lasting from on or about January 2007
to on or about December 2011, and the jury found Ms. Miller guilty of all three counts
“as charged” in the Indictment. IG Ex. 3 at 1; P. Ex. 2 at 1-4. Consistent with the dates
listed in the Indictment, the Judgment in a Criminal Case issued by the U. S. District
Court indicates that the “Date Offense Concluded” for all three counts was December 31,
2011.” IG Ex. 3 at 1; P. Ex. 2 at 2. Based on these court documents, I conclude that
there is sufficient evidence that Ms. Miller was adjudged to have committed criminal acts
that spanned nearly five years.

The purpose of the aggravating factor at 42 C.F.R. § 1001.102(b)(2) “is to distinguish
between petitioners whose lapse in integrity is short-lived from those who evidence a
lack of such integrity over a longer period of time.” Donald A. Burstein, Ph.D., DAB
No. 1865, at 8 (addressing criminal conduct that occurred over a 14-month period). The
fact that Ms. Miller engaged in illegal conduct for approximately five times longer than
the minimum one year required for aggravation means that this aggravating factor
provides strong support for a lengthy exclusion. See Anderson, 311 F.Supp.2d at 1130.

3. The U. S. District Court sentenced Ms. Miller to 12-months and
one day of incarceration.

The IG has also proved that the U.S. District Court sentenced Ms. Miller to incarceration.
42 C.F.R. § 1001.102 (b)(5). The court sentenced Ms. Miller to a period of incarceration
of 12-months and one day. I.G. Ex. 3 at 2; P. Ex. 2 at 3.

Ms. Miller challenges the IG’s reliance on the aggravating factor of 42 C.F.R. § 1001.102
(b)(5) to increase the length of her exclusion period. P. Br.at 4. She claims that although
she was sentenced to incarceration, she served a large portion of that time in a half-way
house where she was allowed to perform work release. P. Br.at 4. She relies on the
decision in Jason Hollady, DAB No. 1855 (2002) to support her position that her
participation in work release decreases her period of incarceration and also the weight
this factor should be given by the IG. P. Br.at 4.

A review of Hollady shows that it supports the IG’s interpretation of the regulations and
not Ms. Miller’s argument. That decision states:

The fact that Petitioner was on a work release program is
irrelevant, however, to the issue of whether his sentence
included incarceration. The term “incarceration” is defined in
the regulations to mean “imprisonment or any type of
confinement with or without supervised release, including,
but not limited to, community confinement, house arrest and
home detention.” 42 C.F.R. § 1001.2. Thus, the evidence
regarding work release does not undercut the ALJ’s finding
that the I.G. proved that the aggravating factor of
“incarceration” existed.

Similarly, the alleged fact that Petitioner may not in fact have
served the full nine-month period of incarceration to which he
was sentenced is irrelevant in determining whether the
aggravating factor existed. Under the regulation, the
aggravating factor exists if the “sentence imposed by the
court included incarceration.” 42 C.F.R. § 1001.102(b)(5).

DAB No. 1855 at 6. Although the Hollady decision did discuss the reduction of the
petitioner’s exclusion from 10 years to 8 years, this was based on the IG’s failure to
prove that the petitioner’s criminal conduct lasted one year or more, as required by
42 CFR. § 1001.102(b)(2). Hollady, DAB No. 1855 at 8-9.

I conclude that the IG has proven that Ms. Miller was sentenced to incarceration of 12
months and a day. Consistent with Hollady, I conclude that even though Ms. Miller
served a large portion of her sentence in a half-way house where she was allowed to
perform work release, this fact is irrelevant to her sentence of incarceration. Therefore, I
determine that the aggravating factor at 42 C.F.R. § 1001.102(b)(5) provides further
support for the IG’s determination to increase Ms. Miller’s exclusion beyond the five-
year minimum period to 10 years. See Stacy Ann Battle, DDS, DAB No. 1843 (2002)
(finding that four months in a halfway house, followed by four months home
confinement, justified lengthening the petitioner’s exclusion period).
4. The Alabama Medicaid Agency excluded Ms. Miller from
participating in the state Medicaid program as a provider of
medical services based on her criminal conviction in the U.S.
District Court.

The IG has shown that a state government agency took an adverse action against Ms.
Miller based on the same set of circumstances that served as the basis for her

exclusion. IG Ex. 4 at 1; 42 C.F.R. § 1001.102 (b)(9). Although Ms. Miller was not an
active Medicaid provider, she was excluded from becoming one by the Alabama
Medicaid Agency effective October 30, 2014, for an indefinite period, based on the same
conviction that provides a basis for her exclusion. IG Ex. 4 (“found guilty of two counts
of healthcare fraud and one count of conspiracy in federal court in the Southern District
of Alabama . . . suspension is consistent with action to be taken by the [HHS IG] under
Section 1128 of the Social Security Act.).

5. Ms. Miller did not prove the existence of any factors to mitigate
the length of exclusion.

When an aggravating factor justifies an exclusion longer than five years, mitigating
factors may be considered as a basis for reducing the period of exclusion to no less than
five years. 42 C.F.R. § 1001.102(c). Here, Ms. Miller does not claim the existence of
any mitigating factors that would justify a reduction in the length of exclusion imposed
by the IG. P. Br. at 5.

V. Conclusion

The IG has a basis to exclude Ms. Miller from participating in Medicare, Medicaid, and
all federal health care programs. The 10-year length of exclusion is not unreasonable
given the aggravating factors present in this case and the lack of any mitigating factors.
Therefore, I affirm the IG’s determination to exclude Ms. Miller for 10 years.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Jodie Knott, Ph.D.
(NPI: 1043244577; PTAN: CB236812)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-265
Decision No. CR4573
Date: April 7, 2016
DECISION

The request for hearing of Petitioner, Jodie Knott, Ph.D.,' is dismissed pursuant to 42
C.F.R. § 498.70(b).

I. Procedural History

Noridian Healthcare Solutions (Noridian), a Medicare contractor, notified Petitioner by
letter dated July 21, 2015, that her application to enroll in Medicare was approved
effective April 15, 2015. CMS Ex. 1. The letter advised Petitioner that if she disagreed
with the effective date determination she could request reconsideration before a
contractor hearing officer within 60 days. The letter provided instructions for how to
submit the request for reconsideration. CMS Ex. | at 2-3.

' The evidence suggests that Petitioner was attempting to enroll as Jodie Knott, Ph.D.,
Psychological Consulting, Inc., NPI 1063803393, at a new practice location. Centers for
Medicare & Medicaid Services (CMS) Exhibit (Ex.) 4 at 7-8. But there is no further
specific reference to this entity in the evidence and there is no impact upon my decision
given the facts of this case.
On September 30, 2015, Noridian notified Petitioner that it rejected Petitioner’s request
for reconsideration, because it was not properly signed and dated by Petitioner, an
authorized or delegated official, or a legal representative. CMS Ex. 3.

Petitioner requested a hearing by letter dated January 5, 2016, which was received by the
Civil Remedies Division of the Departmental Appeals Board on January 20, 2016. The
case was assigned to me for hearing and decision. I issued an Acknowledgment and
Prehearing Order on February 3, 2016.

On February 17, 2016, CMS filed a motion to dismiss this case (CMS Motion) with CMS
Exs. | through 4. Petitioner filed a response on March 9, 2016 (P. Response). Petitioner
did not object to my consideration of CMS exhibits | through 4 and they are admitted.

II. Applicable Law

A provider or supplier may request reconsideration of an initial determination by CMS
that affects the provider’s or supplier’s ability to participate in the Medicare program. 42
C.F.R. § 498.5(a), (b), (d) and (1). CMS or its contractor reconsiders an initial
determination if there is a written request for reconsideration that complies with 42
C.F.R. § 498.22(b) and (c). The request for reconsideration must be filed with CMS or
its contractor; either directly by the provider/supplier or through the provider’s or
supplier’s designated legal representative or authorized official, within 60 days of receipt
of the notice of the initial determination. 42 C.F.R. § 498.22(b). 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
CFR. § 498.22(b).

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 administrative law judge
(ALJ) because there has been no reconsidered determination.

B. Dismissal is appropriate as Petitioner has no right to a hearing.

CMS moved to dismiss Petitioner’s request for hearing on grounds that I lack jurisdiction
because no reconsidered determination was made in this case. CMS alleges more
specifically that Petitioner failed to file a properly signed request for reconsideration and
Noridian rejected the request. CMS Motion at 2.
Petitioner filed an application — a CMS-855] dated January 26, 2015 — to enroll in
Medicare as a clinical psychologist. CMS Ex. 4 at 15. Petitioner listed Deborah R.
Santucci in the application as her “Managing Employee,” effective May 1, 2014.
According to the form:

A managing employee means a general manager, business
manager, administrator, director, or other individual who
exercises operational or managerial control over, or who
directly or indirectly conducts, the day-to-day operation of the
supplier, either under contract or through some other
arrangement, regardless of whether the individual is a W-2
employee of the supplier.

CMS Ex. 4 at 12. Petitioner also listed Debbie R. Santucci as the person to contact
regarding Petitioner’s application. CMS Ex. 4 at 14.

On July 21, 2015, Noridian issued the initial determination approving Petitioner’s
enrollment granting an effective date of April 15, 2015. CMS Ex. 1. The unsigned initial
determination advised Petitioner that if she disagreed with the effective date
determination, she could request reconsideration before a contractor hearing officer. The
letter advised that the request for reconsideration had to be submitted in writing within 60
days of the postmark on the envelope bearing the initial determination. The initial
determination stated that the reconsideration request had to “be signed and dated by the
physician, non-physician practitioner or any responsible authorized or delegated
official within the entity.” CMS Ex. | at 3 (emphasis added). The initial determination
also advised Petitioner that the request for reconsideration could be submitted to one of
two addresses depending upon the manner of shipping. One address was Provider
Enrollment Noridian Healthcare Solutions, PO Box 6775, Fargo, ND 58108-6775. CMS
Ex. | at 3.

Petitioner filed a request for reconsideration dated September 10, 2015, addressed to
Noridian at PO Box 6775 in Fargo. It is not alleged by CMS that the request for
reconsideration was untimely. The request stated the background or history and
requested an earlier effective date of January 1, 2015. The request was signed by Debbie
Santucci on behalf of Petitioner. CMS Ex. 2 at 44.

By letter dated September 30, 2015, Noridian notified Petitioner that reconsideration was
denied because the request for reconsideration “did not meet the requirements as stated in
the PIM (Program Integrity Manual) 15.25.” CMS Ex. 3. Bolded language in the letter
indicates that the reconsideration was denied because it was not “signed and dated by the
provider/supplier, the authorized or delegated official, or a legal representative.” CMS
Ex. 3. CMS states in its motion that reconsideration was denied because Ms. Santucci
and not Petitioner signed the reconsideration request. CMS Motion at 4.
Pursuant to 42 C.F.R. § 498.22(b), an affected party dissatisfied with an initial
determination may request reconsideration by filing the request directly or through its
legal representative or other authorized official. According to the Medicare Program
Integrity Manual (MPIM), CMS pub. 100-08, chap. 15, sec. 15.25.1.2B,* a
reconsideration request must be in the form of a letter that is signed and dated by the
“individual supplier, the authorized or delegated official, or a legal representative.” A
note states that the contact person listed in section 13 of the CMS-855 does not qualify to
sign the reconsideration request. Although Ms. Santucci was listed as the contact person
in section 13 of Petitioner’s January 26, 2015 CMS-855], she was also listed as an
individual having managing control under section 6 of the form. CMS Ex. 4 at 12, 14.

CMS argues that according to MPIM, chap. 15, sec. 15.5.15.1, only the physician or
nonphysician practitioner may sign the CMS-855I. CMS Motion at 4. CMS is correct
that MPIM, chap. 15, sec. 15.5.15.1 clearly provides that only the enrolling or enrolled
physician or non-physician practitioner may sign the CMS-855I, whether for an initial
enrollment, change of information, reactivation, or similar actions that require the filing
of anew CMS-855I. In fact, Petitioner did sign and date the CMS-855I in this case.
CMS Ex. 4 at 15. The issue in this case is not related to the signing of the application,
but rather, the request for reconsideration. In this case, Petitioner did not sign the request
for reconsideration, Debbie Santucci did, and Noridian refused to reconsider for that
reason. CMS Ex. 3.

Debbie Santucci was designated as Petitioner’s managing employee in the CMS-8551,
signed by Petitioner on January 26, 2015, with operational or managerial control or with
direct or indirect control of day-to-day operations. CMS Ex. 4 at 12. The regulation
requires that the request for reconsideration be signed directly by the affected party, who
is Petitioner, or by a “legal representative or other authorized official.” 42 C.F.R.

§ 498.22(b)(2). There is no evidence that Ms. Santucci was an attorney or legal
representative for Petitioner and no argument was made by Petitioner to that effect.
There is no definition of “authorized official” in 42 C.F.R. pt. 498. However, the
regulations that control enrollment of providers defines an “authorized official” to be:

an appointed official (for example, chief executive officer,
chief financial officer, general partner, chairman of the board,
or direct owner) to whom the organization has granted the
legal authority to enroll it in the Medicare program, to make
changes or updates to the organization’s status in the

2 MPIM, chap. 15, sec. 15.25 was cited as the basis for the denial of reconsideration.
CMS Ex. 3.
Medicare program, and to commit the organization to fully
abide by the statutes, regulations, and program instructions of
the Medicare program.

42 C.F.R. § 424.502. MPIM, CMS pub. 100-08, chap. 15, sec. 15.1.1, contains a similar
definition of authorized official. A managing employee is defined as “‘a general manager,
business manager, administrator, director, or other individual that exercises operational or
managerial control over, or who directly or indirectly conducts, the day-to-day operation
of the provider or supplier.” 42 C.F.R. § 424.502. MPIM, CMS pub. 100-08, chap. 15,
sec. 15.1.1, contains a similar definition of managing employee. The regulations and
CMS policy as discussed in the MPIM define “authorized official” and “managing
official” differently. Although Ms. Santucci was designated by Petitioner as a managing
official in the CMS-855] dated January 26, 2015, the evidence does not show that she
was an authorized official of Petitioner who could sign a reconsideration request under 42
C.F.R. § 498.22(b).

Petitioner argues in her request for hearing that Ms. Santucci was, at one time, a
designated official but she was removed from that designation without Petitioner’s
knowledge. The CMS-855] lists Ms. Santucci as a managing employee. But Petitioner
offers no evidence to show that Ms. Santucci ever met the requirements to be an
“authorized official” who had authority to file a request for reconsideration. Petitioner
also fails in responding to the CMS motion to dismiss to show that Ms. Santucci was an
authorized official with the authority to request reconsideration of the July 21, 2015
initial determination.

I conclude that the evidence before me does not show that Ms. Santucci was authorized to
file a request for reconsideration on behalf of Petitioner. I further conclude that there was
no legal error in Noridian’s refusal to conduct reconsideration on grounds that the request
for reconsideration was not signed and dated by Petitioner, Petitioner’s legal
representative, or an authorized official. Pursuant to 42 C.F.R. § 498.5(/)(1), a supplier
dissatisfied with an initial determination may request reconsideration under 42 C.F.R.

§ 498.22(a). Pursuant to 42 C.F.R. § 498.5(/)(2), a supplier dissatisfied with a
reconsidered determination is entitled to a hearing before an ALJ. In this case
reconsideration was denied and no reconsidered determination was issued. Therefore,
Petitioner has no right to a hearing before an ALJ. Accordingly, dismissal pursuant to 42
C.F.R. § 498.70(b), is appropriate.
IV. Conclusion

For the foregoing reasons, Petitioner’s request for hearing is dismissed.

/s/

Keith W. Sickendick
Administrative Law Judge