Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
North Carolina State Veterans Nursing  )
Home, Salisbury, (CCN: 34-5531), ) Date: October 20, 2008
)
Petitioner, )
)
-V.- )
) Docket No. C-06-670
Centers for Medicare & Medicaid ) Decision No. CR1855
Services. )
)
DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose a Civil Money Penalty (CMP) against Petitioner, North Carolina State Veterans
Nursing Home, Salisbury, for failure to comply substantially with federal requirements
governing participation of long-term care facilities in Medicare and State Medicaid
programs. Therefore, I sustain the CMP of $6000 per day effective June 18, 2006
through June 23, 2006. I also sustain a CMP of $100 per day for the period of June 24,
2006 through July 20, 2006.

I. Background

This case came before me pursuant to a request for hearing filed by Petitioner on
September 13, 2006. Petitioner is a long-term care provider located in Salisbury, North
Carolina.

On July 27, 2006, CMS informed Petitioner that it was imposing the following remedies
pursuant to a complaint investigation completed by the North Carolina State Survey
Agency (State Survey Agency) on June 29, 2006:

. CMP of $6000 per day effective June 18, 2006, and continuing through June 23,
2006;
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. CMP of $100 per day beginning June 24, 2006, and continuing until substantial
compliance was achieved;

. Denial of payment for new admissions (DPNA) effective September 29, 2006; and
. Mandatory termination effective December 29, 2006.
CMS Ex. 23, at 1-4.

T held a hearing on March 4, 2008, in Winston Salem, North Carolina. At the hearing,
CMS offered 38 exhibits, identified as CMS Exs. 1-38. I received CMS’s exhibits into
evidence without objection. Petitioner offered 67 exhibits, identified as P. Exs. 1-67.

I received these exhibits into evidence without objection. Transcript (Tr.) at 3-4.

Subsequent to the hearing, the parties submitted post-hearing briefs (CMS Br. and P. Br.)
and reply briefs. (P. Reply and CMS Reply).

Based on the testimony offered at the hearing, the documentary evidence, the arguments
of the parties, and the applicable law and regulations, I find that Petitioner was not in
substantial compliance on the dates determined by the State Survey Agency and CMS. I
further find that CMS was authorized to impose a CMP of $6000 for noncompliance from
June 18, 2006 through June 23, 2006, and a $100 per day CMP thereafter, until July 21,
2006.

If. Applicable Law and Regulations

Petitioner is a long-term care facility that participates in the Medicare and Medicaid
programs. The statutory and regulatory requirements for participation by a long-term care
facility are found at sections 1819 and 1919 of the Social Security Act (Act), and at 42
C.F.R. Part 483.

Sections 1819 and 1919 of the Act invest the Secretary of Health and Human Services
with authority to impose remedies of CMPs and DPNA against a long-term care facility
for failure to comply substantially with participation requirements.

Facilities that participate in Medicare may be surveyed on behalf of CMS by state survey
agencies in order to determine whether the facilities are complying with federal
participation requirements. 42 C.F.R. §§ 488.10- 488.28; 42 C.F.R. §§ 488.300 -
488.335. Pursuant to 42 C.F.R. Part 488, CMS may impose either a per day CMP or a per
instance CMP against a long-term care facility when a state survey agency concludes that
the facility is not complying substantially with federal participation requirements. 42
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C.F.R. §§ 488.406, 488.408, and 488.430. The penalty may start accruing as early as the
date that the facility was first out of compliance until the date substantial compliance is
achieved or the provider agreement is terminated. 42 C.F.R. § 488.440.

The regulations specify that a per day CMP that is imposed against a facility will fall into
one of two broad ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of
CMPs, from $3050 per day to $10,000 per day, is reserved for deficiencies that constitute
immediate jeopardy to a facility’s residents, and in some circumstances, for repeated
deficiencies. 42 C.F.R. §§ 488.438(a)(1), (d)(2). The lower range of CMPs, from $50
per day to $3000 per day, is reserved for deficiencies that do not constitute immediate
jeopardy, but either cause actual harm to residents, or cause no actual harm, but have the
potential for causing more than minimal harm. 42 C.F.R. § 488.438(a)(1)(ii).

The regulations define the term “substantial compliance” to mean:

[a] level of compliance with the requirements of participation
such that any identified deficiencies pose no greater risk to
resident health or safety than the potential for causing
minimal harm.

42 C.F.R. § 488.301.
“Immediate jeopardy” is defined to mean:

a situation in which the provider’s noncompliance with one or
more requirements of participation has caused, or is likely to
cause, serious injury, harm, impairment, or death to a resident.

Id.

The Act and regulations make a hearing available before an administrative law judge
(ALJ) to a long-term facility against whom CMS has determined to impose a CMP. But
the scope of such hearings is limited to whether an initial determination made by CMS is
correct. Act, § 1128A(c)(2); 42 C.F.R. §§ 488.408(g), 498.3(b)(12) and (13). The
hearing before an ALJ is a de novo proceeding. Anesthesiologists Affiliated, et al, DAB
CR65 (1990), aff'd 941 F.2d 678 (8" Cir. 1991).
III. Issues

A. Whether the facility was complying substantially with federal participation
requirements on the dates CMS determined to impose a CMP.

B. Whether CMS’s determination of immediate jeopardy was clearly erroneous.

C. Whether the amount of the penalty imposed by CMS is reasonable, if
noncompliance is established.

IV. Findings and Discussion

The findings of fact and conclusions of law noted below in bolded italics are followed by
a discussion of each finding.

A, The facility was not in substantial compliance with federal participation
requirements from June 18, 2006 through July 20, 2006.

1. Abuse (Tag F223): CMS established that the facility failed to provide
an environment free from verbal, sexual, physical, and mental abuse,
corporal punishment, and involuntary seclusion as provided by 42 C.F.R.
§ 483.13(b) with respect to Resident 2 (immediate jeopardy).

Resident 2 (R2)

Based on record review and staff interviews, the state surveyors found that Petitioner
failed to protect two of its residents R2 and R3 from physical abuse. CMS Ex. 1, at 1-20.
R2 was admitted to the facility on May 5, 2005, with multiple diagnoses, which included
dementia, Parkinson’s disease, aphasia, and stroke. He had both long and short memory
problems and severely impaired decision making skills. The Minimum Data Set (MDS)
assessment indicated that the resident was cognitively impaired and totally dependent on
staff for all of his care. CMS Ex. 1, at2. According to the care plan the resident had a
istory of physically abusive behavior and resistance to care. The intervention to address
this problem required staff to remove themselves from the situation whenever the resident
ecame combative, and re-approach him after he had time to calm down. CMS Ex. 1, at
3.

A review of the nurse’s notes revealed that R2 was found with physical injuries on June
8, 2006. The charge nurse reported that on June 18, 2006, at 11:10 a.m., she was called
into the resident’s room by the certified nurse aide (CNA or nurse aide) and that R2 had
an abrasion to the tip of the right hand in two areas. R2 also exhibited multiple red marks

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to both sides of the neck and three red spots on both sides of the inner groin area. Above
the hairline, an indentation was noted to the left side of the head. Additionally, he had a
red mark on the back of the head, an ulceration on the left side of the upper lip, and red
scratch marks in the left abdominal area and right hip area. CMS Ex. 1, at 4; CMS Ex.
35, at 29.

A nurse’s note dated June 18, 2006, at 11:20 a.m. indicated that the nurse supervisor who
was on duty that morning had seen R2 after the charge nurse (Joanne Shedrick) called
her. She assessed the resident and confirmed that he had physical injuries. She notified
the Director of Nursing (DON), who in turn notified the administrator. The nurse
supervisor also notified the resident’s family and the physician assistant. She then sent
the resident to a local hospital emergency room for treatment and evaluation. CMS Ex. 1,
at 5.

A report from the local hospital emergency department, dated June 18, 2006, indicated
that R2 was evaluated, treated, and discharged that same day. CMS Ex. 1, at 5; CMS Ex.
35, at 13.!

The police department was also called and two CNAs were arrested (referred to in this
decision as CNAs # | and #2). CMS Ex. 1, at 5-6.

On the day of the incident, at approximately 11:15 a.m., Ms. Shedrick was approached by
Loretta Gray’, the CNA in charge of R2’s care on June 18, 2006, and she provided an
account as to how the resident came to be injured. Ms. Gray stated that the resident had
been combative and hit his lip with his own hand. When this happened, she observed
blood on his lip, on the left side, and a cut on the top of the right hand. Tr. at 110.

' The report of emergency treatment is reflected on a boiler plate summary that
renders it useless in attempting to determine the precise findings and treatment rendered.
Thus, although the surveyor stated that the report mentioned that sutures and steri-strips
were used, such finding cannot be gleaned from the emergency room summary. For the
most part, the discharge summary provides a list of instructions to be followed at home by
the patient. Regarding sutures, the instructions tell the patient to keep the wound clean
and dry if sutures and steri-strips were used. CMS Ex. 35, at 13. The discharge
summary does not say that sutures or steri-strips were in fact used. The discharge
summary does indicate, however, that R2 suffered extremity, face, trunk, scalp, and
mouth wounds, albeit without elaboration.

> Loretta Gray was identified on the Statement of Deficiencies (SOD) as nurse
aide # 3.
6

After Ms. Gray returned from lunch she again approached Ms. Shedrick and confessed
that when she originally gave an account as to the manner in which R2 acquired the
injuries observed on the morning of June 18, 2006, she had lied. Ms. Gray then related
the following account:

R2 “was in a mess” and she stuck her head out the resident’s
room and asked two girls who happened to be walking by for
help in providing him with care. She needed assistance
because the resident had been combative. She left the two
nurse aides (CNA # 1 and CNA # 2 with the resident while
she went out to get some linen. When she returned, she
noticed that one of the nurse aides was holding R2 down
while the other was punching him in the head and in the chest.
Upon inquiry, Ms. Gray responded to the charge nurse that
she did not yell out for help because she was frightened,
inasmuch as the two nurse aides told her they knew where she
lived and would get her if she said anything.

See Tr. at 113.

CMS contends that Petitioner acknowledged that the facility was required by regulatory
mandate to provide an abuse-free environment, but that it failed to do so. The abuse
occurred, asserts CMS, when R2 was severely beaten by two employees of the facility
while a third employee witnessed all or part of the event. CMS Br. at 7.

Petitioner contends that the SOD does not identify any deficient practice on the part of the
facility that may have contributed in any way to the abusive actions alleged against the
three CNAs. Thus, reliance on the employment relationship alone as sufficient to
implicate the facility in abusive conduct is completely inappropriate, both as a basis for
citing the deficiency as well as assigning immediate jeopardy. Petitioner places reliance
on the ALJ decision rendered in Bryden Place, Inc., DAB CR1365 (2005).

The victim in the deficiency under scrutiny here (R2), was a 74-year-old male (CMS Ex.
35, at 16). He had end-stage Alzheimer’s disease and had suffered a stroke that left him
without the use of the right side of his body, and he was unable to speak or sit up on his
own. In fact, he relied on staff for all transfers and activities of daily living. Tr. at 104.

The facts surrounding the immediate jeopardy charge are set forth in the interview of Ms.
Loretta Gray by the surveyor that took place on June 23, 2006. Ms. Gray stated that she
began working at the facility on May 24, 2006, and received training on the abuse policy.
During that orientation she was instructed to immediately intervene to prevent an abuse
from happening or immediately call for help
prevent it. A
cooperative o
June 18, 2006, and approached
combative. S
agitated. However, rather than wait awhile |
she enlisted the assistance of ot!
In the company of nurse aides #

7

to stop abuse if she could not intervene to

though R2 had been cooperative on June 17, 2006, he was not so

n the 18". Thus, when Ms. Gray knocked on his door on the morning of
im to provide care, he seemed agitated and became
he left him alone and returned 30 minutes later, only to find him still

longer to see if the resident would calm down,

er staff members to provide care in spite of his resistance.
1 and # 2, she again knocked on R2’s door and entered

his room. Nurse aide # | positioned herself on the right side of the bed and nurse aide # 2

self on the left si
approach R2 with an introducto
They just pulled the covers off
rolling him over. At this point,
aide # 2 grab
He had a bowel movement, and
Ms. Gray was clearly in the pre:
that moment a victim of rough

Gray did not intervene to stop t

positioned he:
ry explanatio

nurse aide #

andling, ver!
e abuse nor

e. The two nurse aides who volunteered to help did not

n as to what care they were about to provide.

im, unfastened his diaper, and shoved him instead of
R2 raised his right [sic] leg to kick, at which time nurse
ed his leg and pinned him down, and told him “you gonna get changed.”*

1 was cleaning him roughly. At that point

sence of abuse upon a very vulnerable resident. R2 was at

al intimidation, and physical abuse. Ms.
did she call for help, and had no excuse for

failing to do so. In spite of the alleged abuse training she had received, she did not act as

required by the facility policy to take imme
undisturbed by what she had witnessed, Ms.

iate action
Gray simp

to curb the abuse. Apparently
y left the room to get wash cloths

and a clean pad for the bed. Upon her return to the resident’s room, the abuse had

significantly escalated. When she entered th

on the side of the head. Nurse aide # 2 push
became angry and started to kick and move

the resident’s hand and pressed it down on h
punched him in his leg. This made R2 angri
said “I’ll break your fingers if you bite me,”
causing a bad skin tear in

swung back, but she was able to land severa

> Ms. Gray stated that nurse aide # 2

e room she saw nurse aide # 1 smacking R2
ed the resident toward nurse aide # 1. R2

is hands [sic] and head.’ Nurse aide # 2 took
im to protect herself from being bitten, and
er. Nurse aide # 2 then grabbed his hand and
and shoved R2’s fingers in his mouth

is hand.* When nurse aide # 2 let the resident’s hand go, he

blows to his head. After the previously

who was positioned on R2’s left side grabbed

his leg and pinned him down to keep him from kicking. However, I find that inasmuch as

on the right side,
to be his left leg.
e.

the resident was paralyze
did raise a leg at all, it ha
aide # 2 was on his left si

* R2 was unable to

* The two nurse ai

he could not have raised his right leg. If he
That would make more sense since nurse

move his right hand.

es accompanied the assault on R2 with derogatory language.
8

described incident, Ms. Gray reported to the charge nurse that R2 had become combative
and caused injuries to himself. She later recanted her story and admitted that she had lied
about how the resident was injured. It was then that she revealed the abuse perpetrated by
nurse aides # 1 and #2. CMS Ex. 25 at 10-12; CMS Ex. | at 9-11.

Ms. Gray stated when interviewed by the surveyor that she did not intervene to prevent
the abuse because she was afraid of nurse aides # 1 and # 2. She also stated that she did
not do anything because she was in shock as she had never seen anything like that before.

Petitioner’s account of the aforementioned described event can be summarized as follows:

On the morning of June 18, 2006, CNA # 3 entered the room
of R2 to provide care. She found him to be difficult, and
uncooperative, so she left the room. She returned later with
CNAs # | and # 2 who agreed to assist her. CNAs # 1 and #2
began positioning the resident for care. CNA # 3 left the
room to obtain some towels to clean the resident, and when
she re-entered the room she saw that the other two CNAs
were handling the resident in an abrupt and harsh manner. He
immediately became combative, swinging his arms and legs
about, and CNAs # | and # 2 responded by physically striking
R2 repeatedly. CNA # 3 later told her supervisor that she was
shocked by what she saw the other CNAs doing. Tr. at 113.
The two CNAs told her they knew where she lived and would
get her if she said anything.

P. Br. at 4-5.

This account omits the fact that Ms. Gray witnessed nurse aides # 1 and # 2 abuse R2 as
soon as they entered his room to assist with his care, and she did not intervene to stop the
abuse. Ms. Gray condoned the abuse and simply stepped out of the room to retrieve
supplies. When she returned, the beating perpetrated on the resident had escalated from
shoving, pinning him down, and verbal abuse to an unrestrained beating. I infer that had
Ms. Gray intervened when she first observed the abuse, the situation would not have
gotten out of hand the way it did after she stepped out of the room to obtain supplies.
Petitioner suggests that the two CNAs had blocked Ms. Gray’s exit from R2’s room,
making it impossible for her to seek help. That is a distortion of the facts. After Ms.
Gray first witnessed the abuse, she was able to leave the room without interference, and
when she returned and saw the physical onslaught being perpetrated upon the resident,
she could have easily turned around at the threshold. She chose not to intervene nor to
seek help from a supervisor to protect a very vulnerable resident who was paralyzed on

9

one side of his body. Notwithstanding his very limited physical and cognitive
capabilities, Petitioner asserts that R2 “immediately became combative, swinging his
arms and legs about.” P. Br. at 4. In truth, R2 became combative when he was
victimized by the facility staff. Moreover, he was incapable of moving arms and legs
because he was paralyzed on the right side. It is worthy of note that Ms. Shedrick had
testified that when she cared for R2 and gave him his medication, she obtained his
cooperation by being friendly. She would share a soda with him and toast in friendly
gesture. Tr. at 109. Her approach was a far cry from the personnel who entered his room
on the 18" of June 2006. In contrast, and without a polite introduction, they began to
push him around with no regard for his compromised physical and mental conditions or
dignity.

The statement given to the surveyor on June 23, 2006, by Ms. Gray is a more complete
account of the June 18 incident than the version provided at the hearing by Ms. Shedrick
or the summary provided by Petitioner in its brief. Ms. Shedrick’s testimony is based on
the undated summary of her discussion with Ms. Gray after the June 18 incident. P. Ex.
26, at 2-3. In this regard, it is worth noting that Ms. Shedrick refers to Ms. Gray’s state of
shock as to the physical assault she witnessed when returning to the resident’s room after
retrieving supplies, but did not mention the abuse she had already witnessed prior to
exiting the room. It is not known whether the omission is attributable to Ms. Gray or Ms.
Shedrick. Thus, it is fair to conclude that either one or the other, or both, did not consider
the events that transpired prior to Ms. Gray leaving the room to obtain supplies to
constitute abuse.

As pointed out earlier, Petitioner unconvincingly states that Ms. Gray did not get help to
stop the assault on R2, because she was blocked from exiting the resident’s room.
Additionally, it maintains Ms. Gray feared retaliation and she “would have known that to
yell for help would have been futile” (due to competing noise). P. Br. at 5. To say that
she would have known that to yell for help would have been futile, is mere speculation.
Moreover, it would be more acceptable if Ms. Gray had in fact yelled for help, and her
voice had been drowned by competing noise. It is ludicrous, however, to excuse her
failure to cry for help under the guise that such effort would have been futile.

Furthermore, if Ms. Gray was in fact threatened, that was not the case when she first
witnessed the abuse of R2 and did nothing to intervene. If she was afterwards threatened,
that still does not exonerate the facility from providing its residents with an environment
free from abuse. At least, after realizing the gravity of her actions (or inactions), Ms.
Gray admitted to the truth as to how R2 was abused.
10

Petitioner places emphasis on its allegation that the facility took immediate steps to

to assure compliance with the regulations dealing with allegations of abuse. P. Br. at 6-8.
However, the fact that the facility took prompt remedial action does not cancel the fact or
the nature of the noncompliance. Not only did R2 suffer actual and severe harm, but
other residents were exposed to the likelihood of harm.

Petitioner also argues that the SOD does not identify any deficient practice on the part of
the facility that may have contributed in any way to the abusive actions alleged against
the three CNAs. Thus, Petitioner maintains that reliance on the employment relationship
alone is insufficient to implicate the facility in abusive conduct.

Petitioner’s argument that the SOD does not identify any deficient practice on the part of
the facility or that the employment relationship alone is insufficient to reach a finding of
noncompliance is misplaced. This is not a situation where liability is being imputed to
the facility simply because of the liability of its employees. The Departmental Appeals
Board (Board) has held that:

A facility that undertakes to receive federal funds for its
services ... commits to meet the applicable requirements to
participate in Medicare and Medicaid. Such a facility can act
only through its agents and employees who make and
implement policies, provide care, and perform the various
responsibilities called for by the federal programs to protect
and ensure the welfare of residents. Therefore, a facility
whose administration and staff have been found not to be
substantially complying with federal requirements is itself
subject to administrative enforcement remedies. The facility
cannot avoid such remedies by merely attempting to disown
the acts and omissions of its own staff and administration
since the facility elected to rely on them to carry out its
commitments.

Beverly Health Care Lumberton, Ruling No. 2008-5, at 6-7, Reconsideration of DAB No.
2156 (2008).

Petitioner also equivocates in alleging that the SOD does not identify any deficient
practice on the part of the facility that contributed to the nurse aides’ abusive conduct
perpetrated against R2. Pertinent to this is Petitioner’s assertion that the surveyor’s work
papers reflect that they inquired into the manner the facility hired its staff and verified
their credentials and suitability for employment. In doing this, no deficiency was found.
Additionally, Petitioner maintains that the surveyors ascertained that the staff understood
11

the facility’s abuse reporting and investigating requirements. | find Petitioner’s
contention that in the absence of a deficient practice related to the illegal acts of its
employees, it is improper to cite the facility for this deficiency, to be without merit.

In Emerald Oaks, the Board considered Petitioner’s suggestion that the ALJ should have
accepted its evidence that it could not fairly be held responsible for the nurse’s actions
because she had received proper training and yet had acted so far outside her duties that
she lost her license. The Board did not find that suggestion persuasive inasmuch as it was
clear from the uncontested findings that the nurse was acting within the scope of her
employment responsibilities. Thus, her employer could not disown the consequences of
the inadequacy of the care provided by the simple expedient of pointing the finger at her
fault, since she was the agent of her employer empowered to make and carry out daily
care decisions. Additionally, the Board considered that the deficient practice did not stem
from the actions of a single nurse (as in the present case). Emerald Oaks, DAB No. 1800,
at 7 n.3 (2001).

Similarly, in the case now before me, Petitioner cannot escape responsibility by arguing
that the facility was diligent in its hiring practices and the staff understood the facility’s
abuse reporting and investigation requirements. Contrary to Petitioner’s contention, I do
not have to look for a deficient facility practice outside the actions of the staff entrusted to
act on behalf of the facility. Consequently, the deficient facility practice, in this case, is
unequivocally found in the improper conduct of those that the facility empowered to act
on its behalf. The facility, as a business entity, exists only in contemplation of the law,
and can only perform the functions of a long-term care provider through the employees it
chooses and empowers to act on its behalf. Acceptance of Petitioner’s argument as
sufficient justification for a finding of substantial compliance would render the law and
regulations applicable here, meaningless.

Petitioner’s reliance on the ALJ decision rendered in Bryden Place, Inc. is unpersuasive.
In that case, the ALJ found that noncompliance was not established where the prohibited
conduct was displayed by a sole employee who was not acting within the scope of his
responsibilities on behalf of the facility because the occasion on which he verbally abused
a resident was his day off. Here, the conduct involved several employees who were
acting on behalf of the facility in two separate instances.° Moreover, although the ALJ
did not articulate his rationale, following my precise reasoning, that decision did not have
the benefit of appellate scrutiny and is not binding. Bryden Place, Inc., DAB CR1365
(2005)

° The incident involving R3 will be discussed later on in my decision.
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n the case now before me, nurse aides # 1 and # 2 caused actual harm to R2 by
perpetrating a physical assault upon him that resulted in severe injuries. The act of abuse
was committed by staff members in the process of providing care to a resident of
Petitioner’s facility. The perpetrators of the abuse had been entrusted by the facility to
carry out its commitment as a participant in the Medicare and Medicaid programs. In the
discharge of that trust, they failed to provide R2 with an environment free from abuse.
Similarly, Ms. Gray, also acting on behalf of the facility, condoned the abusive acts of
nurse aides # 1 and # 2 by not intervening in the abuse that occurred in her presence and
y not reporting it immediately to her supervisor or other staff members who could help
intervene to protect R2 from physical abuse. In view of the foregoing, it is my finding
that CMS has established a prima facie case that Petitioner was in violation of Tag F223.
Petitioner has not overcome that showing by a preponderance of the evidence.

2. Abuse (Tag F226): CMS established that the facility failed to develop
and implement policies and procedures that prohibit mistreatment,
neglect, and abuse of residents as provided by 42 C.F.R. § 483.13(c)

(immediate jeopardy).

Based on record review and staff interviews, the facility failed to follow its abuse policies
and procedures related to providing an environment free from verbal, physical, and
mental abuse. The discussion as to Tag F223 serves as basis for establishing that
Petitioner failed to implement its abuse policies when one of its nurse aides did not
prevent or stop the physical abuse on two of its residents (Residents 2 and 3). In fact, the
nurse aide who incurred in such failure (Ms. Loretta Gray), was terminated from her
employment at the facility because she did not follow the abuse and neglect policy. In the
letter of dismissal dated June 24, 2006, Ms. Sally Davis, the administrator, told her the

following:

The policy clearly states that it is your responsibility to
inform your immediate supervisor immediately of any
violations of the abuse and neglect policy. You failed to
follow the policy by not immediately reporting the witnessed
act of alleged abuse to your immediate supervisor on June 18,
2006 as well as the witnessed act of alleged abuse on June 3,
2006.

P. Ex. 13 (emphasis in original).
Although the facility took prompt action to address the staff member’s failure to

implement its policies and procedures, it was not so diligent in ascertaining that the
policies were actually implemented. Without question, the failure to actually implement
13

facility policy against abuse and neglect leaves the resident at real risk for serious harm.
See West Point Community Living Center, DAB CR1473, at 8 (2006). The best
articulated policies and procedures are of little value if not properly and timely
implemented and understood by each staff member.

It is my finding that CMS has established a prima facie case that Petitioner was in
violation of Tag 226. Petitioner has not overcome that showing by a preponderance of
the evidence.

The deficiencies under Tags 223 and 226 regarding the abuse of Resident 2 constitute
immediate jeopardy.

On June 24, 2006, the surveyors conducted interviews with nurses, nursing assistants, and
administrative and support staff. It was revealed that the facility staff had received re-
inservice training related to the protection of residents at all times, and the need for staff
to report occurrences immediately and without fear of reprisal. Inservice records were
reviewed, and it was determined that the immediate jeopardy was removed on June 24,
2006, at 5:00 p.m. However, the facility remained out of compliance with an isolated
deficiency that constituted no actual harm with potential for more than minimal harm that
is not immediate jeopardy. CMS Ex. 1, at 17-18.

3. Abuse (Tag F223): CMS established that the facility failed to provide
an environment free from verbal, sexual, physical, and mental abuse,
corporal punishment, and involuntary seclusion as provided by 42 C.F.R.
§ 483.13(b) with respect to Resident 3 (less than immediate jeopardy).

Resident 3 (R3)

R3 was admitted to Petitioner’s facility on March 31, 2006, with diagnoses of
Alzheimer’s, dementia, hypertension, cerebrovascular accident, cancer, and seizure
disorder. The MDS also indicated that R3 was hearing and vision impaired. The MDS
had the additional indication that the resident had persistent anger with self and others,
and that the displayed behavior was not easily altered. That behavior included verbal and
physical abuse and resistance to care.

During an interview on June 22, 2006, Ms. Gray stated that she had been employed at the
facility for about a month, and had been a nurse aide for about eight years. She stated that
the first weekend that she worked at North Carolina Veterans Nursing Home she was
assigned to work with nurse aide # 4, who was training her.
14

On May 28, 2006, the nursing assistants from an earlier shift (11-7) reported that R3 was
combative the previous night. Therefore, Ms. Gray asked nurse aide # 4 to help her with
R3. When they entered his room, the resident began to fight. In response, nurse aide # 4
grabbed R3’s knee and pressed it up against his chest. Ms. Gray thought that the nurse
aide was rough with the resident when he pinned him down. Ms. Gray told the supervisor
that the incident should have been reported, but she had not done so because she feared
what nurse aide # 4 would do to her if she told. Ms. Gray revealed the abuse four days
after she witnessed the abuse of R2 on June 18, 2006, by nursing assistants # | and # 2.

Petitioner alleges that when Ms. Gray belatedly reported the abuse she witnessed of R3,
the facility immediately launched an investigation and no corroborating evidence was
found that such incident occurred. In this regard, Joan Russell, a surveyor testified that
she reviewed the facility records and found no entry that provided an indication that R3
had been abused on May 28, 2006. She attempted to reach the CNA who had been
mentioned as the person who engaged in the abusive conduct, and he could not be
reached. Tr. at 63.

Dorothy Moody-Hunt, the DON, testified that she spoke to the resident and employees,
and reviewed the medical record and could not come up with substantiation for the
alleged abuse. The resident was unable to provide information due to his dementia and
Alzheimer’s disease. Tr. at 162, 163. Of course, it is not surprising that no
documentation was found to confirm the incident, because the people involved had
chosen not to make it known. Additionally, the employees who had knowledge of the
abuse were Ms. Gray and CNA #4. Consequently, corroboration could only come from
Ms. Gray and/or CNA #4. Ms. Gray had already confessed that she witnessed the abuse.
She was willing to do this although she was now aware that she had already incurred in a
serious violation of facility policy in a similar matter.’ Thus, she made a confession
knowing that such revelation would place her in a greater negative light than was already
the case.

The other person that could assist in corroborating the alleged abuse was the perpetrator,
CNA #4. The DON testified that she contacted him but he refused to go to the facility to
discuss the matter. Tr. at 162. Sally Fielding Davis, the administrator, also contacted
CNA # 4, and he preferred to discontinue employment at the facility rather than go in to
discuss the matter of the alleged abuse. The administrator stated that his response to the
request to discuss the abuse of R3 was an indication to her that he may very well have
been guilty of the alleged abuse. Tr. at 227-232. In fact, the failure of Ms. Gray to

7 On the 18" of June 2006, she had been reprimanded for not immediately
reporting the abuse she had witnessed of R2.
15

immediately report this allegation of abuse to her supervisor was one of the reasons that
supported her termination of employment with the facility. P. Ex. 13. At one point in
her testimony, the administrator testified that the reason Ms. Gray was terminated from
employment at the facility was because of her failure to immediately report the abuse of
R3. Tr. at 234-235. As stated earlier, the dismissal letter mentions Ms. Gray’s failure to
immediately report the abuse of R2 as well as R3, as the reason for termination.

I find that CMS has established a prima facie case of noncompliance with Tag F223
relative to the abuse of R3. Petitioner has not overcome that showing by a preponderance
of the evidence.

4. Staff treatment of residents (Tag F225): CMS established that the
facility failed to immediately report the physical abuse of Resident 3. 42
C.F.R. § 483.13(c)(2).

Based on record review and staff interviews, a nurse aide (Ms. Gray), witnessed and
failed to immediately report abuse on R3. Ms. Gray witnessed the abuse on R3 on May
28, 2006, but did not reveal the incident until June 22, 2006, when she was interviewed
by a surveyor. CMS Ex. 1, at 19.

Petitioner alleges that inasmuch as the facility was not guilty of any deficient practice in
regard to R3, the incident should not have been cited as an act of noncompliance.
Furthermore, Petitioner maintains that there is an absence of corroborating evidence that
the incident in fact occurred. Petitioner speculates that Ms. Gray may have concocted the
story regarding R3’s abuse by CNA # 4 because she was resentful after being
reprimanded for failure to immediately report the witnessed abuse of R2 on June 18,
2006. P. Br. at 23.

In speculating as to the motives behind Ms. Gray’s revelation, Petitioner fails to address
whether she was of the belief that the revelation would in fact point to the guilt of the
facility rather than to her own guilt. If Petitioner argues (erroneously), that the actions of
the employees are not attributable to the facility, why would it expect Ms. Gray to believe
otherwise. Thus, following Petitioner’s own reasoning, I would have to conclude that
Ms. Gray revealed the occurrence of the incident with the knowledge that it would be
self-incriminating.

* Although the letter references June 3, 2006, as the occasion when Ms. Gray failed to
report an abuse of R3, the correct date is May 28, 2006.
16

Ihave already concluded that CMS has established a prima facie case as to the deficiency
under Tag F223 regarding R3, and that Petitioner has not overcome that showing by a
preponderance of the evidence. In arriving at that conclusion, one of the factors that I
considered is the fact that the administrator testified that the evidence in the case pointed
to the finding that it was very likely that CNA # 4 did in fact abuse R3. In fact, the
administrator testified that she terminated Ms. Gray’s employment with the facility based
on the finding that she witnessed CNA # 4 abuse R3 and did not report it immediately.

Thus, it is my finding that CMS has established a prima facie case that Petitioner was not
in compliance as to the deficiency under Tag 225 at the less than immediate jeopardy
level.

5. Abuse (Tag F226): CMS established that the facility failed to develop
and implement policies and procedures that prohibit mistreatment,
neglect, and abuse of residents as provided by 42 C.F.R. § 483.139(c) at
the less than immediate jeopardy level.

The discussion above regarding Petitioner’s noncompliance as to Tag F223 regarding R3
and Tag F226 regarding R2 and R3 is incorporated here by reference. No additional
discussion is necessary in support of my finding that CMS has established a prima facie
case that Petitioner was in noncompliance with Tag F226 at the less than immediate
jeopardy level. Petitioner has not overcome that finding by a preponderance of the
evidence.

6. Activities F248: CMS established that the facility failed to provide an
ongoing program of activities designed to meet, in accordance with the
comprehensive assessment, the interests and the physical, mental, and
psychosocial well-being of each resident.

Based on observations, group interviews, staff interviews and review of the resident
council minutes, the facility failed to provide meaningful activities to meet the needs and
interests of residents during the evenings and weekends.

Several residents stated that they were interested in engaging in age-appropriate activities,
field trips, sports, gardening, fishing, crafts, table games, music appreciation, etc., but the
facility met their requests with excuses. The residents were told at times that the
requested activity was too expensive, that they lacked the transportation capability, or did
not have the needed volunteers. CMS Ex. 1, at 42-68.
17

Petitioner argues that the activities program met at all times. However, the facility is not
charged with failing to have activity program meetings. What CMS found is that the
facility failed to provide the meaningful activities requested by the residents at those
meetings.

Additionally, Petitioner argues that assuming that the activities program was deficient
during the time of the survey, those deficiencies were corrected after the June 2006
survey, but earlier than July 21, 2006, the correction date assigned by the State Survey
Agency. However, the facility reported that the completion date for the deficiency at Tag
F248 was July 21, 2006. Petitioner has presented no new evidence of probative value that
the facility returned to substantial compliance at any time earlier than July 21, 2006.

CMS Ex. 2, at 59.

In view of the foregoing, I find that CMS has established a prima facie case that
Petitioner was not in substantial compliance with Tag F248 at the less than immediate
jeopardy level. Petitioner has not overcome that showing by a preponderance of the
evidence.

7. Other Issues

Petitioner also contends that CMS attempted to improperly introduce new evidence of an
additional deficiency just as the case was ready to go to hearing. Regarding this
additional incident of abuse, I had already ruled that I would not allow the introduction of
a new deficiency, nor allow CMS to argue in favor of additional remedies as a result of
such incident. Furthermore, I have not considered the alleged incident in arriving at any
of the findings in this case.”

Finally, Petitioner has raised allegations that challenge the validity of the survey process
that are beyond my adjudicative authority. Consequently, I will not address those
challenges. P. Br. at 26-30.

B. CMS’s finding of immediate jeopardy was not clearly erroneous.
I have already found that CMS has established a prima facie case that Petitioner was not

in substantial compliance with federal requirements for skilled nursing facilities
participating in the Medicare and Medicaid programs regarding Tags F223 and F226.

° The alleged incident occurred on May 10, 2008, and involved R2. P. Br.
at 15-16.
18

Furthermore, I sustain CMS’s finding that Petitioner’s level of noncompliance for each of
these two deficiencies constitutes immediate jeopardy.

The regulations define immediate jeopardy as a situation in which a provider’s
noncompliance with one or more requirements of participation has caused, or is likely to
cause, serious injury, harm, impairment, or death to a resident. 42 C.F.R. § 488.301. A
finding of immediate jeopardy does not require “a finding of present harm, but also
encompasses a situation that is [likely to cause] harm.” Britthaven, Inc. d/b/a Britthaven
of Smithfield, DAB No. 2018 (2006) (quoting Hermina Traeye Memorial Nursing Home,
DAB No. 1810 (2002)). CMS’s determination of immediate jeopardy must be upheld
unless it is clearly erroneous. 42 C.F.R. § 498.60(c)(2). The burden rests on the provider
to prove that CMS’s determination of immediate jeopardy is clearly erroneous. Petitioner
as not met that burden here.

Petitioner contends that the immediate jeopardy is not warranted because there is no
evidence of facility culpability. P. Br. at 15.

As [have discussed earlier, Petitioner caused actual physical and emotional harm to one
of its residents (R2). When that occurred, nothing was done to immediately protect the
armed resident as well as other residents from similar harmful conduct. As I have
already discussed, one staff member stood by while two others physically assaulted one
of its residents. Ms. Shedrick, who was the charge nurse at the time of the incident
testified that she admonished Ms. Gray that she should have yelled at the DON for help.
Tr. at 121. In fact, as previously stated, Ms. Gray was terminated from employment at the
facility because of her failure to immediately notify her supervisor of the abuse that she
witnessed.

Although R2 was known to resist care and become combative at times, the abuse incident
of June 18, 2006, was sparked by the rough treatment received by R2 at the hands of two
members of the facility staff whose harsh treatment provoked the resident to anger. The
facility should have foreseen that serious injury, harm, impairment, or death was likely to
come to R2, whose physical and mental condition was severely compromised, if treated
harshly, and forcefully given care. Petitioner should have also foreseen that if staff did
not immediately intervene to stop the abuse, serious harm or injury was likely to come to
R2. Other residents were also placed at risk of suffering serious injury, harm,
impairment, or death.

Also, a requirement for a facility to develop and implement a policy against abuse and
neglect is not a mere formality. The requirement has multiple purposes: it provides
specific notice to facility employees regarding what is considered “abuse and neglect”
and that “abuse and neglect” will not be tolerated; it informs and directs all employees of
19

their obligation to report any suspicion of abuse that they might witness or become aware
of; it directs the facility to initially and continually train all employees to recognize abuse
and how to take appropriate action to report it; and it protects residents from potential
harm, especially because they may not be able to protect themselves from abuse and to
ensure that residents feel safe and secure. Petitioner’s failure to implement its policies
against abuse as evidenced by the incidents with R2 and R3 also caused or was likely to
cause serious injury or harm to these residents.

C. The amount of the penalty imposed by CMS is reasonable.

Petitioner contends that the CMP is unreasonable because even if the acts of the CNAs
are attributable to the facility, their culpability is not. However, Petitioner offers no legal
support for the proposition that liability, but not culpability, may be attributed to the
facility based on the acts of its employees. Petitioner’s assertion that surveyor Joan
Russell testified that the facility bore no responsibility for the acts of its nursing assistants
is misplaced (See Tr. at 52 and 58). The reference to pages 52 and 58 of the transcript
lends no support to Petitioner’s theory. Contrary to Petitioner’s assertion, the surveyor
testified that the facility documentation reflected their culpability. Moreover, Petitioner’s
responsibility for the actions of its employees is a legal issue for me to decide and not a
matter to be resolved on the basis of the surveyor’s testimony.

I have already addressed the basis for a finding of noncompliance and sustained CMS’s
finding that Petitioner’s level of noncompliance for each of the two deficiencies at Tags
F223 and F226 constituted immediate jeopardy.

I conclude that Petitioner has not met its burden of showing that CMS’s determinations of
immediate jeopardy were “clearly erroneous” for the period June 18, 2006 through June
23, 2006. The imposition of a CMP of $6000 per day for this period, imposed for
noncompliance at the immediate jeopardy level, is reasonable in view of the gross failure
to provide an environment for its residents that is free from abuse. In this case, where
two CNAs so abusively assaulted a bedridden resident while a third staff member
witnessed the shameful beating without intervening to stop it or seek the assistance of a
supervisor, a CMP of $6000 per day is not unreasonable. That same CNA had witnessed
a prior incident of abuse a month earlier, and failed to immediately report the incident. In
both instances, the CNA asserted that she did not do anything to protect the residents or
report the abuse for fear of retaliation. The facility’s culpability cannot find sanctuary in
such lame excuse. I find that the failure of Petitioner to implement its policies and
procedures against abuse demonstrates a systemic problem within the facility.

20

The burden is on the facility to prove that it has resumed complying with program
requirements, not on CMS to prove that the deficiencies continued to exist after they were
discovered. Hermina Traeye Memorial Nursing Home, DAB No. 1810 (2002). In this
case, CMS determined that the immediate jeopardy was abated on June 23, 2006, based
on the facility’s plan of correction showing that on that date it completed a physical
assessment on all residents and did not identify any injuries of unknown origin. CMS Ex.
2, at 6.

It is true that other conditions in the facility still created a status of noncompliance.
However, CMS deemed those lingering violations to be at the less than immediate
jeopardy level. It is my finding, therefore, that the period of noncompliance at the less
than immediate jeopardy level commenced on June 24, 2006, and ended on July 20, 2006.

Concerning the CMP of $100 per day for the deficiencies that are less than immediate
jeopardy, I note that such penalty is at the lower end of the maximum permissible amount
of $3000. I find that the penalty is appropriate and within a reasonable range. The onus
is on Petitioner to come forward with evidence, consistent with 42 C.F.R. § 488.404, to
show that the amount of the CMP is unreasonable. Petitioner has failed to do so.

Based on a revisit survey conducted in August 2006, CMS correctly determined that the
facility returned to substantial compliance when the facility reached out to local civic and
volunteer organizations, purchased new activity equipment, inserviced staff members
regarding the new activity program, etc. See CMS Ex. 2, at 62. July 21, 2006, is the date
the facility noted as the completion date of corrections concerning the deficiency under
Tag F248. CMS Ex. 2, at 59. Petitioner has not satisfied its burden of showing that it
eliminated the noncompliance on any date prior to July 21, 2006. Thus, a per day CMP
of $100 for the less than immediate jeopardy deficiencies is appropriate through July 20,
2006.

V. Conclusion

Based on the testimony offered at the hearing, the documentary evidence, the arguments
of the parties, and the applicable law and regulations, I find that Petitioner was not in
substantial compliance with program participation requirements for the period of June 18,
2006 through July 20, 2006.

Petitioner was not in compliance with program participation requirements at the
immediate jeopardy level from June 18, 2006 through June 23, 2006, and the imposition
of a $6000 per day CMP for the period of the immediate jeopardy is reasonable.
21

I also sustain the CMP of $100 per day for the period of June 24, 2006, through July 20,
2006.

/s/
José A. Anglada
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Jay Phillip Parker, ) Date: October 8, 2008
)
Petitioner, )
)

-Vv.- ) Docket No. C-08-373

) Decision No. CR1853
The Inspector General. )
)

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Affirmance of the I.G.’s determination to exclude the Petitioner herein, Jay Phillip Parker,
from participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years. The I.G.’s Motion and determination to exclude Petitioner are based
on the terms of section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C. § 1320a-
7(a)(1). The facts in this case mandate the imposition of a five-year exclusion, and for
that reason | grant the I.G.’s Motion for Summary A ffirmance.

I. Procedural Background

Jay Phillip Parker, R.Ph., was first registered and licensed in the State of Kansas as a
pharmacist in 1970. From 2003 through 2006, he made false or fraudulent claims to the
Kansas Medicaid program in the amount of approximately $75,000.

This activity became the subject of an inquiry by the Kansas State Board of Pharmacy
and the Kansas Attorney General’s Medicaid Fraud Division, and, on November 17,
2006, resulted in Petitioner’s felony conviction. On that date, Petitioner appeared with
counsel in the District Court for the Second Judicial District, Jefferson County, Kansas,
and tendered a negotiated plea of guilty to a single count of Making a False Claim to the
2

Medicaid Program, in violation of KAN. STAT. ANN. 21-3846(a)(1), (6), and (7).
Petitioner’s plea was accepted; he was convicted on that plea; and on December 29, 2006,
¢ was sentenced to a 12-month term of probation and required to pay restitution, costs,
and fees in the total sum of $75,213.

On January 31, 2008, more than 13 months after Petitioner’s conviction, the I.G. notified
Petitioner that he was to be excluded pursuant to the terms of section 1128(a)(1) of the
Act for the mandatory minimum period of five years. Section 1128(a)(1) mandates the
exclusion, for a period of not less than five years, of “[a]ny individual or entity that has
een convicted of a criminal offense related to the delivery of an item or service under...
any State health care program.”

Petitioner timely sought review of the I.G.’s action by his pro se letter of April 2, 2008,
and on April 28, 2008, Petitioner’s present counsel entered his appearance. I convened a
telephonic prehearing conference on June 26, 2008, pursuant to 42 C.F.R. § 1005.6, in
order to discuss the procedures best suited for addressing the issues presented by the case.
The parties agreed that the case likely could be decided on written submissions, and by
Order of June 27, 2008, I established a schedule for the submission of documents and
briefs. All briefing is now complete, and the record in this case is closed.

The evidentiary record on which I decide the issues before me contains 14 exhibits. The
LG. proffered eight exhibits marked I.G. Exhibits 1-8 (1.G. Exs. 1-8). Petitioner proffered
six exhibits marked Petitioner’s Exhibits 1-6 (P. Exs. 1-6). In the absence of objection I
have admitted I.G. Exs. 1-8 and P. Exs. 1-6 as designated.' CMS submitted a brief (CMS
Br.), to which Petitioner responded (P. Br.) and CMS replied (CMS Reply). Petitioner
decided not to submit a sur-reply.

II. Issues

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

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

' The Plea Agreement and Complaint/Information in this case, CMS Exs. 6 and 7,
reflect Petitioner’s name as Jay “Philip” Parker. Before me, Petitioner has been referred
to as Jay “Phillip” Parker instead. However, Petitioner does not deny that he is the
individual referred to in CMS’s exhibits and I thus simply note the discrepancy.
2. Whether the proposed five-year period of exclusion is unreasonable.

Both issues must be resolved in favor of the I.G.’s position. Because his predicate
conviction has been established, section 1128(a)(1) of the Act mandates Petitioner’s
exclusion. A five-year period of exclusion is reasonable as a matter of law, since it is the
minimum period established by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-

7(c)(3)(B).
Ill. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of any “individual or entity that has been convicted of a criminal offense related
to the delivery of an item or service under title XVIII or under any State health care
program.” The terms of section 1128(a)(1) are restated in regulatory language at 42
C.F.R. § 1001.101(a). This statutory provision makes no distinction between felony
convictions and misdemeanor convictions as predicates for mandatory exclusion.

In Kansas, the crime of Making a False Claim to the Medicaid Program is defined by a
specific statute, KAN. STAT. ANN. 21-3846(a), which in relevant parts provides:

Making a false claim, statement, or representation to the medicaid program
is, knowingly and with intent to defraud, engaging in a pattern of making,
presenting, submitting, offering or causing to be made, presented,
submitted, or offered:

(1) Any false or fraudulent claim for payment for any goods,
service, item, facility, accommodation for which payment may be made, in
whole or in part, under the medicaid program, whether or not the claim is
allowed or allowable;

(6) any claim for payment, for any goods, service, item, facility, or
accommodation, which is not medically necessary in accordance with
professionally recognized parameters or as otherwise required by law, for
which payment may be made, in whole or in part, under the medicaid
program, whether or not the claim is allowed or allowable; or
4

(7) any wholly or partially false or fraudulent book, record,
document, data or instrument, which is required to be kept or which is kept
as documentation for any goods, service, item, facility or accommodation or
of any cost or expense claimed for reimbursement for any goods, service,
item, facility or accommodation for which payment is, has been, or can be
sought, in whole or in part, under the medicaid program, whether or not the
claim is allowed or allowable.

The crime of Making a False Claim to the Medicaid Program is classified by degree
according to the value of the property, services, or funds illegally obtained. As classified
by KAN. STAT. ANN. 21-3846(b), Petitioner’s conviction was for a felony offense.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual... bya... State... court, regardless
of... whether the judgment of conviction or other record relating to criminal conduct has
been expunged,” section 1128(i)(1) of the Act; “when there has been a finding of guilt
against the individual... bya... State... court,” section 1128(i)(2) of the Act; or
“when a plea of guilty or nolo contendere by the individual... has been accepted bya...
State ... court,” section 1128(i)(3) of the Act. 42 U.S.C. § 1320a-7(i)(1)-(3). These
definitions are repeated at 42 C.F.R. § 1001.2.

An exclusion based in section 1128(a)(1) is mandatory and the I.G. must impose it for a
minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-
7(c)(3)(B). The regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory
provision.

IV. Findings and Conclusions
I find and conclude as follows:

1. On his plea of guilty on November 17, 2006, in the District Court for the Second
Judicial District, Jefferson County, Kansas, Petitioner Jay Phillip Parker was found guilty
of the criminal offense of Making a False Claim to the Medicaid Program, in violation of
KAN. STAT. ANN. 21-3846(a)(1), (6), and (7). I.G. Exs. 5, 6, 7, 8.

2. The accepted guilty plea and the finding of guilt described above constitute a
“conviction” within the meaning of sections 1128(a)(1) and 1128(i)(1), (2), and (3) of the
Act, and 42 C.F.R. § 1001.2.

5

3. Petitioner’s conviction of the criminal offense of Making a False Claim to the
Medicaid Program, in violation of KAN. STAT. ANN. 21-3846(a)(1), (6), and (7), as noted
in Findings | and 2 above, is related to the delivery of an item or service under a state
health care program as a matter of law.

4. By reason of Petitioner’s conviction, a basis exists for the I.G.’s exercise of authority
to exclude Petitioner from participation in Medicare, Medicaid, and all other federal
health care programs, pursuant to section 1128(a)(1) of the Act.

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

6. There are no disputed issues of material fact and summary disposition is
therefore appropriate in this matter. Michael J. Rosen, M.D., DAB No. 2096 (2007);
Thelma Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under title XVIII of the Act (Medicare) or any state health care program. Tamara
Brown, DAB No. 2195 (2008); Thelma Walley, DAB No. 1367; Boris Lipovsky, M.D.,
DAB No. 1363 (1992). The I.G.’s proof of these two essential elements is not contested
by Petitioner, and in any case they are fully established in the record before me.

The first essential element, the fact of Petitioner’s conviction, is conclusively established
by the District Court records, which include one of the investigators’ Affidavit of
Probable Cause (I.G. Ex. 5), the Plea Agreement by which Petitioner, his counsel, and the
Attorney General negotiated Petitioner’s guilty plea (I.G. Ex. 6), the charging document
in the prosecution, the Complaint/Information (I.G. Ex. 7), and the Journal Entry of
Judgment, by which the overall history and disposition of the prosecution was recorded
(LG. Ex. 8).

The second element is present as a matter of law. I have set out the relevant text of the
Kansas statute above, and that statute’s specific application to the Kansas Medicaid
program supplies the requisite nexus and common-sense connection between crime and
program. I have so held with reference to a similar federal statute in Virginia Planas,
D.C., DAB CR1831 (2008), and with reference to similar state statutes in Tamara Brown,
DAB CR1799 (2008); Stanley Junious Benn, DAB CR1501 (2006); and Mark D.
6

Perrault, M.D., DAB CR1471 (2006). I believe that this view has won at least implicit
approval from the Departmental Appeals Board (Board) in Tamara Brown, DAB No.
2195, at 7.

Petitioner’s sole defense is the one he has relied on from the outset of this appeal.
Petitioner would avoid the mandatory minimum period of exclusion required by section
1128(a)(1) by requesting that the I.G.’s determination to proceed pursuant to the
mandatory authority of section 1128(a)(1) “be set aside and that a permissive exclusion
issued pursuant to section 1128(b)(4) of the Social Security Act be imposed in lieu of the
previously imposed sanction.” P. Br., at 1. That particular provision forms part of
section 1128(b) of the Act, 42 U.S.C. § 1320a-7(b).

Now, section 1128(b) provides 15 distinct predicates for permissive, rather than
mandatory, exclusions. Only three of those predicates are variants of criminal
convictions. Of the remaining 12, several predicates allow the Secretary to exclude
entities that do not cooperate with program requirements concerning inspection and
record-keeping, or that engage in improper billing or other disapproved financial
practices. Section 1128(b)(14) allows the Secretary to exclude individuals who persist in
default of certain classes of scholarships and student loans. The predicate relied on by
Petitioner here, section 1128(b)(4), permits the Secretary to exclude an individual or
entity if its license to provide health care has been revoked or suspended. Petitioner has
proffered uncontradicted evidence that his license has been subject to such proceedings
before the Kansas State Board of Pharmacy. P. Exs. 1, 4,5, 6. It is to be noted that
although the revocation reflected in those proceedings was a sanction for the same
misconduct that led to Petitioner’s criminal conviction, the revocation proceedings did not
assert the conviction itself as a basis for the revocation.

The Secretarial discretion implicit in the grant of permissive authority is sometimes seen
as appropriate to situations in which individuals or entities may present less-serious
threats to the integrity of the protected programs. Petitioner has made an impressive and
sympathetic showing that his license has been restored and that he should not be regarded
as a threat to those programs in the future. P. Exs. 4,5, 6. Nothing in this Decision
should be understood to trivialize or disregard his showing. But, once a conviction is
found to be within the reach of any part of section 1128(a), as this one has been found to
lie within the specific reach of section 1128(a)(1), the mandatory operation of that section
bars Petitioner from asking that other more lenient, more discretionary, or more favorable
exclusionary provisions should be applied instead.

Even in this situation, where the underlying misconduct itself can correctly be argued to
have brought about consequences that fall within both section 1128(a) and one or more of
the permissive exclusions sections 1128(b)(1)-(15), the well-settled, long-established rule
7

is clear: if section 1128(a) applies, then the mandatory exclusion and mandatory
minimum period prescribed by section 1128(a) must be imposed, and neither the I.G. nor
the Administrative Law Judge may choose to proceed under any other provision. The
Board has enlisted the rigorous vocabulary of mathematics to explain the relationship
between sections 1128(a) and 1128(b): “Sections 1128(a) and 1128(b)(11) describe sets
of conduct that intersect but are not coextensive. When conduct falls within the
intersection of the two provisions, section 1128(a)(1), as the mandatory provision,
applies.” Scott D. Augustine, DAB No. 2043, at 14 (2006); see identical language in
James Randall Benham, DAB No. 2042, at 14 (2006). To his credit, Petitioner candidly
acknowledges the rule while asking that he be spared its application.

This rule enjoys a venerable pedigree in the decisions of this forum. Tarvinder Singh,
D.D.S., DAB No. 1752 (2000); Lorna Fay Gardner, DAB No. 1733 (2000); Douglas
Schram, R.Ph., DAB No. 1372 (1992); Niranjana B. Parikh, M.D., DAB No. 1334
(1992); Jack W. Greene, DAB No. 1078, aff'd sub nom. Greene v. Sullivan, 731 F. Supp.
835 (E.D. Tenn. 1990). See also Michael Travers, DAB CR85 (1990). It has, as well,
won explicit approval in the Article II federal judiciary:

An exclusion determination under [section 1128(a) of the Act] is a two-step
process. First, the Secretary must determine whether the mandatory
provision applies. Under [section 1128(a) of the Act] the Secretary shall
exclude individuals who have been convicted of a program-related crime or
who have been convicted of patient abuse. If the prerequisites of this
section are met, the Secretary is directed by Congress to exclude that
individual, and the issue of permissive exclusion becomes moot. It is only
after the Secretary determines that the individual’s conviction was not for

a “program-related crime” that the permissive exclusion statute becomes
relevant.

Travers v. Sullivan, 801 F. Supp. 394, at 405 (E.D. Wash. 1992).

Here, the Travers court’s two-step process ends after the first step. I have found as a
matter of law that Petitioner’s conviction is program-related. Further debate on the issue
of permissive exclusion is moot and further discussion of the statute authorizing it is
irrelevant. Petitioner’s misconduct may well lie within the intersection of the two
provisions, sections 1128(a) and 1128(b) of the Act, but the mandatory provisions of
section 1128(a) apply and control the result in this case.

Resolution of a case by summary disposition is appropriate when there are no disputed
issues of material fact and when the undisputed facts, clear and not subject to conflicting
interpretation, demonstrate that one party is entitled to judgment as a matter of law.
8

Michael J. Rosen, M.D., DAB No. 2096; Thelma Walley, DAB No. 1367. Summary

disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). This forum looks to
FED. R. CIV. P. 56 for guidance in applying that regulation. Robert C. Greenwood, DAB
No. 1423 (1993). The material facts in this case are undisputed, clear, and unambiguous.
They support summary disposition as a matter of law. This Decision issues accordingly.

VI. Conclusion

For the reasons set out above, the I.G.’s Motion for Summary Affirmance should be, and
itis, GRANTED. The I.G.’s exclusion of Petitioner Jay Phillip Parker from participation
in Medicare, Medicaid, and all other federal health care programs for a period of five
years, pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1),
is thereby affirmed.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Chang Goo Yoon, ) Date: October 7, 2008
)
Petitioner, )
)
-Vv.- ) Docket No. C-08-503
) Decision No. CR1852
The Inspector General. )
)
DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Chang
Goo Yoon, from participation in Medicare, Medicaid, and all other federal health care
programs pursuant to section 1128(b)(4) of the Social Security Act (Act) (42 U.S.C.

§ 1320a-7(b)(4)), effective May 20, 2008. Petitioner is excluded because his license to
provide health care as a physical therapist in the State of Colorado was surrendered while
a formal disciplinary proceeding was pending before the Colorado Division of
Registrations Office of Physical Therapy Licensure for reasons bearing on his
professional competence, professional performance, or financial integrity. The I.G. has
established that there is a proper basis for exclusion. Petitioner’s exclusion for not less
than the period during which his state license is surrendered is required by the Act.’ Act,
section 1128(c)(3)(E) (42 U.S.C. § 1320a-7(c)(3)(E)).

' When an individual has been excluded under this section, the Inspector General
(1.G.) will consider a request for reinstatement in accordance with 42 C.F.R. § 1001.3001
if the individual obtains a valid license in the state where the license was originally
surrendered.
-2-
I. Background

The I. G. notified Petitioner by letter dated April 30, 2008, that he was being excluded
from participation in Medicare, Medicaid, and all federal health care programs pursuant
to section 1128(b)(4) of the Act until he is reinstated by the Inspector General and, to be
eligible for reinstatement, Petitioner must regain his license as a physical therapist in the
State of Colorado.

Petitioner timely requested a hearing. The case was assigned to me for hearing and
decision. On July 2, 2008, I convened a prehearing telephonic conference, the substance
of which is memorialized in my Order dated July 7, 2008. The parties agreed that the
case could be heard based on an exchange of briefs accompanied by documentary
evidence in lieu of an in-person hearing.

The I.G. filed a brief in support of exclusion on July 24, 2008 (1.G. Brief), with 1.G.
Exhibits (I.G. Exs.) land 2. Petitioner filed a response (P. Brief) on September 4, 2008,
with one exhibit, P. Ex. 1, consisting of 25 pages. The I.G. filed a reply (1.G. Reply) on
September 22, 2008. The parties have not raised any objections to each other’s exhibits
and the exhibits are admitted.

II. Discussion
A. Findings of Fact

The following findings of fact are based upon the uncontested and undisputed assertions
of fact in the pleadings and the exhibits admitted. Citations may be found in the analysis
section of this decision if not included here.

1. Petitioner received a license to practice physical therapy in the State of Colorado
on July 19, 2001. I.G. Ex. 2.

2. On August 2, 2007, Petitioner entered into a Stipulation and Final Agency Order
with the Colorado Division of Registrations Office of Physical Therapy Licensure
to resolve two cases “without the necessity of holding a formal disciplinary
hearing.” I.G. Ex. 2, at 1.

3. In the Stipulation and Final Agency Order, the Director of the Colorado Division
of Registrations asserted that she had “reasonable grounds to believe that
[Petitioner] had engaged in conduct” that did not “meet generally accepted
standards of physical therapy practice... .” I. G. Ex. 2, at 2.
3-

The Director also asserted that she had “reasonable ground to believe” that
Petitioner violated the statutes against health insurance fraud and abuse and had
“offered, given, or received .. . remuneration for the referral of clients.” I.G. Ex.
2, at 2-3.

Under the terms of the agreement between Petitioner and the Colorado Division of
Registrations, Petitioner permanently surrendered his license to practice physical
therapy in the State of Colorado. I.G. Ex. 2, at 3.

B. Conclusions of Law
Petitioner’s request for hearing was timely and I have jurisdiction.

There is a basis for Petitioner’s exclusion pursuant to section 1128(b)(4)(B) of the
Act because that section authorizes the Secretary of the Department of Health and
Human Services, at his discretion, to exclude an individual who surrendered his
license to provide health care while a formal disciplinary proceeding was pending
concerning the individual’s professional competence, professional performance, or
financial integrity before any State licensing authority. 42 U.S.C. § 1320a-
7(b)(4)(B).

The Secretary has delegated to the I.G. the authority to determine and impose
exclusions under section 1128(b)(4) of the Act. 53. Fed. Reg. 12993 (Apr. 20,
1988).

Exclusions pursuant to section 1128(b)(4) of the Act are derivative and based on
the action of another governmental body.

The I.G.’s decision to exercise his discretion to exclude an individual under section
1128(b) of the Act is not subject to Administrative Law Judge (ALJ) review. 42
C.F.R § 1005.4(c)(5).

Pursuant to section 1128(c)(3)(E) of the Act, the minimum period of exclusion
under section 1128(b)(4) is not less than the period during which Petitioner’s state
license is revoked, suspended, or surrendered and is presumptively reasonable.
See also 42 C.F.R. § 1001.501(b)(1).

The exclusion imposed under section 1128(b)(4) of the Act remains in effect until
the excluded individual regains his license in the state where the license was
surrendered and is reinstated by the 1.G. 42 C.F.R. § 1001.501(b)(4).
-4-
C. Issue

The Secretary of Health and Human Services (the Secretary) has by statute and regulation
limited my scope of review in license surrender cases to whether there is a basis for the
imposition of the exclusion. If I determine that a basis exists then, as a matter of law, the
length of the exclusion must be coterminous with the period during which the license is
surrendered. Act, section 1128(c)(3)(E); 42 C.F.R. § 1001.501(b).

D. Applicable Law

Petitioner’s right to a hearing by an ALJ and judicial review of the final action of the
Secretary is provided by section 1128(f) of the Act (42 U.S.C.

§ 1320a-7(f)). Petitioner’s request for a hearing was timely filed and I do have
jurisdiction.

Pursuant to section 1128(b)(4)(B) of the Act, the Secretary may exclude from
participation in Medicare, Medicaid, and all federal health care programs, any individual
who surrendered his license to provide health care while a formal disciplinary proceeding
was pending before any state licensing authority and the proceeding concerned the
individual’s professional competence, professional performance, or financial integrity.
See also 42 C.F.R. § 1001.501(a)(2).

The standard of proof is a preponderance of the evidence.
E. Analysis

1. There is a basis for Petitioner’s exclusion pursuant to section
1128(b)(4)(B) of the Act.

The L.G. cites section 1128(b)(4) of the Act as the basis for Petitioner’s permissive
exclusion. I.G. Ex. 1. The statute provides:

(b) PERMISSIVE EXCLUSION. — The Secretary may
exclude the following individuals and entities from
participation in any Federal health care program (as defined in
section 1128B(f)):

eR KK
(4) LICENSE REVOCATION OR SUSPENSION. — ANY
INDIVIDUAL OR ENTITY —
-5-

(B) who surrendered such a license [to provide
health care] while a formal disciplinary
proceeding was pending before such a [State
licensing] authority and the proceeding
concerned the individual’s . . . professional
competence, professional performance, or
financial integrity.

The essential facts of this case are not disputed. Petitioner received a license to practice
physical therapy in the State of Colorado on July 19, 2001. I.G. Ex. 2. On August 2,
2007, Petitioner entered into a Stipulation and Final Agency Order with the Colorado
Division of Registrations for the Office of Physical Therapy Licensure to resolve two
separate pending cases against him without the necessity of holding a formal disciplinary
hearing. /d. The Director of the Colorado Division of Registrations asserted that she had
“reasonable grounds to believe” that Petitioner “engaged in conduct that, if proven at a
hearing, would establish violations of the Physical Therapy Practice Act, particularly
sections 12-41-115(1)(a), (f), (g), (b)(D, (@), G) of Colorado Revised Statutes.” 1G. Ex. 2,
at 2-3. While the Stipulation and Final Agency Order indicates that Petitioner did not
admit that he committed any act in violation of the Act, he agreed to permanently
surrender his license to practice physical therapy in Colorado. /d., at 3. He further
acknowledged that he understood that the Stipulation and Final Agency Order had the
same force and effect as an order entered after a formal disciplinary hearing by the
Director. Jd.

Petitioner does not dispute any of these facts; Petitioner, however, contends that the I.G..
cannot rely on the Stipulation and Final Agency Order as a factual or legal basis pursuant
to 42 C.F.R. § 1001.2007 because that Stipulation and Final Agency Order simply
contains allegations against Petitioner and Petitioner indicated in that Order that he did
not admit and specifically denied that he had committed an act in violation of the
Colorado Physical Therapy Practice Act.

Petitioner’s contentions are legally incorrect. Section 1128(b)(4)(B) of the Act contains
two elements: (1) Petitioner must have surrendered his license while a formal
disciplinary proceeding is pending; and (2) the pending proceeding must concern the
individual’s professional competence, professional performance, or financial integrity.
Therefore, under the Act, the I.G. must show the existence of these two elements.
Frankly, under these specific provisions of the statute, the regulatory provisions
prohibiting a petitioner from collaterally attacking an underlying conviction, judgment, or
determination upon which an exclusion is based are not applicable. The I.G. needs only
to prove that these two elements exist. The I.G. has clearly done so.

-6-

The terms of the Stipulation and Final Agency Order state that there were two pending
disciplinary actions against Petitioner and it was because of this that Petitioner agreed to
the settlement and agreed to surrender his license permanently. P. Brief at 1. Next, the
Stipulation and Final Agency Order specifically sets forth that there are reasonable
grounds to believe that Respondent engaged in conduct that, if proven at a hearing, would
establish violations under six grounds for disciplinary action under the Colorado Physical
Therapy Practice Act. Petitioner cannot and does not dispute that these six grounds
asserted against him in the pending disciplinary actions concern his professional
competence, professional performance, or his financial integrity.”

Moreover, as the I.G. correctly points out, the statutory provisions reflect Congress’ clear
intent to prevent unfit providers from avoiding exclusion by surrendering their licenses
before the state can conclude proceedings against them, and to provide the I.G. with the
ability to exclude individuals who have moved away and obtained licenses in other states,
before or after the loss, revocation or surrender of a professional license in another state
where disciplinary action was pending. S. REP. 100-109, at 7, as reprinted in 1987
U.S.C.C.A.N. 682, 688.

Therefore, the I.G. has a legal basis for excluding Petitioner as Petitioner had a license to
practice physical therapy which was surrendered while disciplinary proceedings were
pending against him, and the pending disciplinary proceedings related to his professional
performance, professional competence, and financial integrity.

2. The period of exclusion is reasonable as a matter of law.

There is no issue regarding the duration of the exclusion, as section 1128(c)(3)(E) of the
Act specifies that the exclusion shall not be less than the period during which Petitioner’s
state license to provide health care is revoked, suspended, or surrendered. See also 42
C.F.R. § 1001.501(b)(1). The Secretary’s regulations provide that the I.G. will consider a

> The grounds for disciplinary action asserted against Petitioner include: that
Petitioner committed an act which does not meet generally accepted standards of physical
therapy practice or failed to perform an act necessary to meet generally accepted
standards of physical therapy; failed to make essential entries on patient records or
falsified or made incorrect entries of an essential nature; engaged in ordering or
performing without clinical justification unnecessary lab tests or studies or administered
unnecessary treatment or ordered an unnecessary service x-ray or treatment contrary to
recognized standards; committed abuse of health insurance; committed a fraudulent
insurance act; and offered, gave or received commissions, rebates, or other forms of
remuneration for referral of clients.
-7-

request for reinstatement only after the individual obtains a valid license in the state
where the individual’s license was originally suspended, revoked or surrendered. 42
C.F.R. § 1001.501(b)(4).

III. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all federal health care programs effective May 20, 2008, 20 days after the
April 30, 2008 I.G. notice of exclusion, and for a period coterminous with his license
surrender in the State of Colorado.

/s/
Alfonso J. Montano
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Toni Sisodia, ) Date: September 30, 2008
)
Petitioner, )
)
-Vv.- ) Docket No. C-08-486
) Decision No. CR1850
The Inspector General. )
)
DECISION

Here, Petitioner, loni Sisodia, M.D., asks review of the Inspector General’s (I.G.’s)
determination to exclude her for five years from participation in Medicare, Medicaid and
all federal health care programs under section 1128(a)(1) of the Social Security Act. For
the reasons discussed below, I find that the I.G. is authorized to exclude Petitioner, and
that the statute mandates a minimum five-year exclusion.

I. Background

On June 7, 2007, Petitioner pled guilty in New York State Court to one count of petty
larceny, a violation of section 155.25 of the New York State penal code. I.G. Exs. 4, 5.

Thereafter, in a letter dated March 31, 2008, the I.G. advised Petitioner that, because she
had been convicted of a criminal offense related to the delivery of an item or service
under the Medicare or state health care program, the I.G. was excluding her from
participation in Medicare, Medicaid, and all other federal health care programs for a
minimum period of five years. Section 1128(a)(1) of the Social Security Act (Act)
authorizes such exclusion. Petitioner requested review, and the matter has been assigned
to me for resolution.
2

The parties have submitted their briefs. Attached to the I.G.’s brief are I.G. Exhibits 1-8
(I.G. Exs. 1-8). Attached to Petitioner’s brief is a one-page personal statement from
Petitioner, which we have marked P. Ex. 1. In the absence of any objections, I admit into
evidence I.G. Exs. 1-8 and P. Ex. 1.

II. Issues

The sole issue before me is whether the I.G. has a basis for excluding him from program
participation. Because an exclusion under section 1128(a)(1) must be for a minimum
period of five years, the reasonableness of the length of the exclusion is not an issue.

III. Discussion

A, Petitioner must be excluded for five years because she
was convicted of a criminal offense related to the delivery of
an item or service under a state health care program, within
the meaning of section 1128(a)(1) of the Social Security
Act.'

Petitioner has not disputed any of the facts critical to the I.G.’s case. Section 1128(a)(1)
of the Act requires that the Secretary of Health and Human Services (Secretary) exclude
an individual who has been convicted under federal or state law of a criminal offense
related to the delivery of an item or service under Medicare or a state health care
program.’ 42 C.F.R. § 1001.101. Individuals excluded under section 1128(a)(1) of the
Act must be excluded for a period of not less than five years. Act, section 1128(c)(3)(B).

In a Complaint filed November 21, 2006,° Petitioner, a psychiatrist licensed to practice in
New York, was charged with one count of petty larceny and one count of offering a false
instrument for filing, both misdemeanors. Specifically, the complaint charged that she

submitted “up-coded” claims to the state Medicaid program, that is, she billed Medicaid
for a higher level of service than she actually provided. I.G. Ex. 2. On June 7, 2007, she

' My findings of fact/conclusions of law are set forth, in italics, in the discussion
headings of this decision.

> The term “state health care program” includes a state’s Medicaid program. Act,
section 1128(h)(1).

* T could not find any date on the actual document. However, the I.G. maintains
Petitioner was charged on November 21, 2006, and Petitioner has concurred. I.G. Br. at
2; P. Br. at 1.
3

pled guilty to the petty larceny count, and agreed to pay more than $75,000 in restitution
to the Medicaid program. I.G. Ex. 8. Thus, there is no dispute that her crime falls within
the ambit of section 1128(a)(1) of the Act, so the I.G. has a basis for the exclusion.

B. The statute mandates a five year mandatory minimum
exclusion, and mitigating factors may not be considered to reduce
that period of exclusion.

An exclusion under section 1128(a)(1) of the Act must be for a minimum mandatory
period of five years. As set forth in section 1128(c)(3)(B) of the Act:

Subject to subparagraph (G), in the case of an exclusion under subsection (a), the
minimum period of exclusion shall be not less than five years ....

When the I.G. imposes an exclusion for the mandatory five-year period, the
reasonableness of the length of the exclusion is not an issue. 42 C.F.R.
§ 1001.2007(a)(2).

IV. Conclusion

For these reasons, I conclude that the I.G. properly excluded Petitioner from participation
in Medicare, Medicaid, and all other federal health care programs, and I sustain the five-
year exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge