Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Diane Kennedy, M.D.,
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-145
Decision No. CR2534

Date: May 3, 2012

DECISION

Dr. Diane Kennedy (Petitioner) appeals the determination of Wisconsin Physicians
Service Insurance Corporation (WPS), a Medicare contractor, that she was not eligible
to reassign her billing privileges as a supplier’ to Sanford Health Network (Sanford),
earlier than April 29, 2011 and could not submit claims for payment to Sanford earlier
than March 30, 2011. I grant the Centers for Medicare & Medicaid Services’ (CMS’s)
motion for summary judgment, finding that CMS could not approve Petitioner’s request
for reassignment of billing privileges until it received the appropriate completed
application with Petitioner’s signature.

I. Background

On December 22, 2010, Sanford mailed a CMS 855B application to WPS indicating that
it was adding two practice locations at Luverne and Worthington, Minnesota, to the

' A physician is a Medicare “supplier,” which is defined in the Medicare statute to mean
“a physician or other practitioner, a facility, or other entity (other than a provider of
services) that furnishes items or services” under the Medicare statute. Act § 1861(d), 42
U.S.C. § 1395x(d).
Sanford Health Network. Sanford also requested that WPS reassign Petitioner’s billing
privileges from Sanford Clinic, an affiliate, to Sanford effective December 1, 2010. With
its request, Sanford submitted a list of the names of the suppliers whose billings it wanted
reassigned. CMS Exhibit (CMS Ex.) 1, at 19. This list included Petitioner’s name.
However, Petitioner had not reassigned her billing privileges by completing the requisite
application, a signed CMS 855R.

On April 19, 2011, WPS advised Sanford that its CMS 855B application adding the two
practice locations had been approved. CMS Ex. 3. Also on April 19, 2011, WPS
informed Sanford that it could not issue a new Provider Transaction Access Number
(PTAN) for Petitioner without first receiving a completed CMS 855R. CMS Ex. 2.
Sanford eventually submitted a completed CMS 855R, signed by Petitioner, on April 29,
2011. CMS Exs. 4, 5. On July 20, 2011, WPS informed Sanford that it was granting
Petitioner Medicare billing privileges starting March 30, 2011, thirty days before April
29, 2011, the date of receipt of her CMS 855R application that was processed to
approval. CMS Ex. 6.

Sanford requested reconsideration of WPS’s determination on July 25, 2011. CMS Ex. 7.
An unfavorable reconsideration decision was issued on October 6, 2011. CMS Ex. 8.
Petitioner filed a timely hearing request on November 9, 2011. On November 29, 2011,
this case was assigned to me for hearing and decision.

CMS filed a prehearing brief and Motion for Summary Judgment (CMS Br.)
accompanied by eight exhibits, CMS Exs. 1-8. Petitioner filed a prehearing brief and
opposition to CMS’s Motion for Summary Judgment (P. Br.). Petitioner attached two
items to its brief, emails to and from WPS, which Petitioner labeled as P. Ex. 9, but
which I relabel as Petitioner’s exhibit (P. Ex.) 1, and an unlabeled affidavit which I now
label as P. Ex. 2. Neither party objected to any exhibit, and I admit all proffered exhibits
into evidence.

II. Issue

The issue in this case is whether CMS had a legitimate basis for determining April 29,
2011 as the effective date of reassignment for Petitioner’s Medicare billing privileges.”

? Petitioner only argues here about the ability to get reimbursed from Medicare under a
third-party group reassignment. This decision does not consider Petitioner’s eligibility
for any individual direct-billing option that may have applied.
III. Analysis

My findings of fact and conclusions of law are set forth in italics and bold in the
discussion captions of this decision.

a. This case is appropriate for summary judgment.

CMS seeks summary judgment. The Departmental Appeals Board (Board) stated the
standard for summary judgment as follows:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. ... The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of law. . .
. To defeat an adequately supported summary judgment motion, the non-
moving party may not rely on the denials in its pleadings or briefs, but must
furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. ... In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an Administrative Law Judge (ALJ) in deciding a summary judgment motion
differs from the ALJ’s role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Village at Notre
Dame, DAB No. 2291, at 4-5 (2009).

It is undisputed that Sanford’s December 22, 2010 CMS 855B application had a list
attached to it that stated, “Please issue the following providers new PTAN numbers under
group PTAN number C03080 effective 12/1/2010.” Under this statement was a list of 10
individuals, including Petitioner, with their social security and National Provider
Identifier (NPI) numbers. The vice president of Sanford signed his name below this list.
CMS Ex. 1, at 19. Petitioner’s signature does not appear on the December 22, 2010
application or the attached list. /d. It is also undisputed that Petitioner had not previously
completed a reassignment application, CMS 855R, for Sanford’s Luverne and
Worthington locations prior to April 29, 2011 under Sanford’s tax identification number.
CMS Ex. 7. As the parties do not dispute any of these material facts, summary judgment
is appropriate.
b. WPS properly required a completed CMS 855R application with Petitioner’s
signature before beginning the reassignment process.

Petitioner argues that Sanford’s December 22, 2010 CMS 855B application should have
been broadly construed and treated also as Petitioner’s CMS 855R application. Petitioner
states Stanford received inaccurate information from WPS staff when it inquired how to
reassign Petitioner’s billing privileges and was told to attach Petitioner’s name with
identifying information on a list, along with other individuals whose billing it wanted
reassigned to Sanford’s new business entity. November 19, 2011 Hearing Request; P.
Ex. 2. The CMS 855B form is the Medicare enrollment application for group practices
and not used to enroll individuals. The CMS 855R form is the Medicare enrollment
application to reassign a physician’s Medicare billing privileges. Providers and suppliers
must submit enrollment information on the applicable enrollment application. 42 C.F.R.
§ 424.510. These forms serve different functions and require different information. One
essential feature of each of these forms is that each form requires a signature of the
applicant. A contractor must receive a CMS 855R form, including the provider or
supplier’s signature, before it can approve a reassignment of Medicare billing privileges.
The 855B form may not substitute for the proper reassignment application. See Crawford
M. Barnett, M.D., DAB CR 2233, at 9 (2010).

42 C.F.R. § 424.510(d)(3) requires signature(s) on enrollment applications and states that
the “signature attests that the information submitted is accurate and that the provider or
supplier is aware of, and abides by, all applicable statutes, regulations, and program
instructions.” The signature certification serves an important legal function to bind the
supplier, both legally and financially, and is not a mere formality. See Jennifer Tarr,
DAB CR2299, at 5 (2010).

The requirement of a signature is also set forth plainly on the reassignment form, CMS
855R:

Title XVIII of the Social Security Act prohibits payment for services provided by
an individual practitioner to be paid to another individual or supplier unless the
individual practitioner who provides the services specifically authorizes another
individual or supplier (employer, facility, or health care delivery system) to
receive said payments in accordance with 42 C.F.R. 424.73 and 42 C.F.R. 424.80.
By signing this Reassignment of Benefits Statement, you are authorizing the
supplier identified in Section 2 to receive Medicare payments on your behalf... .
All individual practitioners who allow another supplier (employer, facility, or
health care delivery system) to receive payment for their services must sign the
Reassignment of Benefits Statement. The signatures below acknowledge that you
will abide by all the laws and regulations pertaining to the reassignment of
benefits.
CMS Ex. 4, at 3 (emphasis added). The form states that the provider or supplier will be
certifying, among other things, that the contents of the application are “true, accurate and
complete.” Jd. Also, the application has the applicant certify that, “I understand that any
misrepresentation or concealment of any information requested in this application may
subject me to liability under civil and criminal laws.” Jd.

The CMS 855B form that was submitted on December 22, 2010, containing different
information than the 855R form, merely included Petitioner’s name on an attached list
without Petitioner’s signature. On April 29, 2011, WPS received the correct
reassignment form completed and signed by Petitioner. CMS Ex. 4. WPS properly
began processing the reassignment request as of April 29, 2011 and notified Petitioner of
the approval of her application and the reassignment of her billing privileges by letter
dated July 20, 2011. CMS Ex. 6.

c. WPS’s receipt of Petitioner’s signed application necessarily
determines her effective date and retrospective billing privileges.

The determination of the effective date of Medicare billing privileges is governed by 42
C.F.R. §§ 424.520 and 424.521. Section 424.520(d) provides that the effective date for
billing privileges for physicians, among others, is “the /ater of the date of filing of a
Medicare enrollment application that was subsequently approved by a Medicare
contractor or the date an enrolled physician . . . first began furnishing services at a new
practice location.” (Emphasis added). The “date of filing” is the date that the Medicare
contractor “receives” a signed provider enrollment application that the Medicare
contractor is able to process to approval. 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008).
In this case, the effective date of Medicare billing privileges depends on the date the
contractor first receives an approvable application. This is consistent with the preamble
to the final rule and the plain language of the regulation. 73 Fed. Reg. 69,769; 42 C.F.R.
§ 424.520(d). Therefore Petitioner’s reassignment application was not approvable until
WPS received her completed and signed application. I find that it is undisputed that
Petitioner did not send a signed, complete, and approvable reassignment application to
WPS before April 29, 2011.

Although WPS erroneously referred to March 30, 2011 as Petitioner’s “effective date”
(CMS Ex. 6), regulations actually require the contractor to assign the date of receipt of
the application as the effective date of Petitioner’s enrollment while permitting the
contractor to grant retrospective billing privileges for 30 days prior to the effective date.
42 C.F.R. § 424.521(a)(1). Thus, I am treating WPS’s action as if it intended to set
March 30, 2011 as the earliest date for which Petitioner may submit claims reassigned to
Sanford based on an effective date of April 29, 2011.

Sanford argues that it relied on inaccurate information from the contractor’s staff and
that it should not be punished for that reliance. However, even assuming for purposes of
summary judgment that Sanford did receive incorrect information from WPS, Petitioner
does not allege any affirmative misconduct. Petitioner’s arguments amount to claims of
equitable estoppel, and I am unable to grant the relief that Petitioner requests. It is well-
established by federal case law, and in Board precedent, that: (1) estoppel cannot be the
basis to require payment of funds from the federal fisc; (2) estoppel cannot lie against the
government, if at all, absent a showing of affirmative misconduct, such as fraud; and (3) I
am not authorized to order payment contrary to law based on equitable grounds. It is
well settled that those who deal with the government are expected to know the law and
may not rely on the conduct of government agents contrary to law. See, e.g., Office of
Personnel Mgmt. v. Richmond, 496 U.S. 414 (1990); Heckler v. Cmty. Health Servs. of
Crawford County, Inc., 467 U.S. 51 (1984); Oklahoma Heart Hosp., DAB No. 2183, at
16 (2008); Wade Pediatrics, DAB No. 2153, at 22 n.9 (2008), aff'd, 567 F.3d 1202 (10th
Cir. 2009); U.S. Ultrasound, DAB No. 2303 at 8 (2010).

Sanford also asserts that WPS did not perform a pre-screening of Sanford’s December 22,
2010 application within the 20-day time limit specified in the Medicare Program Integrity
Manual (MPIM). Sanford argues that WPS should be held to the MPIM deadline.
However, the prescreening process is designed to identify missing information from a
particular type of application. Sanford submitted the CMS 855B form to add two
practice locations to the Sanford Health Network and the prescreening was performed
with that purpose in mind, not for reassignment purposes. Petitioner claims that too
much time elapsed between the December 22, 2010 CMS 855B application and the
contractor notice in April 2011 informing her that she needed to file a signed
reassignment application. This lapse in time does not allow me to disturb the contractor’s
determination. The MPIM is CMS’s guidance for its affiliated contractors and does not
have the force and effect of law and therefore is not binding upon me. I am bound by the
regulations, and the effective date provision of 42 C F.R. § 424.520(d) is clear. I have no
authority to grant Petitioner’s request of an earlier reassignment effective date other than
the date the regulations permit me.

IV. Conclusion

Based on the undisputed fact that it was not until April 29, 2011 when the Medicare
contractor received a complete and signed reassignment application that it could
successfully process, I agree with CMS that Petitioner’s effective date of reassignment of
billing privileges was April 29, 2011, with a retrospective billing period starting March
30, 2011. Therefore I grant CMS’s motion for summary judgment.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Eileen M. Rice, M.D.,
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-162
Decision No. CR2533

Date: May 3, 2012

DECISION

Eileen M. Rice, M.D. (Petitioner), appeals a reconsideration decision issued on October
9, 2011. I grant summary judgment and sustain the determination of the Centers for
Medicare and Medicaid Services (CMS) finding that the undisputed evidence establishes
that CMS properly enrolled Petitioner in the Medicare program effective May 18, 2011.

I. Background and Procedural History

Petitioner is a neurologist who started a solo practice on February 1, 2011. CMS Exhibit
(CMS Ex.) 1. To obtain direct billing privileges from Medicare for care provided to
beneficiaries, Petitioner sought to become enrolled as a solo practitioner in the Medicare
program and submitted an enrollment application, CMS Form 855-1, which Highmark
Medicare Services (Highmark), a CMS contractor, received on May 2, 2011. CMS Ex. 1,
at 75-76. By letter dated May 4, 2011, Highmark informed Petitioner that Highmark was
returning the enrollment application because Petitioner submitted an outdated CMS Form
855-I that was no longer valid. CMS Ex. 1, at 75-76. Petitioner filed another Medicare
enrollment application on May 18, 2011, and submitted the current CMS Form 855-1.
CMS Ex 1, at 21-63. By letter dated June 6, 2011, Highmark acknowledged that it had
received Petitioner’s application, informed Petitioner that the application was incomplete,
and requested Petitioner to provide certain revisions and supporting documentation
within 30 days. CMS Ex. 1, at 64-65. Petitioner faxed the requested revisions and
supporting documentation to Highmark on June 8, 2011. CMS Ex 1, at 66-74. CMS
notified Petitioner by letter dated June 10, 2011, that her Medicare enrollment application
had been approved effective April 18, 2011.' CMS Ex. 1, at 17-19. On July 9, 2011,
Petitioner requested reconsideration of the initial decision and requested that her effective
enrollment date be changed to February 1, 2011, the date Petitioner first began providing
services to Medicare patients. CMS Ex. 1, at 6-7. On October 9, 2011, a contractor
hearing officer issued a reconsideration decision denying Petitioner’s request for an
earlier effective date of enrollment. CMS Ex. 1, at 1-3.

Petitioner then filed a hearing request (HR) with the Civil Remedies Division of the
Departmental Appeals Board, and the case was assigned to me for hearing and decision.
In accordance with my Acknowledgment and Pre-hearing Order issued on December 6,
2011, CMS filed a Motion for Summary Judgment and supporting brief (CMS Br.),
accompanied by three exhibits (CMS Exs. 1-3), on January 5, 2012. On February 7,
2012, Petitioner responded to the CMS Motion for Summary Judgment by letter (P.
Response). I admit CMS Exs. 1-3 into the record.

Il. 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
beneficiaries may only be made to eligible providers of services and suppliers. Act

§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395u(h)(1)). The Act
requires the Secretary of Health and Human Services (the Secretary) to issue regulations
that establish a process for the enrollment of providers and suppliers, including the right
to a hearing and judicial review of certain enrollment determinations. Act § 1866(j) (42
U.S.C. § 1395ec(j)).

Pursuant to 42 C.F.R. § 424.505, a 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 Medicare eligible beneficiaries. The effective date of a
provider or supplier’s enrollment in Medicare is governed by regulations at 42 C.F.R. §

' The letter was in error as the January 4, 2012 letter from Diana L. Wert of Provider
Enrollment Services at Highmark explained. CMS Ex. 2. CMS’s determination was that
the effective date of Petitioner’s enrollment was May 18, 2011, the date the CMS
contractor received her enrollment application. However, the CMS contractor authorized
Petitioner to retrospectively file claims for services to April 18, 2011. CMS Ex. 2.
424.520(d). The effective date of enrollment for a supplier may only be the later of two
dates: (1) the date when the supplier filed an application for enrollment that was
subsequently approved by a Medicare contractor charged with reviewing the application
on behalf of CMS; or (2) the date when the supplier first began providing services at a
new practice location. /d. The date of filing of the enrollment application is the date
when the designated Medicare contractor receives the complete enrollment application
and supporting documentation. 42 C.F.R. § 424.510(d)(1); 73 Fed. Reg. 69,725, 69,769
(Nov. 19, 2008).

An outdated enrollment application cannot be processed to approval and Medicare
contractors are directed to return enrollment applications to the provider or supplier if
“the provider submits the outdated paper version of the paper CMS-855 application” in
accordance with Chapter 15, Section 15.8.1 of the Medicare Program Integrity Manual
(MPIM) (Rev. 356, Effective: October 26, 2010). See also 73 Fed. Reg. 69,725, 69,770
(Nov. 19, 2008). Additionally, an enrolled supplier may bill 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. 42 C.F.R. §
424.521(a). Retrospective billing for up to 90 days prior to the effective date of
enrollment is permitted only in the case of a Presidentially-declared disaster, pursuant to
42 CFR. § 424.521.

Ill. Analysis
A. Issue

The issue in this case is whether CMS’s contractor and CMS had a legitimate basis for
determining Petitioner’s effective Medicare enrollment date, and retrospective billing
date, for Medicare billing privileges.

B. Applicable Standard For Summary Judgment
The Departmental Appeals Board (Board) stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . . . The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of

law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. .. . In
determining whether there are genuine issues of material fact for trial, the

reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).

The role of an Administrative Law Judge (ALJ) in deciding a summary judgment motion
differs from the ALJ’s role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre
Dame, Inc., DAB No. 2291, at 5 (2009).

C. Finding of Fact and Conclusion of Law

I) CMS’s contractor and CMS properly determined Petitioner’s effective
date of Medicare enrollment.

The relevant facts are not disputed, and I draw all reasonable inferences in favor of
Petitioner. Petitioner began seeing patients at a new practice location on February 1,
2011. HR. Petitioner subsequently submitted a Medicare enrollment application to
Highmark. CMS Ex. 1, at 21-63. Highmark received Petitioner’s Medicare enrollment
application, that was eventually approved, on May 18, 2011. On June 10, 2011,
Highmark approved Petitioner’s enrollment application with an effective date of May 18,
2011 and retrospective billing privileges commencing on April 18, 2011. CMS Ex. 1, at
17-19; CMS Ex. 2.

Petitioner contends that her effective date of enrollment should be February 1, 2011, the
date she began rendering services to Medicare beneficiaries. Petitioner does not deny
that CMS received her enrollment application on May 18, 2011. However, Petitioner
argues that her effective date should be earlier because Petitioner’s “application was in
Medicare ‘limbo’ because new unrecognized visual problems caused my office manager
to transpose numbers in the application. It required an extensive period of time until this
last problem was recognized and corrected.” HR. Petitioner further requests that
“Medicare actually evaluate the circumstances” and states that “[t]he delay has led to
extreme financial loss and debt, and I am still trying to recover as I provide ongoing care
for my Medicare patients.” HR. Petitioner also requests that I “consider the fact that
[Petitioner has] a 32 year history of service to Medicare patients,” and states that she
understands “that there have been clerical errors made, but I stand behind my track
record, quality of service and dedication to patient care.” P. Response. Petitioner
therefore contends that she should be reimbursed for services delivered during the time
interval between February 1, 2011 and April 18, 2011. P. Response.
The effective date of Medicare enrollment and billing privileges is dictated by 42 C.F.R.
§ 424.520(d). The regulation provides:

(d) Physicians, nonphysician practitioners, and physician and
nonphysician practitioner organizations. The effective date
for billing privileges for physician, nonphysician
practitioners, and physician and nonphysician practitioner
organizations is the later of the date of filing of a Medicare
enrollment application that was subsequently approved by a
Medicare contractor or the date an enrolled physician or
nonphysician practitioner first began furnishing services at a
new practice location.

(Emphasis added).

The regulation is clear that the effective date for Medicare billing privileges is
determined according to the latter of the two dates specified by the regulation. The “date
of filing” is the date that the Medicare contractor receives a signed enrollment application
that the Medicare contractor is able to process to approval. 42 C.F.R. § 424.510(d)(1); 73
Fed. Reg. 69,725, 69,769 (Nov. 19, 2008). Despite the fact that Petitioner’s May 18,
2011 application was deficient in several respects, CMS allowed Petitioner 30 days to
provide the revisions and supporting documentation. CMS Ex. 1, at 64-65. Petitioner
submitted the required information within the 30 day timeframe, and CMS properly
determined that Petitioner’s effective date was the date she originally filed the
application, May 18, 2011. Because it is undisputed that the contractor received
Petitioner’s enrollment application on May 18, 2011, which is after the date Petitioner
began providing services, the regulation dictates that this is the effective date of
Petitioner’s enrollment, and I have no discretion to ignore regulations and determine an
earlier effective date.

Petitioner does not dispute that the May 2, 2011 application submitted was an outdated
version of the CMS Form 855-I. A supplier must submit the current version of a CMS
Form 855-I to participate in the Medicare program. CMS Ex. 3, at 3; MPIM § 15.8.1.
Highmark properly returned the May 2, 2011 application to Petitioner as Highmark was
unable to process this application to approval. See, e.g., David Varlotta, DAB CR2135
(2010); Balaji Charlu, M.D., DAB CR2105 (2010); Malorie Smith, DAB CR1527
(2006). Thus, this application cannot determine Petitioner’s effective date of enrollment
pursuant to 42 C.F.R. § 424.520(d).

Petitioner made various arguments for equitable relief at the reconsideration level and
during this appeal. Petitioner’s arguments for not meeting the legal requirements of
enrollment pertain to clerical errors made during the enrollment process, her history of
service and dedication to Medicare patients, and her extreme financial hardship due to not
being compensated by CMS for over two months of providing services to Medicare
beneficiaries. P. Response; HR. I am not without sympathy for Petitioner’s predicament.
Petitioner did not argue, however, that she filed a complete application on an earlier date
than CMS determined or that the contractor or CMS incorrectly applied the regulatory
criteria. I am without authority to order either Highmark or CMS to provide an
exemption to Petitioner under the regulations set forth at 42 C.F.R. §§ 424.520(d) and
424.521(a), which are binding on me. I cannot alter or deviate from the regulations’
explicit limitation on Petitioner’s ability to bill for services up to 30 days prior to the date
Highmark received Petitioner’s complete application. See Kate E. Paylo, DAB CR2232,
at 14-15 (2010). I have no authority to extend the retrospective billing period for
Petitioner in this circumstance or ignore the clear requirements of the regulations
governing her enrollment in Medicare. /d. Even accepting all of Petitioner’s assertions
as true, Petitioner’s equitable arguments give me no ground to grant Petitioner an earlier
effective date of enrollment. See US Ultrasound, DAB No. 2302, at 8 (2010) (“[nJeither
the ALJ nor the Board is authorized to provide equitable relief by reimbursing or
enrolling a supplier who does not meet statutory or regulatory requirements.”).

I conclude that Petitioner’s effective date of Medicare enrollment was May 18, 2011, the
undisputed date on which she submitted an enrollment application that could be
processed to approval. Petitioner was also properly authorized to bill Medicare for
services provided to Medicare beneficiaries up to 30 days prior to her effective date of
enrollment, i.e., April 18, 2011. Accordingly, I grant summary judgment in favor of
CMS.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In re CMS LCD Complaint: Services That Are Not Reasonable and Necessary (L31686).
Docket No. C-12-94
Decision No. CR2532

Date: May 1, 2012

DECISION DISMISSING LCD COMPLAINT

The Centers for Medicare and Medicaid Services (CMS) contractor, Novitas Solutions
Inc.,' has filed notice that the portions of the Local Coverage Determination (LCD)
listed in the title of this case concerning noncoverage of Posterior Tibial Nerve
Stimulation (PTNS)’ shall be retired. Pursuant to 42 C.F.R. § 426.444(b)(6), I must
dismiss any complaint upon notification that the LCD provisions are no longer in effect.

Accordingly, this LCD complaint is dismissed. Pursuant to 42 C.F.R. § 426.420(a),
retiring the LCD provisions under review has the same effect of an ALJ decision finding
a LCD not valid under the reasonableness standard. Specifically, the aggrieved party is
entitled to have her claims for coverage of PTNS reviewed. 42 C.F.R. § 426.460(b).
Because the CMS contractor has retired the LCD provisions under review, this decision is
not subject to appeal. 42 C.F.R. § 426.465(d).

/s/
Joseph Grow
Administrative Law Judge

' Formerly known as Highmark Medicare Services Inc.

? The remaining portions of the LCD were not being challenged by the Aggrieved Party, are not being retired and
remain in effect.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Enitan Osagie Isiwele,
(OI File No. 6-08-40093-9),

Petitioner,
v.
The Inspector General.
Docket No. C-11-703
Decision No. CR2531

Date: April 24, 2012

DECISION

Based on his conviction for health care fraud and conspiracy, the Inspector General (1.G.)
excluded Petitioner, Enitan Osagie Isiwele, from participation in the Medicare, Medicaid,
and all federal health care programs, as authorized by section 1128(a)(1) of the Social
Security Act (Act). On March 11, 2011, I issued a decision affirming the 17-year
exclusion. Enitan Osagie Isiwele, DAB CR2339 (2011). Petitioner appealed to the
Departmental Appeals Board (Board). While the appeal was pending, one of the factors
relevant to the length of the exclusion (the length of his jail sentence) changed, and the
1.G. cut the period of exclusion from 17 to 15 years. The Board has now remanded the
case to me so that I may consider whether this new period of exclusion is reasonable, in
light of the reduced prison sentence. Enitan Osagie Isiwele, DAB No. 2405 (2011).'

' The parties have submitted briefs (1.G. Br.; P. Br.) and the LG. also filed a reply (I.G.
Reply). Petitioner continues to demand discovery and an in-person hearing. For reasons
set forth in my earlier decision, I have denied his requests. [siwele, DAB CR2339 at 2;
See also Order and Schedule for Filing Briefs and Documentary Evidence at 1-2
(December 13, 2011).
For the reasons discussed below, I find that the 15-year exclusion falls within a
reasonable range.

Background

As a threshold matter, I incorporate into this decision the findings of fact, conclusions of
law, and reasoning of my earlier decision, except: 1) that portion of the decision labeled
“Incarceration (42 C.F.R. § 1001.102(b)(5)),” consisting of two paragraphs; and 2) the
conclusion, consisting of one paragraph. /siwele, DAB CR2339 at 5, 6.

Section 1128(a)(1) of the Act mandates that the Secretary of Health and Human Services
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(a).

Petitioner, doing business as Galaxy Medical Supply, was a supplier of durable medical
equipment in the State of Texas. He participated in the Medicare and Medicaid
programs. After Hurricanes Rita and Katrina hit the Gulf Coast, the Centers for Medicare
and Medicaid Services (CMS), which administers those programs, authorized an
expedited claims process for replacing program beneficiaries’ previously-prescribed
equipment and supplies that were destroyed by the natural disasters. This meant that
suppliers could be paid for these types of claims “without all the normally required
paperwork and safeguards.” Petitioner exploited that reduced oversight to bill the
Medicare and Medicaid programs for equipment he did not provide.

He was indicted on multiple counts of submitting “false and fraudulent claims” to the
Medicare and Medicaid programs, in violation of 18 U.S.C. § 1347, and two counts of
conspiracy to pay or receive illegal remunerations, in violation of 18 U.S.C. § 371. LG.
Ex. 4. Specifically, according to the indictment, he obtained patient information from
door-to-door solicitors and used that information to bill Medicare and Medicaid for
power wheelchairs and accessories for individuals who did not qualify for them and had
never possessed them. In billing, he falsely claimed that this equipment replaced
equipment lost as a result of a natural disaster. Petitioner stood trial in federal district
court for the Eastern District of Texas, and, on March 19, 2009, a jury convicted him on
sixteen counts of healthcare fraud and one count of conspiracy to pay illegal
remunerations. The district court entered judgment against him on April 9, 2010.
Tsiwele, DAB CR2339 at 3-4.

Thus, the court documents establish that Petitioner was convicted of offenses related to
the delivery of items or services under the Medicare and Medicaid programs, and he must
be excluded from program participation. See Jsiwele, DAB CR2339 at 4, for discussion
of why Petitioner may not use this forum, to challenge his conviction.
Issue

The sole issue before me on remand is whether the 15-year exclusion is reasonable in
light of Petitioner’s reduced period of incarceration.”

Discussion

Based on the aggravating factors present in this case, and
the absence of any mitigating factor, the 15-year exclusion
falls within a reasonable range.

Petitioner was convicted of offenses related to the delivery of items or services under the
Medicare and Medicaid programs, and he must be excluded from program participation
for a minimum period of five years. Act, §§ 1128(a)(1); 1128(c)(3)(B); 42 C.F.R.

§§ 1001.102(a), 1001.2007(a)(2).

Federal regulations set forth criteria for lengthening exclusions beyond the five-year
minimum. 42 C.F.R. § 1001.102(b). Evidence that does not pertain to one of the
aggravating or mitigating factors listed in the regulation may not be used to decide
whether an exclusion of a particular length is reasonable.

Among the factors that may serve as bases for lengthening the period of exclusion are the
following: 1) the acts resulting in the conviction, or similar acts, resulted in a financial
loss to Medicare and state health care programs of $5,000 or more; 2) the acts that
resulted in the conviction, or similar acts, were committed over a period of one year or
more; and 3) the sentence imposed by the court included incarceration. 42 C.F.R.

> Petitioner claims that, “without notice,” I conducted a prehearing conference call on
December 9, 2011. P. Br. at 5. In fact, the conference call had to be rescheduled several
times, and, each time, this office provided Petitioner with appropriate notice: our
acknowledgment letter, dated August 19, 2011 advised the parties that the call was
scheduled for September 13, 2011 at 2:30 p.m. Eastern Time; a letter dated August 25,
2011 advised the parties that the call was rescheduled for September 19, 2011 at 2:30
p.m. Eastern Time; an order dated September 21, 2011 directed Petitioner to show cause,
on or before October 14, 2011, why I should not dismiss his case for abandonment since
he was unavailable and had provided us no contact information; a letter dated November
29, 2011 advised the parties that another prehearing conference was scheduled for
December 9, 2011 at 2:00 p.m. Eastern Time and asked that prison officials make
Petitioner available to participate in the call. Petitioner was available and participated in
the call. He did not complain about inadequate notice. Order and Schedule for Filing
Briefs and Documentary Evidence (December 13, 2011).

* I make this one finding of fact/conclusion of law.
§ 1001.102(b). The presence of an aggravating factor or factors not offset by any
mitigating factor or factors justifies lengthening the mandatory period of exclusion.

Determining the appropriate length of an exclusion is not an exact science. I must weigh
the aggravating and mitigating factors and, based on those factors, determine the level of
risk Petitioner poses to program integrity. I then consider whether the period of
exclusion set by the LG. falls within a reasonable range. Joann Fletcher Cash, DAB No.
1725 at 16-17 (citing 57 Fed. Reg. 3298, 3321(1992)).

The Board’s remand did not alter my previous ruling regarding two aggravating factors,
program financial losses and the length of the period of illegal conduct. Nevertheless,
Petitioner continues to challenge my earlier findings with respect to these issues: 1) he
claims that the Medicare program suffered no financial losses because of his crimes, and
argues that the criminal court relied on faulty evidence to reach its conclusions with
respect to restitution; and 2) he claims that, notwithstanding his conviction for crimes that
began in June 2005 and continued until April 2008, his crimes did not last for more than a
year. P. Br. at 16-17. He says that the court and jury reached their conclusions based on
“the government’s deliberate deception of the court and jury by the presentation of
known false evidence. ...” P. Br. at 16. Petitioner’s challenges must fail. I am bound
by the criminal court’s adjudication of these issues, and may not review their underlying
bases. 42 C.F.R. § 1001.2007(d); see Isiwele, DAB CR2339 at 4.

Incarceration (42 C.F.R. § 1001.102(b)(5)). The sentence imposed by the criminal court
included a significant period of incarceration. Initially, the criminal court sentenced
Petitioner to more than eight years (97 months) in prison for each count, to be served
concurrently. Petitioner appealed the conviction and the sentence. The U.S. Court of
Appeals for the Fifth Circuit affirmed the conviction but vacated the sentence and
remanded the matter to the district court to clarify how it determined and applied the
amount of the loss resulting from the fraud, which is one of the factors used to increase
the “base offense level” under the U.S. Sentencing Guidelines. U.S. v. Isiwele, 635 F.3d
196, 202 (5th Cir. 2011); P. Appeal Ex. 1, at 9. Thereafter, the district court issued an
amended judgment, sentencing Petitioner to six and a half years in prison (78 months) for
each count, to be served concurrently. LG. Att. A.

Any period of confinement, no matter how short, triggers the application of this
aggravating factor and justifies increasing the period of exclusion. See Jason Hollady,
M.D., DAB No. 1855 at 9-10 (finding that a few days in jail, followed by fewer than nine
months of work release, justifies an increase in the period of exclusion); Stacy Ann Battle,
D.D.S., DAB No. 1843 (2002) (finding four months in a halfway house followed by four
months home confinement justifies lengthening the period of exclusion); Brenda Mills,
M.D., DAB CR1461, aff'd, DAB No. 2061 (2007) (finding that six months home
confinement justifies increase in length of exclusion). A longer period of incarceration
generally justifies an even greater increase in the period of exclusion, because it
evidences a more serious offense. Incarceration for more than one year, for example,
suggests a felony conviction rather than a less-serious misdemeanor. See 18 U.S.C.
3559; Jeremy Robinson, DAB No. 1905 (2004) (finding that incarceration in the federal
penitentiary for one year and one day “merits weight sufficient,” with remaining factors,
to support a 15-year exclusion).

In this case, I see no reason why a 19-month decrease in the length of Petitioner’s
incarceration, which was based on a fairly technical provision in the federal sentencing
guidelines, makes Petitioner any less of a threat to program integrity. Six-and-a-half
years still represents a lengthy period of incarceration. As the Board noted in Gary Alan
Katz, R. Ph., DAB No. 1842 (2002), “Incarceration for an indeterminate period with a
minimum of one year and a maximum of seven is significant in itself and certainly
justifies a longer period of exclusion than if there was no incarceration or incarceration of
a lesser type or shorter period.” Gary Alan Katz at 10. There, the criminal court
sentenced Pharmacist Katz to a prison term of one to seven years, because state law
required the sentencing judge to impose an indeterminate sentence. In reviewing
Pharmacist Katz’s program exclusion, the Administrative Law Judge (ALJ) apparently
cited the seven-year maximum as evidence of how serious Pharmacist Katz’s crimes had
been. On appeal, the Board found it improper for the ALJ to assess the seriousness of the
offense by looking solely at the maximum possible sentence. In fact, the Board
speculated that the court’s setting the minimum sentence at one year was more
significant, because it reflected the court’s judgment rather than the operation of law.
Ultimately, however, the Board held that the indeterminate sentence should not
substantially affect the weight to be given this aggravating factor.

Here, Petitioner’s crimes demonstrate that he presents a significant risk to the integrity of
health care programs. He callously used a regional crisis as an opportunity to defraud
health care programs. His fraudulent scheme lasted for almost three years, costing the
Medicare and Medicaid programs a large amount of money. His actions were egregious
enough to merit a sentence of six-and-a-half years in prison, which represents significant
jail time. Based on these factors, I find that the 15-year exclusion falls within a
reasonable range.

As noted in my earlier decision, no mitigating factors offset the aggravating factors.
Conclusion

For these reasons, I conclude that the I.G. properly excluded Petitioner from participation
in Medicare, Medicaid and all federal health care programs, and I sustain as reasonable
the 15-year exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Lake Cook Terrace Nursing Center,
(CCN: 14-5809),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-11-125
Decision No. CR2530

Date: April 20, 2012

DECISION

Petitioner, Lake Cook Terrace Nursing Center (Petitioner or facility), is a long-term care
facility located in Northbrook, Illinois, that participates in the Medicare program. Based
on a survey completed September 23, 2010, the Centers for Medicare & Medicaid
Services (CMS) determined that the facility was not in substantial compliance with
multiple Medicare program requirements and that one of its deficiencies posed immediate
jeopardy to resident health and safety. CMS imposed civil money penalties (CMPs) of
$3,050 per day for one day of immediate jeopardy, and $200 per day for 38 days of
substantial noncompliance that was not immediate jeopardy, for a total penalty of
$10,650.

Here, Petitioner challenges just two of 23 deficiencies cited. Petitioner also challenges
the immediate jeopardy finding.

For the reasons set forth below, I find that the facility was not in substantial compliance
with the challenged program requirements; its deficiencies posed immediate jeopardy to
resident health and safety; and the penalties imposed are reasonable.
I. Background

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

The Secretary contracts with state survey agencies to conduct periodic surveys to
determine whether skilled nursing facilities are in substantial compliance. Act § 1864(a);
42 C.F.R. § 488.20. The regulations require that each facility be surveyed once every
twelve months, and more often, if necessary, to ensure that identified deficiencies are
corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a); 488.308.

Here, following a survey completed September 23, 2010, CMS determined that the
facility was not in substantial compliance with multiple program requirements,
specifically:

© 42 C.F.R. §§ 483.10(e) and 483.75(1)(4) (Tag F164 — resident rights: personal
privacy/confidentiality of records) at scope and severity level E (pattern of
noncompliance that causes no actual harm with the potential for more than
minimal harm);

© 42 C.F.R. § 483.12(a)(4)-(6) (Tag F203 — notice requirements prior to
transfer/discharge) at scope and severity level D (isolated instance of
noncompliance that causes no actual harm with the potential for more than
minimal harm);

© 42 C.F.R. §§ 483.13(b) (Tag F223 — resident behavior and facility
practices/freedom from abuse) at scope and severity level J (isolated instance of
immediate jeopardy);

© 42 C.F.R. §§ 483.13(c)(1)-(c)(4) (Tag F225 — resident behavior and facility
practices/staff treatment of residents) at scope and severity level F (widespread
noncompliance that causes no actual harm with the potential for more than
minimal harm);

e 42 C.F.R. § 483.13(c) (Tag F226 — resident behavior and facility practices/
policies to prohibit neglect and abuse) at scope and severity level F;

42 C.F.R. § 4
level E;

QCFR. $4

83.15(a) (Tag F241 — quality of life — dignity) at scope and severity

83.15(b) (Tag F242 — quality of life — self-determination and

participation) at scope and severity level G (isolated instance of noncompliance
that causes actual harm but is not immediate jeopardy);

QCFR. $4

83.15(e)(1) (Tag F246 — quality of life — accommodation of needs) at

scope and severity level E;

QCFR. $4

83.20(k)(3)(i) (Tag F281 — resident assessment/comprehensive care

plans — services provided) at scope and severity level D;

42 CFR. §§

483.20(e) and 483.20(m) (Tag F285 — resident

assessment/coordination and preadmission screening for mentally ill and mentally
retarded) at scope and severity level D;

42 C.F.R. § 4
level E;

QCFR. $4

42 CFR. §4
severity leve

42 CFR. §4
adequacy) at

42 CFR. §4
severity leve

QCFR.§4

83.25(h) (Tag F323 — accident prevention) at scope and severity

83.25(i) (Tag F325 — nutrition) at scope and severity level D;

83.25(k) (Tag F328 — treatment/care of special needs) at scope and
D;

83.35(c) (Tag F363 — dietary services/menus and nutritional
scope and severity level F;

83.35(d)(1)-(2) (Tag 364 — dietary services/food) at scope and
E;

83.35(d)(3) (Tag F365 — dietary services/food/individual needs) at

scope and severity level D;

42 CFR. §4
and severity

42 CFR. §4
and severity

QCFR.§4

83.35(f) (Tag F368 — dietary services/frequency of meals) at scope
level E;

83.35(i) (Tag F371 — dietary services/sanitary conditions) at scope
level F;

83.60(b), (d), and (e) (Tag F431 — pharmacy services) at scope and

severity leve

E;
e 42C.F.R. § 483.65 (Tag F441 — infection control) at scope and severity level F;

e 42C.F.R. § 483.70(f) (Tag F463 — physical environment/resident rooms) at scope
and severity level D;

e 42 C.F.R. § 483.70(h) (Tag F465 — physical environment) at scope and severity
level E; and

e 42 C.F.R. § 483.75(m)(1) (Tag F517 — emergency planning) at scope and severity
level F.

CMS Exhibit (CMS Ex.) 1. CMS subsequently determined that the facility returned to
substantial compliance on October 18, 2010. Petitioner’s Exhibit (P. Ex.) 2.

CMS has imposed against the facility CMPs of $3,050 per day for one day of immediate
jeopardy (September 9, 2010) and $200 per day for 38 days of substantial noncompliance
that was not immediate jeopardy (September 10 — October 17, 2010), for a total CMP of
$10,650.

Petitioner timely requested a hearing to challenge the two deficiencies cited at scope and
severity levels J and G: 42 C.F.R. §§ 483.13(b) and 483.15(b) (Tags F223 and F242,
respectively). P. Post-hrg. Br. at 2. As discussed below, CMS’s determinations with
respect to the remaining deficiencies are therefore final and binding and provide a
sufficient basis for imposing a penalty.

On September 1, 2011, I convened a video hearing from the offices of the Departmental
Appeals Board in Washington, D.C. Counsel and witnesses convened in Chicago,
Illinois. Mr. Craig Herkal appeared on behalf of CMS. Mr. Gary Weintraub appeared on
behalf of Petitioner. I have admitted into evidence CMS Exs. 1-11 and P. Exs. 1-51.
Order Following Prehearing Conference (July 22, 2011); Transcript (Tr.) 4, 7.

The parties have filed pre-hearing briefs (CMS Pre-hrg. Br.; P. Pre-hrg. Br.), post-hearing
briefs (CMS Post-hrg. Br.; P. Post-hrg. Br.) and reply briefs (CMS Reply; P. Reply).

IL. Issues
Based on the uncontested deficiencies, there is no dispute that, from September 9 through

October 17, 2010, the facility was not in substantial compliance with Medicare program
requirements, and I must affirm a CMP of at least $50/day.
The remaining issues are:

1. From September 9 through October 17, 2010, was the facility in substantial
compliance with 42 C.F.R. § 483.13(b) (Tag F223), which requires that residents
be free from abuse, and 42 C.F.R. § 483.15(b) (Tag F242), which governs the
residents’ rights to self-determination and participation;

2. If, on September 9, 2010, the facility was not in substantial compliance with 42
C.F.R. § 483.13(b), did that deficiency pose immediate jeopardy to resident health
and safety; and

3. Are the CMPs imposed — $3,050 for one day of immediate jeopardy and $200 per
day for 38 days of substantial noncompliance that was not immediate jeopardy —
reasonable?

Order Following Prehearing Conference (July 22, 2011); Tr. 6-7.
III. Discussion

A, CMS’s unchallenged determination that the facility was
not in substantial compliance with multiple program
requirements is final and binding, and, based on those
deficiencies, CMS may impose a penalty. 1

CMS’s findings of noncompliance that result in the imposition of a remedy are
considered initial determinations that an affected party, such as Petitioner, may appeal.
The regulations governing such actions dictate that CMS send notice of the initial
determination to the affected party setting forth the basis for and the effect of the
determination and the party’s right to a hearing. 42 C.F.R. §§ 498.20(a)(1); 498.3; 498.5.
The affected party may then challenge the determination by filing a hearing request
within 60 days of its receiving the notice. 42 C.F.R. § 498.40. An initial determination is
final and binding unless reversed or modified by a hearing decision (or under
circumstances not applicable here). 42 C.F.R. § 498.20(b).

In this case, CMS sent the appropriate notice, and Petitioner requested a hearing to
challenge just two of the 23 deficiencies cited: 42 C.F.R. §§ 483.13(b) and 483.15(b). P.
Pre-hrg. Br. at 2. CMS’s determination that the facility was not in substantial compliance
with the remaining cited participation requirements, listed above, is therefore final and
binding.

' My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion
captions of this decision.
Because we have a final and binding determination that the facility was not in substantial
compliance, CMS has the discretion to impose one or more of the enforcement remedies
listed in 42 C.F.R. § 488.406, which include the per diem CMP imposed here. Act

§ 1819(h); 42 C.F.R. § 488.402. So long as CMS has a basis for imposing a remedy, I
have no authority to review its determination to do so (42 C.F.R. § 488.438(e)), nor may I
review CMS’s choice of remedy. 42 C.F.R. § 488.438(a)(1)(ii).

I discuss below why I find $200 per day not only reasonable, but modest.

B. The facility was not in substantial compliance with 42
C.F.R. § 483.13(b), because, without exploring alternatives,
it required an exceptionally resistant resident to shower,
even though showering caused him substantial mental
anguish, and his resulting behaviors jeopardized his safety
and the safety of facility staff:

Program requirements. The regulation governing resident behavior and facility practices
mandates that each resident “has the right to be free from verbal, sexual, physical, and
mental abuse, corporal punishment, and involuntary seclusion.” 42 C.F.R. § 483.13(b).
Abuse is defined as “the willful infliction of injury, unreasonable confinement,
intimidation, or punishment with resulting physical harm, pain or mental anguish. 42
C.F.R. § 488.301. The phrase “willful infliction” means that the actor must have acted
deliberately, not that the actor must have intended to inflict injury or harm. Merrimack
County Nursing Home, DAB No. 2424 at 4 (2011); Britthaven, Inc., d/b/a Britthaven of
Smithfield, DAB No. 2018 at 4 (2006).

Resident 8 (R8). The challenged deficiencies here revolve around R8. R8 was an 82-
year-old man suffering from serious mental illness (variously diagnosed as unspecified
psychosis, schizophrenia, bipolar disorder or schizoaffective disorder), seizure disorder,
glaucoma with deteriorating vision, hypertension, coronary artery disease, and
osteoarthritis. CMS Ex. 6 at 1, 17; CMS Ex. 9 at 2 (Shepard Decl. 4 9); P. Exs. 18, 30,
44, 46, 47. He had significant behavior problems. He used a wheelchair. CMS Ex. 6 at
14 (reporting a fall when attempting to rise from his wheelchair); P. Ex. 50 at 1 (Martinez
Decl. 45); Tr. 27.

Virtually everyone agrees that R8 intensely disliked showers. He regularly refused them,
and, when compelled to take one, was prone to attacking staff and/or accusing them of
rape and other forms of abuse. CMS Ex. 6 at 16, 19; see P. Ex. 43; Tr. 68-69. He had a
history of elopement attempts to avoid being showered. CMS Ex. 6 at 17; see also CMS
Ex. 6 at 16; CMS Ex. 6 at 19 (reporting that R8 had a “long history” of resistance to care,
“especially during shower time”); CMS Ex. 9 at 2 (Shepard Decl. 4 6) (confirming R8’s
“continual resistance” to showering); P. Exs. 40, 43.
The resident himself told the surveyors that “‘over his protests and at times active
resistance to care, two or three staff members would forcibly remove his clothes and
shower him.” Tr. 46. He said that this happened every time he showers, which is three
times a week. See also CMS Ex. 4 at 25; Tr. 38, 91 (confirming that R8 told Surveyor
Mildred Ayala that the facility forced him to take showers and he gives up). R8’s
roommate told Surveyor Ayala that he recalled hearing R8 screaming while being taken
to the shower, although the roommate could not specify when that occurred. Tr. 96-97.

In her written direct testimony, Petitioner’s witness, Nurse Aide Gloria Gonzalez,
understated R8’s resistance to showering, saying “sometimes” he is “compliant with
showering. Sometimes he is not. Often, when he is not, he will say he wants to do it
later in the day, and we will try again later.” P. Ex. 51 at 1 (Gonzalez Decl. § 4). Under
cross-examination, however, she conceded that, for years, R8 had resisted showering and
became angry and upset at shower time. Tr. 68-69. She testified that she had never seen
him angry except when he was compelled to shower. Tr. 85.”

In any event, to the extent that Nurse Aide Gonzalez implied that R8’s resistance to
showering was not a serious problem, the facility’s own documents belie that implication.
They show that R8’s resistance to showering — and the facility’s response — were serious,
long-standing problems that jeopardized the resident’s health and safety, as well as the
safety of facility staff:

e A social services note dated October 17, 2005, for example, describes R8’s
response to staff telling him that he was scheduled for a shower: “[H]e told me
that if I touch him, he was going to slit my throat [with] a razor... .”. When told
that he had to be supervised while showering, he responded, “[I]f anyone comes
near me, I am going to kill them... .” P. Ex. 3.

e According to a nurse’s note, written at 8:00 a.m. on June 23, 2006, after he
behaved aggressively during breakfast, staff wheeled R8 to the nurses’ station to
wait for his scheduled shower. The nurse describes him as “resentful,” then
aggressive and angry. He threatened to call the police and he kicked the garbage.
When the nurse gave him a dose of PRN (as needed) Ativan, he spit it out; she
then injected him with the medication. Two nurse aides restrained him and took
him, kicking and fighting, into his room. P. Ex. 19.

> In this regard, Nurse Aide Gonzalez must have been the exception among facility
employees. The record amply demonstrates that R8 reacted angrily to a variety of
situations, although, it seems, not as consistently or intensely as he did to showering.
See, e.g., P. Post-hrg. Br. at 5-10.
According to an entry in a complaint log, dated September 22, 2008, R8
complained that he had been “raped” in the shower that morning and described a
brutal (and highly unlikely) physical altercation with staff. Investigators
concluded that he was having a delusion. CMS Ex. 6 at 9-10. It seems that once
they verified that R8 had mis-identified the nurse aide who showered him that day,
they stopped the investigation and took no further action. See Tr. 37. This is a
common theme with respect to the facility’s investigations of R8’s complaints.
The resident was unquestionably unreliable and prone to hyperbolic accusations.
Once investigators determined that one or more of his accusations could not be
true, they stopped investigating. I find it insufficient for the facility to dismiss his
complaints this way. When a resident is involved in a physical or verbal
altercation with staff, the facility must report the incident to the appropriate
agencies and must conduct a thorough investigation, which includes assessing the
resident for injuries, interviewing appropriate staff and other witnesses, and
documenting the findings. It should also look for ways to prevent a recurrence.

A note written by Nina Luker, PRSC (Psychosocial Rehabilitative Service
Coordinator) dated September 6, 2009, says that the resident refuses to take
showers, and that staff found the behavior difficult to alter because of the
resident’s physical and verbal aggression. P. Ex. 40.

Three nurse aides told Social Services Director Nelly Diaz that, on New Years
Day 2010, R8 physically and verbally abused them when they tried to shower him.
CMS Ex. 6 at 11. R8 explained to Director Diaz that “every time they take my
clothes off [without] me consenting to it, I feel raped.” CMS Ex. 6 at 15. See also
P. Ex. 43 (identifying R8’s refusal to shower and his “frequently” falsely accusing
staff of rape, beatings, and torture).

According to a subsequent psychiatric admissions note, dated January 5, 2010, the
facility sent R8 to the emergency room, where he told the staff that

3 CNAs (Certified Nurse Aides) raped me last Friday. I went
to the social worker this morning to tell her that I wanted to
file a police report and the social worker told me that I needed
to tell her first. I got mad and hit some cabinets. I hita CNA
last Friday in self-defense as she was trying to rape me. I did
not hit anybody today.

P. Ex. 44. According to the nursing home staff (the report goes on) the resident

became highly agitated yesterday morning and hit a CNA in
the face when she reminded him about taking a shower. He
then went to the administrator’s office where he knocked over
cabinets and attempted to hit the administrator.

P. Ex. 44.

June 24, 2010 incident. During the initial tour of the facility on September 7, 2010, R8
said to Surveyor Licheal Shepard, “[P]lease help me. I am tired of being raped in this
facility every time I get showered.” Tr. 28. When questioned, he explained that when his
clothes were forcibly removed, “he felt like it was rape.” He also said that, in June, when
women nurse aides “had forcibly removed his clothing and showered him,” he tried to
elope in order to report the forcible showering to the police, because staff would not
listen to him. CMS Ex. 9 at 2 (Shepard Decl. 45); CMS Ex. 5 at 14.

R8 showed the surveyors old bruises on his arms and legs, as well as an injury to his ear
(recent tear). He told Surveyor Shepard that the ear injury happened when he resisted
staff’s efforts to shower him. Tr. 53-54. Facility staff produced no records showing that
they had investigated these injuries, which, aside from R8’s claims, are unexplained. Tr.
54.

R8’s statements obviously got the surveyors’ attention, and they decided to investigate
the June incident specifically, as well as the facility’s general practice with respect to R8
and showers.

Given the extent and seriousness of R8’s resistance to showering, the facility produced
surprisingly little documentation to show that it monitored the problem. Nurse Aide
Gonzalez testified that the facility keeps shower records, and that she was supposed to
write whether the resident refused his shower, although she was vague about whether
they kept such records in 2010. Tr. 83-84. When Surveyor Shepard asked the facility for
R8’s shower records for the preceding year, “I barely got two out of the facility for the
last three years.” Tr. 46. And, notwithstanding her repeated requests, the facility could
not or would not produce complete documentation of the shower incidents. “Many
shower records are missing... .” Tr. 45.

The available records include social service notes, a complaint log entry, and an abuse
report:

e According to the complaint log, on June 24, 2010, R8 complained to the social
services office that he had been raped in the shower room. When asked to explain,
he said that “every time they take my clothes off [without] my consenting to it, I
feel rape[d].” CMS Ex. 6 at 15.

e A social service progress note dated June 24, 2010, written at 2:30 p.m., says that
R8 became upset “when he was approach[ed] by his aide for [a] shower.” He
10

attempted to elope in response, explaining later that he did so because he was
upset. CMS Ex. 6 at 12-13. Ina “specialized services” note, dated June 24, 2010,
PRSC Luker reiterates that R8 resists “some care,” such as showers, refuses to
wear a wanderguard, and “[t]hese behaviors are not easily altered and are
connected to his elopement attempt today.” CMS Ex. 6 at 16.

e The June 24, 2010 elopement report says that “in the past, he has attempted to
elope because he does not want a shower,” but it calls for no changes in the
resident’s care plan or any facility practice. CMS Ex. 6 at 17.

e The abuse report form for the June 24, 2010 incident says that R8 accused a male
CNA of sexual abuse. CMS Ex. 6 at 18. According to the report, R8 “has a long
history of being resistive to care, especially during shower time,” and that he “may
make false accusations toward staff.” CMS Ex. 6 at 19. Although he accused a
male CNA of abusing him, investigators found that the CNAs assisting him in the
shower were all female — Rosalba Sanchez, Gloria Gonzalez, and Dora Hernandez.
An entry indicates that Dora Hernandez was terminated (although the record is
silent as to the reasons for her termination). CMS Ex. 6 at 19. Staff reported the
incident to the resident’s family, but not to the state agency or attending physician.
CMS Ex. 6 at 20.’

At the time of the survey, Nurse Aide Gonzalez told the surveyors that R8 “was mad
because he doesn’t shower. I went to get [Nurse Aide] Rosalbo to help remove the
clothes. He started fighting[;] do not give me shower[;] called bad words[;] he kept
hitting atus....” CMS Ex. 5 at 8.

In her written declaration, Nurse Aide Gonzalez altered her statements in subtle but
significant ways. She claimed that

Rosalba and I were assigned to assist R8 with his shower on
June 24, 2010.4 He had not taken a shower in several days.
He had twice refused in the prior several days and had not
showered on those days. We escorted him to the shower

> Petitioner claims that R8 suffered no physical harm from this confrontation, but, given
the inadequacy of the facility’s investigation and its failure to report the incident to the
appropriate authorities — which were cited as deficiencies and which Petitioner did not
contest — the question of any physical injuries must remain unresolved, a fact that can
hardly inure to the facility’s benefit.

* Curiously, Nurse Aide Gonzalez does not mention that another nurse aide, the recently-
terminated Dora Hernandez, participated in the showering incident, even though facility
records confirm that the third nurse aide was there. CMS Ex. 6 at 19.
11

room and were able to assist him in taking off his shoes and
socks. When we were helping him take his shirt off over his
head, he became agitated and was waving his arms. After his
shirt was removed, however, he took his shower. We did not
rip his clothes off or otherwise mistreat him, nor have I ever
done so. I certainly had no intention to cause him any
physical or mental harm.

P. Ex. 51 at 1-2 (Gonzalez Decl. § 5).

At the hearing, Nurse Aide Gonzalez testified that, prior to the June 24 incident, she had
been instructed to leave a resident alone if he did not want to take a shower. She also
admitted that R8 did not want to shower that day. When asked whether she left him
alone, as instructed, she evaded a direct answer: “Well, it had been a number of days
since he had had a shower. And I didn’t force him. He got upset. But I didn’t force
him.” Tr. 72-73.

She also claimed under cross-examination that the resident removed his own clothes,
although in her written declaration, she said that “we were helping him take his shirt off
over his head” when he “became agitated and was waving his arms.” Tr. 76. When
counsel pointed out the apparent inconsistency, she said: “When he was taking off his
shirt and I assisted him, but I didn’t do it for him.” Tr. 76-77. Then she said, “Maybe he
got upset when I tried to help him. But he was taking off his clothes himself. I didn’t do
it for him.” Tr. 77.

She ultimately admitted that R8 became angry, was fighting the aides, and calling them
bad names. Yet, they continued to shower him. Nurse Aide Gonzalez justified the nurse
aides’ actions: “Well, yes. He was already in the bathroom, and he had already taken off
his clothes. And he did get upset, but he didn’t tell us not to bathe him. ... He was
angry, but he didn’t tell us no.” Tr. 79. And later she said: “If he hadn’t wanted to, he
would have gotten up. But there’s a seat there in the shower. And he was seated.” Tr.
87.

I did not find Nurse Aide Gonzalez credible. Her testimony was internally inconsistent
and contradicted the facility’s contemporaneous notes, her prior statements to the
surveyors, and common sense. I do not find it credible that R8 went willingly to the

* Because R8 is an unreliable informant, we will never know for sure what was going
through his mind at the time (although he later suggested that he “just gave up.”).
Thankfully, he did not register his displeasure by getting up and attempting to leave the
bathroom. He was unstable on his feet, used a wheelchair to get around, and could not
safely have extricated himself from the situation, especially if faced with three nurse
aides determined to complete his shower.
12

shower, voluntarily removed his own clothes, suddenly became angry and abusive, but
willingly continued his shower. I find it far more likely that, consistent with the social
service notes and Nurse Aide Gonzalez’s remarks to the surveyors, R8 became upset
when the aide approached him for a shower, that he resisted, that Nurse Aide Gonzalez
enlisted additional help, and that, against his will, the aides compelled him to take his
shower. CMS Ex. 5 at 8; CMS Ex. 6 at 12-13.

Facility responses. The facility did not seem to have in place a coherent policy for
addressing R8’s behaviors. According to Nurse Aide Gonzalez, staff were supposed to
leave the resident alone and report to the nurse when the resident resisted showering. Tr.
69-70. She claimed that those instructions were in writing, but the record contains no
such written instruction. Tr. 70.°

The outline from a June 10, 2010 in-service training session on dealing with an agitated
resident (which Nurse Aide Gonzalez apparently did not attend) tells staff, among other
instructions, to keep the environment calm, follow the care plan, and work as a team. It
says, “When possible, don’t pressure or become forceful with an easily agitated resident
and don’t “[florce the resident to do anything.” CMS Ex. 8 at 54, 55; Tr. 81. It does not
say to leave the resident alone or report to the nurse. Tr. 80-82; CMS Ex. 8.

R8’s care plan, dated January 4, 2010, identifies as a problem R8’s refusal to shower. It
sets as a goal that he “will comply with care delivery, specifically with regard to showers
at least 2 days per week.” An April 4, 2010 entry, however, indicates that the goal was
not met, but says “extend to 7/1/10.” That goal was also apparently not met, because the
next entry says “the resident will shower [one time weekly] by 9/28/10.” P. Ex. 43. To
achieve these goals, the plan calls generally for more evaluations and psychotherapy “to
be provided by [a] psychologist.” It tells staff to “create a warm, safe, and inviting
environment for care,” and to “emphasize soothing, kind, slow and compassionate

° Nurse Aide Gonzalez’s testimony raised questions about her ability to understand and
follow instructions that are conveyed in English. She testified in Spanish with the
assistance of an interpreter. When asked whether she agreed with specific written
instructions, found at CMS Ex. 8 at 55, she testified that she could not understand them
because they were written in English. Tr. 82. But she also claimed that she learned
facility policies by means of written and verbal instructions and the written resident care
plans, all of which were in English. Tr. 70.
13

speech.” Finally, if the resident displays aggression, “staff will maintain calm and will
ask for further assistance from other staff as needed.” P. Ex. 43.’ (emphasis added).

But keeping the environment calm while compelling R8 to take a shower was plainly
unworkable, if not altogether impossible. Remarkably, no evidence suggests that the
facility addressed this problem in any meaningful way. I see no evidence that facility
staff asked him why he resisted showers or considered, as part of his care plan, how they
could meet his hygiene needs in a way that was less stressful to him and to staff.*
Surveyors specifically asked Nurse Aide Gonzalez why staff did not offer him an
alternative, like a tub bath or “wash up,” but she said that she did not know. CMS Ex. 5
at 8.

I see absolutely no evidence that Nurse Aide Gonzalez or any other staff member
intended to hurt R8. But, as the Departmental Appeals Board (Board) has ruled, to find
abuse under section 483.13(b), I need not find that staff intended to inflict injury or harm.
So long as staff acted deliberately, and their actions caused injury or harm, the regulation
is violated. Merrimack County Nursing Home, DAB No. 2424 at 5 (2011). Moreover, as
Surveyor Ayala explained, the staff here lacked the expertise needed to keep R8 from
harm. Tr. 102-03. They did not know what to do. By failing to recognize and address
the problem in an effective way, the facility put R8 and facility staff in harm’s way.

Health care professionals charged with caring for the mentally ill must protect them from
the anguish that can be part of their disease process. Tr. 101. For R8, the prospect of
showering plainly filled him with an irrational level of dread, which he could not control.
Facility staff were required to shield him from this pain, and they did not. Instead of
finding an alternative to the treatment he found so objectionable, they deliberately
repeated the same practice. So, even though the individual staff members did not set out
to harm R8, they did.

7 As far back as November 2008, the facility set as a goal that R8 would take one to two
showers per week without physical aggression. Proposed interventions were similar (and
comparably ineffective) to those in the January 2010 plan: observe the resident’s comfort
levels and adjust interactions accordingly; explore the resident’s reluctance; provide time-
out with 1-1 counseling; give insight “as to possible outcome from” not complying with
care interventions; consult MD or psychiatrist as needed; provide physical support and
care; “explore preferences and intolerances.” The plan also says that social services will
work with the resident. P. Ex. 32.

* When Surveyor Shepard asked R8 why he didn’t like showers, he told her that it was
because he had glaucoma, and feared the impact of the shower water on his vision. CMS
Ex. 9 at 2 (Shepard Decl. § 9); Tr. 50. His reasoning may have been irrational, but the
fear was likely very real to him.
14

The facility thus did not keep R8 free from physical and mental abuse and was not in
substantial compliance with 42 C.F.R. § 483.13(b).°

C. CMS’s determination that, on September 9, 2010,
the deficiency cited under 42 C.F.R. § 483.13(b)
posed immediate jeopardy to resident health and
safety was not clearly erroneous.

Immediate jeopardy exists if a facility’s noncompliance has caused or is likely to cause
“serious injury, harm, impairment, or death to a resident.” 42 C.F.R. § 488.301. CMS’s
determination as to the level of a facility’s noncompliance (which would include an
immediate jeopardy finding) must be upheld unless it is “clearly erroneous.” 42 C.F.R.

§ 498.60(c). The Board has observed repeatedly that the “clearly erroneous” standard
imposes on facilities a “heavy burden” to show no immediate jeopardy, and has sustained
determinations of immediate jeopardy where CMS presented evidence “from which
‘[o]ne could reasonably conclude’ that immediate jeopardy exists.” Florence Park Care
Ctr., DAB No. 1931 at 27-28 (2004), citing Koester Pavilion, DAB No. 1750 (2000);
Daughters of Miriam Ctr., DAB No. 2067 at 7, 9 (2007).

Without question, R8’s sometimes extreme reaction to the prospect of a shower — and the
absence of any clear instructions as to how staff should respond — endangered his
physical safety and the safety of the staff charged with caring for him. Also without
question, the facility’s practice of requiring him to shower despite his vociferous
objections, caused him significant mental anguish. CMS’s immediate jeopardy
determination is therefore not clearly erroneous.

D. The penalties imposed are reasonable.

To determine whether a CMP is reasonable, I apply the factors listed in 42 C.F.R.

§ 488.438(f): 1) the facility’s history of noncompliance; 2) the facility’s financial
condition; 3) factors specified in 42 C.F.R. § 488.404; and 4) the facility’s degree of
culpability, which includes neglect, indifference, or disregard for resident care, comfort
or safety. The absence of culpability is not a mitigating factor. The factors in 42 C.F.R.

°’ Because I find that the multiple uncontested deficiencies here more than justify a $200
per day CMP, I need not consider whether the facility was in substantial compliance with
42 C.F.R. § 483.15(b). Senior Rehab. and Skilled Nursing Ctr., DAB No. 2300 at 6, n.5
(2010), aff'd, Senior Rehab. and Skilled Nursing Ctr. v. HHS, No. 10-60241 (2011). On
the other hand, section 483.15(b) guarantees each resident the right to “[c]hoose
activities, schedules, and health care consistent with his or her interests, assessments, and
plans of care” and to “[m]ake choices about aspects of his or her life in the facility” that
are significant to the resident. Plainly, the facility offered R8 no choice with respect to
showering, which puts it out of substantial compliance with section 483.15(b).
15

§ 488.404 include: 1) the scope and severity of the deficiency; 2) the relationship of the
deficiency to other deficiencies resulting in noncompliance; and 3) the facility’s prior
history of noncompliance in general and specifically with reference to the cited
deficiencies.

I consider whether the evidence supports a finding that the amount of the CMP is at a
level reasonably related to an effort to produce corrective action by a provider with the
kind of deficiencies found, and in light of the section 488.438(f) factors. I am neither
bound to defer to CMS’s factual assertions, nor free to make a wholly independent choice
of remedies without regard for CMS’s discretion. Barn Hill Care Ctr., DAB No. 1848 at
21 (2002); Community Nursing Home, DAB No. 1807 at 22 et seq. (2002); Emerald
Oaks, DAB No. 1800 at 9-10 (2001); CarePlex of Silver Spring, DAB No. 1683 at 8
(1999).

CMS imposed a penalty of $3,050 for one day of immediate jeopardy, which is the

minimum per day penalty for deficiencies constituting immediate jeopardy. 42 C.F.R.
§§ 488.408(e)(iii); 488.438(a)(1)(i). The amount is therefore reasonable as a matter of
law.

With respect to the period of substantial noncompliance that was not immediate jeopardy,
CMS imposes a penalty — $200 per day — that is at the very low end of the applicable
penalty range ($50 to $3,000). 42 C.F.R. §§ 488.408(d)(1)(iii); 488.438(a)(1)(ii).
Considering the relevant factors, the penalty is modest. The facility has a less than
exemplary history. It was not in substantial compliance at the time of any prior survey
back to 2006, and three of the deficiencies cited during this survey had been cited before.
CMS Ex. 2 at 1. Petitioner does not claim that its financial condition affects its ability to
pay the CMP. Moreover, the sheer number of deficiencies, as well as their scope and
severity, justifies increasing significantly the penalty imposed.

IV. Conclusion

From September 9 through October 17, 2010, the facility was not in substantial
compliance with Medicare participation requirements. On September 9, 2010, its
noncompliance with 42 C.F.R. § 483.13(b) posed immediate jeopardy to resident health
and safety. I affirm as reasonable the penalties imposed — $3,050 for one day of
immediate jeopardy and $200 per day for 38 days of substantial noncompliance that was
not immediate jeopardy.

/s/

Carolyn Cozad Hughes
Administrative Law Judge