Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

Pueblo Family Physicians
(NPI: 1790798072; PTAN: ZWCHTQ),

Petitioner,

Centers for Medicare & Medicaid Services.
Docket No. C-16-246
Decision No. CR4661
Date: July 20, 2016
DECISION

The Centers for Medicare & Medicaid Services (CMS), through its administrative
contractor, Noridian Healthcare Solutions (Noridian), revoked the Medicare enrollment
and billing privileges of Pueblo Family Physicians (Petitioner) because Petitioner
submitted to Noridian completed forms with the forged signatures of a physician in order
for that physician’s reimbursement payments to be paid to Petitioner and for the
physician’s address and contact information to be changed in CMS’s records to that of
Petitioner. Noridian revoked based on alleged false or misleading statements Petitioner
made on an enrollment application (42 C.F.R. § 424.535(a)(4)) and on Petitioner’s
alleged failure to comply with Medicare enrollment requirements (42 C.F.R. §
424.535(a)(1)). Petitioner requested a hearing to dispute the revocation arguing that it
had relied on a third party, who had contracted with the physician to provide certain
services to Petitioner, to obtain the physician’s signature on the forms sent to Noridian,
but that Petitioner did not know the third party had forged the physician’s signature on
those forms.

Both parties in this case moved for summary judgment. As explained in more detail
below, I grant summary judgment for Petitioner and deny it for CMS because the
undisputed facts in this case show that the application forms filed with the physician’s

forged signatures did not relate to enrollment, but only to the reassignment of Medicare
benefits between enrolled suppliers and to the change of an address for an enrolled
supplier. Therefore, I reverse the revocation because, as a matter of law, Petitioner did
not violate 42 C.F.R. §§ 424.535(a)(1) or 424.535(a)(4).

I. Background and Procedural History

Petitioner is a physician organization that was enrolled in the Medicare program. On
January 11, 2008, Petitioner entered into an “Equipment and Technician Lease
Agreement” with Phoenix Neurology, Inc. CMS Exhibit (Ex.) 1 at 10-14. The purpose
of this agreement was for Petitioner to lease mobile medical testing equipment. CMS Ex.
1 at 10. The lease placed the duty on Petitioner for determining the medical necessity for
tests, providing physician supervision for all tests, and “billing [Petitioner’s] patients for
the Procedures performed on [Petitioner’s] patients, including deductibles and
coinsurance if applicable.” CMS Ex. 1 at 11. Phoenix Neurology had the obligation to
“employ or contract with physicians to read and interpret the Procedures performed on
[Petitioner’s] patients... .” CMS Ex. | at 11. The lease further provided that “[t]he
Personnel provided pursuant to this Agreement shall be deemed to be employees or
contractors of [Phoenix Neurology.]” CMS Ex. | at 10. Michael R. Grow, Jr. signed the
lease for Phoenix Neurology. CMS Ex. | at 12.

Louis C. Kirby, M.D., a physician enrolled in the Medicare program, contracted with
Michael Grow and Phoenix Neurology to provide test interpretations. Mr. Grow paid Dr.
Kirby $25 per completed test. Dr. Kirby interpreted tests for Mr. Grow that involved
Petitioner’s patients. Mr. Grow annually provided a 1099 tax reporting document to Dr.
Kirby for the compensation Phoenix Neurology/Mr. Grow paid to Dr. Kirby. CMS Ex. 4
at 1; CMS Ex. 5 at 1.

In 2010, Noridian advised Petitioner that it could not bill Medicare for the test
interpretations that Dr. Kirby rendered unless Dr. Kirby reassigned his Medicare billing
privileges to Petitioner. CMS Ex. | at 2. Therefore, Petitioner prepared CMS-855I] and
CMS-855R forms for the purpose of Dr. Kirby reassigning his Medicare benefits to
Petitioner. CMS Ex. | at 2. Petitioner indicated on the CMS-855I (Physician and Non-
physician practitioner Medicare enrollment application) that Petitioner’s offices were to
be added as Dr. Kirby’s practice locations and that Petitioner was to be Dr. Kirby’s point
of contact for Medicare matters. CMS Ex. 2 at 16-18, 20, 24. Petitioner indicated on the
CMS-855R (Reassignment of Medicare benefits application) that Dr. Kirby’s Medicare
benefits were to be reassigned to Petitioner. CMS Ex. 3 at 5. Donald Cunningham, D.O.,
signed the CMS-855R on March 3, 2010, on Petitioner’s behalf. CMS Ex. 3 at 6.
Petitioner sent the CMS-855I and CMS 855R forms to Phoenix Neurology for Phoenix
Neurology to obtain Dr. Kirby’s signatures. CMS Ex. | at 2. A signature purporting to
be Dr. Kirby’s signature appears on the forms that Petitioner submitted to Noridian with
March 3, 2010, shown as the date of signing. CMS Ex. 2 at 27; CMS Ex. 3 at 6.

In 2014, an analyst with a CMS contractor and a special agent with the Department of
Health and Human Services, Office of the Inspector General, investigated the relationship
between Dr. Kirby and Petitioner. On January 29, 2014, they interviewed Dr. Kirby, who
stated that he did not recall signing the CMS-855] and CMS-855R that Petitioner
submitted in 2010. Dr. Kirby stated that the signatures that appear on those forms are not
his and that his work for Petitioner was coordinated through Michael Grow. CMS Exs.
4,5. Dr. Kirby indicated that he had a contractual relationship with Mr. Grow, but that
he did not have a relationship with Petitioner. Dr. Kirby said that Mr. Grow would send
test results to Dr. Kirby, and Dr. Kirby would read and report the results to Mr. Grow.
CMS Ex. 4 at 1; CMS Ex. 5 at 1.

On January 30, 2014, after Dr. Kirby learned that Petitioner was billing Medicare for his
services, Dr. Kirby: informed Mr. Grow that he would not read test results for Petitioner
any longer; took steps to terminate the reassignment of Medicare benefits from Dr. Kirby
to Petitioner; and informed Dr. Cunningham by letter that he would no longer read any
test results for Petitioner. CMS Ex. 4 at 2; CMS Ex. 6. On January 31, 2014, Mr. Grow
informed Dr. Kirby that he had signed Dr. Kirby’s name to the CMS-855I and CMS-
855R forms, although Mr. Grow indicated that Dr. Kirby had known that he was
“credentialed” with Petitioner for several years. CMS Ex. | at 16. Also on January 31,
2014, Mr. Grow informed Petitioner of Dr. Kirby’s decision to no longer interpret test
results for Petitioner and of Mr. Grow’s admission that he had signed Dr. Kirby’s name
to the CMS-855I and CMS-855R forms. P. Ex. 6 at 1.

On January 31, 2014, Petitioner filed a CMS-855R terminating Dr. Kirby’s reassignment
of Medicare benefits. CMS Ex. | at 1,2,22, 24. Petitioner’s position is that it did not
know that Mr. Grow forged Dr. Kirby’s signature to the CMS-855I and CMS-855R
forms signed in 2010, and that Dr. Kirby was aware that he was “credentialed as a part of
[Petitioner’s] practice and that [Petitioner] billed for his test interpretation services.”

P. Ex. 6 at 2; see also CMS Ex. | at 1-2; P Ex. 3; P. Ex. 4; P. Ex. 5 at 8.

In a July 23, 2015 initial determination, Noridian informed Petitioner that it was revoking
Petitioner’s Medicare enrollment and billing privileges effective August 22,2015. CMS
Ex. 7. The initial determination stated the following reasons for revocation:

42 CFR §424.535(a)(1) — Not in Compliance with
Medicare Requirements

Pueblo Family Physicians submitted an 8551 application and
an 855R application with Dr. Louis Kirby as the enrollee in
the Medicare Program and his signature. However, Dr. Louis
Kirby has attested that these enrollment applications were
submitted to Medicare without his knowledge or consent and
that his signature was forged on both documents. This is in
violation of the enrollment requirements in 42 C.FR.
§ 424.510(d)(2)(i) which requires that each submitted
enrollment application must include “[c]omplete, accurate,
and truthful responses to all information requested within
each section as applicable to the provider or supplier type.”

42 CFR §424.535(a)(4) — False or Misleading Information
on Application

On Pueblo Family Physicians’ enrollment application, Dr.
Louis Kirby is the signing practitioner. However, Dr. Louis
Kirby has attested that he did not sign this enrollment
application and that it was submitted to Medicare without his
knowledge or consent.

CMS Ex. 7 at 1. The initial determination also stated that Petitioner had the right to file a
corrective action plan (CAP) within 30 days and a request for reconsideration within 60
days. CMS Ex. 7.

On August 20, 2015, Petitioner timely submitted a CAP and a request for reconsideration.
CMS Ex. 1. In an October 19, 2015 letter, Noridian informed Petitioner that it denied
Petitioner’s CAP, but that it was still considering Petitioner’s reconsideration request.
CMS Ex. 8 at 1-2. On November 17, 2015, Noridian issued an unfavorable reconsidered
determination. CMS Ex. 9.

On December 1, 2015, Petitioner requested a hearing before an Administrative Law
Judge (ALJ) to contest Noridian’s October 19, 2015 denial of Petitioner’s CAP. The
Civil Remedies Division (CRD) docketed this case under C-16-147 and assigned it to
Judge Joseph Grow. On December 8, 2015, Judge Grow issued an Acknowledgement
and Pre-Hearing Order (Pre-Hearing Order) in which he provided a pre-hearing
submission schedule. On January 12, 2016, CMS moved for dismissal of Petitioner’s
hearing request arguing that Noridian’s October 19, 2015 CAP decision is not subject to
further review. On January 14, 2016, Petitioner timely filed a new hearing request
seeking to contest Noridian’s November 17, 2015 reconsidered determination. CRD
docketed the new hearing request under C-16-246 and assigned it to Judge Grow. On
February 5, 2016, Judge Grow consolidated both of Petitioner’s hearing requests under
docket number C-16-246 and administratively dismissed C-16-147. Judge Grow also
modified the pre-hearing submission due dates. On March 31, 2016, CRD assigned this
case to me because Judge Grow transferred to another component of the Department of
Health and Human Services.

In response to the Pre-Hearing Order, CMS filed a brief and motion for summary
judgment (CMS Br.), and nine proposed exhibits (CMS Exs. 1-9). Petitioner filed a brief
and cross-motion for summary judgment (P. Br.), six exhibits (P. Exs. 1-6), which
included an affidavit from its witness, Rick Johns (P. Ex. 6). CMS filed a reply to
Petitioner’s motion for summary judgment (CMS Reply), objected to all of Petitioner’s
proposed exhibits, and requested to cross-examine Petitioner’s witness if I declined to
grant summary judgment. Petitioner filed a rebuttal to CMS’s objections.

II. Issues

1. Whether either party is entitled to summary judgment; and

2. Whether CMS had a legitimate basis for revoking Petitioner’s Medicare billing
privileges under 42 C.F.R. §§ 424.535(a)(1) and/or (a)(4).

III. Jurisdiction

Ihave jurisdiction to hear and decide this case. 42 C.F.R. §§ 498.3(b)(17), 498.5(1)(2);
see also 42 U.S.C. § 1395cc(j)(8).

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

The Social Security Act (Act) authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations governing the enrollment process for providers and
suppliers.’ 42 U.S.C. §§ 1302, 1395cc(j). Under the Secretary’s regulations, a provider
or supplier seeking billing privileges under the Medicare program must “submit
enrollment information on the applicable enrollment application. Once the provider or
supplier successfully completes the enrollment process . .. CMS enrolls the provider or
supplier into the Medicare program.” 42 C.F.R. § 424.510(a). CMS then establishes an
effective date for billing privileges under the requirements stated in 42 C.F.R.

§ 424.520(d) and may permit limited retrospective billing under 42 C.F.R. § 424.521.
CMS may revoke the enrollment and billing privileges of a provider or supplier for any
reason stated in 42 C.F.R. § 424.535(a).

For Medicare Part B claims, a beneficiary may assign his or her benefits to a physician or
non-physician practitioner providing services to that beneficiary. 42 U.S.C.

§ 1395u(b)(3)(B)(ii). In certain circumstances, a supplier who has received an
assignment of benefits may reassign those benefits to an employer, or to an individual or
entity with which the supplier has a contractual arrangement. 42 U.S.C. § 1395u(b)(6);
42 C.F.R. § 424.80(b)(1)-(2). CMS instructs its employees that reassignments of benefits
may only occur between enrolled providers and suppliers. Medicare Program Integrity
Manual (MPIM) § 15.5.20(A).

' Petitioner is considered a “supplier” for purposes of the Act and the regulations.
See 42 U.S.C. § 1395x(d),(u); 42 C.F. R. § 498.2; see also 42 C.F.R. § 400.202.
1. Summary judgment is appropriate in this case.

When appropriate, an ALJ may decide a case arising under 42 C.F R. part 498 by
summary judgment. Livingston Care Ctr. v. U.S. Dep’t of Health & Human Servs.,

388 F.3d 168, 172 (6th Cir. 2004) (citing Crestview Parke Care Ctr. v. Thomson, 373
F.3d 743 (6th Cir. 2004)). “Matters presented to the ALJ for summary judgment will
follow Rule 56 of the Federal Rules of Civil Procedure and federal case law... .” Civil
Remedies Division Procedures § 19(a). As stated by the United States Supreme Court:

Rule 56(c) of the Federal Rules of Civil Procedure provides
that summary judgment ‘shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.’
By its very terms, this standard provides that the mere
existence of some alleged factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment; the requirement is that there be no
genuine issue of material fact.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original).

To determine whether there are genuine issues of material fact for an in-person hearing,
the ALJ 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).

There is no genuine dispute of material fact in this case. For purposes of summary
judgment, I accept all of the facts that CMS asserts as undisputed in its brief. These
undisputed facts are quoted below:

1. Dr. Louis Kirby was never employed by [Petitioner] and was
never in a contractual relationship with [Petitioner]. CMS
Exhibit 1, at 1-2.

2. [Petitioner] certified to CMS on a Form CMS-855R that it
would abide by all laws and regulations pertaining to the
reassignment of benefits. CMS Ex. 3 at 6.

3. [Petitioner] certified to CMS on a Form CMS-855R that it
had examined the information on the Form CMS-855R and
that it was true, accurate and complete. CMS Ex. 3 at 6.
4.

Dr. Kirby’s signatures on the Form CMS-855I and on the
Form CMS-855R were forgeries. CMS Exhibit 1, at 1-2.

CMS Br. at 5-6.

For purposes of summary judgment, I draw all reasonable inferences in favor of CMS.

As explained below, Petitioner is entitled to judgment as a matter of law.

CMS revoked Petitioner based on a violation of 42 C.F.R. § 424.535(a)(4) for submitting
false or misleading information on an enrollment application. CMS Ex. 7 at 1; CMS Ex.
9 at 1. In this litigation, CMS asserts the facts quoted below support its revocation

2. CMS did not have a legal basis to revoke Petitioner’s Medicare
enrollment and billing privileges based on 42 C.F.R. § 424.535(a)(4)

because that regulation prohibits the submission of false or

misleading information on an enrollment application used to enroll or
maintain enrollment in the Medicare program; in this case, however,
CMS revoked Petitioner for false or misleading information provided

on an application for the reassignment of Medicare benefits.

determination under section 424.535(a)(4):

1.

2.

4.

CMS Reply at 9-10. Accepting these facts as true, they are insufficient, as a matter of

Petitioner submitted a Medicare enrollment application (CMS
Form-855R) in March 2010 for the purpose of reassigning the
Medicare billing privileges of Dr. Kirby to Petitioner. CMS
Ex. 3;

The March 3, 2010 CMS Form-855R indicated that Dr. Kirby
authorized the reassignment of his Medicare billing privileges
to Petitioner. CMS Ex. 3 at 4, 5, 6;

. Petitioner, operating through its authorized representative, Dr.

Cunningham, signed the March 3, 2010 CMS Form-855R
which had the effect of certifying on the application that he
had read its contents and that the information he had provided
was true, accurate, and complete. CMS Ex. 3 at 6; and

The March 3, 2010 CMS Form-855R application included
false or misleading information as Dr. Kirby never authorized
the reassignment of his Medicare billing privileges to
Petitioner and his signature on the application was admittedly
forged. CMS Ex. | at 1-2, 16; CMS Exs. 4-6

law, to prove a violation of section 424.535(a)(4).
Section 424.535(a)(4) states that CMS may revoke under the following circumstance:

False or misleading information. The provider or supplier
certified as “true” misleading or false information on the
enrollment application to be enrolled or maintain
enrollment in the Medicare program.

42 C.F.R. § 424.535(a)(4) (emphasis added). Although the preamble to the final rule
establishing section 424.535(a)(4) did not discuss that section in detail, the preamble’s
summarized version of section 424.535(a)(4) amplifies the limitations on the scope of
that section: “The provider or supplier certified as ‘true’ deliberately submitted false or
misleading information on the CMS 855 in order to enroll or maintain enrollment in
the Medicare program.” 71 Fed. Reg. 20,754, 20,761 (Apr. 21, 2006) (emphasis added).
Therefore, in order to revoke under section 424.535(a)(4), a provider or supplier’s
misleading or false information must be on an enrollment application used for the
purpose of enrolling or maintaining enrollment in the Medicare program, such as those
referred to in 42 C.F.R. §§ 424.510(a), 424.515(a).

The regulations provide the following definition of the words Enroll/Enrollment:

the process that Medicare uses to establish eligibility to
submit claims for Medicare-covered items and services,
and the process that Medicare uses to establish eligibility
to order or certify Medicare-covered items and services.
The process includes—

(1) Identification of a provider or supplier;

(2) Validation of the provider’s or supplier's eligibility to
provide items or services to Medicare beneficiaries;

(3) Identification and confirmation of the provider or
supplier's practice location(s) and owner(s); and

(4) Granting the Medicare provider or supplier Medicare
billing privileges.

42 CFR. § 424.502 (2009) (emphasis added)?

> Effective on February 3, 2015, the Secretary changed the definition of the words
Enroll/Enrollment to accommodate a new type of enrollment using a CMS-8550 form.
79 Fed. Reg. 72,500, 72,501-502, 72,531 (Dec. 5, 2014). Although the changes would
not affect this case, I quote in this decision the regulatory definition as it appeared when
Petitioner filed the CMS-855I and CMS-855R forms in 2010 to Noridian.
It is significant that the definition of the words Enroll/Enrollment do not include the
reassignment of Medicare benefits. As indicated by CMS in this litigation, the
“enrollment” application referred to in its revocation determination is a CMS-855R.
CMS Exs. 3,7. Although a CMS-85SR is generally titled as a “Medicare Enrollment
Application,” it is subtitled as “Reassignment of Medicare Benefits.” CMS Ex. 3 at 1.
The form itself explains what it is used for:

Complete this application if you are reassigning your right to
bill the Medicare program and receive Medicare payments, or
are terminating a reassignment of benefits. Reassigning your
Medicare benefits allows an eligible supplier to submit claims
and receive payment for Medicare Part B services that you
have provided. Such an eligible supplier may be an
individual, a group practice or other organization.

Both the individual practitioner and the eligible supplier
must be currently enrolled (or concurrently enrolling via
submission of the CMS-855B for the eligible supplier and
the CMS-855I for the practitioner) in the Medicare
program before the reassignment can take effect.
Generally, this application is completed by a supplier, signed
by the individual practitioner, and submitted by the supplier.

CMS Ex. 3 at 2 (emphasis added).

Nowhere does it state that the CMS-855R is used for enrollment in the Medicare
program. Indeed, as indicated in the quote above from the CMS-855R, the parties to the
reassignment must already be enrolled or concurrently filing enrollment applications in
order for a reassignment to take place. This is also CMS’s published policy. MPIM

§ 15.5.20(A).

The quoted material on the CMS-855R is consistent with the Act and the regulations. A
reassignment does not involve the granting of Medicare billing privileges, but rather is a
method of redirecting payment for services from the supplier who is providing services to
another provider or supplier (e.g., to an employer of a supplier if reassignment is a
condition of employment or to another supplier if there is a contractual arrangement
between the suppliers), the provider or supplier’s agent, a government agency, or a court-
ordered recipient. 42 C.F.R. §§ 424.70, 424.80. In regard to reassignments based on a
contractual relationship, 42 C.F.R. § 424.80 limits reassignment to occur between
enrolled providers and suppliers; however, this does not mean an entity contracted to
receive a reassignment from a supplier is automatically entitled to enroll as a supplier.
Wolverine State Inpatient Svcs., DAB No. 2509, at 6-7 (2013). Therefore, reassignment
has no effect on the enrollment of providers or suppliers, but enrollment as a provider or
supplier is usually the condition precedent to participate in a reassignment. See Mound
City Inpatient Srvcs., DAB CR2569, at 5 (2012) “Further, considering CMS denied
10

Petitioner’s CMS Form 855B because Petitioner did not meet the Medicare definition of
an operational supplier, there would be no basis to approve any Medicare enrollment
reassignments to Petitioner.”); Alexander C. Gatzimos, MD, JD, LLC, DAB CR4421, at
14 (2015) (“ Regardless of the form, it is essential for reassignment that the entity to
which Medicare claims are reassigned be enrolled in Medicare in order for the
reassignment to be effective.”’). It is significant that the regulations governing the
reassignment of Medicare benefits, which are located in 42 C.F.R. part 424, subpart F,
are not even included in the same subpart as the one that provides rules for establishing
and maintaining Medicare billing privileges. Compare 42 C.F.R. part 424, subpart F with
42 CFR. part 424, subpart P.

I have previously noted, in cases involving the effective dates for reassignments, CMS
conflated the enrollment of providers and suppliers with the reassignment of benefits.
Thomas Boyd, D.O., DAB CR3971, at 5 (2015); see also Lindsey Faucette, D.O., DAB
CR3992, at 8-9 (2015). It has done so again in this case.

In regard to CMS’s past history of revoking providers or suppliers under section
424.535(a)(4), it appears that CMS has revoked when there are false or misleading
statements on enrollment applications filed in instances where a provider or supplier was
either trying to enroll in the Medicare program or revalidate its enrollment in the
Medicare program. See Mark Koch, D.O., DAB No. 2610 at 4 (2014); Conchita Jackson,
M._D., DAB No. 2495, at 3 (2013); Leigh Gilburn, D.O., DAB CR1890, at 3-4 (2009).
The present case, however, involves an application for the reassignment of Medicare
benefits from an enrolled supplier to another enrolled supplier, and not an application to
establish or maintain enrollment. As a result, section 424.535(a)(4) does not reach
Petitioner’s conduct involving the submission of a CMS-855R in which one of the
signatures on the form was forged.

3. CMS did not have a legal basis to revoke Petitioner’s Medicare
enrollment and billing privileges based on a failure to comply with
enrollment requirements under 42 C.F.R. § 424.535(a)(1) because
Petitioner’s alleged improper reassignment of Medicare benefits from
a physician to Petitioner does not violate an enrollment requirement.

The initial and reconsidered determinations asserted that Petitioner was not in compliance
with Medicare enrollment requirements under 42 C.F.R. § 424.535(a)(1) because the
reassignment application and a CMS-855I submitted in support of the reassignment
application were not accurate or truthful, in violation of 42 C.F.R. § 424.510(d)(2)(i).
CMS Exs. 7,9. In this proceeding, CMS has provided a detailed argument to explain this
basis for revocation. I summarize its argument below, using some of the facts it alleges
related to the violation alleged with regard to 42 C.F.R. § 424.535(a)(4) to fully convey
CMS’s concerns over Petitioner’s actions.
11

In its brief, CMS asserts that despite the fact that Petitioner admits that Dr. Kirby was
never an employee or contractor of Petitioner, Petitioner still took steps to obtain
reimbursement from Medicare for the services that Dr. Kirby performed. CMS Br. at 9.
CMS further asserts that although Petitioner did not contact Dr. Kirby about the
reassignment, Petitioner submitted a CMS-855] that changed the address and contact
information for Dr. Kirby to that of Petitioner. CMS Br. at 9. While CMS does not
dispute that Petitioner worked through Mr. Grow and Phoenix Neurology to obtain Dr.
Kirby’s signatures on the reassignment form and CMS-855I, and that Petitioner did not
know Mr. Grow forged Dr. Kirby’s signature to the forms, CMS argues that Petitioner
was responsible for submitting the forms that led to Petitioner receiving improperly
reassigned payments for years. CMS Br. at 10. CMS is clear that Petitioner’s revocation
is not based on Petitioner knowingly submitting forms with Dr. Kirby’s forged
signatures, but rather, is based on the fact that Petitioner submitted the reassignment form
and the CMS-855I in order to obtain reassignment in a misleading way because Dr. Kirby
never worked for or was a contractor with Petitioner (i.e., Dr. Kirby was not eligible
under 42 C.F.R. § 424.80 to reassign his benefits to Petitioner). CMS Br. at 10.

The main thrust of CMS’s argument regarding Petitioner’s alleged failure to comply with
enrollment requirements is that “violating 42 C.F.R. § 424.80 [is] a separate bas[i]s for
revocation.” CMS Br. at 13. Asa result, CMS asserts that “[i]n order to be in
compliance with Medicare enrollment requirements, a supplier must at all times act in
accordance with applicable Medicare regulations. 42 C.F.R. § 424.516(a)(1).” CMS Br.
at 14. CMS supports this argument by pointing out that Petitioner certified, on the CMS-
855R reassignment form, that it would abide by all laws and regulations pertaining to the
reassignment of benefits. CMS Br. at 14; see also CMS Br. at 11. CMS concluded its
argument as follows:

Because [Petitioner] was actively receiving Medicare
payments under an illegal reassignment in violation of 42
CFR. [§] 424.80, [Petitioner] was clearly not in compliance
with all Medicare regulations at the time of the revocation.
Non-compliance is a reason for revocation listed in 42 C.F.R.
§ 424.535(a)(1), and it was one of the reasons cited in CMS’s
letter of revocation to [Petitioner.] CMS Exhibit 7 at 1.

CMS Br. at 14-15; see also CMS Reply at 7 n.2.

As already discussed above, submission of a reassignment application is not an act
directly related to the enrollment of a provider or supplier in the Medicare program.
Although it may be true that Petitioner was not entitled under the Act or regulations to
receive the reassignment of benefits from Dr. Kirby, a reassignment that violates the
regulations does not violate provider or supplier enrollment requirements, but rather the
requirements concerning reassignments. As noted earlier, the reassignment regulations
12

are not even contained in the same subpart as those dealing with the enrollment of
providers and suppliers in the Medicare program. Even if they were, it is not clear that
all provisions located in the enrollment subpart, i.e., 42 C.F.R. part 424, subpart P, are
enrollment requirements for purposes of revocation under 42 C.F.R. § 424.535(a)(1). As
can be seen in the quoted text below, the scope of section 424.535(a)(1) is significantly
narrower than CMS urges in the present case.

The revocation regulations specify certain “reasons for
revocation” in section 424.535(a). CMS stated, in the
preamble to the proposed rule adopting the revocation
provisions, that it intended to consider various factors in
applying the reasons, including balancing program and
beneficiary risk and beneficiary access to care. 71 Fed. Reg.
20,754, 20,761 (Apr. 21, 2006). CMS explained that the
revocation reasons were generally similar to reasons that
initial enrollment could be denied. Id. Under section
424.535(a)(1), CMS contemplated that a provider might face
revocation if it is determined “to be out of compliance with
the Medicare enrollment requirements outlined in subpart P
including the failure to report changes to enrollment
information timely or failure to adhere to corrective action
plans[.]” Id. The Medicare Program Integrity Manual
(MPIM) instructs contractors about when to use section
424.535(a)(1) as the reason for revocation, such as when a
provider no longer has a business location or has not paid
assessed user fees. MPIM, Ch. 15, § 15.27.2.A (eff. Jan. 28,
2014). Other appropriate situations for use of this provision
include, among others, lack of appropriate license, failure to
meet the regulatory requirement for the relevant specialty,
lack of valid social security numbers, failing to submit all
required documentation within 60 days of being notified to
submit an enrollment application, and otherwise not meeting
“general enrollment requirements.” Id.

On the other hand, while we do not decide here the precise
scope of section 424.535(a)(1), we have concerns about
CMS’s assertions that (1) every provision contained
anywhere in subpart P constitutes a revocable enrollment
requirement or (2) that the certification statement in
enrollment applications converts every Medicare regulation
and instruction into a revocable enrollment requirement.
CMS relied on these assertions to argue that failing to include
13

the correct NPI in Proteam’s claims in violation of section
424 .507(b)(1) (in subpart P) necessarily proved that Proteam
was noncompliant with an enrollment requirement. We do
not find support for the position taken by CMS.

Proteam Healthcare Inc., DAB No. 2658, at 8, 11 (2015). If all of the provisions in
subpart P are not necessarily requirements the contravention of which can warrant
revocation under 42 C.F.R. § 424.535(a)(1), then the reassignment regulations located in
subpart F certainly cannot be considered enrollment requirements for purposes of
revocation under 42 C.F.R. § 424.535(a)(1).

In the present case, CMS also attempts to use the certification statement that Petitioner’s
representative signed when completing the CMS-855R reassignment form to transform
reassignment requirements into enrollment requirements. CMS Br. at 14. As indicated in
the quote from the decision above, a certification statement cannot broadly make
Medicare requirements into enrollment requirements. In that case, the issue involved
compliance with Medicare billing requirements, but it is sufficiently analogous to the
present case. As stated in that decision:

We are also not persuaded that the duty undertaken by a
provider in certifying that it will comply with Medicare
requirements amounts to acknowledging that any
noncompliance with any requirement in the submission of a
claim may result in revocation as CMS contends here. The
certification does clearly require the applicant to agree to
abide by “the Medicare laws, regulations, and program
instructions” applicable to its provider type. CMS Ex. 20, at
3. The certification also calls for an acknowledgment that
“payment of a claim by Medicare is conditioned” on
compliance. Id. The certification statement does not,
however, inform the applicant that submission of a claim
inconsistent with any law, regulation or instruction, without
more, may result in revocation of billing privileges as
opposed to nonpayment of the claim.

Proteam, DAB No. 2658, at 12. Based on the analysis in the Proteam decision, I
conclude that while the certification statement signed by Petitioner’s representative
placed Petitioner on notice of the reassignment regulations, it did not turn the
reassignment regulations into enrollment requirements for purposes of section
424.535(a)(1).

Although not raised by either party, it is significant that the reassignment regulations
provide for the revocation of the right to receive assigned benefits if a provider or
supplier “[e]xecutes or continues in effect a reassignment or power of attorney or any
other arrangement that seeks to obtain payment contrary to the provisions of § 424.80.”
14

42 CFR. § 424.82(c)(3). The Secretary has provided a right to a hearing to contest the
revocation of the right to receive assigned benefits. 42 C.F.R. § 424.83-.84. Further, the
reassignment regulations also provide for the termination of a provider agreement for
violating the reassignment regulations. 42 C.F.R. § 424.74(a). Given the comprehensive
nature of the reassignment regulations, I must conclude that had the Secretary meant for
violations of the reassignment regulations to be considered violations of provider and
supplier enrollment requirements, the reassignment regulations would have made some
indication of it.

V. Conclusion

I grant Petitioner’s motion for summary judgment, deny CMS’s motion for summary
judgment, and reverse CMS’s determination to revoke Petitioner’s Medicare enrollment
and billing privileges.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Mumtaz Tabbaa, M.D.,
(PTAN: ZZZ30904Z),

Petitioner,
v.
Centers for Medicare & Medicaid Services.

Docket No. C-16-446
Decision No. CR4660

Date: July 14, 2016

DECISION

I sustain the determination of a Medicare contractor, as affirmed upon reconsideration
and ratified by the Centers for Medicare & Medicaid Services (CMS), to reactivate the
Medicare billing privileges of Petitioner, Mumtaz Tabbaa, M_D., effective September 22,
2015.

I. Background

Petitioner requested a hearing in order to challenge the contractor’s determination that I
describe in this decision’s opening paragraph. CMS filed a brief (CMS Br.) in support of
that determination plus five proposed exhibits that are identified as CMS Ex. 1 -CMS
Ex. 5. I receive these exhibits into the record. Petitioner’s representative, Janis Rovetti,
filed a letter in support of Petitioner’s arguments. Petitioner filed no proposed exhibits.

CMS argues that I should enter summary judgment in its favor. It is not necessary that I
decide whether the criteria for summary judgment are met here. Neither CMS nor
Petitioner offered proposed testimony and, consequently, there would be no purpose
served by an in-person hearing. I decide this case based on the parties’ written
submissions.
II. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether a Medicare contractor properly determined the effective date of
reactivation of Petitioner’s Medicare billing privileges to be September 22, 2015.

B. Findings of Fact and Conclusions of Law

This case is governed by a regulation, 42 C.F.R. § 424.540. In relevant part the
regulation states:

(a) Reasons for deactivation. CMS may deactivate the Medicare billing
privileges of a provider or supplier for any of the following reasons:

(3) The provider or supplier does not furnish complete and accurate
information and all supporting documentation within 90 calendar days of
receipt of notification from CMS to submit an enrollment application and
supporting documentation, or resubmit and certify to the accuracy of its
enrollment information.

(b) Reactivation of billing privileges. (1) When deactivated for any reason
other than nonsubmission of a claim, the provider or supplier must
complete and submit a new enrollment application to reactivate its
Medicare billing privileges or, when deemed appropriate, at a minimum,
recertify that the enrollment information currently on file with Medicare is
correct.

The regulation plainly tells a provider or supplier that it will be deactivated by CMS if
CMS directs it to submit an enrollment application and the provider or supplier fails to do
so within 90 calendar days. Additionally, it puts the onus on the deactivated provider or
supplier to submit a new Medicare enrollment application if it desires to reactivate its
participation.

CMS has published guidance to its contractors concerning what effective participation
date to assign to a supplier or provider that seeks to reactivate its participation. That date
shall be the date when that the contractor receives a re-enrollment application that it
processes to completion. Medicare Program Integrity Manual (MPIM), § 15.27.1.2. That
guidance is consistent with regulatory requirements governing the effective date of
participation of newly participating suppliers and providers. 42 C.F.R. § 424.520(d).
The contractor and CMS acted appropriately to assign an effective reactivation date to
Petitioner consistent with the regulatory requirements and with the facts of this case. The
earliest date that the contractor could have assigned Petitioner as an effective date of
reactivation of his billing privileges, consistent with this case’s undisputed facts, was
September 22, 2015. 42 C.F.R. § 424.520(d).

The undisputed facts are that on August 11,2014, a Medicare contractor sent a request
for Medicare enrollment validation to Petitioner, a Part B Medicare supplier. CMS Ex. 1.
Petitioner did not reply to this request and so, on February 20, 2015, the contractor
deactivated Petitioner’s enrollment and sent notice of this action to Petitioner. Id. More
than seven months elapsed before Petitioner filed with the contractor an application
(Form CMS-855I) for reactivation of his billing privileges. CMS Ex. 2 at 28. The
contractor assigned Petitioner an effective date of reactivation of his billing privileges of
September 22, 2015, based on its determination of the date of receipt of Petitioner’s
application for reactivation.’ That is exactly what the regulation requires.

Petitioner argues that he is facing “unreasonable penalties” because he dealt with his
Medicare patients in good faith during the period when his Medicare billing privileges
were deactivated. Essentially, he argues that it would be unfair to deny him
reimbursement for the care that he provided during that period inasmuch as he always
acted in good faith.

I have no reason to question Petitioner’s intent or good faith. However, his argument is
an equitable one that I have no authority to hear or decide. See, e.g., Oak Lawn
Endoscopy, DAB CR1187 (2004). In this case the contractor acted entirely consistently
with the requirements of law, and I must sustain the contractor’s determination.

/s/
Steven T. Kessel
Administrative Law Judge

' There is apparent confusion about the date when the contractor received this form. The
contractor reactivated Petitioner’s billing privileges effective September 22, 2015. CMS
Ex. 5 at 2. CMS now says, however, that the contractor didn’t receive the form until
October 16, 2015. CMS Br. at 2 n.1. If that is so, then technically, the earliest
reactivation date that Petitioner could be assigned is October 16 and not September 22.
However, CMS has agreed to assign a September 22, 2015 reactivation date to Petitioner
and so, I do not address the question of whether the regulations allow that.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Kindred Transitional Care and Rehab-Greenfield,
(CCN: 15-5188),

Petitioner,

v.

Centers for Medicare & Medicaid Services
Docket No. C-16-387
Decision No. CR4659

Date: July 12,2016

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose civil money penalties against Petitioner in the amount of $3550 per day for each
day of a period that began on September 18, 2015 and that ran through September 20,
2015. I do not sustain additional civil money penalties because I find that Petitioner’s
noncompliance ended after September 20, 2015.

I ground my decision sustaining the $3550 daily penalty amount on my finding that
CMS’s determination of immediate jeopardy level noncompliance is not clearly
erroneous. A consequence of the immediate jeopardy level noncompliance is that
Petitioner loses its authority to conduct a nurse aide training and/or competency
evaluation program for a period of two years.

I. Background
Petitioner, a skilled nursing facility, filed hearing requests to challenge CMS’s remedy

determinations. I consolidated the requests into a single case. CMS moved for summary
judgment. Petitioner opposed CMS’s motion and cross-moved for summary judgment.
With its motion CMS filed 14 proposed exhibits that it identified as CMS Ex. 1-CMS Ex.
14. With its opposition and cross motion Petitioner filed three proposed exhibits that it
identified as P. Ex. 1-P. Ex. 3. I receive all of the parties’ exhibits into the record.

Although there are no disputed facts in this case, I do not find it necessary to adjudicate it
using the criteria for summary judgment. Neither side has requested an in-person
hearing; and, consequently, I decide the case based on the parties’ written exchanges.

II. Issues, Findings of Fact and Conclusions of Law
A. Issues
The issues are whether:

e Petitioner failed to comply substantially with Medicare participation requirements;

e CMS’s determination of immediate jeopardy level noncompliance is clearly
erroneous; and

e CMS’s remedy determinations are reasonable.

B. Findings of Fact and Conclusions of Law

There are no disputed facts in this case. It is undisputed that a certified nursing assistant
(CNA) employed by Petitioner sexually abused or attempted to sexually abuse two of
Petitioner’s residents and engaged in sex with a third, cognitively impaired resident. Nor
is there any dispute that these acts and attempted acts constituted “‘abuse” within the
meaning of governing regulations. 42 C.F.R. § 488.301 (“abuse” is defined as the willful
infliction of injury with resulting physical harm, pain, or mental anguish). Beginning
around September 17 or 18, 2015, a male CNA fondled a female resident, exposed
himself to her, and briefly climbed on top of her. CMS Ex. 2 at 2-3; CMS Ex. 3 at 12.
During that same time period the CNA exposed himself to a second female resident.
CMS Ex. 2 at 4; CMS Ex. 3 at 2. Also, the same CNA had multiple sexual encounters
with a male, cognitively impaired resident. CMS Ex. 2 at 7-8. The CNA subsequently
admitted his abusive conduct. CMS Br. at 7; CMS Ex. 10; P. Br. at 6 n.3.

There is no evidence that other abusive acts were committed by this CNA or by other
individuals at Petitioner’s facility. Nor is there evidence that Petitioner’s management
knew or should have known that the CNA in question had the propensity to engage in
sexual abuse. Petitioner hired this individual on July 28, 2015. CMS Ex. 5 at 32.
Petitioner conducted a criminal background check of the CNA prior to hiring him. The
background check turned up some minor traffic citations but no evidence of a history of
sexual offenses. CMS Ex. 7 at 1-4. There were no reports of sexual abuse or attempted
sexual abuse by this CNA during his employment at Petitioner’s facility from July 28,
2015 through September 19, 2015. Id. at § 14.
The undisputed facts establish also that Petitioner has in place extensive anti-abuse
policies. CMS Ex. 8 at 76. Petitioner has identified procedures to identify abuse that
include pre-employment screening of prospective employees, training of employees on
how to recognize and report abuse, and advising residents as to how to report allegations
of abuse. Id. at 76-78.

CMS asserts that these facts establish that Petitioner contravened two regulations
governing skilled nursing facilities’ participation in Medicare. These regulations are

42 CFR. §§ 483.13(b) and 483.13(c)(1)(i). The first of these regulations provides that
residents of a skilled nursing facility have the right to be free from verbal, sexual,
physical and mental abuse, among other things. The second regulation requires a skilled
nursing facility to develop and implement policies and procedures that prohibit
mistreatment, neglect, and abuse of residents. It provides also that a facility must not
engage in verbal, mental, sexual or physical abuse, among other things.

The undisputed facts establish persuasively that Petitioner failed to comply with these
regulations’ proscriptions against abuse of residents. In fact, there were multiple
incidents of sexual abuse of residents at Petitioner’s facility during the period from
September 18 through September 20, 2015. I do not find that Petitioner failed to
implement its anti-abuse policies. The undisputed facts establish that Petitioner
established and implemented these policies. However, the incidents of abuse by
themselves are sufficient to establish noncompliance with 42 C.F.R. §§ 483.13(b) and
483 .13(c)(1)(i).

Petitioner makes two arguments to support its assertion that it did not contravene
regulatory requirements. First, it characterizes the abuse that I have documented as being
an isolated incident or collection of incidents attributable to one individual. It contends
that CMS seeks to impose an impermissible strict liability standard on Petitioner for these
allegedly isolated incidents, especially given Petitioner’s vigorous anti-abuse policy, the
pre-employment screening that it did of the CNA whose conduct is at issue, and that
employee’s benign work history prior to September 19, 2015. Second, Petitioner
contends that the allegations of noncompliance were carefully reviewed at the state level
during a process of independent dispute resolution (IDR) and that it was held blameless
after that review. It asserts that it would be arbitrary and an abuse of discretion to now
hold it liable.

I do not find these arguments to be persuasive. First, I do not find the incidents of abuse
to be so isolated as Petitioner contends. There was a pattern of abuse committed by the
CNA. The CNA in question sexually assaulted two female residents and engaged in sex
with a third and cognitively impaired resident. That said, I would find a violation here if
there had been only a single episode of sexual abuse. The governing regulations make it
plain that a facility is liable for any sexual abuse committed by a member of its staff.
In arguing that CMS is imposing a “strict liability” standard, Petitioner is analogizing this
case to a civil tort proceeding. But, that is not what this case is about. The regulations
governing skilled nursing facilities do not incorporate civil tort liability law into their
prohibitions against abuse. To the contrary, they make a facility liable for any abuse
committed by it or its agents.

Here, the CNA, employed by Petitioner, was an integral part of Petitioner’s provision of
care. Indeed, it would be impossible for Petitioner or any skilled nursing facility to
render the care required by governing regulations without the efforts of their employees.
Consequently, the act of any employee performed while he or she is on duty at
Petitioner’s facility becomes the act of the facility. Sexual abuse committed by an
employee thus is attributable to a facility even if it is isolated and even if it runs contrary
to facility policy.

Any other holding would strip the anti-abuse regulations of their force and effect. A
resident of a skilled nursing facility has a right to be free of any abuse. 42 C.F.R.

§§ 483.13(b), (c)(1)(i). There is no qualifying language in these regulations suggesting
that only abuse committed under limited circumstances is proscribed. There is certainly
nothing in these regulations that limits a facility’s liability for abuse to the circumstance
where it is negligent in hiring or supervising an abusive employee or where its
management is indifferent to abuse committed by its staff.

Appellate panels of the Departmental Appeals Board have considered and rejected
essentially the same argument as made by Petitioner on several occasions. Springhill
Senior Residence, DAB No. 2513 (2013); North Carolina State Veterans Nursing Home,
DAB No. 2256 (2009); Life Care of Gwinnet, DAB No. 2240 (2009). In each of these
cases the facility held that it could not be held accountable for actions by its employees if
the facility itself was not negligent or indifferent to the care provided by its staff and in
each case the panel rejected that argument.

I find no merit to Petitioner’s assertion that CMS’s determination is unlawful in light of
the decision made at IDR. CMS is not bound by an IDR determination because it has
ultimate authority to determine whether or not to impose remedies in a case involving a
skilled nursing facility or a dually participating facility (one that participates in Medicare
and Medicaid). 42 C.F.R. §§ 488.431(a), 488.452(a)(2).

I do not find CMS’s determination of immediate jeopardy level noncompliance to be
clearly erroneous. There was a likelihood of severe psychological injury to those
residents who were sexually assaulted. These are frail, elderly, highly vulnerable
individuals, dependent on Petitioner and its staff for their care. They were in no position
to defend themselves when the CNA assaulted them. That neither of them sustained
physical injury was fortuitous, but that does not gainsay the shock that they certainly
experienced.
CMS imposed a civil money penalty of $3550 per day for the three days of immediate
jeopardy level noncompliance. I find that to be reasonable. It is close to the minimum
amount that may be imposed for an immediate jeopardy level deficiency. 42 C.F.R.

§ 488 .438(a)(1)(i).

CMS asserts that Petitioner’s noncompliance continued after September 21, 2015 — until
October 29, 2015 — and asserts that I should sustain a civil money penalty of $250 for
each day of that period. I find no basis to do so. The penalty cannot be based on
continuing abuse at Petitioner’s facility. Petitioner terminated the employment of the
offending CNA on September 22, 2015 and the record is devoid of any evidence to show
that there was continuing abusive behavior after that date. The only conceivable basis for
imposition of additional penalties would be alleged failure by Petitioner to implement its
anti-abuse policies. However, and as I have discussed, the record does not support a
finding that Petitioner failed to implement these policies.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Vishwa Dev Rattan
d/b/a Low Bob’s,

Respondent.

Docket No. C-15-825
FDA No. FDA-2015-H-0032

Decision No. CR4655

Date: July 5, 2016

INITIAL DECISION AND DEFAULT JUDGMENT

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

I. Procedural History

CTP served its complaint on Respondent on January 9, 2015. Initially, Respondent did
not file an answer to CTP’s complaint and I issued an Initial Decision and Default
Judgment imposing a $500 CMP. Following the issuance of my Initial Decision and
Default Judgment, Respondent filed a motion to reopen the Initial Decision. I granted
Respondent’s motion to reopen and Respondent later filed an answer. I then issued an
Acknowledgement and Prehearing Order (APHO) that set deadlines for parties’
submissions, including the July 27, 2015 deadline to request that the opposing party
provide copies of documents relevant to this case. Additionally, the APHO stated that a
party receiving such a request must provide the requested documents no later than 30
days after the request.

CTP served Respondent with its request for documents on July 27, 2015. On September
3, 2015, CTP filed a motion to compel discovery indicating that CTP had not received a
response to its request for production of documents. See 21 C.F.R. § 17.23(a). On
September 3, 2015, CTP also filed a motion to extend the deadlines. Pursuant to my
direction, a September 8, 2015 letter allowed Respondent until September 21, 2015 to file
a response to CTP’s motion to compel discovery. On September 8, 2015, I also issued an
Order that extended the parties’ pre-hearing exchange deadlines.

On September 30, 2015, I issued an Order that granted CTP’s motion to compel
discovery. In that Order, I stated that Respondent shall comply with CTP’s request for
production of documents by October 20, 2015. The September 30, 2015 Order also
further extended the parties’ pre-hearing exchange deadlines.

On October 27, 2015, CTP filed an updated status report and a motion to impose
sanctions advising me that Respondent had not complied with my September 30, 2015
Order and asking me to strike the Respondent’s answer and issue a default judgment in
this case.

On October 23, 2015, Respondent filed a motion asserting that he not be compelled to
submit discovery because it was unduly burdensome. Pursuant to my direction, a
November 3, 2015 letter allowed CTP until November 18, 2015 to file a response to
Respondent’s motion and assert why it needed the requested documents at issue. On
November 3, 2015, I also issued an Order that extended the parties’ pre-hearing exchange
deadlines. On November 17, 2015, CTP filed its opposition to Respondent’s request for
a protective order. On December 3, 2015, I stayed the parties’ pre-hearing exchange
deadlines pending the resolution of this issue. On December 17, 2015, Respondent filed
stipulations with the Court. On January 13, 2016, CTP filed an updated status report
stating that “in light of statements made by Respondent in its Motion for Protective Order
... and stipulations recently submitted by Respondent . . . CTP has now received
sufficient documents and information from Respondent to proceed in this case.”

On March 14, 2016, I issued an Order that set the pre-hearing exchange dates in this case.
Both parties have filed timely pre-hearing exchanges. On April 11, 2016, I issued an
Order Scheduling a Pre-Hearing Conference for May 11, 2016 at 1:00 pm Eastern Time.
That Order provided a toll free telephone number for the parties to call to appear at the
telephone pre-hearing conference. At the scheduled time, Michael Shane, the attorney
representing CTP, appeared at the pre-hearing conference. Respondent did not appear for
the scheduled pre-hearing telephone conference.

On May 12, 2016, I issued an Order informing Respondent that he had until May 23,
2016 to show cause for his failure to appear at the scheduled pre-hearing conference. In
that Order I stated that: “Failure to do so may result in sanctions, including the issuance
of an Initial Decision and Default Judgment finding Respondent liable for the violations
listed in the Complaint and imposing a civil money penalty.”

To date Respondent has not submitted any explanation for his failure to appear at the pre-
hearing conference.

Il. Striking Respondent’s Answer

Respondent failed to appear at the scheduled pre-hearing conference and did not respond
to my Order to show cause for his failure to appear. Respondent has not made any
contact with this Court since December 17, 2015, the date Respondent filed its
stipulations. Respondent’s failure to effectively prosecute and defend actions taken over
the course of the proceedings have interfered with the orderly and speedy processing of
this case, further warranting imposition of sanctions. See 21 C.F.R. § 17.35(a) (1)(2) and

(3).

Due to Respondent’s failure to appear at the scheduled pre-hearing conference and failure
to respond to my Order to show cause for his failure to appear, I am striking
Respondent’s Answer, issuing this default decision, and assuming the facts alleged in
CTP’s complaint to be true. See 21 C.F.R. § 17.35(c) (3), 17.11(a). The harshness of the
sanctions I impose upon either party must relate to the nature and severity of the
misconduct or failure to comply, and I find the failure to comply here sufficiently
egregious to warrant striking the answer and issuing a decision without further
proceedings. See 21 C.F.R. § 17.35(b). Respondent did not comply with my orders on
two occasions nor did he provide any adequate justification for not doing so.

Ill. Default Decision

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

For purposes of this decision, I assume the facts alleged in the Complaint are true and
conclude that default judgment is merited based on the allegations of the Complaint and
the sanctions imposed on Respondent for failure to comply with my orders. 21 C.F.R.
§ 17.11. Specifically:
e Respondent owns Low Bob’s, an establishment that sells tobacco products and is
located at 1907 North Greensburg Crossing, Greensburg, Indiana 47240.
Complaint 3.

e During an inspection of Respondent’s establishment on May 29, 2013, at
approximately 6:20 PM, an FDA-commissioned inspector observed that “‘a person
younger than 18 years of age was able to purchase a package of Grizzly Long Cut
Premium Wintergreen smokeless tobacco . . . [.]” The inspector also observed that
“the minor’s identification was not verified before the sale... .” Complaint § 10.

¢ On June 20, 2013, CTP issued a Warning Letter to Respondent regarding the
inspector’s observations from May 29, 2013. The letter explained that the
observations constituted violations of regulations found at 21 C.F.R. § 1140.14(a)
and (b)(1), and that the named violations were not necessarily intended to be an
exhaustive list of all violations at the establishment. The Warning Letter went on
to state that if Respondent failed to correct the violations, regulatory action by the
FDA or a civil money penalty action could occur and that Respondent is
responsible for complying with the law. Complaint § 10.

e Initially, CTP did not receive a response to the Warning Letter, and on August 6,
2013 CTP sent Respondent a letter stating that it had not received a response to the
Warning Letter. Vishwa Dev Rattan contacted CTP via telephone on November
27, 2013, and “stated that the employee who sold the tobacco product to the minor
had been disciplined and all employees had been trained to sell tobacco products
pursuant to federal law. Mr. Rattan also stated that the establishment’s
management would organize periodic surprise checks.” Complaint § 11.

e During a subsequent inspection of Respondent’s establishment on June 27, 2014,
at approximately 11:35 AM, FDA-commissioned inspectors documented that “a
person younger than 18 years of age was able to purchase a package of Marlboro
cigarettes .. . [.]” The inspectors also documented that “the minor’s identification
was not verified before the sale... .” Complaint § 1.

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

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

Taking the above alleged facts as true, Respondent violated the prohibition against selling
tobacco to persons younger than 18 years of age, 21 C.F.R. § 1140.14(a), on May 29,
2013, and June 27, 2014. On those same dates, Respondent also violated the requirement
that retailers verify, by means of photo identification containing a purchaser’s date of
birth, that no tobacco purchasers are younger than 18 years of age. 21 C.F.R.

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

CTP has requested a fine of $500, which is a permissible fine under the regulations.
21 C.F.R. § 17.2. Therefore, I find that a civil money penalty of $500 is warranted and so
order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Joel G. Bailey, OD,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-585
ALJ Ruling No. 2016-13

Date: July 1, 2016

ORDER OF DISMISSAL

I dismiss the hearing request of Petitioner, Joel G. Bailey, OD, because it was untimely
and Petitioner did not establish good cause to extend the time for filing. 42 C.F.R.
§§ 498 .40(a)(2), (c); 498.70(c).

I. Background and Procedural History

Petitioner is an optometrist. On December 14, 2015, Palmetto GBA (Palmetto), a
Medicare administrative contractor acting on behalf of the Centers for Medicare &
Medicaid Services (CMS), issued a determination revoking Petitioner’s Medicare
enrollment and billing privileges effective December 18, 2014. Petitioner timely
requested reconsideration of that determination, and on March 4, 2016, Palmetto issued a
reconsidered determination upholding the revocation of Petitioner’s enrollment and
billing privileges. The reconsidered determination notified Petitioner that if he disagreed
with the determination, he could request review by an administrative law judge (ALJ) by
filing an appeal within 60 calendar days after the date of receipt of the determination.

On May 20, 2016, Petitioner filed, by certified mail, a request for hearing dated May 11,
2016. See https://tools.usps.com/go/TrackConfirmAction|!input.action (tracking #
2

70150640000364430423, last visited June 28, 2016). Petitioner appended several
documents to his request for hearing, including an April 1, 2015 Interim Order of
Reinstatement from the South Carolina State Board of Examiners in Optometry and
letters from other professionals that were dated May 11 and 17,2016. The Civil
Remedies Division received Petitioner’s request for hearing on May 23, 2016.

An initial review of Petitioner’s submissions raised questions about the timeliness of his
hearing request. I issued an order on June 2, 2016, directing Petitioner to show cause
why the hearing request should not be dismissed as untimely. I explained that if
Petitioner had not filed his hearing request within 60 days of receipt of the reconsidered
determination, he must show good cause as to why I should extend the time for filing the
request. 42 C.F.R. § 498 .40(c).

On June 16, 2016, Petitioner responded to my Order to Show Cause. Petitioner stated the
following in his response: “I was waiting on information with referral letters that I
thought would help with the appeal. They were late when I realized it was past the
deadline to submit my next appeal.” CMS filed a reply to Petitioner’s response on June
27, 2016.

II. Issues

The general issue here is whether I should dismiss Petitioner’s hearing request. The
specific issues that I must decide are whether Petitioner’s hearing request was untimely
and, if so, whether Petitioner had good cause to file the request after the deadline.

III. Analysis

A supplier dissatisfied with a reconsidered determination “is entitled to a hearing before
an ALJ.”' 42 CER. § 498.5(1)(2). The procedures to request a hearing are found in

42 C.F.R. § 498.40. In order to exercise the right to a hearing, a supplier must file its
request for hearing in writing no later than 60 days from the date that it receives a
reconsidered determination. 42 C.F.R. § 498.40(a)(2). Receipt of the notice of a
reconsidered determination is presumed to be five days after the date of notice unless
shown otherwise. Id.; 42 C.F.R. § 498.22(b)(3). A supplier may request that an ALJ
extend the date to file a hearing request; however, the supplier must show good cause in
order for the ALJ to grant such a request. 42 C.F.R. § 498.40(c). If a hearing request is

' A “supplier” furnishes services under Medicare, and the term “supplier” applies to
physicians and non-physician practitioners and facilities that are not included within the
definition of the phrase “provider of services.” 42 U.S.C. § 1395x(d). Petitioner is a
supplier.
3

untimely and there is no good cause to extend the filing date, then an ALJ may dismiss
the hearing request. 42 C.F.R. § 498.70(c).

A. Petitioner filed an untimely hearing request.

The reconsidered determination is dated March 4, 2016. Under the regulations, I
presume that Petitioner received the determination on Wednesday, March 9, 2016. 42
CFR. § 498.40(a)(2); see 42 C.F.R. 498.22(b)(3). Petitioner had 60 days, until May 9,
2016, to file a hearing request.” 42 C-F.R §§ 498.40(a)(2). Petitioner filed his hearing
request on May 20, 2016. Consequently, I find that Petitioner’s hearing request was
untimely.

B. Petitioner did not establish good cause for extending the regulatory deadline
for filing his hearing request.

If a supplier establishes that there was good cause to extend the filing date for a hearing
request, then an ALJ may accept an otherwise untimely hearing request. 42 C.F.R.

§ 498 40(c). The regulations do not define what constitutes “good cause” to extend the
filing deadline, and the Departmental Appeals Board “thas never attempted to provide an
authoritative or complete definition of the term ‘good cause’ in section 498.40(c)(2).”
Brookside Rehab. & Care Ctr., DAB No. 2094 at 7 n.7 (2007) (citing Glen Rose Med.
Ctr. Nursing Home, DAB No. 1852 at 7 n.5 (2002)). Rather, an adjudicator must
consider the relevant circumstances of each case to determine whether there is “good
cause” to extend the filing deadline. See NBM Healthcare, Inc., DAB No. 2477 at 3-4
(2012) (“[T]he facts of this case do not show good cause under ‘any reasonable definition
of that term.””).

In his response to the Order to Show Cause, Petitioner explained that he filed an untimely
hearing request because he was “waiting on information with referral letters that [he]
thought would help with the appeal.” Petitioner’s reason for failing to file a timely
hearing request does not constitute good cause to extend the filing deadline. Dismissal of
a hearing request is appropriate where the reconsidered determination clearly explained
the filing requirements and deadlines, the petitioner did not claim that “it reasonably
misunderstood what steps it needed to take to exercise its right to a hearing,” and “the
only reason for the late filing was that Petitioner was hoping ... to achieve a satisfactory
resolution by means other than a formal hearing before an administrative law judge.”
Borger I Enterprises, LLC, DAB No. 2618 at 4 (2015); see also Vanguard Vascular &
Vein, PLLC, DAB No. 2523 at 3-4 (2013) (upholding the dismissal of an untimely

> The 60-day deadline fell on a Sunday; the first business day following the deadline was
Monday, May 9, 2016.
4

hearing request when the reconsidered determination explained in “unambiguous and
conspicuous language” that the petitioners had 60 days from their receipt of the
reconsidered determination to request a hearing before an ALJ).

Here, the reconsidered determination clearly instructed Petitioner that, if he disagreed
with the determination, he “must file [an] appeal within 60 calendar days after the date of
receipt of this decision by writing to the following address. .. .”. The determination also
provided the postal address for Petitioner to file his request by mail and an alternative
electronic filing address and instructions for Petitioner to file his hearing request
electronically. In addition, the determination included the office (“Provider Contact
Center”) and telephone number to call if Petitioner had any questions. Petitioner does not
deny that he was provided clear notice of his right to appeal and detailed instructions for
submitting his request or that he understood those instructions.

Furthermore, Petitioner’s delay in exercising his appeal rights because he was attempting
to obtain evidence “[he] thought would help with the appeal” does not constitute good
cause for extending the filing deadline.? Borger I Enterprises, DAB No. 2618 at 3-4.
Nothing prevented Petitioner from exercising his formal appeal rights while
simultaneously obtaining evidence that he thought would resolve the matter in his favor.
While the reconsidered determination instructed Petitioner to include specific identifying
information and a copy of the decision being appealed, it did not instruct Petitioner that
he needed to submit any evidence, such as the documents and reference letters that were
appended to his request for hearing. Accordingly, Petitioner “must bear the
consequences of focusing [his] time and energy on advocacy tactics other than preparing
and filing a timely hearing request.” Id. at 4.

> CMS contends in its response that Petitioner was obligated to submit the documents
that were appended to his request for hearing with his request for reconsideration. CMS
Reply at 2. CMS further argues that “[n]otwithstanding his untimely filed appeal, the
documents themselves would not even be admissible unless Petitioner could separately
establish that he had good cause for submitting them for the first time at the ALJ level.”
CMS Reply at 2, citing 42 C.F.R. § 498.56(e)(1),(2)(ii). Because I have determined that
good cause has not been established for extending the filing deadline, I need not reach
this issue. However, I note that the bases cited in the reconsidered determination
revoking enrollment were 42 C.F.R. § 424.535(a)(1) (noncompliance) and 42 C.F.R.

§ 424.535(a)(9) (failure to report). The documents submitted in conjunction with the
untimely request for hearing do not appear to be relevant to either of the listed bases for
revocation.
5

Because Petitioner has made no showing of good cause for filing his hearing request 11
days after the expiration of the 60-day deadline for doing so, I cannot extend the filing
deadline for the hearing request based on good cause.

IV. Conclusion

Petitioner filed an untimely request for hearing and did not show that an extension of the
filing deadline is warranted based on good cause. Therefore, I dismiss Petitioner’s
hearing request.

/s/
Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Clemenceau Theophilus Acquaye
(OI File No. 5-13-40236-9),

Petitioner,
v.
The Inspector General.
Docket No. C-16-64
Decision No. CR4653

Date: June 30, 2016

DECISION

The Inspector General (IG) of the United States Department of Health and Human
Services excluded Petitioner, Clemenceau Theophilus Acquaye, from participation in
Medicare, Medicaid, and all other federal health care programs based on Petitioner’s
convictions for criminal offenses related to the delivery of a health care item or service
under Medicare or a state health care program and the neglect or abuse of a patient in
connection with the delivery of a health care item or service. For the reasons discussed
below, I conclude that the IG has a basis for excluding Petitioner because he was
convicted of four offenses, including Medicaid fraud, health care fraud, and the unlawful
practice of medicine, that relate to the delivery of a health care item or service under the
Medicaid program, and was also convicted of third degree criminal sexual conduct,
which was a crime against a patient in connection with the delivery of a health care item
or service. I affirm the 13-year exclusion period because the IG has proven one
aggravating factor and there are no mitigating factors present. I also affirm that the
effective date of Petitioner’s exclusion is August 20, 2015.
I. Background

By letter dated July 31, 2015, the IG notified Petitioner that, pursuant to sections
1128(a)(1) and 1128(a)(2) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(1),
(2), he was being excluded from participation in Medicare, Medicaid, and all federal
health care programs for a minimum period of 13 years, effective 20 days from the date
of the letter. IG Exhibit (Ex.) | at 1. In the letter, the IG informed Petitioner of the
factual basis for the exclusion, stating:

This action is being taken under sections 1128(a)(1) and 1128(a)(2) of the
Act (42 U.S.C. 1320a-7(a)) and is effective 20 days from the date of this
letter. The section 1128(a)(1) exclusion is due to your conviction as
defined in section 1128(i) (42 U.S.C. 1320a-7(i)), in the State of Michigan,
30" Judicial Circuit Court, Ingham County, of a criminal offense related to
the delivery of an item or service under the Medicare or a State health care
program, including the performance of management or administrative
services relating to the delivery of items or services, under any such
programs. The section 1128(a)(2) exclusion is due to your conviction as
defined in section 1128(i) (42 U.S.C. 1320a-7(i)), in the same court, of a
criminal offense related to neglect or abuse of patients, in connection with
the delivery of a health care item or service, including any offense that the
Office of Inspector General (OIG) concludes entailed, or resulted in,
neglect or abuse of patients (the delivery of a health care item or service
includes the provision of any item or service to an individual to meet his or
her physical, mental, or emotional needs or wellbeing, whether or not
reimbursed under Medicare, Medicaid, or any Federal health care program).

IG Ex. | at 1. The IG extended the exclusion period from the statutory minimum of five
years to 13 years based on the presence of one aggravating factor. IG Ex. 1 at 1-2. As
for the aggravating factor, the IG found that “[t]he sentence imposed by the court
included incarceration. The court sentenced you to 36 to 180 months of incarceration.”
IG Ex. | at 2; see 42 C-F.R. § 1001.102(b)(5). The IG did not consider any mitigating
factors. IG Ex. 1; see 42 C.F.R. § 1001.102(c).

Petitioner, through counsel, timely filed a request for hearing before an administrative
law judge that was dated September 29, 2015 and received on October 5, 2015. On
December 2, 2015, I convened a prehearing conference by telephone pursuant to

42 C.F.R. § 1005.6, during which I clarified the issues of the case and established a
schedule for the submission of prehearing briefs and exhibits. The schedule and
summary of the prehearing conference was memorialized in an Order and Schedule for
Filing Briefs and Documentary Evidence (Order), dated December 2, 2015.
Pursuant to the Order, the IG filed an informal brief (IG Br.) along with nine proposed
exhibits (IG Exs. 1-9), and also filed a reply brief (IG Reply). Petitioner filed a lengthy
handwritten informal brief! (P. Br.) and a separate response to the IG’s brief.
Petitioner’s brief included 15 exhibits. As nearly every exhibit includes handwritten
notations and arguments, Petitioner’s exhibits will not be separately admitted, but rather,
will be admitted with his brief. While Petitioner has requested a live hearing, the

' Petitioner does not make any cogent arguments supporting why he should not be
excluded from Medicare, Medicaid, and all other federal health care programs, nor does
he address with any specificity whether the 13-year length of the exclusion is
unreasonable. For example, Petitioner argues that he had ineffective counsel and that it is
unfair that he was convicted and incarcerated, whereas Dr. Elrington, his employer, fled
the country and evaded prosecution. P. Br.; see also
www.oig.hhs.gov/fraud/fugitives/profiles.asp, last visited June 28, 2016 (listing Dr. Errol
Elrington as a “WANTED” fugitive-at-large after he fled to Belize.). He further contends
that he worked under abusive conditions and that Dr. Elrington was his “slave master.”
Petitioner challenges his conviction, arguing that evidence was planted, witnesses were
coached and told lies under oath, prosecutors committed fraud, and that a polygraph
examiner was “high on Marijuana when he conducted the polygraph examination.”
Petitioner argues that he “was refused admission to Graduate Medical Education for
political reasons” and “refused to be trained by the State Department and then sent to
Ghana to lead a coup d’état.” Finally, Petitioner argues that he was a “Good Samaritan”
and would “diagnose and treat conditions that Board-certified physicians fail[ed] to
diagnose and treat.” Petitioner’s submissions also make references to a myriad of
irrelevant topics, such as the Flint city water situation, opioid-related overdoses, the basis
for United States invading Iraq, and shootings involving law enforcement officers.

My Order directed that briefs should not be in excess of 25 typed pages. Due to the
fact that Petitioner is incarcerated, I will presume that he does not readily have the means
to submit typewritten filings. Because I am unable to equate hand-written pages to
typewritten pages, and the IG has not objected to the lengthy submissions, I will admit
his filings into the record. However, in a June 6, 2016 Order, I ordered redaction of
Petitioner’s submissions because he repeatedly identified the victim of a sexual assault
for which he had been adjudicated guilty by name, and also submitted documentation
regarding the victim’s medical treatment. I permitted Petitioner an opportunity to file a
written response if he objected to the redaction of the victim’s name from the record so
long as the response neither exceeded three pages in length nor identified the sexual
assault victim. I further cautioned that I may impose sanctions if Petitioner submitted a
noncompliant response. In a 14-page response dated June 15, 2016, Petitioner identified
the sexual assault victim by name. Accordingly, on June 23, 2016, I issued an Order
Sanctioning Petitioner and Striking Petitioner’s Submission Dated June 15, 2016, in
which I struck Petitioner’s submission from the record as a sanction pursuant to 42
CFR. § 1005.14(a).

arguments in support of his request for a live hearing center on his attempt to essentially
re-litigate his conviction and establish that his defense attorney “destroyed evidence” and
was “a paid attorney but he worked for the prosecution.” P. Br. Petitioner pleaded guilty
to the offenses for which he was convicted, and his guilty plea was accepted by the judge
who presided over his criminal case. IG Ex. 7 at 1; see Michigan Court Rules, Rule
6.302 (Pleas of Guilty and Nolo Contendre) (“The court may not accept a plea of guilty
or nolo contendere unless it is convinced that the plea is understanding, voluntary, and
accurate.”)* A live hearing is therefore unnecessary because, pursuant to 42 CFR.

§ 2002.2007(d), Petitioner cannot re-litigate his conviction in this forum. Therefore, I
will decide this case based on the written submissions and documentary evidence. See
Order § V.

II. Issues

Whether there is a basis for exclusion, and, if so, whether the length of the exclusion that
the IG has imposed is unreasonable. 42 C.F.R. § 1001.2007(a)(1)-(2).

III. Jurisdiction
Ihave jurisdiction to decide this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.
IV. Findings of Fact, Conclusions of Law, and Analysis*

1. Petitioner’s guilty plea to the offenses of Medicaid fraud (false claim),
health care fraud (false claim), and committing the unauthorized
practice of medicine resulted in convictions for criminal offenses
related to the delivery of an item or service under a state health care
program and an exclusion from Medicare, Medicaid, and all other
federal health care programs for a minimum of five years is
warranted.

The Act requires the exclusion of any individual or entity from participation in all federal
health programs based on four types of criminal convictions. 42 U.S.C. § 1320a-7(a). In
this case, the IG first relied on section 1320a-7(a)(1) as the legal basis to exclude
Petitioner, which states:

> The relevant section of the Michigan Court Rules was lasted updated in January 2015
and is available on the Michigan Courts website.

http: //courts.mi.gov/Courts/MichiganSupremeCourt/rules/Documents/subchapters/Subch
apter %206.300%20Pleas.pdf, last visited June 28, 2016).

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

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

(1) Conviction of program-related crimes

Any individual or entity that has been convicted of a criminal
offense related to the delivery of an item or service under subchapter
XVIII of this chapter or under any State health care program.

42 USC. § 1320a-7(a)(1).

The IG argues that, pursuant to 42 U.S.C. § 1320a-7(a)(1), Petitioner’s exclusion is
required based on his conviction for two counts of Medicaid fraud (false claim), one
count of health care fraud (false claim), and one count of the unlawful practice of
medicine. IG Br. at 5-7. Petitioner, in his various submissions, does not dispute that he
pleaded guilty to the above-named offenses. As discussed below, I agree with the IG that
exclusion is mandated.

In September 2013, the State of Michigan filed a nine-count felony complaint charging
that Petitioner committed one count of conducting criminal enterprises, seven counts of
Medicaid fraud with regard to false claims, and one count of the unauthorized practice of
Medicine. IG Ex. 4. The following month, in October 2013, the State of Michigan filed
an amended complaint charging Petitioner with 14 felony offenses, to include first degree
criminal sexual conduct, one count of conducting a criminal enterprise, nine counts of
Medicaid fraud (false claim), two counts of health care fraud (false claim), and one count
of unauthorized practice in the health profession. IG Ex. 5. Nearly a year later, in
September 2014, the State of Michigan filed a third amended information charging 15
felony offenses, to include the offenses that were charged in October 2013, along with an
additional count of third degree felony criminal sexual conduct as an alternative to Count
1, first degree criminal sexual conduct. IG Ex. 6. Petitioner entered a guilty plea to
Counts 4 and 5, pertaining to Medicaid fraud (false claim); Count 12, relating to health
care fraud (false claim); Count 14, unlawful practice of medicine; and Count 15, third
degree criminal sexual conduct.° IG Ex. 7 at 1. The remaining 10 counts were
dismissed. IG Ex. 7 at 1. Petitioner was sentenced on September 24, 2014, and at the
time of his sentencing, he had already been incarcerated for 369 days. IG Ex. 7 at 2. For
Count 15, the sentencing judge ordered a minimum sentence of 36 months and a

> Petitioner’s offenses are listed in various sections of the Michigan Compiled Laws,
specifically: § 400.6071 (Counts 4 and 5); § 752.10031 (Count 12); § 333.16294 (Count
14); and § 750.520D1B (Count 15).
maximum sentence of 180 months of incarceration. IG Ex.7 at 2. The judge also
imposed a minimum sentence of 24 months and a maximum sentence of 48 months of
incarceration for Counts 4, 5, 12, and 14, with the sentences for all five counts to be
served concurrently. IG Ex. 7 at 2.

Petitioner has not presented any arguments that his guilty plea to the charges discussed
above does not mandate at a minimum a five-year exclusion. Petitioner, through his
guilty plea, has been convicted of, pursuant to section 1128(a)(1) of the Act, “criminal
offens[es] related to the delivery of an item or service under Medicare or a State
Medicaid program.” IG Exs. 1, 6, citing 42 U.S.C. § 1320a-7(a)(1); see 42 U.S.C.

§ 1320a-7(h)(1) (stating Medicaid is a state health care program for purposes of the Act);
42 U.S.C. § 1320a-7(i)(3) (individual is “convicted” for purposes of an exclusion when
he or she enters a plea of guilty that has been accepted by a federal, state, or local court).
Specifically, Petitioner was convicted of Medicaid fraud and health care fraud, both of
which involved the submission of false claims. Petitioner was also convicted of the
unlawful practice of medicine, an offense that involved him treating patients and billing
Medicaid as if Dr. Elrington had treated those patients. IG Exs. 2,3, 6. Petitioner was
unquestionably convicted of criminal offenses related to the delivery of a health care item
or service under the Medicaid program. 42 U.S.C. § 1320a-7(a)(1).

2. Petitioner’s guilty plea to the offense of third-degree criminal sexual conduct
resulted in a conviction for a criminal offense relating to the abuse or
neglect of patients in connection with the delivery of a health care item or
service and an exclusion from Medicare, Medicaid, and all other federal
health care programs for a minimum of five years is warranted.

Section 1128(a)(2) of the Act requires that an individual or entity convicted of “a
criminal offense relating to neglect or abuse of patients in connection with the delivery of
a health care item or service” be excluded from participation in federal health care
programs. An individual who is excluded under section 1128(a)(2) must be excluded for
a period of not less than five years. 42 U.S.C. § 1320a-7(c)(3)(B).

In addition to entering a plea of guilty to Medicaid fraud, health care fraud, and
practicing medicine without a license, Petitioner was also convicted of third degree
sexual assault on a patient. IG Ex. 7. The charge involved Petitioner, who held no
medical license, performing digital pelvic examinations on a victim and performing a
breast examination on the same victim “even when she was not being seen for a condition
that she believed would have warranted a breast exam.” IG Ex. 9. The offense of third
degree sexual conduct, which is punishable by up to 15 years of imprisonment, entails a
person engaging “in sexual penetration with another person” and “force or coercion is
used to accomplish the sexual penetration.” Mich. Comp. Laws § 750.520d(1)(b), (2).
Petitioner posed as a doctor who was licensed to practice medicine, and employed this
scheme in order to sexually penetrate the victim. Thus, at a minimum, a mandatory five-

year exclusion is warranted because Petitioner pleaded guilty to an offense involving the
abuse of a patient in connection with the delivery of a health care item or service. 42
U.S.C. § 1320a-7(a)(2). See Narendra M. Patel, M.D., DAB No. 1736 (2000)
(concluding that a sexual battery conviction was a criminal offense relating to the abuse
of a patient and warranted exclusion pursuant to section 1128(a)(2)).

3. A 13-year exclusion is not unreasonable based on the presence of one
aggravating factor and no mitigating factors.

As previously discussed, the Act requires a minimum exclusion period of five years when
the exclusion is mandated under section 1320a-7(a). 42 U.S.C. § 1320a-7(c)(3)(B). The
IG increased the exclusion period from the minimum five years to 13 years based on his
consideration of one aggravating factor. IG Ex. 1 at 1-2. The IG has the discretion to
impose an exclusion longer than the minimum period when there are aggravating factors
present. See 42 C.F.R. § 1001.102(

LS

The IG asserts that the presence of one aggravating factor warrants an exclusion for 13
years, and neither the IG nor Petitioner has argued that there are any regulatory
mitigating factors present that may be considered as a basis for reducing the period of
exclusion to no less than five years. See 42 C.F.R. § 1001.102(a)-(c) f

Petitioner was sentenced to a period of incarceration for the offenses for which he was
convicted. The period of incarceration, a minimum of three years up to a maximum of 15
years, is quite significant. IG Ex. 7; see IG Ex. 8 (printout from Michigan Department of
Corrections website, showing an earliest potential release date of September 19, 2016 and
a maximum discharge date of September 19, 2028). It is also noteworthy that Petitioner
was incarcerated for 369 days pending his trial and ultimate conviction. IG Ex. 7 at 2.
The IG properly considered the period of incarceration to be an aggravating factor in this
case. See Jason Hollady, M.D., DAB No. 1855 at 12 (2002) (stating that a nine-month
period of incarceration was “relatively substantial”); Gary Alan Katz, R.Ph., DAB No.
1842 at 10 (2002) (“Incarceration for an indeterminate period with a minimum of one
year and a maximum of seven is significant in and of itself and certainly justifies a longer
period of exclusion than if there was no incarceration or incarceration of a lesser type or
shorter period.”)

In summary, the 13-year period of Petitioner’s exclusion is not unreasonable based on the
significant aggravating factor present in this case. Petitioner was ordered to be
incarcerated for no less than three years, but up to 15 years. Petitioner committed
Medicaid fraud, health care fraud, treated patients and billed Medicaid as a doctor when

® Thave reviewed each of the regulatory mitigating factors enumerated in 42 C.F.R.
§ 1001.102(c)(1)-(3) and I have determined the evidence does not indicate that any of
those factors are applicable.
in fact he did not have a medical license, and committed a felonious sexual assault on a
patient. Petitioner’s conduct for which he pleaded guilty demonstrates his
untrustworthiness and a lack of integrity in dealing with health care programs. I therefore
conclude that the 13-year period of exclusion is not unreasonable. See Jeremy Robinson,
DAB No. 1905 at 3 (2004) (ALJ review must reflect the deference accorded to the IG by
the Secretary).

V. Effective Date of Exclusion

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

VI. Conclusion

For the foregoing reasons, I affirm the IG’s decision to exclude Petitioner from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of 13 years, effective August 20, 2015.

/s/
Leslie C. Rogall
Administrative Law Judge