Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Mark Rausch, M.D.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-533
Decision No. CR2926

Date: September 18, 2013

DECISION

Physician Services Nationwide, appearing here on behalf of Petitioner Mark Rausch,
M.D.., appeals the effective date assigned to Petitioner’s enrollment as a Medicare
provider with Emergency Physicians Care Center, PLLC. For the reasons explained
below, I grant the Centers for Medicare & Medicaid Services’ (CMS’s) Motion for
Summary Judgment and uphold the January 18, 2013 effective date.

I. Background

On March 6, 2013, Petitioner filed a hearing request challenging the effective date
determination made by Palmetto GBA (Palmetto), a Medicare contractor. In accordance
with my Acknowledgment and Initial Docketing Order dated March 20, 2013, CMS and
Petitioner filed Reports of Readiness. I convened a teleconference in this matter on June
12, 2013, and issued an Amended Order. Subsequently, CMS submitted a Motion for
Summary Judgment and a brief in support of its motion (CMS Br.), along with five
exhibits identified as CMS Exs. 1-5. Petitioner filed a brief in opposition to the CMS
Motion for Summary Judgment (P. Br.), and attached several documents, which I have
identified as P. Ex. 1. Neither party chose to file an Answer Brief. On August 15, 2013, I
issued an Order Closing Record in this matter.

In the absence of objection, I admit CMS Exs. 1-5 and P. Ex. | into the record.
II. Applicable Law

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. Act §§ 1102, 1866(j) (42 U.S.C. §§ 1302, 1395cc(j)). Under the Secretary’s
regulations, a provider or supplier that seeks billing privileges under Medicare 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).

Also, a “provider or supplier must submit a complete enrollment application and
supporting documentation to the designated Medicare fee-for-service contractor,” and the
application must include “complete . . . responses to all information requested within
each section as applicable to the provider or supplier type.” 42 C.F.R. § 424.510(d)(1)-
(2).

The effective date of enrollment for physicians and nonphysician practitioners is set as
follows:

The effective date for billing privileges for physicians, 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.

42 C.F.R. § 424.520(d).
III. Issue

The issue in this case is whether CMS’s contractor and CMS properly determined
Petitioner’s effective date of Medicare enrollment.
IV. Analysis

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

1. This case is appropriate for summary judgment.

CMS argues that it is entitled to summary disposition in the nature of 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 Rehabilitation & Skilled Nursing Center, DAB No. 2300, at 3 (2010) (citations
omitted).

The Board has further explained that 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, Inc., DAB No. 2291, at 5 (2009).

I have accepted all of Petitioner’s factual assertions as true and drawn all reasonable
inferences in Petitioner’s favor. Therefore, I accept Petitioner’s claim that Petitioner
mailed a Medicare enrollment application around November 1, 2012. Hearing Request
(AR); P. Br. at 1. I further accept Petitioner’s concession that this application was not
received and “never scanned into the system for review” by Palmetto. P. Br. at 1.
Finally, I accept Petitioner’s assertion that a new Medicare enrollment application was
submitted in January of 2013, after Petitioner spoke with a Palmetto representative and
learned the application sent around November 1, 2012 had not been processed. HR; P.
Br. at 1. For the purposes of summary judgment, I accept Petitioner’s description of
these events as true. However, this depiction does not support a favorable outcome for
Petitioner. Petitioner has not disputed any fact material to my resolution of the case.
Accordingly, I agree with CMS that summary judgment is appropriate.
2. CMS correctly determined the effective date of Petitioner’s Medicare
enrollment.

Petitioner is a physician employed by Emergency Physicians Immediate Care (the group
practice) located in Midlothian, Virginia. CMS Ex. 3; P. Br. at 1. On or about November
1, 2012, Petitioner contends that he and several other physicians signed Medicare
enrollment applications and applications to assign Medicare payments (Forms CMS 855R
and CMS 8551) for participation as group practice members, and began seeing Medicare
beneficiaries. HR; P. Br. at 1. Petitioner claims that his enrollment application was
submitted on November 1, 2012 to Palmetto, along with the applications of the other
group practice members. P. Br. at 1. Petitioner did not send this Medicare enrollment
application by certified or registered mail and cannot provide proof showing that
Petitioner mailed a completed, approvable enrollment application to Palmetto on
November 1, 2012. Also, a cover letter to Medicare dated September 6, 2012, submitting
three other group practice members’ Medicare enrollment applications referenced in
Petitioner’s brief, does not mention or include Petitioner’s Medicare enrollment
application. CMS Ex. 1.

Subsequently, Petitioner called Palmetto to verify that Petitioner’s application had been
received. P. Br. at 1. A Palmetto representative informed Petitioner that the enrollment
application “was not scanned into the system and therefore, resubmit.” P. Br. at 1.
Petitioner began preparing another application for submission following this
conversation. P. Br. at 1. On January 18, 2013, Palmetto received an application to
assign Petitioner’s Medicare payments and Petitioner was given a retrospective billing
date of December 19, 2012.'! CMS Exs. 2,5.

The determination of the effective date of Medicare enrollment is governed by 42 C.F.R.
§ 424.520. Section 424.520(d) provides that the effective date for enrollment for
physicians, among others, 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.” 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.” 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008). It is well settled that the date
of filing is the date the Medicare contractor receives an approvable application. Caroline
Lott Douglas, PA, DAB CR2406 (2011); Rizwan Sadiq, M.D., DAB CR2401 (2011);
Jennifer Tarr, M.D., DAB CR2299 (2010); Roland J. Pua, M.D., DAB CR2163 (2010);
Michael Majette, D.C., DAB CR2142 (2010).

' Petitioner’s effective date of Medicare enrollment is January 18, 2013, the date
Petitioner’s enrollment application was received by Palmetto. However, Palmetto
granted Petitioner authorization to file claims for services retrospective to December 19,
2012. CMS Br. at 1-2; 42 C.F.R. § 424.521(a)(1).
Petitioner requests that I hold the date that he asserts he first submitted an application to
be controlling, even though there is no evidence that this application was received or
processed by Palmetto. Petitioner wishes to have his billing privileges adjusted to the
date that Petitioner alleges he initially sent an application, but Petitioner has pointed to no
authority that would allow this departure from settled principles. Petitioner presents no
evidence that would support his assertion that he mailed an application on November 1,
2012. Moreover, the regulations are clear that an application must be received and
subsequently approved by a Medicare contractor before an effective date can be
established. It is undisputed that the contractor did not receive an application it was able
to process to approval from Petitioner until January 18, 2013. Therefore, the correct
effective date of Petitioner’s enrollment remains January 18, 2013. 42 C.F.R.

§ 424.520(d).

Petitioner’s argument is essentially that the effective date should be adjusted because the
CMS contractor mishandled the application Petitioner sent in November of 2012. As
blunt as this assertion is, Petitioner can point to no evidence in support of it, and in the
absence of any such evidence I cannot accept it as proven. Even if the assertion were
proven, however, this is not a basis to adjust Petitioner’s enrollment date. Petitioner’s
argument amounts to a claim of equitable estoppel. 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 government; (2) estoppel can lie against the government, if at all,
only on a showing of affirmative misconduct, such as fraud; and (3) I am not authorized
to order payment contrary to law based on equitable grounds. See, e.g., Oklahoma Heart
Hospital, 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); Office of Personnel Management v.
Richmond, 496 U.S. 414 (1990); Heckler v. Community Health Services of Crawford
County, Inc., 467 U.S. 51 (1984). Petitioner alleges no affirmative misconduct against
the government, and it is simply the case that the regulations governing this situation
were promulgated with the understanding that these stricter requirements for enrolling
and maintaining enrollment would have possible effects on providers and suppliers. Yet,
the stricter Medicare enrollment requirements — such as those that guide this decision —
were understood as a necessary means to further program integrity. See 73 Fed. Reg.
69,725, 69,768 (November 19, 2008).
V. Conclusion

For the reasons explained above, and based on the undisputed fact that Palmetto did not
receive an enrollment application it was able to process to approval from Petitioner until
January 18, 2013, I conclude that Petitioner’s effective date of enrollment was correctly
determined to be January 18, 2013.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

AARCH, Inc.
d/b/a Cool Valley BP,

Respondent.

Docket No. C-13-904
FDA Docket No. FDA-2013-H-0732

Decision No. CR2924

Date: September 17, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against AARCH, Inc. d/b/a Cool Valley BP (Respondent), which
alleges facts and legal authority sufficient to justify imposing a $2,000 civil money
penalty. Although Respondent timely filed an answer and request for hearing in
response to the Complaint, it subsequently failed to comply with my pre-hearing
order scheduling a mandatory settlement conference. I issued a show cause order
directing Respondent to explain why it failed to comply with my pre-hearing
order. The show cause order informed Respondent that failing to respond or to
demonstrate good cause for its non-compliance would result in sanctions.
Respondent did not file a response. Therefore, I sanction Respondent by striking
its answer, entering a default judgment against Respondent, and ordering that
Respondent pay a civil money penalty in the amount of $2,000.
CTP initiated this case by serving a Complaint on Respondent and filing a copy of
the Complaint with the Civil Remedies Division (CRD) and the Food and Drug
Administration’s (FDA) Division of Dockets Management. The Complaint
alleges that Respondent unlawfully sold a tobacco product to a minor on three
separate occasions and twice failed to verify that a purchaser of a tobacco product
was of sufficient age, thereby violating the Federal Food, Drug, and Cosmetic Act
(Act), codified at 21 U.S.C. §§ 301 — 399d, and its implementing regulations
found at 21 C.F.R. Part 1140. CTP seeks a civil money penalty of $2,000 for
these violations.

On July 12, 2013, I issued an Acknowledgement and Pre-hearing Order (Pre-
hearing Order) in this case to notify the parties of a “mandatory settlement
conference” scheduled for August 14, 2013, at 1:00 PM ET.

Pre-hearing Order § 3. Respondent failed to comply with the Pre-hearing Order
and appear at the mandatory settlement conference as instructed. In further
violation of the Pre-hearing Order, Respondent failed to provide the telephone
number where it could be reached at the time scheduled for the settlement
conference.

Notwithstanding Respondent’s failure to comply with the Pre-hearing
Order, the staff attorney assisting me with this case attempted to contact
Respondent on three separate occasions. On August 14, 2013, the staff
attorney attempted to contact Respondent’s representative twice at the
number Respondent provided in its answer. On the staff attorney’s first
attempt, there was neither an answer nor a voicemail box to leave a
message. On the staff attorney’s second attempt, a male who identified
himself as “an employee” of AARCH, Inc., answered the call and provided
the purported cell phone number of Respondent’s representative. The staff
attorney called the number provided and left a message for Respondent’s
representative. On August 16, 2013, the staff attorney again called the cell
phone number and left another message for Respondent’s representative.

As stated in the Pre-hearing Order, Respondent was required to provide the
telephone number where it can be reached at least five (5) days prior to the
settlement conference. Pre-Hearing Order § 2. I assume Respondent received the
Pre-hearing Order five days after the date it was placed in the mail. See 21 C.F.R.
§ 17.30(c). Pursuant to the Pre-hearing Order, Respondent should have filed its
contact information by August 9, 2013. As of August 20, 2013, Respondent had
not provided its contact information or returned the messages left by the CRD staff
attorney.
To determine whether Respondent had good cause for failing to comply with the
Pre-hearing Order, on August 20, 2013, I issued an Order to Show Cause (Order).
l ordered Respondent to explain why it failed to provide the telephone number
where it could be reached at the time scheduled for the settlement conference and
why it failed to appear at the mandatory settlement conference. Order at 2. The
Order explained that I might accept Respondent’s late response if it could show
that it had good cause for the delay. Jd. The Order further explained if
Respondent could not show good cause, I might dismiss its request for hearing and
enter a default judgment. Jd.; See 21 C.F.R. § 17.35(a)(1)-(3)(e).

Moreover, the Order informed Respondent that if I did not receive its response in
writing by September 4, 2013, I would assume that it had nothing to submit, and I
would impose sanctions against Respondent for failing to comply with the Order.
Order at 2. As of September 16, 2013, I have not received a response from

Respondent.

Respondent had the obligation to maintain contact with my office, to participate in
the mandatory settlement conference that I scheduled, or to explain why it did not
do so. Respondent’s complete failure to communicate with me following its filing
of an answer in this case -- despite repeated efforts by my office to contact it --
constitutes failure to comply with my pre-hearing orders, failure to defend this
cause of action, and misconduct that interferes with the speedy, orderly, or fair
conduct of the hearing in this case. 21 C.F.R. § 17.35(a)(1)-(3). Therefore, as
authorized by the regulations, I strike Respondent’s answer and enter a default
judgment pursuant to the provisions of 21 C.F.R. § 17.35.

Striking Respondent’s answer leaves the Complaint in this case unanswered. 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 Respondent’s abandonment of this proceeding. 21 C.F.R.

§ 17.11(a). In support of that conclusion, I make the following findings of fact
and conclusions of law:

On June 21, 2013, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. Specifically, CTP’s Complaint
alleges that:

e Respondent owns Cool Valley BP, an establishment that sells tobacco
products and is located at 1790 South Florissant Road, Saint Louis,
Missouri 63121. Complaint § 3.
On August 24, 2011, an FDA-commissioned inspector observed two
violations of 21 C.F.R. Part 1140 at Cool Valley BP. Specifically, the
inspector observed a “Sale of cigarettes or smokeless tobacco to a person
younger than 18 years of age . . .” and observed that Respondent failed “to
verify[,] by means of photo identification, containing the bearer’s date of
birth, that no person purchasing cigarettes or smokeless tobacco is younger
than 18 years of age... .” Complaint § 12.

“[OJn November 17, 2011, CTP issued a Warning Letter to Harsimran
LLC, d/b/a Cool Valley BP.” The letter informed Respondent of the
violations the FDA-commissioned inspector observed at the establishment
on August 24, 2011, and explained that Respondent’s failure to correct the
violations “may result in a civil money penalty action, or other regulatory
action by [the] FDA.” CTP further explained that the Warning Letter was
not intended to provide an exhaustive list of violations and that Respondent
was responsible for complying with the law. Complaint § 12.

“[The] FDA did not receive a response to the Warning Letter. UPS records
show that the Warning Letter was received on November 18, 2011, by
[‘Ariane’]. CTP’s research shows that, at the time the Warning Letter was
issued, KSD Petroleum LLC owned Cool Valley BP. CTP also contacted .
. . the registered agent for KSD Petroleum LLC, by telephone on May 23,
2012. [The registered agent] confirmed ownership of both Harsimran LLC
and KSD Petroleum LLC, that KSD Petroleum owns Cool Valley BP, and
that he received the November 2011 Warning Letter addressed to
Harsimran LLC for the violations at Cool Valley BP.” Complaint § 13.

“On June 11, 2012, CTP initiated a civil money penalty action against KSD
Petroleum LLC for another violation of 21 C.F.R. § 1140.14(a).”"
Specifically, ““a person younger than 18 years of age was able to purchase a
package of Marlboro cigarettes on February 8, 2012, at approximately 7:05
PM CST.” Complaint § 11.

On August 16, 2012, the civil money penalty action “concluded with a
default judgment entered against Respondent” that ordered Respondent “to
pay a civil money penalty in the amount of $250.” Complaint 4 11.

On October 18, 2012, FDA-commissioned inspectors documented two
additional violations of 21 C.F.R. Part 1140 at Respondent’s establishment.

' CTP does not allege that Harsimran LLC and AARCH, Inc. are the same legal
entity owned by KSD Petroleum LLC. However, I will infer that they are.
The inspectors documented a violation of 21 C.F.R. § 1140.14(a) when “a
person younger than 18 years of age was able to purchase a package of
Newport Box cigarettes . . . at approximately 8:20 PM[.]” The inspectors
also documented a violation of 21 C.F.R. § 1140.14(b)(1) when “the
minor’s identification was not verified before the sale... .” Complaint { 1.

¢ On October 24, 2012, CTP issued a Notice of Compliance Check
Inspection (Notice) informing Respondent that an inspection had been
conducted on October 18, 2012, “and that during the inspection a minor
was able to enter the establishment and purchase a regulated tobacco
product at approximately 8:20 PM.” The Notice also warned Respondent
“that other potential violations of [the] federal tobacco law may have been
observed,” and if “CTP determined that there were additional violations of
federal law, the establishment may receive further notification from [the]
FDA.” Complaint § 2.

I find that these facts, which I must assume are true, 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 sold or distributed in
violation of regulations issued under section 906(d) of the Act, codified at

21 U.S.C. § 387f(d). See 21 U.S.C. § 387(a)(7)(B); 21 C.F.R. § 1140.1(b). The
regulations prohibit the sale of cigarettes or 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 purchaser of cigarettes or smokeless tobacco is
younger than 18 years of age. 21 C.F.R. § 1140.14(b)(1).

In the present case, Respondent committed five violations of 21 C.F.R. Part 1140
within a 24-month period. First, on August 24, 2011, Respondent unlawfully sold
a regulated tobacco product to a minor and failed to verify, by means of photo
identification, that the purchaser was 18 years of age or older. 21 C.F.R. §
1140.14(a)-(b)(1). Subsequently, on February 8, 2012, Respondent again
unlawfully sold a regulated tobacco product to a minor. 21 C.F.R. § 1140.14(a).
On October 18, 2012, Respondent yet again sold a regulated tobacco product to a
minor and failed to verify, by means of photo identification, that the purchaser was
18 years of age or older. 21 C.F.R. § 1140.14(a)-(b)(1). Respondent’s actions and
omissions at the same retail outlet constitute violations of law for which a civil
money penalty is merited.
The regulations require me to impose a civil money penalty that is either the
maximum amount provided for by law, or the amount sought in the Complaint,
whichever amount is smaller. 21 C.F.R. § 17.11(a)(1)-(2). After the first two
violations, Respondent received a Warning Letter, and subsequently committed
three additional violations within a 24-month period. The regulations provide that
the maximum penalty for these actions is $5,000. See 21 C.F.R. § 17.2. In its
Complaint, however, CTP seeks a civil money penalty in the amount of $2,000.

Accordingly, I find that a civil money penalty in the amount of $2,000 is
permissible and order it imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Erin Dalton,
(OI File No. H-12-4-40482-9),

Petitioner,
v.
The Inspector General.
Docket No. C-13-543
Decision No. CR2922

Date: September 11, 2013

DECISION

This matter is before me in review of the Inspector General’s (I.G.’s) determination to
exclude Petitioner pro se Erin Dalton from participation in Medicare, Medicaid, and all
other federal health care programs for a period of five years. The I.G.’s determination to
exclude Petitioner is based on the terms of section 1128(a)(4) of the Social Security Act
(Act), 42 U.S.C. § 1320a-7(a)(4). As I explain below, the facts of this case require the
imposition of a mandatory five-year exclusion. Accordingly, I grant the I.G.’s Motion
for Summary Disposition.

I. PROCEDURAL BACKGROUND

Erin Dalton, Petitioner pro se, was licensed by the Commonwealth of Pennsylvania as a
registered nurse in 2004. She was employed in that capacity during 2010 at the Crozer-
Chester Medical Center in Upland, Pennsylvania.

In April 2010, Petitioner attempted to use a forged prescription, naming herself as the
patient and purportedly signed by a physician at that facility, to obtain a supply of
schedule II controlled substance painkillers. Her effort was unsuccessful: the pharmacy
2

where she attempted to fill the prescription recognized it as fraudulent, and multiple
criminal charges were soon filed against her. 1.G. Exs. 3,4. Those charges were
resolved in a plea agreement Petitioner and her counsel reached with prosecutors, and on
March 29, 2011, in the Court of Common Pleas of Delaware County, Pennsylvania,
Petitioner pleaded nolo contendere to the felony offense of attempting to obtain a
controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge, in
violation of 18 PA. CONS. STAT. § 901(a). IG. Exs. 2, 5. When she returned to the
Court of Common Pleas on June 14, 2011, she was sentenced to a three-year term of
probation and was required to pay certain fees, costs, and assessments.

As required by the terms of section 1128(a) of the Act, 42 U.S.C. § 1320a-7(a), the I.G.
began the process of excluding Petitioner from participation in Medicare, Medicaid, and
all other federal health care programs. On January 31, 2013, the I.G. notified Petitioner
that she was to be excluded for a period of five years pursuant to section 1128(a)(4). LG.
Ex. 1.

Acting pro se, Petitioner timely sought review of the L.G.’s action on March 16, 2013. I
convened a telephonic prehearing conference on April 15, 2013, pursuant to 42 C.F.R.

§ 1005.6. Its results and the actions taken during the conference are set out in my Order
of that date, by which a schedule for the filing of the I.G.’s Motion and the parties’ briefs
on the merits of that Motion was established. That schedule was amended by my Order
of June 20, 2013. The cycle of briefing closed for purposes of 42 C.F.R. § 1005.20(c) on
August 29, 2013.

The evidentiary record on which I decide the issues before me contains 12 exhibits. The
1.G. proffered seven exhibits marked I.G. Exhibits 1-7 (I.G. Exs. 1-7). Petitioner has
proffered four exhibits marked Petitioner’s Exhibits 1-4 (P. Exs. 1-4). I have admitted all
proffered exhibits as marked, and I have sua sponte admitted a copy of the criminal
docket sheet reflecting the complete course of the proceedings against Petitioner as ALJ
Exhibit 1 (ALJ Ex. 1). This docket sheet was attached to Petitioner’s request for hearing,
but not proffered by her as an exhibit; I have admitted it because it is particularly helpful
in understanding the course of the proceedings in the Court of Common Pleas.

II. ISSUES

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

1. Whether the I.G. has a basis for excluding Petitioner from participating
in Medicare, Medicaid, and all other federal health care programs pursuant
to section 1128(a)(4) of the Act; and

2. Whether the five-year term of the exclusion is unreasonable.

The applicable authorities require that both issues be resolved in favor of the LG.’s
position. Section 1128(a)(4) of the Act mandates Petitioner’s exclusion since her
predicate conviction has been established. A five-year term of exclusion is the minimum
period of exclusion established by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-
7(c)(3)(B), and is therefore reasonable as a matter of law.

HI. CONTROLLING STATUTES AND REGULATIONS

Section 1128(a)(4) of the Act, 42 U.S.C. § 1320a-7(a)(4), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of “(a)ny individual or entity that has been convicted . . . under Federal or State
law, of a criminal offense consisting of a felony relating to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled substance.” The terms of section
1128(a)(4) are restated somewhat more broadly in regulatory language at 42 C.F.R.

§ 1001.101(d).

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual . . . by a Federal, State, or local court,”
Act § 1128(i)(1); “when there has been a finding of guilt against the individual .. . by a
Federal, State, or local court,” Act § 1128(i)(2); “when a plea of guilty or nolo contendere
by the individual . . . has been accepted by a Federal, State, or local court,” Act

§ 1128(4)(3); or “when the individual . . . has entered into participation in a first offender,
deferred adjudication, or other arrangement or program where judgment of conviction has
been withheld.” Act § 1128(i)(4). These definitions are repeated in slightly different
language at 42 C.F.R. § 1001.2.

An exclusion based in section 1128(a)(4) is mandatory and the I.G. must impose it for a
minimum term of five years. Act § 1128(c)(3)(B), 42 U.S.C. § 1320a-7(c)(3)(B).

IV. FINDINGS AND CONCLUSIONS

I find and conclude as follows:

1. On March 29, 2011, in the Court of Common Pleas of Delaware County,
Pennsylvania, Petitioner Erin Dalton pleaded nolo contendere to the felony offense of

attempting to obtain a controlled substance by misrepresentation, fraud, forgery,
deception, or subterfuge, in violation of 18 PA. CONS. STAT. § 901 (a). LG. Exs. 2, 5.
4

2. Petitioner was sentenced in the Court of Common Pleas on June 14, 2011, and was
placed on a three-year term of probation. She was also required to pay certain fees, costs,
and assessments. I.G. Ex. 2, at 1.

3. The Court of Common Pleas’ acceptance of Petitioner’s nolo contendere plea
constitutes a “conviction” within the meaning of section 1128(a)(4) and 1128(i)(3) of the
Act, and 42 C.F.R. § 1001.2.

4. Petitioner was “convicted” within the meaning of section 1128(a)(4) and 1128(i)(4) of
the Act, and 42 C.F.R. § 1001.2.

5. A nexus and a common-sense connection exist between the felony offense of which
Petitioner was convicted, as noted above in Findings 1, 2, 3, and 4 and the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance. IG. Exs.
3, 4; Berton Siegel, D.O., DAB No. 1467 (1994).

6. Petitioner’s conviction constitutes a basis for the I.G.’s exclusion of Petitioner from
participation in Medicare, Medicaid, and all other federal health care programs. Act
§ 1128(a)(4), 42 U.S.C. § 1320a-7(a)(4).

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

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

V. DISCUSSION

The four essential elements necessary to support an exclusion based on section
1128(a)(4) of the Act are: (1) the individual to be excluded must have been convicted of
a criminal offense; (2) the criminal offense must have been a felony; (3) the felony
conviction must have been for conduct relating to the unlawful manufacture, distribution,
prescription, or dispensing of a controlled substance; and (4) the felonious conduct must
have occurred after August 21, 1996. Thomas Edward Musial, DAB No. 1991 (2005);
Russell A. Johnson, DAB CR1378 (2005); Gerald A. Levitt, D.D.S., DAB CR1272
(2005); Robert C. Richards, DAB CR1235 (2004).
5

Petitioner denied the first element at the outset of this appeal: in her pro se hearing
request of March 16, 2013, she asserted that the criminal proceedings did not result in her
“conviction.” She claimed then that upon the offer and acceptance of her nolo
contendere plea, the trial judge placed her on supervised probation and withheld final
adjudication of guilt and imposition of sentence. Petitioner claims that her “conviction”
will be expunged at the end of the period of probation. Although she has not renewed
that argument in her briefing, her pro se status requires that I address it here.

I have been unable to find any reference to such a resolution of Petitioner’s case in the
Court of Common Pleas’ records before me. 1.G. Exs. 2-5; ALJ Ex. 1. But the important
point for this discussion is that even if Petitioner’s description of the resolution of the
proceedings against her is perfectly accurate, and even if the charges to which she
pleaded nolo contendere have been or will eventually be dismissed, those proceedings
would still constitute a “conviction” within the precise terms of section 1128(i)(4) of the
Act, which declares that a conviction has occurred “when the individual . . . has entered
into participation in a first offender, deferred adjudication, or other arrangement or
program where judgment of conviction has been withheld.” Similar regulatory language
appears at 42 C.F.R. § 1001.2, and both statute and regulation have been applied by the
Departmental Appeals Board (Board) in rejecting arguments similar to Petitioner’s. Ellen
L. Morand, DAB No. 2436 (2012); Henry L. Gupton, DAB No. 2058 (2007), aff'd sub
nom Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Tenn. 2008); Carolyn Westin, DAB
No. 1381 (1993), aff'd sub nom Westin v. Shalala, 845 F. Supp. 1446 (D. Kan. 1994).

Moreover, the I.G. correctly points out that the trial court’s acceptance of Petitioner’s
nolo contendere plea represents a second, independent, and entirely sufficient basis for
regarding the proceedings in the Court of Common Pleas as culminating in Petitioner’s
“conviction.” That is, the I.G. points out that whatever the effect of a deferred or
withheld adjudication of Petitioner’s guilt might be, her nolo contendere plea
incontestably was tendered, and just as incontestably was accepted by the trial court. It is
patent that unless and until the trial court accepted Petitioner’s nolo contendere plea, the
process represented by the trial court’s imposition of sentence and penalty on June 14,
2011 (ALJ Ex. 1, at 1, 3, 6, 8) simply could not have begun. Douglas L. Reece, D.O.,
DAB CR305 (1994); Robert W. Emfinger, R.Ph., DAB CR92 (1990). Because
Petitioner’s plea of nolo contendere was accepted by the trial court, the acceptance of that
plea constitutes a “conviction” within the meaning of sections 1128(a)(4) and 1128(4)(3)
of the Act, and 42 C.F.R. § 1001.2, and does so independently of the basis provided by
section 1128(i)(4) of the Act.

The second, third, and fourth of the four essential elements in a section 1128(a)(4)
exclusion are proven here without serious argument. Records of the Court of Common
Pleas show conclusively that the criminal proceedings against Petitioner began with the
6

events of April 2010, in which she attempted to use a forged prescription to obtain a
supply of schedule II controlled substance painkillers. .G. Exs. 3, 4. The charges
immediately filed against Petitioner included both felonies and misdemeanors, but all
were related to her use of the forged prescription for the controlled substance drug. I.G.
Exs. 2, 3, 4, 5; ALJ Ex. 1. The Criminal Information to which Petitioner pleaded guilty is
inked to her attempt by the date of the offense it charges, by the Criminal Complaint first
filed in the prosecution, and by the transcript of her Preliminary Hearing in the Court of
Common Pleas on October 13, 2010. I.G. Exs. 3, 4,5. The classification of the crime to
which Petitioner pleaded nolo contendere as a felony is established by the Court of
Common Pleas’ judgment and sentencing records. I.G. Ex. 2, at 1, 4. The nexus of
Petitioner’s admitted felony offense to the “unlawful manufacture, distribution,
prescription, or dispensing of a controlled substance” as required by section 1128(a)(4) of
the Act, and the crime’s having occurred after 1996, are fully established on the record
before me.

Petitioner’s hearing request raised another issue not further elaborated in her briefing.

She complained that a substantial period elapsed between the conclusion of the criminal
case in June 2011 and the L.G.’s final action of January 2013 in determining to exclude

er from the protected programs. Petitioner’s complaint may be reasonable as a matter of
fairness, for significant consequences may flow from the I.G.’s delay in beginning the
exclusion process. The I.G.’s unexplained delay in this case is approximately 18 months.
When seen against the period of exclusion that the I.G. seeks to impose — five years —
the delay obviously amounts to a significant de facto enhancement of that period. My
views on this issue in general have not changed since Stephen Michael Cook, M.D., DAB
CR1234 (2004), and have been restated in Abelardo Lecompte-Torrez, DAB CR2379, at
7 (2011); Marilyn June McCullough, DAB CR1931, at 6 (2009); Vivienne Esty-Fenton,
DAB CR1931, at 11 (2009); Kimberly Mazzeo, DAB CR1591, at 5 (2007); and Dana
William White, DAB CR1495 (2006). So far, the effort to set rational limits on I.G.
delays — or to discover the justifications for them — has not been pressed before an
Article III court with vigor and tenacity sufficient to affect the law of this forum. Randall
Dean Hopp, DAB No. 2166 (2008); Kailash C. Singhvi, M.D., DAB No. 2138 (2007).
And so, at least for now, the timing of the I.G.’s decision to begin the exclusion process
remains entirely beyond review by the Board or any Administrative law Judge (ALJ) of

7

this forum. Randall Dean Hopp, DAB No. 2166; Kailash C. Singhvi, M.D., DAB No.
2138; Kevin J. Bowers, DAB No. 2143 (2008); Lisa Alice Gantt, DAB No. 2065 (2007);
Thomas Edward, DAB No. 1991; Douglas Schram, R.Ph., DAB No. 1372 (1992); David
D. DeFries, D.C., DAB No. 1317 (1992); Richard G. Philips, D.P.M., DAB No. 1279
(1991); Samuel W. Chang, M.D., DAB No. 1198 (1990).!

Petitioner’s Answer Brief raises a number of arguments based on her successful treatment
for the substance abuse that led to her conviction, on the Pennsylvania State Board of
Nursing’s approval of her return to nursing work, on her unblemished record as a
caregiver up to the time of her conviction, and on the expanding need for nurses in the
future. P. Exs. 1-4. These are all significant points in a social context, and I intend no
slight to Petitioner’s successful efforts to address her problems, nor to her dedication to
er chosen profession. But the operation of section 1128(a)(4) is mandatory: neither the
1.G. nor I can act on Petitioner’s arguments and avoid the statute’s terms. Charice D.
Curtis, DAB No. 2430, at 6 (2011). Neither the I.G. nor I can exercise the slightest
discretion: the law requires Petitioner’s exclusion once the essential elements have been
proven, as they have here. The waiver provisions of section 1128(c)(3)(B), 42 U.S.C.

§ 1320a-7(c)(3)(B), apply only when certain well-defined and strictly-limited
administrative requirements have been met, and none of them have been met here.”

' Although the I.G. may exercise no discretion whatsoever in determining whether to
impose the exclusion sanction under section 1128(a) of the Act, he continues to enjoy
absolutely unfettered latitude in deciding when to impose the sanction. The LG.’s
unexplained delay in this case is approximately 18 months, and, as I have noted, has at
least the potential for significant consequences. But the I.G.’s delay in this case pales
when measured against other unexplained delays given unremarked approval by the
Board. In Kailash C. Singhvi, M.D., DAB No. 2138, the Board acceded to the I.G.’s
delay of five years and four months. In Lisa Alice Gantt, DAB No. 2065, the Board
declared itself unable to question the I.G.’s delay of five years and 19 days. For what the
observation may be worth, it would appear that the range of I.G. delays has expanded
considerably since my review of them in Stephen Michael Cook, M.D., DAB CR1234,
and that it is now the Board itself whose nihil obstat is written on the very longest of
those delays. Given the Board’s present reading of the law, the LG.’s timing can be the
manifestation of random accident, purest whim, or cunningly-crafted design — and no
judge of this forum may so much as wonder which of those factors shaped the
determination, or why.

? Petitioner does not explicitly cite section 1128(c)(3)(B) as the basis for her waiver
request, but she does quote that section’s language with reference to an “essential
(continues on next page)
The five-year period of exclusion proposed in this case is the minimum required by
section 1128(c)(3)(B) of the Act. As a matter of law it is not unreasonable, and neither
the Board nor I can reduce it. 42 C.F.R. § 1001.2007(a)(2); Mark K. Mileski, DAB No.
1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002).

Petitioner appears here pro se, and I have been guided by the Board’s reminders that pro
se litigants should be offered “‘some extra measure of consideration” in developing their
records and their cases. Louis Mathews, DAB No. 1574 (1996); Edward J. Petrus, Jr.,
M.D., et al., DAB No. 1264 (1991). I have searched Petitioner’s pleadings for any
additional contentions that might raise a valid defense to the I.G.’s Motion, but have
found nothing that could be so construed.

Resolution of a case by summary disposition is particularly apt when settled law can be
applied to undisputed material facts. Michael J. Rosen, M.D., DAB No. 2096; Thelma
Walley, DAB No. 1367. Summary disposition is authorized by the terms of 42 C.F.R.

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

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Erin Dalton from participation
in Medicare, Medicaid, and all other federal health care programs for a period of five
years, pursuant to the terms of section 1128(a)(4) of the Act, is SUSTAINED.

/s/
Richard J. Smith
Administrative Law Judge

specialized service” in making her point, and so I conclude that she relies on that
section’s terms.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Celestine Tony Okwilagwe,
(O.I. File No. H-12-41812-9),

Petitioner,
v.
The Inspector General.
Docket No. C-13-322
Decision No. CR2920

Date: September 6, 2013

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Disposition affirming the I.G.’s determination to exclude Petitioner Celestine Tony
Okwilagwe from participation in Medicare, Medicaid, and all other federal health care
programs for a period of five years. The I.G.’s Motion and determination to exclude
Petitioner are based on section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C.

§ 1320a-7(a)(1). The undisputed material facts in this case require the imposition of the
five-year exclusion. Accordingly, I grant the I.G.’s Motion for Summary Disposition.

I. Procedural Background

On June 21, 2012, in the 265th Judicial District Court, Dallas County, Texas, Petitioner
appeared with counsel and tendered a negotiated plea of guilty to the Class A
Misdemeanor charge of Attempted Theft, in violation of TEX. PENAL CODE ANN.

§ 31.03. LG. Ex. 4. The District Court accepted Petitioner’s guilty plea, placed
Petitioner on community supervision for one year, and entered its Order of Deferred
Adjudication on that date. IG. Ex. 5. Petitioner was ordered to perform 80 hours of
community service, and was required to pay restitution in the sum of $4730.84 and
additional costs. On December 19, 2012, the District Court’s Order Dismissing
Proceedings and Granting Early Discharge from Community Supervision Following
Deferred Adjudication was filed, by which “all proceedings in this cause against the
defendant, including the indictment or information, are hereby dismissed.” I.G. Ex. 6;
P. Ex. 2.

Section 1128(a)(1) of the Act mandates the exclusion of “[a]ny individual or entity that
has been convicted of a criminal offense related to the delivery of an item or service
under . . . any State health care program” for a period of not less than five years. On
December 31, 2012, the I.G. notified Petitioner that he was to be excluded pursuant to the
terms of section 1128(a)(1) for a period of five years.

Acting pro se, Petitioner timely sought review of the L.G.’s action on January 18, 2013.

l attempted to conduct a prehearing conference by telephone pursuant to 42 C.F.R.

§ 1005.6 to discuss procedures for addressing the issues presented by this case, but was
unable to do so because Petitioner failed to provide a telephone number at which he could
be contacted. Accordingly, by Order of February 28, 2013, I established procedures and
a schedule for the submission of documents and briefs.

That Order required amendment after Petitioner’s counsel filed his written entry of
appearance on June 13, 2013. The circumstances attending the development of this case
after that point, and the amendments to the original Order, appear in my Order of July 31,
2013. By the terms of that latter Order the record in this case closed for purposes of 42
C.F.R. § 1005.20(c) on August 30, 2013.

The evidentiary record on which I decide the issues before me contains nine exhibits: six
were proffered by the I.G. marked LG. Exhibits 1-6 (.G. Exs. 1-6), and Petitioner
proffered three exhibits (P. Exs. 1-3). In the absence of objection, I have admitted all
proffered exhibits.

II. Issues

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

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

b. Whether the five-year length of the proposed period of exclusion is
unreasonable.
Application of the controlling authorities to the undisputed facts of this case requires that
these issues be resolved in favor of the I.G.’s position. Section 1128(a)(1) of the Act
mandates Petitioner’s exclusion, for his predicate conviction has been established. A
five-year period of exclusion is the minimum period required by section 1128(c)(3)(B) of
the Act, 42 U.S.C. § 1320a-7(c)(3)(B), and is therefore as a matter of law not
unreasonable.

Ill. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the exclusion from
participation in Medicare, Medicaid, and all other federal health care programs of any
individual or entity convicted of a criminal offense related to the delivery of an item or
service under title XVIII of the Act (the Medicare program) or any state health care
program (the Medicaid program). The terms of section 1128(a)(1) are restated in similar
language at 42 C.F.R. § 1001.101(a). Section 1128(a)(1) does not distinguish between
felonies and misdemeanors as predicates for exclusion.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual . . . by a Federal, State, or local court,”
Act § 1128(i)(1); “when there has been a finding of guilt against the individual .. . by a
Federal, State, or local court,” Act § 1128(i)(2); “when a plea of guilty or nolo contendere
by the individual . . . has been accepted by a Federal, State, or local court,” Act

§ 1128(4)(3); or “when the individual . . . has entered into participation in a first offender,
deferred adjudication, or other arrangement or program where judgment of conviction

as been withheld.” Act § 1128(i)(4). These definitions are repeated in slightly different
language at 42 C.F.R. § 1001.2.

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

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

1. On June 21, 2012, in the 265th Judicial District Court, Dallas County, Texas,
Petitioner pleaded guilty to the Class A Misdemeanor charge of Attempted
Theft, in violation of TEX. PENAL CODE ANN. § 31.03. I.G. Ex. 4. The District
Court accepted Petitioner’s guilty plea and entered its Order of Deferred
Adjudication on that date. LG. Ex. 5.
2. The accepted plea of guilty and the Order of Deferred Adjudication described
above constitute a “conviction” within the meaning of sections 1128(a)(1),
1128(i)(3), and 1128(i)(4) of the Act, and 42 C.F.R. § 1001.2.

3. A nexus and a common-sense connection exist between the criminal offense of
which Petitioner was convicted, as noted above in Findings 1 and 2, and the
delivery of an item or service under the Medicaid program. I.G. Ex. 2; Berton
Siegel, D.O., DAB No. 1467 (1994).

4. Petitioner’s conviction constitutes a basis for the I.G.’s exclusion of Petitioner
from participation in Medicare, Medicaid, and all other federal health care
programs, pursuant to section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-

T(aj(1).

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

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

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under Title XVIII of the Act (Medicare) or any state health care program.
Tamara Brown, DAB No. 2195 (2008); Thelma Walley, DAB No. 1367; Boris Lipovsky,
M.D., DAB No. 1363 (1992); Lyle Kai, R.Ph., DAB CR1262 (2004), rev'd on other
grounds, DAB No. 1979 (2005); see also Russell Mark Posner, DAB No. 2033, at 5-6
(2006).

This record reflects uncontested and objective proof of both essential elements. Court
records of the criminal proceedings against Petitioner are before me as I.G. Exs. 3, 4, 5,
and 6, and P. Ex. 2. Those exhibits establish the first essential element. Petitioner notes
that under Texas law he would not now be considered convicted of the violation to which
he pleaded guilty, but he concedes that federal, and not Texas, law controls this situation.
That concession is justified: even though his description of the resolution of the
proceedings is perfectly accurate, and even though the charge to which he pleaded guilty
has been dismissed, those proceedings still constitute a “conviction” within the precise
terms of section 1128(i)(4) of the Act. Similar regulatory language appears at 42 C.F.R.
§ 1001.2, and both statute and regulation have been applied by the Departmental Appeals
Board (Board) in rejecting arguments similar to Petitioner’s. Ellen L. Morand, DAB No.
2436 (2012); Henry L. Gupton, DAB No. 2058 (2007), aff'd sub nom. Gupton v. Leavitt,
575 F. Supp. 2d 874 (E.D. Tenn. 2008); Carolyn Westin, DAB No. 1381 (1993), aff'd sub
nom. Westin v. Shalala, 845 F. Supp. 1446 (D. Kan. 1994).

The relation of Petitioner’s crime to the Medicaid program is elaborated by the
investigators who developed the case against Petitioner in I.G. Ex. 2. In summary,
Petitioner was at relevant times the manager and co-owner of a business called South
Medical Equipment and Supply (South Medical), a business that participated in the Texas
Medicaid program. South Medical billed Medicare for medical supplies it did not deliver
as claimed, and overcharged for supplies it purportedly delivered to program
beneficiaries. In his plea agreement, Petitioner acknowledged his criminal participation
in South Medical’s activity as originally charged. I.G. Exs. 3, 4. Those facts establish
the nexus or common-sense connection to the Medicaid program defined in Berton
Siegel, D.O., DAB No. 1467.

Petitioner asks that the period of his exclusion be reduced to “one year from the entry of
the original Order of the 265th Judicial District Court... ,” and relies on the terms of
section 1128B(a)(6)(ii) of the Act, 42 U.S.C. § 1320a-7(b)(6)(ii). P. Ans. Br. 2. His
reliance on that section of the Act is very seriously misplaced, given that it addresses the
circumstances under which an individual otherwise eligible for benefits under certain
federal health care programs may be declared ineligible for them if convicted of crimes
adversely affecting those programs. The section Petitioner cites has nothing whatsoever
to do with the exclusion process established by sections 1128(a) or 1128(b) of the Act.

Petitioner asserts that he “has been unable to act in the medical field for more than a year
at this point... ,” and suggests that this is somehow unfair to him. P. Ans. Br. 1. But as
the Board observed in Joann Fletcher Cash, DAB No. 1725 (2000), the precise point of
the exclusion mechanism is to prevent untrustworthy individuals from involvement with
protected health care programs. That this exclusion may have a limiting effect on an
excluded individual’s future employment is a natural and predictable consequence of any
such exclusion, including this one. The substantial closing of certain occupations to
Petitioner for five years and the probable loss of earnings from those occupations are no
bar to the mandatory imposition of this exclusion. Henry L. Gupton, DAB No. 2058;
Salvacion Lee, M.D., DAB No. 1850 (2002).

Once an individual’s conviction is found to have been “related to the delivery of an item
or service under Medicare or a State health care program,” and thus to lie within the
application of section 1128(a)(1), the imposition of the five-year minimum exclusion
established by section 1128(c)(3)(B) of the Act is mandatory and beyond the authority of
the I.G. or an Administrative Law Judge (ALJ) to reduce, modify, or suspend. The Board
has used the plainest language to make the point: “Petitioner’s exclusion was mandatory
under the Act once the nexus was established between his offense and the delivery of an

item or service under the Medicare program. The ALJ had no discretion to impose a
lesser remedy.” Salvacion Lee, M.D., DAB No. 1850, at 4; Lorna Fay Gardner, DAB
No. 1733, at 6 (2000); Douglas Schram, R.Ph., DAB No. 1372 (1992); Napoleon S.
Maminta, M.D., DAB No. 1135 (1990). Because the five-year period of Petitioner’s
exclusion is the mandatory minimum period provided by law, as a matter of law it is not
unreasonable.

Summary disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). Resolution
of a case by summary disposition is fitting when settled law can be applied to undisputed
material facts. Marvin L. Gibbs, Jr., M.D., DAB No. 2279 (2009); Michael J. Rosen,
M.D., DAB No. 2096. The material facts in this case are undisputed and unambiguous.
They support summary disposition as a matter of law, and this Decision issues
accordingly.

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition must be, and
itis, GRANTED. The I.G.’s exclusion of Petitioner Celestine Tony Okwilagwe from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C.

§ 1320a-7(a)(1), is sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Dr. James McGuckin, Jr.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-703
Decision No. CR2918

Date: September 4, 2013

DECISION

I grant the Centers for Medicare & Medicaid Services’ motion for summary disposition.'
The effective date of Petitioner’s reactivated enrollment remains May 1, 2012, with a 30
day retrospective billing period beginning on April 1, 2012.

I. Background

Petitioner, Dr. James McGuckin, Jr., is the founder and CEO of the Vascular Access
Center of Atlanta, and Director of the Philadelphia Vascular Institute in Philadelphia,
Pennsylvania. The Vascular Access Center of Atlanta provides comprehensive dialysis
access maintenance and various other services relating to vascular access. Petitioner
works primarily at the Philadelphia location, but travels to work at other locations of the
Vascular Access Center, located nationwide, including the Vascular Access Center of
Atlanta. Petitioner’s Exhibit (P. Ex.) 1, at 1 f§ 1, 4, 5, 6, 7. Petitioner is a supplier to the

' I decide this case on a summary judgment standard. See Glenburn Home, DAB No.
1806 (2002).
Medicare program.’ This case addresses the deactivation of Petitioner’s billing privileges
and Medicare provider transaction access numbers (PTANs)’ with respect to the Vascular
Access Center of Atlanta.

On September 20, 2010, Cahaba Government Benefit Administrators, LLC (Cahaba
GBA), a Medicare Administrative Contractor, issued notices informing Petitioner that his
PTANs 2021940341, 2021940343, and 2021940344 were deactivated effective September
18, 2010, due to 12 consecutive months of non-billing. CMS Exhibit (CMS Ex.) 1, at 2;
CMS Ex. 5. The notices were sent to the address Petitioner listed in his enrollment
application and were sent through Cahaba GBA’s automated deactivation notification
system. CMS Ex. 1, at 2; CMS Ex. 2, at 3-4.

In September 2011, Petitioner resumed billing under PTAN 2021940344 for services
provided on and after August 30, 2011 (almost a year after the deactivation became
effective). CMS Ex. 7, at 2; CMS Ex. 4, at 1-2. On September 13, 2011, Cahaba GBA
notified Petitioner, via the claims denial code on Electronic Remittance Advices (ERAs),
that Petitioner “was not certified/eligible to be paid for this procedure/service on this date
of service.” CMS Exs. 7, 8.

In April 2012, Petitioner noticed that collections at the Atlanta Vascular Access Center
were low and asked his staff to enquire of Cahaba GBA about the discrepancy. Petitioner
states that “[b]ecause our focus was primarily on patient care and not cash receipts, the
underpayments did not immediately come to our attention.” Petitioner states when he
discovered that his PTANs had been deactivated (in April 2012), he asked Cahaba GBA
how the situation could be rectified. On April 27, 2012, Petitioner filed an application to
reactivate PTAN 2021940344. CMS Ex. 4, at 2; P. Ex. 1, at 2 9 12, 15. Cahaba GBA
received the application on May 1, 2012. CMS Ex. 7. Cahaba GBA treated the
application as a new enrollment application and determined Petitioner’s effective date to
be May 1, 2012, with a retrospective billing period beginning on April 1, 2012. Cahaba

> Petitioner is considered a “supplier” for purposes of the Act and the regulations. See
42 U.S.C. §§ 1395x(d), 1395x(u); see also 42 C.F.R. § 498.2. A “supplier” furnishes
services under Medicare and the term applies to physicians or other practitioners that are
not included within the definition of the phrase “provider of services.” 42 U.S.C.

§ 1395x(d).

> A supplier must be enrolled in the Medicare program and issued a billing number in
order to have billing privileges and be able to receive payment for services rendered.
Once enrolled, a supplier uses a national provider identifier (NPI), and one or more
PTANs associated with that NPI, to participate in and bill the Medicare program.
GBA issued Petitioner a new PTAN, number 202i1944710.4 CMS Ex. 1; CMS Ex. 3, at 1;
P. Ex. 2.

In letters dated July 12 and October 26, 2012, Petitioner requested that Cahaba GBA
retroactively reactivate PTAN 2021940344 to July 2011. Petitioner asserted that he had
not received notice that the PTAN had been deactivated. CMS Ex. 4. On December 18,
2012, Cahaba GBA affirmed the May 1, 2012 effective date, stating that was the date
Cahaba GBA received Petitioner’s enrollment application. CMS Ex. 3. On January 17,
2013, Petitioner sent a letter to Cahaba GBA stating that he was “rebut[ting] [Cahaba
GBA’s] December 18, 2012 letter” and asking Cahaba GBA “‘to investigate the denial of
claims based upon a deactivation of Dr. McGuckin’s billing privileges,” and “reconsider
the determination” because of the lack of notice to Petitioner. Specifically, Petitioner
requested that Cahaba GBA “rescind the deactivation” because “there was no requisite
notice to Dr. McGuckin.” CMS Ex. 2. On February 27, 2013, Cahaba GBA issued a
reconsideration decision upholding the May 1, 2012 effective date and noting that the
effective date for retrospective billing is April 1, 2012. CMS Ex. 1; P. Ex. 2.

Petitioner filed a request for hearing on April 25, 2013. The case was assigned to me for
hearing and decision on May 2, 2013. CMS filed a motion for summary disposition
(CMS Br.), accompanied by eight exhibits (CMS Exs. | through 8) on May 22, 2013.
Petitioner filed a response (P. Br.), accompanied by three exhibits (P. Exs. 1 through 3)
on June 11, 2013. In the absence of objection, I admit CMS Exs. 1 through 8 and P. Exs.
1 through 3 into evidence.

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

The issues in the case are as follows:
1. Whether summary judgment is appropriate;

2. Whether Petitioner has a right to appeal the deactivation of PTAN 2021940344
in this forum; and

3. Whether CMS has a legitimate basis for establishing May 1, 2012, as the
effective date of Petitioner’s reactivated billing privileges.

4 This case was originally titled Dr. James McGuckin, Jr., (PTANS: 2021944710;
2021949439; 2021949437), as these PTANs were listed on Petitioner’s hearing request.
However, the only two PTANSs at issue here are the PTAN Petitioner sought to reactivate
in April 2012 (PTAN 2021940344) and the PTAN issued to Petitioner by Cahaba GBA
and effective May 1, 2012 (PTAN 2021944710).
B. Findings of Fact and Conclusions of Law
I make the following findings of fact and conclusions of law, as noted in italics and bold.
I. Summary judgment is appropriate.
The Departmental Appeals Board (Board) states 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 he 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 Rehabilitation & Skilled Nursing Center, 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 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).

Petitioner does not assert that he submitted claims for services under PTAN 2021940344
in the 12 months before the deactivation of this PTAN. Petitioner is not contesting
whether CMS and its contractor, Cahaba GBA, had the authority to deactivate his PTAN.
Petitioner is instead arguing that he did not receive any notice from Cahaba GBA
deactivating his PTAN, notice that CMS asserts Cahaba GBA generated and sent to
Petitioner’s address on September 20, 2010, with the deactivation effective date of
September 18, 2010. And Petitioner argues that because deactivation is not mandatory
under 42 C.F.R. § 424.540(a)(1) [CMS may deactivate the Medicare billing privileges of
a supplier who does not submit any Medicare claims for 12 consecutive months],
Petitioner would not know his PTAN was being deactivated absent proper notice.

Petitioner acknowledges that there is no regulatory provision requiring CMS to give him
notice of deactivation. CMS Ex. 2, at 1; P. Ex. 3. Petitioner argues, however, that
Petitioner’s assertion that he never received notice of his deactivation is a dispute of
material fact that I must decide. Petitioner argues specifically that “there is a genuine
issue of material fact as to whether Dr. McGuckin received notice of the deactivation of
PTAN 2021940344.” P. Br. at 1. However, as explained below, whether Petitioner
received notice of the deactivation or not is irrelevant, because under the regulations an
ALJ does not have the authority to review a challenge to the deactivation of a PTAN.
And the decision about whether or when to deactivate a PTAN is not something an ALJ
as the authority to consider, as only CMS or its contractor has that authority.

Petitioner also argues that CMS is not entitled to summary judgment because CMS’s
refusal to reimburse Dr. McGuckin for claims between September 2010 and April 2012 is
contrary to the congressional intent regarding deactivation. Petitioner’s argument is an
equitable argument that I am not authorized to hear, as discussed below. Thus, even if I
view all the evidence in this case in the light most favorable to Petitioner, and accept
Petitioner’s argument that he did not receive any notice of the deactivation of PTAN
2021940344, CMS still prevails.

2. Petitioner has no right to appeal the deactivation of PTAN
2021940344.

CMS may deactivate a provider or supplier’s Medicare billing privileges if the provider
or supplier “does not submit any Medicare claims for 12 consecutive calendar months.”
42 C.F.R § 424.540(a)(1). Deactivation is not, however, an initial determination, and an
ALJ is authorized only to hear disputes involving initial determinations. 42 C.F.R.

§ 424.545; 42 C.F.R. § 498.3. Ifa provider or supplier’s Medicare billing privileges are
deactivated, the provider or supplier’s only option is to submit a rebuttal to the contractor
under 42 C.F.R. § 424.545(b), in accordance with 42 C.F.R. § 405.374.° Accordingly, I
am not authorized to hear Petitioner’s arguments with regard to the deactivation of his
billing privileges, including whether or not Petitioner received notice of the deactivation.

Once a supplier’s billing privileges are deactivated for non-billing, billing privileges may
only be reactivated under a new billing number. The supplier must submit a CMS-855

> Although I cannot consider a rebuttal, it appears that Petitioner’s January 17, 2013
letter served as both a rebuttal to Cahaba GBA’s deactivation of its PTAN (“Dr. James
McGuckin, Jr. has retained this office to rebut your December 18, 2012 letter and to
investigate the denial of claims based upon a deactivation of Dr. McGuckin’s billing
privileges”) and as a request that Cahaba GBA reconsider the effective date of PTAN
2021944710 (“We ask that you reconsider that determination as there was no requisite
notice to Dr. McGuckin.””). Cahaba GBA apparently treated the letter as a
reconsideration of Petitioner’s effective date of PTAN 2021944710 and it is Cahaba
GBA’s February 27, 2012 decision reconsidering the effective date that authorizes me to
hear this case. CMS Ex. 1; CMS Ex. 2, at 1-2; P. Ex. 2. Petitioner does argue that the
February 27, 2013 letter it received from Cahaba GBA afforded him a right to appeal the
deactivation. However, the letter gave Petitioner notice of his right to appeal the
effective date of his billing privileges, not the deactivation.
application, which is treated as an initial enrollment application. Arkady B. Stern, M.D.,
DAB No. 2329, at 4 n.5 (2010); citing MPIM, Rev. 289, issued April 15, 2009, effective
January 1, 2009.

3. CMS has a legitimate basis for establishing May 1, 2012, as the
effective date of Petitioner’s reactivated Medicare enrollment and billing
privileges.

Although I do not have the authority to consider Petitioner’s challenge to the deactivation
of his billing privileges, I do have the authority to consider whether CMS had a legitimate
basis for finding that May 1, 2012, is the effective date of Petitioner’s reactivated billing
privileges.

The relevant regulation states:

The effective date for billing privileges for physicians, 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.

42 C.F.R. § 424.520(d). The date of filing is the date that the Medicare contractor
receives a signed provider or supplier enrollment application that the Medicare contractor
is able to process to approval. Tri-Valley Family Medicine, Inc., DAB No. 2358 (2010).
The regulation at 42 C.F.R. § 424.521 limits a supplier’s retrospective billing privileges
to 30 days prior to the effective date, except in circumstances not applicable here.

Cahaba GBA first received an enrollment application from Petitioner seeking reactivation
of his billing privileges on May 1, 2012. The application was processed to approval, and
Petitioner received the PTAN 2021944710. Under the regulations, May 1, 2012, is the
earliest effective date Petitioner could receive. April 1, 2012, is the earliest date on
which Petitioner could retrospectively bill for his services.

4. Petitioner is not entitled to equitable relief.

Petitioner states that from September 2011 through April 2012 he traveled to the
Vascular Access Center of Atlanta to perform procedures necessary to save the legs of
many patients. Many of the patients were members of minorities, said by Petitioner to
have been neglected by local hospitals and treatment facilities. Petitioner states that he
spent on average $8,000 from his own pocket to be certain these patients received proper
treatment. Petitioner states that there are currently over $600,000 of unpaid Medicare
claims for services he performed during this time period. Petitioner states that if the
claims are unpaid the Vascular Center of Atlanta will be forced to close. Petitioner
asserts there are few vascular centers in the Atlanta area and that its closing would leave a
eavily populated area with insufficient medical services. P. Ex. 1, at 2-3 44 7- 20.

Petitioner argues that regardless of whether he received notice of the deactivation of his
billing privileges or not, CMS is not entitled to summary judgment in this case because
CMS’s decision has had the “unintended and inequitable result” of punishing Petitioner
by precluding payment of the claims he submitted between September 2011 and April
2012, thus resulting in Petitioner providing his services for free to patients in the Atlanta
community. Petitioner asserts that this is contrary to the Congressional intent behind
deactivation which is not to punish but instead to “protect the provider . . . from misuse of
its billing number and to protect Medicare Trust Funds from unnecessary payments.”

P. Br. at 5-6; 42 C.F.R. § 424.540(c); Horatio Aldredge, M.D., et. al, DAB CR2351, at 5
(2011).

Petitioner’s argument is ultimately unavailing, at least in this forum, because it amounts
to a claim for equitable relief which I am unable to grant. It is well-established that: (1)
estoppel cannot be the basis to require payment of funds from the federal treasury; (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 Management v. Richmond, 496 U.S. 414
(1990); Heckler v. Community Health Services of Crawford County, Inc., 467 U.S. 51
(1984); U.S. Ultrasound, DAB No. 2302, at 8 (2010); Oklahoma Heart Hospital, 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). Therefore, Petitioner’s equitable estoppel argument must be
rejected. And it seems important to add this observation, given the procedural history of
this case: entities that would participate in Medicare as providers or suppliers are
responsible for making themselves aware of, and for complying promptly and carefully
with, all the myriad regulatory provisions that govern their eligibility. Such entities may
choose to ignore or disregard those provisions as trivial or bothersome, but they do so at
risk of that eligibility. Manor of Wayne Skilled Nursing and Rehabilitation, DAB No.
2249, at 11 (2009); Cary Health and Rehabilitation Center, DAB No. 1771, at 21 n.5
(2001); Kids Med (Delta Medical Branch), DAB CR2494 (2012); Brookside
Rehabilitation and Care Center, DAB CR1541 (2006); The Heritage Center, DAB
CR1219 (2004).

III. Conclusion

I grant CMS’s motion for summary judgment. Petitioner’s effective date remains May 1,
2012, with a 30 day retrospective billing period beginning on April 1, 2012.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Cookie’s DME, Inc.,
(Supplier No.: 6367990001),
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-455
Decision No. CR2915

Date: August 30, 2013

DECISION

Petitioner, Cookie’s DME, Inc., appeals the Centers for Medicare & Medicaid Services’
(CMS’s) decision to revoke its Medicare supplier number and billing privileges. For the
reasons set forth below, I sustain CMS’s determination to revoke the Medicare supplier

number of Petitioner.

I. Background

Petitioner was enrolled in the Medicare program as a supplier of durable medical
equipment, prosthetics, orthotics and supplies (DMEPOS). In a letter dated October 19,
2012, National Supplier Clearinghouse (NSC), a Medicare contractor, notified Petitioner
that its supplier number would be revoked retroactive to August 28, 2012. CMS Exhibit
(Ex.) 2, at 1. The notice letter stated that the basis for the revocation was that Petitioner
was in violation of 42 C.F.R. § 424.57(c)(7) and 42 C.F.R. § 424.535(a)(5)(ii) because it
was closed during posted hours of operation on July 31, 2012 and August 28, 2012, when
a site surveyor attempted to complete site inspections to verify Petitioner’s compliance
with supplier standards. CMS Ex. 2, at 2. The notice letter also stated that Petitioner was
barred from re-enrolling in the Medicare program as a supplier for two years from the
effective date. CMS Ex. 2, at 1.

Petitioner timely requested a reconsidered determination and on December 18, 2012, the
earing officer issued an unfavorable decision and upheld the revocation. CMS Ex. 4.
Petitioner timely requested a hearing with the Civil Remedies Division of the
Departmental Appeals Board. On February 25, 2013, I issued an Acknowledgment and
Pre-Hearing Order (Order). Pursuant to that Order, CMS filed a Motion for Summary
Judgment (CMS Br.), along with five exhibits. Petitioner also filed a Motion for
Summary Judgment (P. Br.), along with two unmarked exhibits, which I now mark as
Petitioner’s Exhibits (P. Exs.) 1 and 2.

By letter dated May 30, 2013, I denied the parties’ motions for summary judgment.

I explained that I was unable to resolve the matter based on the record before me and
instructed that this matter must be resolved through a full hearing. I gave the parties the
option of holding a hearing via video teleconference or by deciding the case on its merits
based on the written record, including any additional documents and written arguments
the parties wished to proffer. On June 12, 2013, the parties advised that they agreed that
this case be submitted on the written record. On June 21, 2013, CMS proffered Ex. 6 and
on June 27, 2013, Petitioner submitted six unmarked exhibits, which I now mark as

P. Exs. 3-8. In the absence of objection from either party, I admit all the proffered
exhibits, CMS Exs. 1-6 and P. Exs. 1-8, into the record. I issue this decision on the full
written record.

Il. Applicable Law

Pursuant to section 1834(j)(1)(A) of the Social Security Act, a DMEPOS supplier may
not be reimbursed for items provided to an eligible Medicare beneficiary unless the
supplier has a supplier number issued by the Secretary of the U.S. Department of Health
& Human Services. To receive a supplier number, a DMEPOS supplier must meet and
maintain each of the supplier enrollments standards set forth in 42 C.F.R.

§§ 424.57(c)(1)-(30). Among other things, a DMEPOS supplier must maintain a physical
facility on an appropriate site which is in a location that is accessible to the public, staffed
during posted hours of operation, and maintained with a visible sign and posted hours of
operation. 42 C.F.R. §424.57(c)(7). Also, a DMEPOS supplier must permit CMS or its
agent to conduct on-site inspections to determine supplier compliance with each of the
enrollment standards. 42 C.F.R. § 424.57(c)(8). CMS will revoke a currently-enrolled
Medicare supplier’s billing privileges if CMS or its agent determines that the supplier is
not in compliance with any supplier enrollment standard. 42 C.F.R. § 424.57(d); see also
1866I1CPayday.com, DAB No. 22839, at 13 (2009) (“[F]ailure to comply with even one
supplier standard is a sufficient basis for revoking a supplier’s billing privileges.”).
In addition, if an on-site visit reveals that a supplier is no longer operational, or otherwise
fails to meet one of the supplier standards, CMS may revoke the supplier’s Medicare
billing privileges. 42 C.F.R. § 424.535(a)(5)(ii). A provider or supplier is operational if
it “has a qualified physical practice location, is open to the public for the purpose of
providing health care related services, is prepared to submit valid Medicare claims, and is
properly staffed, equipped, and stocked . . . to furnish these items or services.” 42 C.F.R.
§ 424.502. The effective date of revocation is the date CMS determines the supplier was
no longer operational. 42 C.F.R. § 424.535(g). Suppliers who have had their billing
privileges revoked “are barred from participating in the Medicare program from the
effective date of the revocation until the end of the re-enrollment bar,” which is “a
minimum of | year, but not greater than 3 years depending on the severity of the basis for
revocation.” 42 C.F.R. § 424.535(c).

Til. Issue

The issue before me is whether CMS had a legitimate basis to revoke Petitioner’s
Medicare supplier number.

IV. Findings of Facts and Conclusions of Law

A. CMS had a legitimate basis to revoke Petitioner’s Medicare supplier number
when its surveyor found Petitioner’s facility was not staffed and accessible
during two attempted site inspections on July 31, 2012 and August 28, 2012.

Suppliers must maintain physical facilities that are “accessible and staffed during posted
hours of operation.” 42 C.F.R. § 424.57(c)(7)(i)(C). In addition, suppliers must permit
CMS or its agents to conduct on-site inspections to determine the supplier’s compliance
with the regulatory standards. 42 C.F.R. § 424.57(c)(8). Petitioner was a DMEPOS
supplier that participated in the Medicare program. Petitioner’s posted hours of operation
were Monday through Friday, 9:00 a.m. through 5:00 p.m. CMS Ex. 5, at 1. On July 31,
2012, at 9:34 a.m., an NSC site surveyor attempted to inspect Petitioner’s facility,

but found it closed and no one there. CMS Ex. 1, at 4, 9. Petitioner explains that its
employee left the office to assist the owner with a flat tire, but transferred the telephones
to an answering service and left a note on the door that included contact numbers. P. Br.
at 4. Thus, there is no dispute that Petitioner’s facility was not open and accessible
during its posted hours of operation and that the surveyor was unable to conduct a site
inspection at the time of the first visit.

The surveyor attempted a second site visit on August 28, 2012, but, according to the
surveyor, Petitioner’s facility was again closed. CMS Ex. 6, at 1. On this date, however,
there was someone at Petitioner’s facility. According to the surveyor, there was a man
“just hanging around the office.” CMS Ex. 6, at 1. The surveyor states that she asked the
man whether anyone was at Petitioner’s facility, he stated no and offered to call the
owner. CMS Ex. 6, at 1. In the site visit report, the surveyor’s notes do not indicate the
presence of the man with whom she spoke, but indicates that the office was locked and
no one was there. CMS Ex. 1, at 9. The surveyor took pictures of Petitioner’s facility,
including a note on the door stating, “OUT IN THE FIELD MAKING DELIVERIES”
and providing a phone number for assistance. CMS Ex. 5, at 4.

Petitioner’s version of the second visit varies, but only slightly. Petitioner states that the
person present at the time of the second site visit was an employee who has been
continually employed by Petitioner since 2009. P. Br. at 6. According to Petitioner, its
employee greeted two individuals (which Petitioner assumes were the surveyors), stated
ie was the only one there and offered to call the owner. P. Br. at 5; P. Ex. 3, at 1.
Petitioner surmises that “[the surveyors] thought [the employee] was merely a yard boy
and not the current staff.” P. Br. at 6; see also Request for Hearing (RFH) at 2.
Petitioner states that the employee performs several job duties, which include opening the
office and transferring calls. RFH at 1. In support of this contention, Petitioner submits
the employee’s 1040 tax forms for 2010 and 2011 (P. Exs. 5 and 6) and W-2s for 2009
through 2012 and a 1099-MISC form for 2012 (P. Ex. 7). In addition, Petitioner submits
various training documents and an employee acknowledgment form, signed and dated for
various dates in 2012. P. Ex. 8. Finally, Petitioner acknowledges the sign stating that
Petitioner was in the field making deliveries was visible, but states the employee was
nevertheless physically present. P. Br. at 6.

The essential question before me is whether the employee’s presence outside the
Petitioner’s facility, not engaged in activities obviously related to the operation of the
facility and in the absence of self-identification as an employee authorized to conduct
Petitioner’s business, is sufficient to meet the requirement that Petitioner be accessible
and staffed during posted hours of operation. I conclude that it does not. For a supplier
to be “operational,” it must be “open to the public for the purpose of providing health
care related services . . . and [be] properly staffed . . . to furnish these services.”

42 C.F.R. § 424.502. “The requirement that a supplier be open at all times during normal
business hours reflects CMS’s determination that a supplier be available to beneficiaries
to meet their needs and to alleviate their medical conditions.” A to Z DME, LLC, DAB
CR1995, at 6 (2009), aff'd A to Z DME, LLC, DAB No. 2303 (2010). If the employee at
issue in this case was indeed able and permitted to provide health care related services
and conduct business on Petitioner’s behalf, then I am at a loss as to why he would not
identify himself as such. Instead, by both accounts, the employee stated no one was in
the facility and offered to call the owner. In addition, there was a sign on Petitioner’s
door stating Petitioner was out in the field making deliveries and provided a telephone
number “for assistance.” CMS Ex. 5, at 4. The sign directing visitors to the facility to
call for assistance, coupled with the employee’s conduct supports the conclusion that
Petitioner’s facility was not accessible and staffed during its posted hours of operation at
the time of the second attempted site visit.

Nor does the evidence provided by Petitioner warrant an opposite conclusion. The tax
documents provided by Petitioner shows that this person was indeed employed by it in
some capacity. As previously stated, however, the question is whether the employee was
one who could provide services to Medicare beneficiaries and perform Petitioner’s
business, or someone employed in some other capacity and who was merely present. The
training documents provided by Petitioner relate to first aid, infection control, and abuse
and neglect, and they are all signed and dated by the employee at issue. See P. Ex. 8.
Notably these documents are all dated for various dates in 2012, including an employee
acknowledgment form dated for March 14, 2012. P. Ex. 8, at 13. Ifthe employee at
issue was trained and employed since 2009, then Petitioner conspicuously fails to provide
evidence of such. In addition, other than the employee’s signatures and dates there are no
other markings, such as markings for correctness that support the reliability of the
documents. Thus, I do not find the training documents credible. I also note that while
Petitioner provided an affidavit from the employee at issue, the employee fails to attest to
his specific job duties and functions. See P. Ex. 3. The central issue in this case is the
employee and his role at Petitioner’s facility, that employee’s failure to state with
specificity in what capacity he works cuts against the conclusion that his presence on
August 28, 2012 rendered the facility open, accessible and staffed. I find that the record
does not support Petitioner’s contention that its facility was accessible and staffed at the
time of the second visit as required by the regulations and, therefore, that CMS had a
legitimate basis to revoke Petitioner’s supplier number.

V. Conclusion

For the foregoing reasons, I find that Petitioner was not operational when it was not open
and accessible at the time of the two attempted site visits during Petitioner’s posted hours
of operation. Therefore, I sustain the revocation of Petitioner’s supplier number,
effective August 28, 2012. Accordingly, Petitioner is barred from re-enrolling for two
years from the effective date of its revocation.

/s/
Richard J. Smith
Administrative Law Judge