Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Yakima Valley School
(CCN: 50-A261),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-09-745
Decision No. CR2350

Date: April 8, 2011

DECISION

I sustain the determination of the Centers for Medicare and Medicaid Services (CMS) to
withdraw its approval of Petitioner Yakima Valley School’s (YVS), Nurse Aid Training
and Competency Evaluation Program (NATCEP) for two years, effective July 16, 2009.

I. Background

Petitioner is a nursing home owned and operated by the State of Washington and located
in Selah, Washington. That State’s Department of Social and Health Services (State
agency) conducted an unannounced, abbreviated, partial-extended complaint survey of
Petitioner’s facility that ended on July 16, 2009. By letter dated July 20, 2009, Petitioner
was notified that the July survey found immediate jeopardy deficiencies that constituted
substandard quality of care on July 15, 2009, but the immediate jeopardy was abated on
July 16, 2009. CMS Ex. 2. By letter dated July 23, 2009, Petitioner was notified that the
deficiencies were determined to be immediate jeopardy at scope and severity level K,
constituting a pattern in nature. CMS Ex. 3. CMS notified Petitioner that it would be
imposing a discretionary denial of payments for new admissions (DPNA) if Petitioner did
not return to substantial compliance before August 7, 2009 and that approval for
Petitioner’s NATCEP must be withdrawn because substandard quality of care had been
cited. Id. By letter dated July 30, 2009, CMS corrected its earlier notice letter and
notified Petitioner that the deficiencies were at a scope and severity “level K, isolated and
constituting immediate jeopardy to resident health and safety.” CMS Ex. 2, at 5. By
letter dated August 5, 2009, Petitioner was notified that the deficiencies were found to be
corrected on July 29, 2009. CMS Ex. 4. By letter dated August 5, 2009, Petitioner was
notified that it was in substantial compliance and the DPNA would not be imposed. CMS
Ex. 5. By letter dated September 28, 2009, Petitioner was notified that approval of its
NATCEP was withdrawn for two years, effective July 16, 2009. CMS Ex. 7.

Petitioner timely requested a hearing before an Administrative Law Judge (ALJ), and the
case was assigned to me for hearing and decision. I conducted an in-person hearing in
Seattle, Washington, on August 9 and 10, 2010. CMS offered exhibits (CMS Exs.) 1
through 16, which were admitted into evidence. Petitioner offered exhibits (P. Exs.) 1
through 41, which were also admitted into evidence. CMS elicited testimony from P. A.
Becker, the surveyor employed by the State agency. Petitioner elicited testimony from
M. J. Barney, an attendant counselor level 3 (AC3) for cottages 103 and 104 located at
Petitioner’s facility, J. A. Welch, an attendant counselor level 1 (AC1) who at times was
part of the enhanced staffing for cottages 103 and 104 at Petitioner’s facility, E. F.
Wilson, Ph.D., Petitioner’s clinical psychologist, and T. K. Winegar, Petitioner’s
Superintendent and Administrator. Each party submitted a post hearing brief (CMS Brief
and P. Brief, respectively) and a reply brief (CMS Reply and P. Reply, respectively).
Petitioner submitted an attachment, identified as Appendix Q of the State Operations
Manual, along with its post hearing brief.

IL. Issues, Applicable Law, Findings of Fact and Conclusions of Law
A. Issues
The issues in this case are:

1. Whether Petitioner failed to comply with one or more Medicare participation
requirements;

2. Whether CMS’s determination as to the immediate jeopardy level of
noncompliance was clearly erroneous; and

3. Whether the remedy imposed is reasonable.
B. Applicable Law and Regulations

Petitioner is considered a long-term care facility under the Social Security Act (Act) and
regulations promulgated by the Secretary of Health and Human Services (Secretary).

The statutory requirements for participation by a long-term care facility are found at
sections 1819 and 1919 of the Act, and at 42 C.F.R. Part 483. Sections 1819 and 1919 of
the Act vest the Secretary with authority to impose civil money penalties (CMPs) and
other remedies against a long-term care facility for failure to comply substantially with
participation requirements.

Pursuant to the Act, the Secretary has delegated to CMS the authority to impose various
remedies against a long-term care facility that is not complying substantially with federal
participation requirements. Facilities which participate in Medicare may be surveyed on
behalf of CMS by State survey agencies in order to ascertain whether the facilities are
complying with participation requirements. 42 C.F.R. §§ 488.10-488.28; 42 C.F.R.

§§ 488.300-488.335.

The regulations define the term “substantial compliance” to mean “a level of compliance
with the requirements of participation such that any identified deficiencies pose no
greater risk to resident health or safety than the potential for causing minimal harm.”

42 C.F.R. § 488.301. Non-compliance that is immediate jeopardy is defined as “a
situation in which the provider’s noncompliance with one or more requirements of
participation has caused, or is likely to cause, serious injury, harm, impairment, or death
to a resident.” Id.

In this case, the State agency was required to withdraw Petitioner’s approval to conduct a
NATCEP. Pursuant to sections 1819(b)(5) and 1919(b)(5) of the Act, skilled nursing
facilites (SNFs) and nursing facilites (NFs) may only use nurse aides who have taken a
training and competency evaluation program. Sections 1819(e) and 1919(e) of the Act
impose upon the states the requirement to specify what NATCEPs they will approve that
meet the requirements established by the Secretary and a process for reviewing and
reapproving those programs using criteria set by the Secretary. Pursuant to sections
1819(f)(2) and 1919(f)(2) the Secretary was tasked to develop requirements for approval
of NATCEPs and the process for review of those programs. The Secretary promulgated
regulations at 42 C.F.R. Part 483, subpart D. Pursuant to 42 C.F.R. § 483.151(b)(2) and
(e)(1) a state may not approve and must withdraw any prior approval of a NATCEP
offered by a skilled nursing or nursing facility that: (1) has been subject to an extended
or partial extended survey under sections 1819(g)(2)(B)(i) or 1919(g)(2)(B)(i) of the Act;
(2) has been assessed a CMP of not less than $5000; or (3) that has been subject to
termination of its participation agreement, a DPNA, or the appointment of temporary
management. Extended and partial extended surveys are triggered by a finding of
“substandard quality of care” during a standard or abbreviated standard survey and
involve evaluating additional participation requirements. “Substandard quality of care”
occurs where surveyors identify one or more deficiencies related to participation
requirements established by 42 C.F.R. § 483.13 (Resident Behavior and Facility
Practices), § 483.15 (Quality of Life), or § 483.25 (Quality of Care) that are found to
constitute either immediate jeopardy, a pattern of or widespread actual harm that does not
amount to immediate jeopardy, or a widespread potential for more than minimal harm
that does not amount to immediate jeopardy with no actual harm. 42 C.F.R. § 488.301.

The Act and regulations make a hearing before an ALJ available to a long-term care
facility against which CMS has determined to impose an enforcement remedy. Act §
1128A(c)(2); 1866(h); 42 C.F.R. §§ 488.408(g); 498.3(b)(13). The hearing before an
ALJ is a de novo proceeding. Anesthesiologists Affiliated, et al, DAB CR-65 (1990),
aff'd, 941 F.2d 678 (8th Cir. 1991); Emerald Oaks, DAB No. 1800, at 11 (2001);
Beechwood Sanitarium, DAB No. 1906 (2004); Cal Turner Extended Care, DAB No.
2030 (2006), The Residence at Salem Woods, DAB No. 2052 (2006). A facility has a
right to appeal a “certification of noncompliance leading to an enforcement remedy.”

42 C.F.R. § 488.408(g)(1); see also 42 C.F.R. §§ 488.330(e) and 498.3. However, the
choice of remedies by CMS or the factors CMS considered when choosing remedies are
not subject to review. 42 C.F.R. § 488.408(g)(2). A facility may only challenge the
scope and severity level of noncompliance found by CMS if a successful challenge would
affect the range of the CMP that could be imposed by CMS or impact the facility’s
authority to conduct a nurse aide training and competency evaluation program. 42 C.F.R.
§§ 498.3(b)(14) and (d)(10)(). The CMS determination as to the level of noncompliance
“must be upheld unless it is clearly erroneous” (42 C.F.R. § 498.60(c)(2)), including the
finding of immediate jeopardy. Woodstock Care Center, DAB No. 1726, at 9, 38 (2000),
aff'd, Woodstock Care Center v. Thompson, 363 F.3d 583 (6th Cir. 2003). The
Departmental Appeals Board (the Board) has long held that the net effect of the
regulations is that a provider has no right to challenge the scope and severity level
assigned to a noncompliance finding, except in the situation where that finding was the
basis for an immediate jeopardy determination. See e.g., Ridge Terrace, DAB No. 1834
(2002); Koester Pavilion, DAB No. 1750 (2000). Review of a CMP by an ALJ is subject
to 42 C.F.R. § 488.438(e).

The standard of proof or quantum of evidence required is a preponderance of the
evidence. CMS has the burden of coming forward with the evidence and making a prima
facie showing of a basis for imposition of an enforcement remedy. Petitioner bears the
burden of persuasion to show by a preponderance of the evidence that it was in
substantial compliance with participation requirements or any affirmative defense. See
Hillman Rehabilitation Center, DAB No. 1611 (1997), aff'd, Hillman Rehabilitation
Center v. United States Dep’t of Health and Human Services, No. 98-3789, 1999 WL
34813783 (D.N.J. May 13, 1999); Cross Creek Health Care Center, DAB No. 1665
(1998); Emerald Oaks, DAB No. 1800; Batavia Nursing and Convalescent Center, DAB
No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Center v. Thompson, 129 F.
App’x. 181 (6th Cir. 2005); Batavia Nursing and Convalescent Inn, DAB No. 1911
(2004).

C. Findings of Fact, Conclusions of Law, and Discussion

I make findings of fact and conclusions of law to support this decision. I set them forth
below as separate headings in bold type, and then discuss each in detail.

1. The parties stipulated that certain facts are undisputed.

On March 25, 2010, the parties submitted a List of Joint Factual Stipulations. These facts
are undisputed. At the time of the July survey, Petitioner used a Level of Supervision
(LOS) scale from LOS 1 (low supervision) to LOS 5 (high supervision) “to rank its
residents according to the intensity of staff supervision that each resident required.” The
LOS scale directed that “for residents on LOS 4, staff were to position supervision in a
manner to prevent danger or harm to self and others; one-to-one staffing at bedside to
maintain a medical treatment or one-to-one supervision allowing as much social space as
possible or per care plan. An acute care plan is required.”

The LOS scale directed that for residents on LOS 5, Petitioner’s “staff were to maintain
two-to-one staffing within arms length of the resident.” LOS 5 “was for residents who
had the potential to cause frequent severe danger to self and to others.”

A care plan for Resident 1 (R-1) dated August 25, 2008 states:

During waking hours: LOS 4 Supervision must be positioned in a manner to
prevent danger or harm to self or others. One-to-one staffing at bedside to
maintain a medical treatment or one-to-one supervision allowing as much social
space as possible. Acute care plan is required. This was increased on 5/13/08.

CMS Ex. 16, at 12.

An updated care plan for R-1 was created on April 14, 2009. CMS Ex. 10, at 15-19.
While at YVS, R-1 had been followed by George Petzinger, M.D., YVS’s consulting
psychiatrist.

E. F. Wilson, Ph.D., Petitioner’s licensed clinical psychologist, wrote a review of R-1’s
condition on April 17, 2009 in a document entitled “Yakima Valley School Resident
Status for Guardianship Review.” CMS Ex. 13, at 43-47. This document states that R-1
“is, at age 18, in 2009, dependent 24/7 on supervision by competent caregivers to prevent
self and other harm . .. . He may react with many actions including: violence, self-
exposure, or other actions which appear to have the goal of creating emotional shock.”
CMS Ex. 13, at 43.
Seven incidents occurred at Petitioner’s facility involving R-1 in a four-month period.
The incidents occurred on February 14, 2009, March 1, 2009, March 8, 2009, April 14,
2009, June 13, 2009, June 14, 2009, and June 16, 2009. The YVS Resident
Occurrence/Incident Investigation Report (incident report) was completed by Petitioner’s
staff on the same day as each incident described.

An incident report on February 14, 2009 reveals that R-1 struck two residents with his
hand, one in the stomach (R-6) and the other in his leg (R-2). The incident report
“further indicates there were no signs and symptoms of pain and no injuries to either
resident, as well as no adverse side effects.” CMS Ex. 10, at 1-2.

An incident report reflects that R-1 kicked another resident (R-6) on his arm on March 1,
2009 and states “[n]o injuries to Resident 6.” CMS Ex. 10, at 5.

An incident report indicates that on March 8, 2009 R-1 hit another resident (R-8) on the
head, and identifies no injuries or psychological distress experienced by R-8 following
this incident. CMS Ex. 10, at 8-12.

An incident report records that although R-1 was prevented from successfully biting a
resident (R-5), R-1 kicked one resident (R-5) on the lower back and another resident (R-
9) on the chest on April 14, 2009, and identifies no injuries or psychological distress
sustained by R-5 or R-9 following the incident. CMS Ex. 10, at 13-21.

An incident report reflects that on June 13, 2009 R-1 kicked another resident (R-6) on the
thigh, and identifies no injuries or psychological distress suffered by R-6 following this
incident. CMS Ex. 10, at 22-24.

An incident report documents that on June 14, 2009 R-1 hit another resident (R-7) on the
shoulder and identifies no physical injuries to R-7 following this incident. However, the
victim of the June 14, 2009 incident, R-7, stated that the incident made him angry and
afraid. CMS Ex. 10, at 25-27. Four days after the June 14, 2009 incident, the social
worker documented that there were no noted residual signs or symptoms of harm or
distress on the part of R-7. CMS Ex. 10, at 25.

An incident report records that on June 16, 2009 R-1 was passing another resident in the
hallway. R-1 thrust his hand down the front of the other resident’s sweatpants very
quickly. The report indicates that the staff immediately intervened and that it was
unknown if R-1 touched the other resident’s private area. No injuries or psychological
distress sustained by the victim were identified following this incident. CMS Ex. 10, at
28.
2. I make a de novo review of this case.

Petitioner attempts to discredit the way the survey was conducted and in particular
criticizes the surveyor’s alleged failure to make inquires into the level of force R-1
employed during the seven incidents and the surveyor’s alleged failure to interview the
attendant counselors providing care to R-1. Petitioner’s attempt is irrelevant. The issue
is not how the survey was conducted, but rather whether the surveyor’s allegations are
supported by the evidence at hearing. The hearing before me is a de novo review of
whether the allegations are supported by the evidence. Inadequate survey methodology,
even if demonstrated — and I make no finding that the methodology employed in this
survey was inadequate in any way whatsoever — does not invalidate citations based on
adequately-documented deficiencies. 42 C.F.R. § 488.318(b)(2). Northlake Nursing and
Rehabilitation Center, DAB No. 2376, at 10-11 (2011); North Carolina State Veterans
Nursing Home, DAB No. 2256, at 23 (2009); Jewish Home of Eastern Pennsylvania,
DAB No. 2254, at 15 (2009).

3. Petitioner failed to comply with the regulation at 42 C.F.R. § 483.13(c)(3)
during the July 16, 2009 survey.

During the July 16, 2009 survey, Petitioner was found to be out of compliance with the
regulation at 42 C.F.R. § 483.13(c)(3). This regulation provides that:

(c) Staff treatment of residents. The facility must develop
and implement written policies and procedures that prohibit
mistreatment, neglect, and abuse of residents and
misappropriation of resident property.

* * *

(3) The facility must have evidence that all
alleged violations are thoroughly investigated,
and must prevent further potential abuse while
the investigation is in progress.

42 CFR. § 483.13(c)(3).

“Abuse” is “the willful infliction of injury, unreasonable confinement, intimidation, or
punishment with resulting physical harm, pain or mental anguish.” 42 C.F.R. § 488.301.
Willful means that the action was deliberate. Even a resident who does not possess his
full mental capabilities can take deliberate action in the sense that the resident “ intends
his or her actions to have consequences.” Singing River Rehabilitation & Nursing
Center, DAB CR1838, at 15 (2008). A resident does not need to have intended harm for
the resident’s action to be willful. See Wayne View Convalescent Center, DAB CR1502
(2006). Hitting, kicking, pushing down another person are all considered abuse. See
Western Care Management Corp. DAB No. 1921 (2004). Petitioner’s own policy
provides that physical abuse includes biting, kicking, pushing, shoving, and slapping.
CMS Ex. 11, at 15. Petitioner’s policy also provides that sexual abuse includes
inappropriate or unwanted sexual touching. Jd. “Neglect” is defined as “failure to
provide goods and services necessary to avoid physical harm, mental anguish, or mental
illness.” 42 C.F.R. § 488.301

The Board addressed the scope of the regulation at 42 C.F.R. § 483.13(c) in Martha &
Mary Lutheran Services, DAB No. 2147 (2008). That case involved the failure of a
facility to protect its residents adequately against a verbally and physically aggressive
resident. There, the Board sustained the ALJ’s determination comparing a facility’s duty
under 42 C.F.R. § 483.13 to protect all its residents from neglect with its obligation,
under 42 C.F.R. § 483.25(h)(2), to provide individual residents with adequate supervision
and assistance devices to protect against accidents. The Board noted that the latter
provision has been interpreted to require a facility to implement “all reasonable efforts to
protect residents against adverse events that are reasonably foreseeable,” and also held
that a facility’s “[fJailure to protect a resident against a known or foreseeable hazard -
including the possibility that a resident might be physically abused or assaulted by
another resident whose aggressive behavior has become known to a facility’s staff - is a
failure by a facility to provide services that are necessary to prevent physical harm or
mental anguish and is, thus, neglect.” Martha & Mary Lutheran Services, DAB No.
2147, at 6, citing DAB CR1595, at 3 (2007); see also Emerald Oaks, DAB No. 1800, at
17 (2001).

Although the title of 42 C.F.R. § 483.13(c), “[s]taff treatment of residents” could be read
to focus the section upon staff actions toward residents, the substantive language of the
section does not limit the obligation of the facility to regulating or controlling staff and
resident interaction. Rather, the substantive language of the section imposes a general
obligation upon a provider to prohibit mistreatment, neglect, and abuse of its residents or
the misappropriation of their property, without limiting the focus of the required policies
to a specific source, i.e., staff, visitors, or other residents. Decisions of the Board in the
cases cited above are consistent with my interpretation.

Subsection (c)(3) of section 483.13 plainly states that the facility must thoroughly
investigate all alleged violations and have evidence of that thorough investigation. This
subsection places an affirmative duty on the facility to prevent further potential abuse
while the investigation is in progress. A facility has a duty to identify residents who are
at risk for “abusing” other residents. The participating facility must develop
interventions to prevent occurrences, monitor for changes that would trigger abusive
behavior, and reassess interventions on a regular basis.
Petitioner provides 24-hour-per-day direct care to developmentally-disabled residents.
Residents are housed in cottages with eight residents per cottage. Cottages 103 and 104
are side-by-side cottages with a garage in between the cottages. Cottages 103 and 104
were a special unit designed for residents with challenging behaviors. Tr. at 209. R-1
resided in cottage 104 with seven other residents and attending staff. R-1, at the time of
the survey, was a physically-fit 18-year-old male, weighing approximately 180 pounds,
with a history of difficulty maintaining social boundaries and impaired executive and
social judgment. R-1 is described as very fast-moving, impulsive, fully mobile, and
agile. Tr. at 63. R-1’s behaviors include coarse and scatological language and behavior,
propositioning nurses for sex acts, attempting to expose himself, being physically
aggressive, and verbally offensive. R-1 was diagnosed as having mild mental retardation,
autism, post-traumatic stress syndrome, obsessive-compulsive disorder, and behavioral
disorders. Tr. at 64; CMS Ex. 13, at 43. The surveyor testified that during the survey,
Dr. Wilson, whom it will be recalled was at the time on YVS’ staff as its clinical
psychologist, described R-1 as exhibiting conscious anti-social behavior, possibly
requiring two-to-one supervision all the time. CMS Ex. 13, at 29; Tr. at 64-65. Dr.
Wilson testified that R-1 would react to numerous things that occurred around him, and
that it was therefore difficult to predict when R-1 would become aggressive. Dr. Wilson
also testified that R-1 was a “reactor and also a strategic planner of aggression.” Tr. at
337-8. R-1 was repeatedly described by witnesses at the hearing as attention-seeking,
and desiring “stimulus items” such as toys, games, and electronic devices. Tr. at 282,
297, 309. There is no doubt at all that R-1 was and is a difficult and unpredictable young
man. R-1’s Behavior Support Plan (BSP) dated February 27, 2009 describes R-1 as
someone who “always uses his muscles more than his words to get what he wants.”

P. Ex. 37, at 1.

CMS characterizes this case as concerning protecting vulnerable residents from being
physically assaulted by R-1, who had a history of aggressive behavior. The victims of
these assaults (R-2, R-5, R-6, R-7, R-8, and R-9) were vulnerable, cognitively-impaired
residents with severe developmental disabilities including serious intellectual deficits,
many of them lacking the ability to communicate and some victims (R-7 and R-9) who
were wheelchair-bound. One victim, R-6, is described as particularly susceptible to
bruising. R-1 was known to cause bruising to staff members. Tr. at 335. R-1 was also
able to increase his level of aggression depending on the circumstances. Jd. R-1 was
nown to break away from the staff and able to move ahead of staff. Tr. at 357. Partially
because R-1 was so agile that he could move ahead of the staff supervising him, R-1 was
able to assault his fellow residents successfully.

Petitioner describes R-1’s attacks as de minimis in their effect on the attacker’s victims.
Dr. Wilson stated that there was a high probability that R-1 was “not going to hurt
people, other than accidentally” (Tr. at 283), that R-1 might bite and leave teeth marks
but would not break the skin of his victim, and that R-1 “‘pulls his punches. He goes for
the disturbing effect on the consciousness of the other person. He doesn’t want to hurt

10

the body.” Tr. at 284. Dr. Wilson further describes R-1’s behavior as “high frequency of
light weight harassing behaviors” (Tr. at 296) and low intensity behaviors (Tr. at 311).

Incident investigations or reports — informally referred to as “IRs” — at YVS were
performed at two levels. The first level was an immediate overview of the incident to
determine whether changes needed to be made to the resident’s care. Tr. at 381-386.
The second phase was a deeper, more detailed level of investigation into the incident and
was only used when the incident rose to a greater degree of seriousness. Evidently, all
the incidents involving R-1 never got past the first phase of investigation. Ms. Winegar,
whom it will be recalled was the administrator of YVS’s facility, reviewed the incident
reports, but never reviewed a second phase of investigation concerning the incidents with
R-1. Tr. at 402-403. Petitioner never produced any phase two investigations concerning
any of these incidents as evidence before me. Ms. Winegar implied that a phase two
investigation would not be necessary for any of the incidents concerning R-1 because a
phase two investigation would be required only if actual harm had been sustained by the
other victim-residents. Tr. at 293, 295.

The phase one incident reports consistently failed to provide information concerning how
much force was used by R-1, whether R-1’s care plan was being properly followed,
whether one-on-one supervision was applied at the time of each incident and the
proximity of the one-on-one caregiver to R-1 at the time of each incident. Tr. at 33, 39,
41, 44-45, 51, 53,57; CMS Ex. 10, at 1, 5, 8, 13, 22, 25, 28. Ms. Becker, the surveyor,
testified that the incident reports failed to indicate whether the one-on-one caregiver was
“intervening appropriately, positionally, and with the appropriate intervention to protect
the other residents in the face of [R-1’s] aggression.” Tr. at 41. The incident reports
further failed to provide an adequate plan for preventing further physical aggression by
R-1. Tr. at 34-35, 39-40, 41-42, 46, 52, 54, 59; CMS Ex. 10, at 5, 8, 13, 22. Some of the
incident reports merely direct the staff to make no changes in R-1’s care plan and in the
level of R-1’s supervision. CMS Ex. 10, at 8, 13, 22, 25. The incident reports failed to
identify the triggering events for each incident. Tr. at 39.

The testimony of Mr. Welch, an AC1, also demonstrates that the phase one investigations
were not thorough. Phase one investigations are documented by the incident reports and
witness statements. Mr. Welch observed the incident of April 14, 2009 where R-1
attempted to bite R-5 on the back of the neck, and then kicked R-5 on the lower back and
kicked R-9 on the chest. CMS Ex. 10, at 13. Mr. Welch admitted that his witness
statement of the April 14, 2009 incident does not reflect where he was positioned with
respect to R-1. Tr. at 353-54. Mr. Welch’s witness statement for the June 13, 2009
incident, where R-1 kicked R-6 on the right thigh, did not reflect where Mr. Welch was
positioned at the time of the incident. Tr. at 354; CMS Ex. 10, at 24. Mr. Welch’s
witness statement did not describe what triggered R-1’s aggressive behavior prior to the
June 13, 2009 incident. Tr. at 344; CMS Ex. 10, at 24. Similarly, Mr. Welch’s witness
statement for the June 14, 2009 incident, where R-1 walked past R-7 and hit R-7 on the

11

shoulder, did not reflect where Mr. Welch was positioned at the time of the incident and
did not describe what triggered R-1’s aggressive behavior. Tr. at 355-356; CMS Ex. 10,
at 27. Although, Mr. Welch did testify that he observed the April 14, June 13, and
June14 incidents and staff were right next to R-1 (Tr. at 351), Mr. Welch’s witness
statements which were made closer in time to the incidents do not reflect that
information. Again, Mr. Welch has demonstrated that his witness statements were not
complete and thorough.

Ms. Melanie Kohler, Petitioner’s Director of Nursing, was asked during the survey
whether there was anything other than the phase one incident reports and attached
witness statements as a record of the investigation of these seven incidents. Ms. Kohler
did not provide any other documentation. Tr. at 61; CMS Ex. 13, at 27; P. Ex. 41.
According to Petitioner, Ms. Kohler conducts phase two investigations including
developing plans of prevention. P. Br. at 19. However, no evidence of any phase two
investigations conducted for any of the seven incidents were provided during the hearing.

According to Petitioner, all the residents in cottages 103 and 104 exhibited aggressive or
challenging behaviors at one time or another. Tr. at 357. Mr. Barney, an AC3, testified
that there have been “a lot of incidents” where residents hit, kicked or bit each other and
stated that “they’re quite used to it.” Tr. at 153-54. Ms. Winegar testified that given
YVS’s population, there were going to be some assaults. Tr. at 399. At the hearing, Mr.
Welch testified that suffering from aggressive behavior by R-1 was part of the other
residents’ daily lives. Tr. at 209. Mr. Welch confirmed this testimony on cross-
examination:

Q: And I believe you testified yesterday that all the residents in cottages 103 and
104 exhibited challenging behaviors, isn’t that correct?

A: That’s correct.

Q: In fact, I believe you testified that they were all placed together in these
cottages to keep them away from other residents, is that correct?

A: Yes.

Q: And I believe that you testified that hitting, kicking, and biting were a part of
their daily routines, isn’t that correct?

A: Correct.

Q: So it’s expected that a certain amount of hitting, kicking and biting would
occur in these cottages, isn’t that correct?
12

A: Correct.
Tr. at 357-8.

YVS seems to have decided at some point that it would have to expect and accept a
certain level of disruptive and even dangerous behavior from R-1 and that the staff could
not realistically hope to protect the other residents from R-1. For, example, the plan for
prevention section of the incident report concerning the March 1, 2009 incident notes,
“(d]iffcult to prevent as R-1 is very quick and the staff has no inkling as to when his
behaviors is (sic) going to take place — Does have LOS IV, but R-1 is very quick and fast
— [continue] to monitor.” CMS Ex. 10, at 5. No evidence was presented to me
suggesting that Petitioner did anything to protect its other vulnerable residents or to
increase the supervision that R-1 received. R-1’s supervision was maintained at LOS 4.
No evidence was presented that, prior to the survey, R-1’s level of supervision was
increased to a LOS 5. More importantly, no documentation was presented that
Petitioner’s staff even considered the possibility of instituting a LOS 5 for R-1. No
documentation was presented that Petitioner’s staff considered separating R-1 from his
fellow residents to protect them from potential abuse.

R-1 was well-known to Petitioner’s staff as having a propensity for violent physical
assault. R-1’s care plan dated April 14, 2009, has a section in it entitled “Potential for
Violence” in which is noted R-1’s history of physical assaults toward other residents
including hitting, kicking, pulling hair, biting, his “hit and run” style of assault, and that
R-1 was known to “dash quickly away and strike another resident or staff.” CMS Ex. 10,
at 15-16.

Mr. Barney testified that when a resident intends to hit or kick another resident it was

“almost impossible to stop the first incident.” Tr. at 191. However, R-1 was twice able
to physically assault more than one resident at the same time and staff failed to prevent
the second assault, even though R-1 was under a LOS 4.

YVS failed to prevent further potential abuse of R-1’s victims while the investigations
were in progress. There is no mention of keeping R-1 separated from his victims, of
preventing future contact with his victims, or of increasing the LOS. This is particularly
evidenced by the fact that there were three incidents in four days from June 13 to June 16,
2009. The incident of June 14, 2009 plainly demonstrates Petitioner’s failure to prevent
further potential abuse by R-1. During the incident of June 14, 2009, R-1 hit R-7 on the
shoulder and R-7 reported being angry and afraid. Following the June 14 incident, R-1
was allowed to get close enough to R-7 for a conversation. Mr. Welch testified that this
conversation occurred “[w]ithin a few hours. It wasn’t even — it could have been right
after.” Tr. at 205. Petitioner completely failed to prevent further potential abuse of R-7
by permitting R-1 to approach R-7 close enough and for a sufficient period of time to

13

allow a conversation to take place even though R-1 had abused R-7 just a few hours
earlier.

I find that Petitioner failed to comply with 42 C.F.R. § 483.13(c)(3). Petitioner failed to
thoroughly determine the facts surrounding the seven incidents. This failure was
particularly egregious given the increasing frequency of R-1’s attacks on other residents.
This lapse led to a subsequent failure to determine whether one-on-one supervision was
being implemented properly and whether R-1’s level of supervision was adequate.
Petitioner failed to determine which additional interventions were required. In addition,
Petitioner failed to prevent further potential abuse of R-1’s victims while the
investigations were in progress.

4. Petitioner failed to comply with the regulation at 42 C.F.R. § 483.25(h)
during the July 16, 2009 survey.

The regulation at 42 C.F.R. § 483.25 provides that:

Each resident must receive and the facility must provide the necessary care and
services to attain or maintain the highest practicable physical, mental, and
pyschosocial well-being, in accordance with the comprehensive assessment and
plan of care.

(h) Accidents. The facility must ensure that-

(1) The resident environment remains as free of accident hazards as is
possible; and

(2) Each resident receives adequate supervision and assistive devices to
prevent accidents.

The Board has also explained the requirements of 42 C.F.R. § 483.25(h)(2) in numerous
decisions. Golden Living Centers — Riverchase, DAB No. 2314, at 6-7 (2010);
Eastwood Convalescent Center, DAB No. 2088 (2007); Liberty Commons Nursing and
Rehab — Alamance, DAB No. 2070 (2007); Century Care of Crystal Coast, DAB No.
2076 (2007), aff'd, Century Care of the Crystal Coast, 281 F. App’x 180 (4th Cir. 2008);
Golden Age Skilled Nursing & Rehabilitation Center, DAB No. 2026 (2006); Estes
Nursing Facility Civic Center, DAB No. 2000 (2005); Northeastern Ohio Alzheimer’s
Research Center, DAB No. 1935 (2004); Woodstock Care Center, DAB No. 1726
(2000), aff'd, Woodstock Care Center v. Thompson, 363 F.3d 583 (6th Cir. 2003).
Section 483.25(h)(2) does not make a facility strictly liable for accidents that occur, but it
does require that a facility take all reasonable steps to ensure that a resident receives
14

supervision and assistance devices that meet his or her assessed needs and mitigate
foreseeable risks of harm from accidents. Woodstock Care Center v. Thompson, 363
F.3d at 589 (a nursing home must take “all reasonable precautions against residents’
accidents”).

CMS claims that Petitioner failed to provide sufficient supervision of R-1 to protect the
other residents from R-1’s physical attacks. During the hearing, Petitioner’s witnesses,
Mr. Welch and Mr. Barney, and Petitioner’s counsel, Mr. Dee, provided me with hitting
and kicking demonstrations to illustrate R-1’s typical assaults. Tr. at 171-179, 346-351.
The live demonstrations showed enough force that a prepared healthy victim was moved
from a standing position by the force of the assault. Tr. at 176. I note that the live
demonstrations portrayed enough impact to constitute a battery and to definitely qualify
as abuse. The live demonstrations would also qualify as abuse under Petitioner’s own
abuse policy.

As I described above, YVS seemed to accept physically abusive behavior on the part of
R-1 toward other vulnerable residents as acceptable because perceived as unavoidable
and de minimis in danger or significance. YVS knew R-1 posed a risk of physical abuse
to other residents because YVS knew that R-1 had an established history of abuse
towards other residents. R-1 was known to be very quick, physically fit, and young.
Petitioner’s staff could not anticipate and did not know when R-1’s physical attacks
would take place. R-1 physically assaulted other residents repeatedly in a period of four
months. Three attacks happened within only four days. Twice R-1 was able to assault
more than one resident in the same incident without his one-on-one supervising caregiver
intervening to stop the second assault. If LOS 4 supervision was adequate or
implemented properly then the LOS 4 care-giver providing supervision should have been
positioned in a manner to prevent danger or harm to R-1 and others residents. It is
undisputed that R-1 was able to physically abuse other residents seven times in a four-
month period, in spite of the LOS 4 supervision provided by Petitioner. All these facts
lead me to the inescapable conclusion that LOS 4 supervision was either inadequate per
se or was not being implemented properly by Petitioner’s staff. YVS never reevaluated
the way LOS 4 was being implemented. YVS never considered changing the level of its
supervision to LOS 5. YVS never separated R-1 from the other residents he had either
repeatedly victimized or who were potentially the next victims of his unpredictable but
violent outbursts. YVS never instituted LOS 5 supervision until after immediate
jeopardy was cited by the survey. In response to the immediate jeopardy finding,
Petitioner also isolated R-1 from other residents by placing him in a living unit with staff
only. There is no evidence that Petitioner pursued any other options to address R-1’s
continued aggression. The Board has held that a facility’s duty of care is, “breached
where a facility fails to take action to prevent foreseeable aggressive conduct by mentally
impaired residents that impact other residents.” Columbus Nursing & Rehabilitation
Center, DAB No. 2247, at 9 (2009). A resident so inadequately supervised that he has
the opportunity to repeatedly assault other residents and engage in an incident of possible

15

sexual touching demonstrates a failure on YVS’s part to adequately supervise R-1 to
prevent accidents and a failure to comply with the requirements of 42 C.F.R. § 483.25.

5. CMS’s finding of immediate jeopardy was not clearly erroneous.

I have already found that CMS has established a prima facie case that Petitioner was not
in substantial compliance with federal requirements for nursing facilities participating in
the Medicare and Medicaid program. Furthermore, I sustain CMS’s finding that
Petitioner’s level of non-compliance for both these deficiencies constitutes immediate
jeopardy.

The regulations define immediate jeopardy as a situation in which a provider’s non-
compliance with one or more requirements of participation has caused, or is likely to
cause, serious injury, harm, impairment, or death to a resident. 42 C.F.R. § 488.301. A
finding of immediate jeopardy does not require a finding of actual harm but also
encompasses a situation that is likely to cause harm. The burden rests on Petitioner to
prove that CMS’s determination of immediate jeopardy is clearly erroneous. Petitioner
has not met that burden here.

Petitioner has never seriously denied the occurrence of the deficiencies themselves. The
main thrust of Petitioner’s case is that these deficiencies do not amount to immediate
jeopardy. Petitioner alleges that “[n]Jot only did [R-1] never cause any injury, his
aggressive behavior was of such low magnitude that his actions never resulted in any
need for medical treatment, any bruising, any first aid, or even any need for band-aids or
ointments.” P. Br. at 31 (italics in the original). Petitioner misunderstands the nature of
the term “immediate jeopardy.” No showing of actual harm is necessary to establish
Petitioner’s failure to protect its residents exposed to immediate jeopardy by its failure to
adequately supervise R-1 or its failure to fully investigate the incidents involving R-1.
All that need be demonstrated is a likelihood of serious harm occurring. See, e.g.,
Daughters of Miriam Center, DAB No. 2067 (2007).

I have determined that YVS seems to have decided at some point that it would have to
expect and accept a certain level of disruptive, even violent, behavior from R-1 and that
the staff could not protect the other residents from R-1. Once Petitioner had reached this
mindset, the evidence persuades me that it then it allowed itself to see R-1’s attacks on
others as de minimis. Even Dr. Wilson testified that R-1’s behavior was merely
“lightweight harassing behaviors.” Tr. at 297. The attacks were something that on a
school ground or in a recreation-center gym might amount to little more than rough-
housing or horseplay, but at YVS and among its residents these behaviors were serious
and risky business. The victims of R-1’s outbursts were without exception vulnerable by
reason of mental or physical disabilities, or both. In each case the attack came as R-1
rushed up and suddenly kicked, hit or shoved his victim, and ran off — all abruptly and
without any sort of warning or prelude. R-1 was known to YVS to have caused bruising
16

to healthy staff members and was known to YVS to be able to increase his level of
aggression when circumstances prompted him to do so. Tr. at 335. In one case R-1
grabbed his victim and thrust his arm down the victim’s trousers. Now, although the
emotional effects of these assaults on their victims is a fairly obvious subject of concern,
it is true that there is no serious argument that any bruising, bleeding, torn clothing, or
other obvious physiological injury resulted from the attacks. This absence of
physiological damage may be the reason that YVS has maintained that the incidents
cannot even be described fairly as “attacks.”

Petitioner’s argument is meritless. Petitioner overlooks the fact that its facility is a
nursing home caring for vulnerable residents, not a playground or a gym. In one incident,
R-7 expressed fear and anger which is clearly suggestive of psychological harm. In spite
of R-7’s fear and anger, R-1 was allowed to get close to R-7 and to speak to R-7 shortly
after R-1 hit R-7. P. Br. at 15. Petitioner did not take any steps to protect R-7 after being
hit by R-1. It was only fortuitous — indeed nothing other than extremely fortuitous —
that R-1’s physical assaults on vulnerable residents had not yet caused any of them
actual physical harm.

The pattern of R-1’s behavior was dangerous, unconsented-to by its victims, frightening
to its victims, and intolerable by any reasonable standards in the setting of a skilled
nursing home specifically dedicated to caring for residents with severe mental and
physical impairments. YVS’s view of the incidents and its approach to controlling them
and protecting other residents may in part be because Petitioner views itself as a
residential habitation center, and perhaps sees its environment as more comparable to a
village than for what it is: a certified nursing facility. The model of a village-like
community is admirable in many ways, and nothing in this decision should be understood
as critical of it as long as that model serves the purpose of ensuring the safety and
happiness of the community’s members. But in a community of those largely unable to
protect themselves, YVS misunderstood its fundamental obligation to limit R-1’s danger
to them. Asa result, YVS failed to investigate and document R-1’s persistent and
repeated outbursts adequately because YVS simply did not take them seriously enough
and in context. The Board has held that “thorough investigations are critical in
identifying not only what has happened in a particular incident but also in identifying
‘patterns and trends that may constitute abuse.’” Britthaven, Inc. d/b/a/Britthaven of
Smithfield, DAB No. 2018, at 12 (2006). A facility has “a duty to investigate a possible
incident of abuse sufficiently so that it and its staff are apprised of all the facts necessary
to form a reasoned conclusion as to what happened so as to protect residents from
additional abuse.” Singing River Rehabilitation & Nursing Center, DAB CR1838, at 14
(2008).

Given the vulnerability of the other residents at YVS, R-1’s physical attacks were
serious. The victims of R-1’s outbursts were without exception quite typical of that
population, vulnerable by reason of mental or physical disabilities, sometimes both. R-
17

1’s victims included: R-2, who was profoundly mentally retarded and unable to
communicate in a meaningful manner; R-5, who was severely mentally retarded and had
expressive language difficulties; R-6, who was mentally retarded, had expressive and
receptive aphasia (difficulty receiving and expressing information), had impaired
mobility and was in a wheelchair for a period of time; R-7, who was wheelchair-bound
and expressed anger and fear after R-1’s attack; R-8, who was unable to communicate
meaningfully and had gait problems; and R-9, who displayed severe mental retardation,
hearing loss, and was wheelchair-bound. YVS’s failure to thoroughly investigate the
seven incidents of R-1’s aggressive behavior and its failure to adequately supervise R-1
left the other residents, particularly those in cottages103 and 104, unprotected from
serious abuse. Therefore, I cannot find CMS’s determination of immediate jeopardy for
both these deficiencies clearly erroneous.

6. The deficiencies constituted substandard quality of care and revocation of
Petitioner’s NATCEP is mandated.

As a matter of law, CMS must revoke Petitioner’s NATCEP for a period of two years.

As a result of an extended survey, Petitioner was found to manifest substandard quality of
care and deficiencies at a level of immediate jeopardy. Consequently, loss of NATCEP
for a period of two years is mandated. Act § 1819(£)(2)(B)(iii)(D(b).

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Care Time Home Health Services
(PTAN: 10-9194),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-10-972
Decision No. CR2349

Date: April 6, 2011

DECISION

Petitioner, Care Time Home Health Services, appeals a reconsideration decision issued
on September 7, 2010. I sustain the determination of the Centers for Medicare and
Medicaid Services (CMS) to revoke Petitioner’s Medicare enrollment and billing
privileges. I do so because Petitioner has failed to show that it met all Medicare
enrollment requirements.

I. Background and Procedural History

On December 22, 2009, two inspectors from SafeGuard Services, LLC, a CMS
contractor, attempted to conduct an on-site review of Petitioner’s facility. CMS contends
that the inspectors arrived at Petitioner’s facility at 11:15 a.m., during Petitioner’s listed
hours of operation, and found the door to the facility locked, the blinds closed, and the
lights turned off. CMS Ex. 1, at 4. Because the site review could not be completed,
CMS could not verify Petitioner’s compliance with Medicare enrollment requirements,
and CMS therefore determined that the facility was found “no longer operational to
furnish Medicare covered items or services . . .” in violation of 42 C.F.R.

§ 424.535(a)(5)(i). CMS Ex. 2. Petitioner contends that it was operational, and
“{nJumerous home health services were rendered to various beneficiaries by Care Time
on the date in question, December 22, 2009...” P. Br. at 4.

By letter dated May 13, 2010, CMS revoked Petitioner’s Medicare billing privileges
retroactive to December 22, 2009, the date of the attempted on-site review. CMS Ex. 2.
Petitioner submitted a request for reconsideration on June 9, 2010, and included a
Corrective Action Plan (CAP). CMS Ex. 3. Petitioner’s CAP contained remedial
measures including in-service training of all office staff, posting an “open/closed” sign,
and installing a bell on the front door. Jd. at 2. In its reconsideration request, Petitioner
contends that the facility was operational on December 22, 2009, but states that:

[o]n several occasions our office is been advised to keep doors
closed to avoid assaults. Even though we keep the doors open most
of the time, there is a possibility that on Dec 22, 2009 the door
would be closed due the proximity of the Christmas and the increase
rate of related crimes.

Id. at 1.

Petitioner also submitted a visitor log and treatment records from the date in question to
prove Petitioner was open for business. Jd. at 4. On September 7, 2010, CMS issued an
unfavorable reconsideration decision. CMS Ex. 4. The decision states that:

Although Care Time did provide justification for why the facility
doors may have been locked on the day of the onsite visit, it is
required that the facility remain open during their scheduled hours of
operation. In addition, the observations made by the Investigators of
the facility on the date of the onsite inspection, indicate that the
facility was not open and operational during regular hours.
Therefore, we are unable to determine if the facility was operational
and meeting the requirements to qualify as a Home Health Agency.
Accordingly, I am upholding Palmetto GBA’s decision to revoke
Medicare billing privileges for Care Time.

Id. at 2.

On September 13, 2010, Petitioner filed a hearing request with the Civil Remedies
Division (CRD) of the Departmental Appeals Board (Board) to appeal the
reconsideration decision. This case was initially assigned to Board Member Leslie A.
Sussan pursuant to 42 C.F.R. § 498.44, which permits a Board Member to hear appeals
under part 498. On October 25, 2010, this case was reassigned to me for hearing and
decision.
In accordance with the Acknowledgment and Pre-hearing Order of September 20, 2010,
CMS filed Respondent’s Brief in Support of Revocation (CMS Br.), accompanied by 9
exhibits (CMS Ex. 1-9) on October 20, 2010. CMS provided a statement from the two
inspectors that attempted to verify the operation of Petitioner’s facility on December 22,
2009. CMS Ex. 6. On November 19, 2010, Petitioner filed its Reply Brief in Support of
Reinstatement of PTAN 10-9194 (P. Br.), accompanied by 14 exhibits (P. Exs. 1-14).
Petitioner did not list any proposed witnesses and accordingly did not include any written
direct testimony. Petitioner did not request to cross-examine either of the CMS proposed
witnesses. In the absence of objection, I receive into the record of this case CMS Exs. 1-
9 and P. Exs. 1-14. Without the need for cross-examination, I do not need to conduct a
hearing in this case, and I therefore make my decision based upon the written record.

II. Applicable Law

A provider in the Medicare program “must be operational to furnish Medicare covered
items or services.” 42 C.F.R. § 424.510(d)(6). A provider is “operational” when it has a
“qualified physical practice location, is open to the public for the purpose of providing
health care related services, is prepared to submit valid Medicare claims, and is properly
staffed, equipped, and stocked ... to furnish these items and services.” 42 C.F.R. §
424.502. Thus, CMS has a right to perform on-site inspections to verify the accuracy of a
provider’s enrollment information and to determine the provider’s compliance with
Medicare enrollment requirements. 42 C.F.R. § 424.510 (d)(8).

Federal regulations provide for revocation of a provider or supplier’s Medicare billing
privileges for a variety of reasons including:

(5) On-site review. CMS determines, upon on-site review, that the
provider or supplier is no longer operational to furnish Medicare
covered items or services, or is not meeting Medicare enrollment
requirements under statute or regulation to supervise treatment of, or
to provide Medicare covered items or services for, Medicare
patients. Upon on-site review, CMS determines that —

(i) A Medicare Part A provider is no longer operational to
furnish Medicare covered items or services, or the provider
fails to satisfy any of the Medicare enrollment requirements.

42 CFR. § 424.535(a)(5)(i).

In provider and supplier appeals under 42 C.F.R. Part 498, CMS must make a prima facie
showing that the provider or supplier has failed to comply substantially with federal

requirements. See Medisource Corp., DAB No. 2011 (2006). To prevail, the provider or
supplier must overcome CMS’s prima facie showing by a preponderance of the evidence.
Batavia Nursing and Convalescent Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing
and Convalescent Ctr. v. Thompson, 129 Fed. Appx. 181 (6th Cir. 2005).

III. Issue

The issue in this case is whether CMS had a legitimate basis to revoke Petitioner’s
Medicare enrollment and billing privileges.

IV. Analysis

The issue in this case turns on the legal interpretation of 42 C.F.R. § 424.535 and other
regulatory provisions that govern the revocation of Medicare billing privileges. CMS
contends that it attempted and was unable to conduct an on-site review of Petitioner’s
facility during Petitioner’s posted hours of operation because the facility was closed. A
Medicare provider 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 (emphasis added).

Petitioner submitted a CAP, as well as a reconsideration request containing remedial
measures Petitioner would undertake to improve the facility’s operations. CMS’s
decision whether or not to reinstate a provider based on a CAP is not an initial
determination and not reviewable by an Administrative Law Judge (ALJ). 42 C.F.R. §
405.874(e).

The Board recently addressed the issue of an opportunity to correct through a CAP and
explained how it is distinct from the contractor reconsideration process:

After the initial notice of revocation, the supplier has two tracks

to seek to avoid revocation and may elect to pursue either or both
concurrently. [Medicare Program Integrity Manual (MPIM)],

Ch. 10, § 19.A. The supplier, within 60 days, may request
“reconsideration” of whether the basis for revocation is erroneous or,
within 30 days, it may submit a CAP to demonstrate that it has corrected
that basis. If the contractor accepts the CAP, it notifies the supplier,

and any reconsideration request is withdrawn. Ifthe contractor denies

the CAP, the reconsideration process may proceed to a hearing before a
hearing officer, who reviews “the Medicare contractor’s reason for
imposing a. . . revocation at the time it issued the action... .” Id.

An unfavorable hearing officer decision is appealable to an ALJ,

who reviews the basis for the revocation. Jd. No provision is made for

an appeal of the contractor’s decision not to reinstate based on the CAP. Id.
The hearing officer conducting the reconsideration (and the ALJ on appeal
of the hearing officer decision) are limited to reviewing the basis for
revocation set out in the initial notice, not the merits of any contractor
decision that corrective action under a CAP was unacceptable.

DMS Imaging, Inc., DAB No. 2313, at 7-8 (2010) (footnote omitted).

Thus, the contractor’s CAP evaluation is not an initial determination and not appealable.
However, CMS’s reconsideration decision arises from the contractor’s initial
determination to revoke Petitioner’s Medicare billing privileges and is appealable through
the administrative process, including the present review. Emmanuel Brown M.D. and
Simeon Obeng M.D., DAB CR2145, at 6-8.

Petitioner argues that the reconsideration decision was incorrect because the facility was
open from 9:00 a.m. until 5:00 p.m. on December 22, 2009, the day of the attempted on-
site review. P. Br. at 5. Petitioner alleges that, because it is located in a high crime area,
the staff is advised to close the doors to the facility to avoid assaults. P. Ex. 5. However,
Petitioner does not provide further explanation as to the circumstances in which it had
closed the facility. Nor does Petitioner explain the inspectors’ observations that the doors
were not only locked, but also there was an absence of interior lighting and drawn blinds
indicating that the facility was not open for business. CMS Exs. 6-9.

Petitioner also questions why the inspectors’ report is dated approximately thirteen days
after the date of the attempted on-site review on December 22, 2009. However,
Petitioner did not request cross-examination of the inspectors to clarify or shed doubt on
the accuracy of the inspector reports.’ I find the inspectors’ report and direct testimony
credible and supportive of the CMS position that Petitioner was nonoperational and
closed at the time of the site inspection. CMS Exs. | and 6.

On the other hand, Petitioner has not overcome its burden of showing by a preponderance
of the evidence that it was in substantial compliance with Medicare requirements. The
documentary evidence Petitioner has submitted, both at the reconsideration stage and at
the ALJ level, does not demonstrate Petitioner’s compliance with all Medicare
requirements at the time of the on-site review. Instead, Petitioner concedes that “there is
a possibility that on Dec 22, 2009 the door would be closed due the proximity of the
Christmas and the increase rate of related crimes.” CMS Ex. 3, at 1. Petitioner does not
to explain why, in addition to closing its door; it also locked the door, closed the blinds,
turned off the lights, and provided no alternative notice to the public.

Petitioner did submit a visitor log and nine pages of treatment records, which seem to be
created throughout the day on the date in question to prove Petitioner was open for

‘It is a reasonable assumption that the inspectors may have relied on contemporaneous
notes at the time they completed the site report on January 4, 2010. However, CMS also
does not explain the date discrepancy, and I weigh the inspectors’ report accordingly.
business. P. Exs. 10-11. Petitioner does not offer witness testimony to explain who
exactly was present at the facility on December 22, 2009 or to support its argument that
someone advised Petitioner to keep its doors closed to avoid assaults. Although I
admitted the visitor log and treatment records, they are unsupported hearsay evidence,
and standing alone they do not afford CMS an opportunity to cross-examine the person
who created them.

Furthermore, a showing that Petitioner has been operational at some time prior to, or
after, the on-site review would not provide a basis for reversing the revocation. CMS is
authorized to revoke a provider or supplier’s Medicare billing privileges based upon the
failure to be operational when the inspector visited its address, regardless of whether it
may have been operational at some earlier or later time. See Mission Home Health et al.,
DAB No. 2310 (2010). CMS and its contractors have limited resources and cannot be
compelled to attempt multiple on-site inspections during an enrollee’s posted business
hours to determine if the facility complies with all Medicare requirements. Thus, I find
the CMS decision to revoke Petitioner’s Medicare enrollment and billing privileges was
justified based upon the observations of the inspectors that Petitioner was not open during
its business hours during the December 22, 2009 on-site review.

V. Conclusion

For the reasons explained above, I sustain CMS’s determination to revoke Petitioner’s
Medicare billing privileges on the basis that it was not operational.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Sheldon Pinsky, Ph.D., LICSW,
Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-11-86
Decision No. CR2347

Date: April 6, 2011

DECISION

Petitioner, Dr. Sheldon Pinsky, Licensed Independent Clinical Social Worker (LICSW),
of Minnesota Medical and Rehabilitative Services, LLC, appeals the determination of the
Centers for Medicare and Medicaid Services (CMS) to deny his enrollment application
into the Medicare program as a clinical social worker. Considering it is undisputed that
Petitioner does not possess a master’s or a doctoral degree in social work, as the Social
Security Act (Act) and the implementing regulations require, I affirm CMS’s denial. A
legitimate legal basis exists for CMS to deny Petitioner’s application; accordingly, I grant
CMS’s motion for summary judgment.

I. Background

Petitioner completed a Master of Science degree in Guidance and Personnel Services at
the State University of New York at Albany in 1971. CMS Exhibit (Ex.) 7, at 8.
Petitioner then completed a Ph.D. in Higher Education at Iowa State University in 1978.
Id. at 9. On April 7, 1989, Petitioner obtained his LICSW license in Minnesota. Jd. at 1-
2. There are several social work licenses in Minnesota including the LICSW license.
MINN. STAT. ANN. § 148D.055 subdiv. 5 (2010). At the time Petitioner obtained his
LICSW license, the Minnesota Board of Social Work issued LICSW licenses to
individuals with certain practice experience, “if the board determines that the applicant
has received a master’s degree from an accredited program of social work or doctoral
2

degree in social work; or a master’s or doctoral degree from a graduate program in a
human service discipline as approved by the board.” MINN. STAT. ANN. § 148B.23
subdiv. 1, cl. 4 (1989). The Minnesota Board of Social Work granted Petitioner’s
LICSW license, “based on the determination that [Petitioner’s] MA degree in Guidance
and Personnel Services . . . and [his] PhD in Education . . . was ‘a master’s or doctoral
degree from a graduate program in a human service discipline as approved by the
Board.’” CMS Ex. 3, at 2.

On August 4, 2010, Wisconsin Physician Services (WPS), a CMS contractor, denied
Petitioner’s individual enrollment request into Medicare. CMS Ex. 2. In its denial, WPS
explained that Petitioner did not meet the enrollment conditions to qualify as a clinical
social worker because he lacked a master’s or doctorate degree in social work, pursuant
to 42 C.F.R. § 410.73. Jd. at 1. WPS also stated that Petitioner has “a master’s degree in
guidance and personnel services and a doctoral degree in education.” Jd. Petitioner
subsequently sought reconsideration on August 10, 2010. CMS Ex. 3, at 1. Petitioner
submitted evidence regarding his qualifications and experience in the field of social

work. CMS Exs. 4-5. However, the materials submitted did not indicate that Petitioner
obtained a graduate degree in social work. On October 26, 2010, a Hearing Officer
affirmed the denial of Petitioner’s Medicare enrollment application on the grounds that
Petitioner did not satisfy the regulatory requirements for a clinical social worker. CMS
Ex. 1. The Hearing Officer stated that Petitioner provided “no new information regarding
the required educational documents in order to enroll [Petitioner] into the Medicare
program.” Id. at 1.

On November 4, 2010, Petitioner filed a hearing request to appeal the reconsideration
decision. An Acknowledgment and Pre-Hearing Order was sent to the parties on
November 17, 2010. On December 9, 2010, CMS submitted its Motion for Summary
Judgment, supporting CMS Memorandum (CMS Br.), and ten proposed exhibits.
Petitioner filed numerous submissions consisting of often duplicative evidence and
argument. Petitioner filed these submissions on the following dates: November 4, 2010;
November 30, 2010; December 9, 2010; December 14, 2010; December 28, 2010;
December 30, 2010; January 6, 2011; and January 10, 2011. On January 12, 2011, CMS
moved for the closure of the record and a ruling on its Motion for Summary Judgment.
On January 20, 2011, I issued an Order Closing Record in this case. In the absence of
any objection that would materially affect the outcome in this case,’ I admit into the
record CMS exhibits (CMS Exs.) 1-10 and all documents Petitioner submitted.

'CMS initially raised an objection to Petitioner’s submission of any document “not
submitted to CMS during the enrollment application process or on reconsideration” and
noted that Petitioner failed to follow Civil Remedies Division Procedures with respect to
serving additional materials on CMS at the time of filing. CMS Br. at 7. Because none
of the additional materials submitted by Petitioner alter the outcome of this case, and
because I am deciding this case on summary judgment, I have admitted into the record all
documents Petitioner submitted.
II. Applicable Law and Regulations

A supplier? who wishes to bill Medicare for clinical social worker services must be
enrolled in Medicare to have billing privileges. Specifically, Medicare Part B will pay
for services from clinical social workers who accept Medicare assignment. Act §
1842(b)(18)(A), (C)(iv); 42 C.F.R. § 410.150(b)(18). The Act and the regulations define
a “clinical social worker” as an individual who: (1) possesses a master’s degree or
doctorate in social work; (2) has performed at least two years of supervised clinical work
after receiving the degree; and (3) is licensed, or certified, in the state that the services are
performed. Act § 1861(hh)(1); 42 C.F.R. § 410.73(a).

Ill. Issue

The sole issue in this case is whether Petitioner satisfied the necessary requirements to
enroll into the Medicare program as a clinical social worker.

IV. Discussion

A. Petitioner was ineligible to enroll in the Medicare program as a clinical
social worker because he did not have a master’s degree in social work, as the
statute and regulations require.

In his hearing request and submissions, Petitioner describes his extensive experience as a
clinical social worker in the State of Minnesota and his many credentials, affiliations, and
activities. Petitioner states that he provides services for “patients on Medicaid and every

insurance company in Minnesota” and believes he is entitled to Medicare reimbursement.
P. Letter Dated December 28, 2010. I accept as true, for purposes of summary judgment,
that Petitioner has all of the education and experience that he states in his hearing request
and numerous submissions.

However, Petitioner does not present evidence or assert that he has a master’s or a
doctoral degree in social work as 42 C.F.R. § 410.73(a) requires. To enroll in Medicare
as a clinical social worker, the language of the statute and regulation is plain and clear.
An individual must possess a graduate degree in social work to qualify. Prior
Administrative Law Judge (ALJ) decisions reflect that CMS has consistently denied
Medicare billing privileges to individuals similarly situated to Petitioner. See Vikki
Green, LMSW, DAB CR2318 (2011), Jeanne E. Daly-McIntee, DAB CR2073 (2010),
Elizabeth M. Prokay, DAB CR1860 (2008), Sherry K. Jose, LICSW, DAB CR1750
(2008), Dorothy Rose Hrynyk, DAB CR1444 (2006). Petitioner does not have the
requisite graduate degree in social work, which he does not dispute. Instead, Petitioner
essentially argues that CMS should allow for an exception and grant his enrollment

> Medicare defines “supplier” to mean “a physician or other practitioner, a facility, or
other entity (other than a provider of services) that furnishes items or services.” Act §
1861(d), 42 U.S.C. § 1395x(d).
4

request as a supplier of clinical social worker services because his credentials and
extensive experience as a social worker ensure that Medicare beneficiaries will receive
services from a competent practitioner, as the statute and regulation intend. Petitioner
also argues that, because he has been approved and receives reimbursement for Medicaid,
a State and Federal program, he should also be approved for Medicare reimbursement. P.
Letter Dated January 10, 2011.

However, nothing in the Act or the regulations provides that an individual may qualify to
provide clinical social worker services with education or experience that fails to precisely
satisfy the criteria to participate as a clinical social worker with Medicare. Additionally,
nothing in the Act or the regulations permits the Secretary of the Department of Health
and Human Services (Secretary) to waive the statutory or regulatory qualifying criteria
and allow an individual to participate as a clinical social worker. Congress has not
granted the Secretary any discretion to accept another degree as functionally equivalent to
a master’s or doctorate degree in social work. See McIntee, DAB CR2073 at 4-5; see
also Prokay, DAB CR1860 at 3-4 (holding that the Act does not allow for a “functional
equivalent” exception to the participation criteria and does not permit the Secretary to
waive the statutory qualifying criteria), Rosalyn L. Olian, DAB CR1472 (2006) (rejecting
equivalency argument). Although Petitioner’s degrees in “a human service discipline”
met the requirements for licensure by the Minnesota Board of Social Work in 1989, his
educational background does not satisfy the Medicare requirement that clinical social
workers have a master’s or doctoral degree in social work. Thus, Petitioner does not
satisfy the education requirement for classification as a clinical social worker in the
Medicare program. Act § 1861(hh)(1); 42 C.F.R. § 410.73(a).

Accordingly, the statute and regulations restrict me, and I lack authority to direct CMS to
make any exception. A legitimate legal basis exists for CMS to deny Petitioner’s
enrollment request, and therefore I must affirm the denial.

B. Summary judgment is appropriate in this case

CMS seeks summary disposition in the nature of summary judgment. The 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
5

all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (citations omitted). An
ALJ’s role in deciding a summary judgment motion differs from its role in resolving a
case after a hearing. The ALJ should not assess credibility or evaluate the weight of
conflicting evidence. Holy Cross Vill. at Notre Dame, Inc, DAB No. 2291 at 5 (2009).
The Board has further stated, “[i]n addition, it is appropriate for the tribunal to consider
whether a rational trier of fact could regard the parties’ presentation as sufficient to meet
their evidentiary burden under the relevant substantive law.” Dumas Nursing and
Rehab., L.P., DAB No. 2347, at 5 (2010).

I have accepted all of Petitioner’s factual assertions as true. In addition, I have drawn all
reasonable inferences in his favor. However, no dispute exists that Petitioner lacks the
requisite graduate degree in social work required for enrollment into the Medicare
program. Accordingly, summary judgment is appropriate, and I grant CMS’s motion.

V. Conclusion

I sustain CMS’s determination to deny Petitioner enrollment into Medicare because
Petitioner does not possess the requisite degree and does not satisfy the statutory and
regulatory requirements. Considering Petitioner has no graduate degree in social work,
CMS had a legitimate legal basis to deny his enrollment application. Accordingly, I grant
CMS’s motion for summary judgment.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Alexander Eugene Istomin, M.D.
(NPI: 1235185778)

Petitioner,

Vv.

Centers for Medicare and Medicaid Services.
Docket No. C-11-9
Decision No. CR2346

Date: April 1, 2011

DECISION REMANDING CASE

I deny the motion of the Centers for Medicare and Medicaid Services (CMS) to dismiss
this case. In addition, I remand the matter so that either CMS or its contractor, First
Coast Service Options, Inc. (First Coast), may continue the enrollment determination
process using the correspondence address of record for Petitioner Alexander Eugene
Istomin, M.D.

I. Background

On October 6, 2008, First Coast received a CMS-855 Medicare enrollment application
from Petitioner dated June 30, 2008. CMS Ex. 1, at 2. The correspondence address
listed on this application was an Old Westbury, New York address (correspondence
address). CMS Ex. 3, at 7. By letter dated October 20, 2008, First Coast requested
additional information from Petitioner to complete the processing of his Medicare
enrollment application. CMS Ex. 5. The letter indicated that Petitioner must provide the
requested additional information by November 20, 2008. Jd. at 3. For some unexplained
reason, First Coast sent the letter to Petitioner at a Hallandale, Florida address (Florida
practice address), one of four addresses which were listed under “practice location
information” on Petitioner’s enrollment application. CMS Ex. 3, at 17. First Coast did
not receive the requested additional information from Petitioner by November 20, 2008.
CMS Ex. 1, at 95. By letter dated November 20, 2008, First Coast informed Petitioner
that it was closing his Medicare enrollment application because Petitioner failed to
provide the additional information needed to process his application. Id. at § 6; CMS Ex.
6.

Petitioner claims that he did not receive the letter dated October 20, 2008, or the letter
dated November 20, 2008, because these letters were sent to an invalid mailing address in
Florida instead of to Petitioner’s correspondence address in New York. P. Br. 3-4. CMS
never disputed that it sent these letters to Petitioner’s Florida practice address rather than
to Petitioner’s correspondence address. Petitioner claims that all of his requests for a
current status of his enrollment application were ignored until October of 2010. P. Br. at
2.

On October 11, 2010, First Coast received a letter from Petitioner dated October 5, 2010
and a copy of the CMS-855 application dated June 30, 2008. CMS Ex. 1, at 97; CMS
Ex. 8. The letter states: “[w]ould you please update me regarding my application status.
The copy of my application is enclosed for your convenience.” CMS Ex. 8, at 1. By
letter dated October 15, 2010, First Coast informed Petitioner that his Medicare
enrollment application could not be processed because it contained a copied or stamped
signature. CMS Ex. 9. First Coast finally sent this letter to Petitioner’s correspondence
address. [d. However, First Coast apparently treated Petitioner’s status inquiry as a new
application.

By letter dated October 6, 2010, Petitioner filed a letter requesting a hearing before an
Administrative Law Judge (ALJ) regarding his Medicare enrollment application. An
Acknowledgment and Pre-hearing Order was sent to the parties on October 14, 2010.
Petitioner submitted an amended hearing request (HR) on October 22, 2010. This case
was initially assigned to Board Member Leslie A. Sussan pursuant to 42 C.F.R. § 498.44,
which permits a Board Member to hear appeals under 42 C.F.R. part 498.

On November 4, 2010, this case was reassigned to me for hearing and decision. On
November 9, 2010, CMS filed a Motion to Dismiss (CMS Br.). On November 17, 2010,
CMS filed an Amended Motion to Dismiss and Pre-Hearing Brief (CMS Am. Br.). With
its brief, CMS submitted nine exhibits (CMS Exs. 1-9). On December 7, 2010, Petitioner
filed his Reply to Amended Motion to Dismiss and Pre-Hearing Brief! (P. Br.). In the
absence of objection, I admit CMS Exs. 1-9 into the record. On March 18, 2011, I held a

' Petitioner also included a copy of CMS Exs. 1-9 with his brief.
telephone conference with Petitioner and CMS counsel to clarify certain issues prior to
issuing this decision.

II. Issue

The issue in this case is whether CMS properly processed Petitioner’s application such
that this appeal should be dismissed for lack of jurisdiction.

Ill. Analysis

CMS did not properly reject Petitioner’s enrollment application; thus I deny
CMS’s motion to dismiss.

CMS contends that First Coast did not deny Petitioner’s Medicare enrollment application
in November of 2008, but instead it rejected the enrollment application. CMS also argues
that First Coast did not deny Petitioner’s Medicare enrollment application in October of
2010, but it simply returned the application as a non-application. Thus, CMS contends
that Petitioner did not receive an initial determination that would be appealable to an
ALJ. In addition, CMS claims that Petitioner has no appeal rights because his 2008
Medicare enrollment application was rejected and First Coast never processed an
enrollment application for Petitioner. CMS Am. Br. at 8. CMS also asserts that, even if
Petitioner’s October 5, 2010 letter could be construed as a request for reconsideration,
such request would be untimely pursuant to 42 C.F.R. § 498.22(b)(3).

Although I may agree with CMS that I lack jurisdiction to hear cases of rejected
applications, I do not find here that Petitioner’s application was properly rejected. CMS
mailed both the October 20, 2008 letter requesting additional information and the
November 20, 2008 letter “closing” Petitioner’s application to an address listed as of one
of Petitioner’s practice locations in Florida, rather than to Petitioner’s correspondence
address in New York. The CMS-855 application states in the correspondence address
section to “[p]rovide contact information for the person shown in Section 2A above.
Once enrolled, the information provided below will be used by the fee-for-service
contractor if it needs to contact you directly.” CMS Ex. 3, at 7.

It is reasonable, and really only logical, that an applicant would expect to receive
correspondence from CMS at the address he listed as the “correspondence address.” At
the telephone conference on March 18, 2011, CMS could provide no definitive
explanation as to why First Coast sent correspondence to Petitioner to one of four
practice locations listed rather than to Petitioner’s correspondence address of record in
New York.
Without proper notification, Petitioner could not be expected to know what information
he was required to send to the CMS contractor. Furthermore, there is no indication in the
record indicating that Petitioner ever received the correspondence that CMS sent to his
practice address in Florida. When CMS finally started mailing letters to Petitioner’s
correspondence address of record in October of 2010, I note Petitioner did respond
expeditiously.

In the telephone conference on March 18, 2011, CMS counsel noted that Petitioner
certified that he saw patients at the practice location address in Florida, listed in his CMS-
855 application filed in October of 2008, and questioned why this mailing address for
Petitioner would be invalid. However, if CMS is concerned about why Petitioner was not
able to receive mail at a practice location, CMS should explore that concern with the
Petitioner through other means. CMS may not now use this concern as a sole
justification to refuse to properly process Petitioner’s application in light of its
notification errors.

Notwithstanding the inequity to Petitioner in this case, I do not base this decision on
equitable principles. CMS and its contractors have broad authority to process enrollment
applications, much of which is not reviewable by an ALJ. But underlying this grant of
unreviewable authority is the expectation that CMS will not abuse its authority and will
act competently. In this case, the contractor sent Petitioner, a potential Medicare
supplier, a notice letter to an address other than that was listed as Petitioner’s
“correspondence address.” Then, the contractor sent another notice to the practice
location address indicating that CMS had stopped processing Petitioner’s application.
CMS now defends its actions by claiming that Petitioner has absolutely no recourse. At a
minimum, the CMS contractor is required to properly send accurate notices of its
determinations advising potential suppliers of their appeal rights. Its failure to do so is
reviewable in this forum. However, I do not reach the ultimate issue of whether CMS’s
actions in this case are acceptable here; rather, I remand this case to CMS to afford it the
opportunity to correct its errors.

I deny the CMS motion to dismiss. I remand this case to CMS to continue the enrollment
determination process using Petitioner’s correspondence address of record from the
application that CMS received on October 6, 2008. I instruct CMS to consider the date of
receipt of Petitioner’s 2008 application in any effective date determination it makes
pursuant 42 C.F.R. § 424.520(d). If CMS is able to subsequently approve this
application, it should use CMS’s receipt date as Petitioner’s effective date for Medicare
billing privileges.
IV. Conclusion

I remand the matter to CMS so that CMS or its contractor may review all relevant files
and materials and take the appropriate actions on Petitioner’s 2008 application.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Gulf South Medical & Surgical Institute, Inc. and
Kenner Dermatology Clinic,
Petitioners
Vv.
Centers for Medicare and Medicaid Services.

Docket No. C-11-27
Decision No. CR2345

Date: April 1, 2011

DECISION

For the reasons set forth below, I grant the motion of the Centers for Medicare and
Medicaid Services (CMS) for summary judgment. Pinnacle Business Solutions, Inc.
(Pinnacle), the CMS contractor, had an undisputed and legitimate basis to revoke
Petitioner’s enrollment and billing privileges as a supplier in the Medicare program for
non-compliance with Medicare enrollment requirements under section 42 C.F.R. §
424.535(a)(1).

I. Background

Petitioner Gulf South Medical & Surgical Institute, Inc.,' is a corporation solely owned

' Kenner Dermatology Clinic is also a corporation solely owned by Dr. Farber. Although
this case was not originally captioned to include Kenner Dermatology Clinic, as
Petitioner’s Hearing Request did not reference this entity, the Hearing Officer’s
September 30, 2010 reconsideration decision clearly addressed both corporations. In the
interests of efficiency and clarity, I have addressed both corporations in this decision and
have amended the case caption to reflect this.
by George A. Farber Sr., M.D. (Dr. Farber), that participated as a supplier in the
Medicare program. Hearing Request (HR). On November 17, 2009, the Louisiana State
Board of Medical Examiners notified Pinnacle that Dr. Farber had his state medical
license revoked and cancelled, effective October 20, 2009. CMS Ex. 2. After learning of
the revocation of Dr. Farber’s medical license from the Louisiana State Board of Medical
Examiners, on November 30, 2009, Pinnacle notified Petitioner that it was revoking the
Medicare Provider Transaction Access Numbers (PTANS) associated with the National
Provider Identifier (NPI) for Dr. Farber effective October 20, 2009. CMS Ex. 1.
Specifically, Pinnacle articulated that Petitioner was not in compliance with the Medicare
enrollment requirements set forth in 42 C.F.R. § 424.535(a)(1). The letter further noted
that Petitioner failed to comply with the reporting requirements in 42 C.F.R.

§ 424.516(d)(1)(ii), which requires that a physician report any adverse legal action within
30 days. Id.

Subsequently, Petitioner requested that the contractor reconsider his revocation and
reinstate his billing privileges. On September 30, 2010, Pinnacle issued its unfavorable
determination, finding that the contractor properly revoked Petitioner’s enrollment and
billing privileges in the Medicare program. CMS Ex. 3. Pursuant to 42 C.F.R. § 498.40,
Petitioner timely filed a request for an Administrative Law Judge (ALJ) hearing by letter
dated October 7, 2010.

I issued an Acknowledgement and Pre-Hearing Order on October 19, 2010. On
November 23, 2010, CMS filed a motion for summary judgment and exchange of
evidence and argument (CMS Br.). CMS accompanied its submission with three exhibits
(CMS Exs. 1-3). On December 23, 2010, my office received Petitioner’s exchange of
evidence and argument and counter motion for summary judgment (P. Br.). Petitioner
also included three exhibits (P. Exs. 1-3). In the absence of objection, I receive into the
record of this case P. Exs. 1-3 and CMS Exs. 1-3.

II. Applicable Standard
The Board stated the standard for summary judgment:

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

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

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

III. Issue

The issue in this case is whether a basis exists for CMS to revoke Petitioner’s enrollment
as a supplier in the Medicare program.

IV. Findings of Fact, Conclusions of Law, and Discussion
I make a single finding and conclusion set out below:
A legitimate basis exists for CMS to revoke Petitioner’s enrollment in Medicare.

There is no dispute that Dr. Farber had his medical license revoked and cancelled
effective October 20, 2009 and that CMS subsequently revoked Petitioner’s enrollment in
Medicare. CMS Exs. | and 2. Gulf South Medical & Surgical Institute, Inc. and Kenner
Dermatology Clinic are Louisiana corporations solely owned by Dr. Faber. P. Br. and
CMS Ex. 3, at 6.

The undisputed facts establish that CMS was authorized to revoke Dr. Farber’s Medicare
enrollment because he ceased to comply with applicable requirements due to the
revocation of his license to practice medicine. CMS may revoke the billing privileges of
a participating Medicare provider for noncompliance with Medicare enrollment
requirements. 42 C.F.R. § 424.535(a)(1). Such noncompliance includes the revocation
of a physician’s license to practice medicine. Medicare will pay for a physician’s
services to its beneficiaries only where the physician is licensed to practice medicine in
the State where he provides them. 42 C.F.R. § 410.20(b). Thus, a physician who has his
license revoked, such as Petitioner, is not in compliance with Medicare enrollment
requirements.

Dr. Farber argues “that [Gulf South] is a corporation separate and independent from its
owner, that is in full compliance with its enrollment requirements, that it provides Part B
medical services through the employment of physicians, nurse practitioners and physician
assistants other than Dr. Farber . . . and that [Gulf South], as a separate and independent
entity from its sole shareholder, did not suffer any reportable adverse legal action.” P. Br.
at 3. However, Dr. Farber is admittedly the principal and sole owner of Gulf South
Medical & Surgical Institute, Inc. and Kenner Dermatology Clinic, and when CMS
revokes a supplier from the Medicare program, CMS automatically reviews all other
related Medicare enrollment files that the revoked supplier has an association with (for
example, as an owner) to determine if the revocation warrants an adverse action of the
associated Medicare supplier. See 42 C.F.R. § 424.535(f).

Further, the Medicare Program Integrity Manual (MPIM), Ch. 10, § 4.20 C clearly states
that, when a physician solely owns a practice and has his billing privileges revoked, the
practice is automatically dissolved for purposes of Medicare enrollment, and all
reassignments to the practice are automatically terminated as well. Thus, the revocation
of Dr. Farber’s state medical license does constitute enumerated grounds for CMS to
revoke the PTAN numbers and Medicare billing privileges of corporations that Dr.
Farber solely owns, including Gulf South Medical Surgical Institute, Inc. and Kenner
Dermatology Clinic.

Additional grounds to revoke Petitioner’s enrollment in Medicare may also exist due to
Petitioner’s failure to report his change in circumstances. Regulations require a
participating physician to report to Medicare within 30 days an adverse legal action.

42 C.F.R. § 424.516(d)(1)(ii). However, because CMS may revoke Dr. Farber’s
enrollment based on his noncompliance with Medicare enrollment requirements, I need
not further discuss Dr. Farber’s failure to timely report his change in circumstances. See
Houston v. CMS, DAB CR2071, at 4 (2010) (“License suspension and failure to inform
CMS of a change in circumstances are independent grounds for revocation of enrollment.
Either basis, standing alone, is sufficient authority for CMS to revoke Petitioner’s
enrollment.”).

V. Conclusion

CMS had authority to revoke Petitioner’s enrollment and billing privileges for
noncompliance with Medicare enrollment requirements under 42 C.F.R. § 424.535(a)(1).
I therefore grant the CMS motion for summary judgment and deny Petitioner’s counter
motion for summary judgment.

/s/
Joseph Grow
Administrative Law Judge