Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Winterhaven Healthcare Center,
(CCN: 67-5686),

Petitioner,
v.
Centers for Medicare & Medicaid Services.

Docket No. C-14-424

Decision No. CR3978

Date: June 22, 2015

DECISION

Petitioner, Winterhaven Healthcare Center, violated 42 C.F.R. § 483.10(b)(1) and (6) in
this case.’ However, the regulatory violation did not constitute noncompliance because it
did not have the potential to cause more than minimal harm. Accordingly, there is no
basis for the imposition of an enforcement remedy, and the discretionary denial of
payment for new admissions (DPNA) imposed from October 19, 2013, through
November 29, 2013, is not a reasonable enforcement remedy.
I. Background
Petitioner, a long-term care facility, is located in Houston, Texas and participates in
Medicare as a skilled nursing facility (SNF) and the state Medicaid program as a nursing

facility (NF). Petitioner was subject to a recertification and licensure survey by the Texas
Department of Aging and Disability Services (state agency) from September 17 through

' References are to the 2012 revision of the Code of Federal Regulations (C.F.R.), unless
otherwise indicated.
20, 2013. The state agency surveyors concluded that Petitioner was not in substantial
compliance with program participation requirements due to eleven deficiencies.
Petitioner was also subject to a life safety code survey that was completed on September
19, 2013. The life safety code survey cited Petitioner with five additional deficiencies.
Centers for Medicare & Medicaid Services (CMS) Exhibit (Exs.) 1 at 2, 2, and 5.

CMS notified Petitioner by letter dated October 22, 2013, that it was imposing the
following enforcement remedies: termination of Petitioner’s provider agreement and
participation in Medicare effective March 20, 2014, if Petitioner did not return to
substantial compliance prior to that date; and a DPNA effective October 19, 2013. CMS
Ex. | at 2-3. CMS notified Petitioner by letter dated January 7, 2014, that Petitioner
returned to substantial compliance on November 30, 2013. The letter advised Petitioner
that the DPNA was in effect from October 19 through November 29, 2013, and that the
termination of Petitioner’s provider agreement was rescinded. CMS Ex. | at 1.

Petitioner requested a hearing before an administrative law judge (ALJ) on December 3,
2013. The case was assigned to me for hearing and decision on December 19, 2013, and
an Acknowledgement and Prehearing Order (Prehearing Order) was issued at my

direction.

On May 8, 2014, the parties filed a “Joint Settlement Status Report and Motion to
Proceed to Hearing on Written Submission” (Jt. Rpt.). This document contained the
parties’ joint stipulations. Jt. Rpt. at 2-3. The parties stipulated that all the deficiencies
cited by the September 19, 2013 life safety code survey and the September 20, 2013
recertification survey, with the exception of the deficiency citation under 42 C.F.R.

§ 483.10(b)(1) and (b)(5)-(10) (Tag F156)", were corrected by September 30, 2013. Jt.
Rpt. at 2-3; CMS Ex. 6. Both parties waived an oral hearing and requested a decision on
the briefs. Jt. Rpt. at 3-4. On May 12, 2014, I accepted the waiver of oral hearing and set

> This is a “Tag” designation as used in CMS Publication 100-07, State Operations
Manual (SOM), Appendix PP — Guidance to Surveyors for Long Term Care Facilities
(http://www.cms.hhs.gov/Manuals/IOM/list.asp). The “Tag” refers to the specific
regulatory provision allegedly violated and CMS’s policy guidance to surveyors.
Although the SOM does not have the force and effect of law, the provisions of the Act
and regulations interpreted clearly do have such force and effect. Ind. Dep’t. of Pub.
Welfare v. Sullivan, 934 F.2d 853 (7th Cir. 1991); Northwest Tissue Ctr. v. Shalala,

1 F.3d 522 (7th Cir. 1993). Thus, while the Secretary of Health and Human Services
(Secretary) may not seek to enforce the provisions of the SOM, she may seek to enforce
the provisions of the Social Security Act (Act) or regulations as interpreted by the SOM.

a briefing schedule. Order Accepting the Waiver of Oral Hearing and Establishing
Briefing Schedule.

The parties filed opening briefs (CMS Br. and P. Br.) and reply briefs (CMS Reply and
P. Reply). CMS offered CMS Exs. | through 13, and Petitioner offered exhibits (P. Exs.)
1 through 4.° No objection has been made to my consideration of the exhibits, and they
are admitted as evidence.

II. Discussion
A. Issues

Whether there is a basis for the imposition of an enforcement
remedy; and, if so,

Whether the remedy imposed is reasonable.
B. Applicable Law

The statutory and regulatory requirements for participation of a SNF in Medicare are
found at section 1819 of the Act and at 42 C.F.R. pt. 483. Section 1819(h)(2) of the Act
authorizes the Secretary to impose enforcement remedies against a SNF for failure to
comply substantially with the federal participation requirements established by sections
1819(b), (c), and (d) of the Act.* The Act requires that the Secretary terminate the
Medicare participation of any SNF that does not return to substantial compliance with
participation requirements within six months of being found not to be in substantial
compliance. Act § 1819(h)(2)(C). The Act also requires that the Secretary deny payment
of Medicare benefits for any beneficiary admitted to a SNF, if the SNF fails to return to
substantial compliance with program participation requirements within three months of
being found not to be in substantial compliance — commonly referred to as the mandatory
or statutory DPNA. Act § 1819(h)(2)(D). The Act grants the Secretary discretionary
authority to terminate a noncompliant SNF’s participation in Medicare, even if there has

> CMS listed only 10 proposed exhibits on its exhibit list filed March 19, 2014, but
submitted 13 proposed exhibits.

* Participation of a NF in Medicaid is governed by section 1919 of the Act. Section
1919(h)(2) of the Act gives enforcement authority to the states to ensure that NFs comply
with the participation requirements established by sections 1919(b), (c), and (d) of the
Act.
been less than 180 days of noncompliance. The Act also grants the Secretary authority to
impose other enforcement remedies, including a discretionary DPNA, civil money
penalties, appointment of temporary management, and other remedies such as a directed
plan of correction. Act § 1819(h)(2)(B).

The Secretary has delegated to CMS and the states the authority to impose remedies
against a long-term care facility that is not complying substantially with federal
participation requirements. “Substantial compliance means 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 (emphasis in original). A deficiency is a violation of a participation
requirement established by sections 1819(b), (c), and (d) of the Act or the Secretary’s
regulations at 42 C.F.R. pt. 483, subpt. B. Noncompliance refers to any deficiency that
causes a facility not to be in substantial compliance. 42 C.F.R. § 488.301. State survey
agencies survey facilities that participate in Medicare on behalf of CMS to determine
whether the facilities are complying with federal participation requirements. 42 C.F.R.
§§ 488.10-.28, 488.300-.335. The regulations specify the enforcement remedies that
CMS may impose if a facility is not in substantial compliance with Medicare
requirements. 42 C.F.R. § 488.406.

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). A facility has a right to
appeal a “certification of noncompliance leading to an enforcement remedy.” 42 C.F.R.
§ 488.408(g)(1); 42 C.F.R. §§ 488.330(e), 498.3. However, the choice of remedies, 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 determined by CMS if a successful challenge would affect the range of
the CMP that may be imposed or impact the facility’s authority to conduct a nurse aide
training and competency evaluation program (NATCEP). 42 C.F.R. § 498.3(b)(14),
(d)(10)(). The CMS determination as to the level of noncompliance, including the
finding of immediate jeopardy, “must be upheld unless it is clearly erroneous.” 42 C.F.R.
§ 498.60(c)(2); Woodstock Care Ctr., DAB No. 1726 at 9, 38 (2000), aff'd, 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).

The hearing before an ALJ is a de novo proceeding, i.e., “a fresh look by a neutral
decision-maker at the legal and factual basis for the deficiency findings underlying the
remedies.” Life Care Ctr. of Bardstown, DAB No. 2479, at 32 (2012) (citation omitted);
The Residence at Salem Woods, DAB No. 2052 (2006); Cal Turner Extended Care
Pavilion, DAB No. 2030 (2006); Beechwood Sanitarium, DAB No. 1906 (2004);
Emerald Oaks, DAB No. 1800, at 11 (2001); Anesthesiologists Affiliated, DAB CR65
(1990), aff'd, 941 F.2d 678 (8th Cir. 1991). The Secretary’s regulations do not address
the allocation of the burden of proof or the standard of proof. However, the Board has
addressed the allocation of the burden of proof in many decisions. The standard of proof
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. Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004);
Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, 129 F. App’x 181
(6th Cir. 2005); Emerald Oaks, DAB No. 1800; Cross Creek Health Care Ctr., DAB No.
1665 (1998); Hillman Rehab. Ctr., DAB No. 1611 (1997), DAB CR500 (1997) (on
remand), rev'd, DAB No. 1663 (1998), aff'd, Hillman Rehab. Ctr. v. United States, No.
98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999).

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

My conclusions of law are set forth in bold text followed by my findings of fact and
analysis. I have carefully considered all the evidence and the arguments of both parties,
although not all may be specifically discussed in this decision. I discuss the credible
evidence given the greatest weight in my decision-making.° I also discuss any evidence
that I find is not credible or worthy of weight. The fact that evidence is not specifically
discussed should not be considered sufficient to rebut the presumption that I considered
all the evidence and assigned such weight or probative value to the credible evidence that
I determined appropriate within my discretion as an ALJ. There is no requirement for me
to discuss the weight given every piece of evidence considered in this case, nor would it
be consistent with notions of judicial economy to do so. Charles H. Koch, Jr., Admin. L.
and Prac. § 5:64 (3d ed. 2013).

The parties stipulated that the only deficiency citation at issue before me is the alleged
violation of 42 C.F.R. § 483.10(b)(1), (b)(5)-(10) (Tag F156) at a scope and severity level
E, which means that the violation had the potential for more than minimal harm without
actual harm or immediate jeopardy. Jt. Rpt. at 2. I infer, based on the stipulation, that
CMS and Petitioner agree that the alleged violation of 42 C.F.R. § 483.10(b)(1), (b)(5)-
(10), is the only basis for the imposition of the DPNA for the period October 19 through

> “Credible evidence” is evidence that is worthy of belief. Black's Law Dictionary 596
(18th ed. 2004). The “weight of evidence” is the persuasiveness of some evidence
compared to other evidence. Id. at 1625.
November 29, 2013, because they stipulated that all other alleged deficiencies were
corrected by September 30, 2013. Jt. Rpt. at 2-3, CMS Ex. 6. Accordingly, my
jurisdiction is limited to reviewing the issues of whether there was a violation of 42
C.F.R. § 483.10(b)(1), (b)(5)-(10); whether the violation is a basis for the imposition of
an enforcement remedy; and whether the proposed DPNA is a reasonable enforcement
remedy. As discussed in more detail hereafter, Petitioner effectively concedes the
regulatory violation, but argues that that violation does not pose a risk for more than
minimal harm. If Petitioner is correct, then the regulatory violation would not amount to
noncompliance and would not be a basis to impose an enforcement remedy, including the
DPNA proposed by CMS. P. Br. at 7-10, P. Reply.

1. Judgment on the written pleadings and documentary evidence is
permissible in this case.

Pursuant to 42 C.F.R. § 498.66(a), Petitioner may waive its right to appear and present
evidence at an oral hearing by filing a written waiver. When a written waiver is filed by
a petitioner, an ALJ need not conduct an oral hearing except in two circumstances: the
ALJ concludes witness testimony is necessary to clarify facts at issue; or CMS shows
good cause for presenting oral testimony. 42 C.F.R. § 498.66(b). Petitioner waived its
right to an oral hearing consistent with the requirements of 42 C.F.R. § 498.66(a). After
review of the evidence and pleadings of the parties, I conclude that oral testimony is not
necessary for clarification of the facts at issue. CMS has not argued that oral testimony is
necessary or otherwise shown good cause to convene an oral hearing.

In accordance with 42 C.F.R. § 498.66, the record of the hearing in this case without oral
testimony consists of the documentary evidence admitted and the parties’ pleadings. The
parties also had a reasonable opportunity for rebuttal as reflected by their various filings.
Accordingly, this decision is on the merits.

2. Petitioner violated 42 C.F.R. § 483.10(b)(1) and (6).

3. The violation of 42 C.F.R. § 483.10(b)(1) and (6) did not pose a risk
for more than minimal harm.

4. Petitioner’s violation of 42 C.F.R. § 483.10(b)(1) and (6) did not
amount to noncompliance.

5. There is no basis for the imposition of any enforcement remedy, and
the proposed DPNA is not a reasonable enforcement remedy.

The regulations provide that each long-term care resident has “‘a right to a dignified
existence, self-determination, and communication with and access to persons and services
inside and outside the facility.” 42 C.F.R. § 483.10. The regulations list specific rights
that a long-term care facility, such as Petitioner, must protect and promote for each of its
residents. Petitioner is required to inform each resident, orally and in writing in a
language the resident can understand, of the resident’s rights and all rules and regulations
governing resident conduct and responsibilities. 42 C.F.R. § 483.10(b)(1). The rights of
a resident not competent to exercise his or her own rights are exercised by the resident’s
court-ordered or the resident-designated legal representative. 42 C.F.R. § 483.10(a)(3)-

(4).

The Statement of Deficiencies alleges that Petitioner failed to meet the following

requirements of the regulation in addition to 42 C.F.R. § 483.10(b)(1):

(5) The facility must—

(i) Inform each resident who is entitled to Medicai
benefits, in writing, at the time of admission to the

nursing facility or, when the resident becomes eligible

for Medicaid of —

(A) The items and services that are included in
nursing facility services under the State plan and
for which the resident may not be charged;

(B) Those other items and services that the

facility offers and

or which the resident may be

charged, and the amount of charges for those

services; and

(ii) Inform each resident
items and services speci:
and (B) of this section.

when changes are made to the
fied in paragraphs (5)(i)(A)

(6) The facility must inform each resident before, or at the
time of admission, and periodically during the resident’s stay,

of services available in the faci
services, including any charges
Medicare or by the facility’s pe:

ity and of charges for those
for services not covered under
r diem rate.

(7) The facility must furnish a written description of legal

rights which includes—

(i) A description of the

manner of protecting personal

funds, under paragraph (c) of this section;
(ii) A description of the requirements and procedures
for establishing eligibility for Medicaid, including the
right to request an assessment under section 1924(c)
which determines the extent of a couple’s non-exempt
resources at the time of institutionalization and
attributes to the community spouse an equitable share
of resources which cannot be considered available for
payment toward the cost of the institutionalized
spouse's medical care in his or her process of spending
down to Medicaid eligibility levels;

(iii) A posting of names, addresses, and telephone
numbers of all pertinent State client advocacy groups
such as the State survey and certification agency, the
State licensure office, the State ombudsman program,
the protection and advocacy network, and the
Medicaid fraud control unit; and

(iv) A statement that the resident may file a complaint
with the State survey and certification agency
concerning resident abuse, neglect, misappropriation
of resident property in the facility, and non-compliance
with the advance directives requirements.

(8) The facility must comply with the requirements specified
in subpart I of part 489 of this chapter relating to maintaining
written policies and procedures regarding advance directives.
These requirements include provisions to inform and provide
written information to all adult residents concerning the right
to accept or refuse medical or surgical treatment and, at the
individual’s option, formulate an advance directive. This
includes a written description of the facility’s policies to
implement advance directives and applicable State law.
Facilities are permitted to contract with other entities to
furnish this information but are still legally responsible for
ensuring that the requirements of this section are met. If an
adult individual is incapacitated at the time of admission and
is unable to receive information (due to the incapacitating
condition or a mental disorder) or articulate whether or not he
or she has executed an advance directive, the facility may
give advance directive information to the individual’s family
or surrogate in the same manner that it issues other materials

about policies and procedures to the family of the
incapacitated individual or to a surrogate or other concerned
persons in accordance with State law. The facility is not
relieved of its obligation to provide this information to the
individual once he or she is no longer incapacitated or unable
to receive such information. Follow-up procedures must be in
place to provide the information to the individual directly at
the appropriate time.

(9) The facility must inform each resident of the name,
specialty, and way of contacting the physician responsible for
his or her care.

(10) The facility must prominently display in the facility
written information, and provide to residents and applicants
for admission oral and written information about how to
apply for and use Medicare and Medicaid benefits, and how
to receive refunds for previous payments covered by such
benefits.

42 C.F.R. § 483.10(b)(5)-(10); CMS Ex. 5 at 2-4. However, the more specific allegations
of the surveyors in the SOD is that Petitioner had three cognitively impaired residents,
Residents 96, 97, and 98, sign a “Notice of Medicare Non-Coverage,” and there was no
evidence that the resident’s responsible parties were given the “Notice of Medicare Non-
Coverage.” Therefore, the factual allegations of the surveyors relate specifically to a
failure to effectively inform the three residents or their legal representatives of non-
coverage by Medicare, a violation of 42 C.F.R. § 483.10(b)(1) and (6). The factual
allegations in the SOD do not support violations of 42 C.F.R. § 483.10(b)(5) or (7)-(10),
and CMS does not urge me to find violations of those regulatory provisions.

a. Facts

The parties stipulated that: “Residents No. 96, 97, and 98 each signed Notices of
Medicare Non-Coverage. Each resident had some cognitive impairment and had a
responsible party.” Jt. Rpt. at 3; P. Br. at 4.

Petitioner admits by its proposed findings of fact and conclusions of law (FFCL) as
follows:

Resident 96 was assessed in March and August 2013 as severely cognitively
impaired for daily decision-making. FFCL 17, 18. Resident 96 had a designated
responsible party and a primary financial contact. FFCL 19. Resident 96 signed a
Notice of Medicare Non-Coverage on August 28, 2013, with an effective date of
10

termination of August 31, 2013. FFCL 20, 21; CMS Ex. 8 at 39-41. Resident
96’s responsible party was not notified of Medicare non-coverage. FFCL 23.

Resident 97 was assessed as being severely cognitively impaired with impaired
ability for daily decision making in July 2013. FFCL 26, 27. Resident 97 had a
responsible party who was also her primary contact for financial matters. FFCL
28. Resident 97 signed a Notice of Medicare Non-Coverage on July 23, 2013,
with an effective date of termination of July 27, 2013. FFCL 29; CMS Ex. 9 at
46-48. Petitioner cannot show that Resident 97’s responsible party was notified of
Medicare non-coverage. FFCL 31.

Resident 98 was assessed as being severely cognitively impaired for daily decision
making in September 2013. FFCL 34, 35. Resident 98 had a responsible party or
individual who held a power of attorney for decision-making. FFCL 37. Resident
98 signed a Notice of Medicare Non-Coverage on July 25, 2013, with a
termination effective date of August 2, 2013. FFCL 36, 38; CMS Ex. 10 at 3-5.
Resident 98’s responsible party was not notified of Medicare non-coverage. FFCL
40.

b. Analysis

Petitioner concedes that it violated 42 C.F.R. § 483.10(b)(6), which also amounts to a
violation of 42 C.F.R. § 483.10(b)(1), by having the three cognitively impaired residents
sign Notices of Medicare Non-Coverage rather than providing the notices to the
residents’ representatives. I conclude based on the evidence and Petitioner’s concession
that Petitioner violated 42 C.F.R. § 483.10(b)(1) and (6) based on the examples of
Residents 96, 97, and 98.

However, the conclusion that Petitioner committed a regulatory violation, which is a
deficiency, is not a sufficient basis for the imposition of an enforcement remedy. The
regulatory violation or deficiency must also cause Petitioner not to be in substantial
compliance with program participation requirements. A deficiency is a violation of a
participation requirement established by sections 1819(b), (c), and (d) of the Act or the
Secretary’s regulations at 42 C.F.R. pt. 483, subpt. B. An enforcement remedy is
authorized only when a long-term care facility is not in substantial compliance with
program participation requirements due to a deficiency. 42 C.F.R. § 488.400.
“Substantial compliance means 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 (emphasis in
original). Noncompliance refers to any deficiency that causes a facility not to be in
substantial compliance. 42 C.F.R. § 488.301. CMS or the state agency may only impose
an enforcement remedy for noncompliance. 42 C.F.R. § 488.402(b). The regulations
specify the enforcement remedies that CMS or the state may impose if a facility is not in

11

substantial compliance with Medicare requirements. 42 C.F.R. § 488.406. A DPNA,
either the mandatory or discretionary DPNA, may be imposed for failure to maintain
substantial compliance with program participation requirements. 42 C.F.R. § 488.417(a),
(b). No enforcement remedy is authorized for a deficiency that causes no actual harm
and has only the potential for minimal harm. 42 C.F.R. §§ 488.404, 488.408.

The surveyors cited the violation of 42 C.F.R. § 483.10(b) (Tag F156), at a scope and
severity level of E, meaning that in the surveyors’ opinion, the violation did not cause
actual harm but constituted a pattern that posed a risk for more than minimal harm. CMS
Ex. 5 at 2. The surveyors allege that the violation placed a total of seven residents at risk
for having their rights violated by not being properly notified of Medicare non-coverage.
CMS Ex. 5 at 5. However, the surveyors did not specifically describe what harm the
residents would suffer if their right to notice of Medicare non-coverage was violated.

The term “harm” is not defined in the regulations. However, surveyors are instructed by
CMS to determine the level of severity of deficiencies as follows:

A. General Objective

After the survey team determines that a deficiency (ies)
exists, assess the effect on resident outcome (severity level)
and determine the number of residents potentially or actually
affected (scope level). Use the results of this assessment to
determine whether or not the facility is in substantial
compliance or is noncompliant. When a facility is
noncompliant, consider how the deficient practice is
classified according to severity and scope levels in selecting
an appropriate remedy. (See §7400 for discussion of
remedies.) Scope and severity determinations are also
applicable to deficiencies at §483.70(a), Life Safety from
Fire.

B. Guidance on Severity Levels

There are four severity levels. Level 1, no actual harm with
potential for minimal harm; Level 2, no actual harm with
potential for more than minimal harm that is not immediate
jeopardy; Level 3, actual harm that is not immediate
jeopardy; Level 4, immediate jeopardy to resident health or
safety. These four levels are defined accordingly:
12

1. Level 1 is a deficiency that has the potential for
causing no more than a minor negative impact on the
resident(s).

2. Level 2 is noncompliance that results in no more than
minimal physical, mental and/or psychosocial
discomfort to the resident and/or has the potential (not
yet realized) to compromise the resident’s ability to
maintain and/or reach his/her highest practicable
physical, mental and/or psychosocial well-being as
defined by an accurate and comprehensive resident
assessment, plan of care, and provision of services.

3. Level 3 is noncompliance that results in a negative
outcome that has compromised the resident’s ability to
maintain and/or reach his/her highest practicable
physical, mental and psychosocial well-being as defined
by an accurate and comprehensive resident assessment,
plan of care, and provision of services. This does not
include a deficient practice that only could or has caused
limited consequence to the resident.

4. Level 4 is immediate jeopardy, a situation in which
immediate corrective action is necessary because the
facility’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
receiving care in a facility. (See Appendix Q.)

SOM, app. P, 4 IV (eff. Apr. 24, 2009). This CMS policy statement makes clear that
whether or not there is harm is determined by whether or not a deficiency impacts a
resident’s mental, physical, or psychosocial well-being or a resident’s ability to achieve
the highest practicable mental, physical, or psychosocial well-being. The CMS policy is
consistent with the Secretary’s regulatory guidance that the survey process uses resident
outcomes as the primary means for determining facility compliance with participation
requirements with the focus upon whether or not the care provided meets the needs of
individual residents. 42 C.F.R. §§ 488.26(c)(2), 488.110. Therefore, the surveyors’
conclusion that seven residents may suffer a violation of their rights does not constitute
harm in the sense of the regulations and CMS policy, absent some additional evidence
that the rights violated have some mental, physical, or psychosocial impact upon the
resident. Further, the guidance of CMS policy and regulations is that the harm must
affect or potentially affect the mental, physical, or psychosocial well-being of the resident
and not the resident’s representative or family.
13

CMS argues before me that the harm that could befall residents due to the infringement
of their right to proper notice of Medicare non-coverage was that “future health care
decisions may be impacted by whether they [the residents] are covered by Medicare.”
CMS Br. at 9. CMS further asserts that Petitioner exposed its “residents to the potential
for excessive financial exposure” which “had the potential to cause more than minimal
harm to the affected residents’ health and safety.” CMS Br. at 9. CMS suggests in its
reply brief that the violation of the residents’ right to notice of Medicare non-coverage,
by failure to deliver such notice to the impaired residents’ representatives, had the
potential to impact the cognitively impaired residents’ psychosocial well-being; but CMS
points to no specific evidence to support that assertion. CMS Reply.

In this case, there is no evidence cited by the surveyors in the SOD or CMS in its briefs,
that the failure to provide a “Notice of Medicare Non-Coverage” to Residents 96, 97, and
98 in a form that they could understand or to provide such notice to the residents’
representatives had any actual or potential adverse impact upon the residents’ mental,
physical, or psychosocial well-being or their ability to achieve the highest practicable
level of mental, physical, or psychosocial well-being. Whether or not there may have
been some impact upon a resident’s representative is not relevant, but in this case there is
no evidence of such impact or the potential for such impact.

The CMS argument regarding potential financial impact is also unsupported and
inconsistent with CMS policy and the law. The SOM states that residents should be told
in advance the charges for which they will be billed and that the provider is required to
fully inform the resident of services and related charges. SOM, app. PP, Tag F156 (eff.
Jun. 12, 2009). The regulations specifically prohibit a facility from charging a resident
for: (1) any item or service covered by Medicare or Medicaid; (2) any item or service not
covered by Medicare or Medicaid and not requested by the resident or the resident’s
representative, even if requested by a physician except as part of the resident plan of care;
or (3) any item or service for which the facility has not advised the resident or the
resident’s representative that there will be a charge and the amount of the charge. 42
C.F.R. § 483.10(c)(8); SOM, app. PP, Tag F162 (eff. Jun. 12, 2009). Therefore, in the
scenario where a facility fails to advise a resident that the service is not covered by
Medicare, the facility is prohibited from charging the resident or the resident’s
representative for the non-covered item or service. In this case, Petitioner argues it could
turn to Medicaid for reimbursement in such a circumstance. It is not necessary for me to
determine whether or not Petitioner could seek reimbursement from Medicaid. The key
is that Petitioner cannot seek reimbursement from a resident without a valid notice in
terms the resident can understand that the care or service is not covered and that the
resident or representative is liable to pay the related charge. Thus, the failure to give a
valid notice of termination of Medicare coverage has no negative financial impact upon a
resident, only upon the facility.

14

The Secretary’s regulations provide further protection to residents from harm associated
with non-covered long-term care costs. A long-term care facility such as Petitioner and
other Medicare providers or health plans are required to give advance notice of no fewer
than two days before terminating services. The CMS Form CMS-10123 titled “Notice of
Medicare Non-Coverage (NOMNC),” the form at issue in this case, is the form that must
be used to satisfy the notice requirement. The purpose of the notice is to advise the
resident or representative that Medicare coverage will end in two days and that the
beneficiary is liable for the cost of any continued services. The regulations provide that a
notice is valid only when signed and dated by the resident or authorized representative
and the signatory can comprehend the contents of the notice. The regulations dictate that
a provider, such as Petitioner, is financially liable for any continued services after
Medicare coverage lapses for at least two days after the beneficiary or the responsible
party receives a valid notice of service termination. 42 C.F.R. §§ 405.1200, 422.624;
CMS Ex. 12. In the case before me, there is no dispute that the notices of Medicare non-
coverage delivered to Residents 96, 97, and 98 were not valid because the residents were
assessed as suffering severe cognitive limitations and could not understand the notices.
Therefore, under the regulations, Petitioner became liable for the costs of continued care
and services after the residents’ Medicare coverage lapsed. Whether or not Petitioner
could seek reimbursement from Medicaid is not an issue on which I need opine. What is
determinative is that the regulation ensures that Petitioner’s residents and their
representatives were subject to no harm due to Petitioner’s failure to deliver a valid notice
that the residents’ Medicare coverage was about to end.

I conclude that, although Petitioner violated 42 C.F.R. § 483.10(b)(1) and (6), the
violation posed no risk for more than minimal harm to Petitioner’s residents.
Accordingly, I conclude that the violation of 42 C.F.R. § 483.10(b)(1) and (6) did not
amount to noncompliance, and there was no basis for the imposition of an enforcement
remedy.

III. Conclusion

For the foregoing reasons, I conclude that Petitioner violated 42 C.F.R. § 483.10(b)(1)
and (6). I conclude, however, that the regulatory violation did not pose a risk for more
than minimal harm and did not amount to noncompliance. Because the regulatory
violation did not amount to noncompliance, there was no basis to impose an enforcement
remedy, including a discretionary DPNA, from October 19, 2013 through November 29,
2013.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Martin G. Hoffmeister, D.P.M.,
(OI File No. 5-10-40975-9),

Petitioner,
v.
The Inspector General.
Docket No. C-15-530
Decision No. CR3973
Date: June 19, 2015
DECISION

Petitioner, Martin G. Hoffmeister, D.P.M., appeals the determination of the Inspector
General for the U.S. Department of Health and Human Services (1.G.) to exclude him
from participating in Medicare, Medicaid, and all federal health care programs pursuant
to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)) for five
years. For the reasons discussed below, I find the I.G. was authorized to exclude
Petitioner for the five-year minimum mandatory exclusionary period.

I. Background

The LG. notified Petitioner, by letter dated October 31, 2014, that he was being excluded,
pursuant to section 1128(a)(1) of the Act, from participating in Medicare, Medicaid, and
all federal health care programs for the minimum mandatory period of five years. The
1.G. advised Petitioner that the exclusion was based on his conviction in the U.S. District
Court for the Western District of Michigan of a criminal offense related to the delivery of
an item or service under Medicare or a state health care program.
Petitioner timely filed a request for hearing. I convened a prehearing conference with the
parties, which I summarized in my January 12, 2015 Order and Schedule for Filing Briefs
and Documentary Evidence. Pursuant to that order, I asked the parties to answer the
questions on short-form briefs I provided, together with any additional arguments and
supporting documents they wished to present. The I.G. filed his short-form brief (1.G.
Br.) together with eight exhibits (I.G. Exs. 1-8). Petitioner filed a short-form brief (P.
Br.) together with 18 exhibits (P. Exs. 1-18).! The I.G. filed a reply. Neither party
requested an in-person hearing or objected to the opposing party’s exhibits. P. Br. at 2;
IG. Br. at 7. I admit I.G. Exs. 1-8 and P. Exs. 1-18 into the record, and I decide the case
based on the written record.

II. Discussion

A. Issue

The only issue before me is whether the I.G. had a legitimate basis to exclude Petitioner
from participating in Medicare, Medicaid, and all federal health care programs pursuant
to section 1128(a)(1) of the Act. If I find that the I.G. was authorized to exclude
Petitioner, then I must uphold the I.G.’s exclusion because it is for the minimum
mandatory period of five years. 42 C.F.R. § 1001.2007(a)(2).

B. Findings of Fact and Conclusions of Law

I. The 1G. had a legitimate basis to exclude Petitioner under section
1128(a)(1) of the Act.

The I.G. must exclude an individual when: 1) the individual has been convicted of a
criminal offense, whether a felony or a misdemeanor; and 2) the criminal offense is
related to the delivery of an item or service under Medicare or a state health care
program. Act § 1128(a)(1); see also 42 C.F.R. § 1001.101(a).

a. Petitioner was convicted of a criminal offense.

For exclusionary purposes, a conviction occurs when: 1) a judgment of conviction has
been entered against an individual by a federal, state, or local court, regardless of whether
there is an appeal pending or whether the judgment of conviction or other record relating
to the criminal conduct has been expunged; 2) there has been a finding of guilt against an
individual by a federal, state or local court; 3) a plea of guilty or nolo contendere by an
individual has been accepted by a federal, state, or local court; or 4) an individual has

' I granted Petitioner’s uncontested motion to replace P. Ex. 7 with Amended P. Ex. 7,
which is a redacted version of the originally filed exhibit.
entered into participation in a first offender, deferred adjudication, or other arrangement
or program where judgment of conviction has been withheld. Act § 1128(i).

Here, Petitioner does not dispute that he pled guilty before the U.S. District Court for the
Western District of Michigan to one count of conversion in connection with health care, a
misdemeanor in violation of 18 U.S.C. § 669. LG. Exs. 6, 7. The court accepted
Petitioner’s guilty plea and entered judgment against him. I.G. Ex. 6 at 1; LG. Ex. 7 at 1.
The court’s acceptance of the guilty plea and judgment of conviction constitute a
conviction for exclusion purposes. Act § 1128(i)(1),(3).

b. Petitioner’s conviction was related to the delivery of a
service under Medicare.

A conviction is related to the delivery of an item or service under Medicare or Medicaid
if there is a common sense connection or nexus between the offense and the delivery of
the item or service. Berton Siegel, D.O., DAB No. 1467 (1994). Petitioner was a
icensed podiatrist in the State of Michigan and owned and operated a podiatric practice
that participated as a provider in the Medicare program. I.G. Ex. 2; 1G. Ex. 3 at 1, 2; P.
Ex. 3 at 1; P. Ex. 6. In December 2013, a grand jury returned an indictment charging
Petitioner with 67 counts of health care fraud. I.G. Ex. 3; P. Ex. 3. With advice of
counsel, Petitioner entered into a plea agreement with the U.S. Attorney’s Office for the
Western District of Michigan. I.G. Ex. 5; P. Ex. 5. Based on the agreement, Petitioner
pled guilty to a Superseding Class A Misdemeanor Information charging him with one
count of theft from a health care benefit program, in violation of 18 U.S.C. § 669. LG.
Ex. 4; .G. Ex. 5 at 1; P. Ex. 2 at 1; P. Ex. 5 at 1. The Information to which Petitioner
pled guilty states that “[o]n or about February 25, 2009 . . . [Petitioner] knowingly and
willfully converted to his own use without authority less than $100 in moneys and funds
belonging to Medicare, a health care benefit program...” I.G. Ex. 4; LG. see Ex. 5 at 1.

Petitioner’s plea agreement further details the conduct underlying his offense and further
establishes the required nexus to Medicare. I.G. Ex. 5; P. Ex. 5. As part of that
agreement Petitioner admitted that he billed Medicare for a partial nail avulsion that was
not performed in accordance with Medicare guidelines, which resulted in Petitioner
wrongfully obtaining $49.24 from Medicare. I.G. Ex. 5 at 4; P. Ex. 5 at 4. Petitioner
agreed to pay $8,088 as restitution to the Medicare program, which represented an
estimate of the Medicare claims described in the indictment and also for other procedures
that Petitioner did not perform in accordance with Medicare guidelines. Petitioner also
agreed to an additional payment of $44,904 to Medicare for reimbursed claims from other
podiatric procedures not supported by patient records. I.G. Ex. 5 at 2, 3; LG. Ex. 8 at 1;
P. Ex. at 5 at 2, 3; see also I.G. Ex. 6 at 2; L.G. Ex. 7 at 2.

In exclusion cases, restitution has long been considered evidence of the nexus between
the offense and the program to which restitution is to be made. See, e.g., Juan de Leon,
Jr., DAB No. 2533 at 5 (2013); Craig Richard Wilder, DAB No. 2416 at 9 (2011); Jason
Hollady, M.D., DAB No. 1855 (2002). Based on Petitioner’s restitution and the records
from his underlying conviction, I find Petitioner’s criminal offense and subsequent
conviction relate directly to his delivery of podiatry services under Medicare.

Petitioner disputes that the criminal offense for which he was convicted related to the
delivery of a health care item or service under Medicare or a state Medicaid program
because he pled guilty to a Class A misdemeanor. P. Br. at 2, 3; P. Ex. 2. However, an
exclusion pursuant to section 1128(a)(1) of the Act does not distinguish between felonies
and misdemeanors as predicates for program-related offenses. Even when an individual
is convicted of a program-related misdemeanor that involves the delivery of an item or
service, the mandatory exclusion statute still applies. Gregory J. Salko, M.D., DAB No.
2437 at 4-5 (2012) (citations omitted).

c. Tam unable to consider Petitioner’s collateral attacks
to his predicate conviction.

Petitioner raises issues regarding the fairness of his predicate conviction. Petitioner
specifically claims he did not understand the implications of his plea agreement, he did
not intend to defraud Medicare, and he has no history of wrongdoing. P. Br. at 6-11; P.
Exs. 7-18. Despite Petitioner’s assertions, his predicate conviction is not reviewable or
subject to collateral attack before me, whether on substantive or procedural grounds.

42 C.F.R. § 1001.2007(d). The Departmental Appeals Board has repeatedly affirmed this
categorical preclusion. See, e.g., Lyle Kai, R.Ph., DAB No. 1979 at 8 (2005) (“Excluding
individuals based on criminal convictions ‘provides protection for federally funded
programs and their beneficiaries and recipients, without expending program resources to
duplicate existing criminal processes.’” (internal cite omitted)). Although Petitioner
alleges he did not realize that accepting the plea would result in his exclusion, that is not
a legal basis for me to reverse the exclusion. See, e.g., Tamara Brown, DAB No. 2195 at
10 (2008).

2. Petitioner’s exclusion for five years is reasonable as a matter of law.

Petitioner claims the five-year exclusion is unreasonable and cites to an administrative
law judge decision, Roderick Spencer, D.P.M., DAB CR721 (2000) as support. P. Br. at
3-6. However, that case did not involve a conviction of a criminal offense and resulted in
a permissive exclusion based on section 1128(b)(7) of the Act, which is not applicable to
Petitioner’s mandatory exclusion pursuant to section 1128(a)(1). When an individual is
convicted of a Medicare-related criminal offense, not only is the I.G. required to exclude
that individual pursuant to section 1128(a)(1) of the Act, but the exclusion period must be
for a minimum period of five years.
Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a). I do not
have the authority to consider any mitigating circumstances here. Therefore, Petitioner’s
exclusionary period of five years is reasonable as a matter of law.

III. Conclusion

I find the I.G. was authorized to exclude Petitioner under section 1128(a)(1) of the Act
because Petitioner was convicted of a misdemeanor offense related to the delivery of a
health care service under the Medicare program. The five-year exclusion that the L.G.

imposed is mandatory as a matter of law and became effective 20 days from the I.G.’s

exclusion notice dated October 31, 2014. See 42 U.S.C. § 1320a-7(a); 42 C.F.R.

§ 1001.101(a).

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Thomas Boyd, D.O.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-1281
Decision No. CR3971

Date: June 18, 2015

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its administrative
contractor, Wisconsin Physicians Service Insurance Corporation (WPS), determined that
the effective date for reassignment of benefits from Thomas Boyd, D.O. (Petitioner) to
Great River Physicians and Clinics, Inc. (GRPC) was August 11, 2014. Petitioner
requested a hearing to obtain an effective date of April 1, 2014, which was the date that
Petitioner began providing services in association with GRPC. Because Petitioner and
GRPC were already enrolled in the Medicare program on April 1, 2014, the effective date
of reassignment is the date on which Petitioner began providing services with GRPC.
Therefore, I reverse CMS’s determination and order that Petitioner’s effective date for
the reassignment of benefits to GRPC be April 1, 2014.

I. Background and Procedural History
On September 3, 2014, Petitioner and a representative of GRPC completed and signed a

CMS-855R form (Medicare Enrollment Application - Reassignment of Medicare
Benefits). CMS Ex. 1. The purpose of the CMS-855R was to obtain reassignment of
Medicare benefits from Petitioner to GRPC. CMS Ex. | at 5-6. WPS received the CMS-
855R on September 10, 2014. CMS Ex. 4 at 2. In a September 27, 2014 initial
determination, WPS stated that Petitioner’s “initial Medicare enrollment application is
pproved” and indicated the “Effective date” was August 11, 2014. CMS Ex. 2 at 1.

2

In a November 10, 2014 letter, Petitioner requested that WPS reconsider its determination
and establish April 1, 2014, as the effective date for reassignment. Petitioner stated that
he had been a long-time enrolled supplier with Medicare and employee with Great River
Health Systems, Inc. (Great River), primarily working from Great River’s Burlington
Area Family Practice Center (Burlington Center). Petitioner explained that Great River
established a new electronic billing system and, as part of this new system, Great River
designated GRPC as the entity within Great River to bill for services provided by
physicians from the Burlington Center. The substitution of GRPC’s taxpayer
identification for Medicare billing purposes occurred on April 1, 2014, with all of the
physicians practicing from the Burlington Center, except Petitioner, filing reassignment
applications. Great River thought that Petitioner did not need to submit a new CMS-
855R to reassign benefits to GRPC because Petitioner occasionally provided services that
were billed from another location under GRPC’s taxpayer identification. After CMS
rejected claims that GRPC filed related to the services Petitioner provided at the
Burlington Center, Petitioner and GRPC filed the CMS-855R that is the subject of this
case. CMS Ex. 3.

In a December 17, 2014 reconsidered determination, a WPS hearing officer upheld the
August 11, 2014 effective date for Petitioner’s reassignment of benefits to GRPC. In
doing so, the hearing officer applied the regulatory provisions related to the effective date
for Medicare enrollment and billing privileges (including retrospective billing privileges)
at 42 C.F.R. §§ 424.520(d) and 424.521(a). The hearing officer explained that Great
River incorrectly believed that Petitioner did not need to submit a new application for
reassignment, but that a new reassignment application was necessary because
reassignment to GRPC meant that Petitioner needed to change the taxpayer identification
number from the previous Great River Health System entity to which Petitioner
reassigned his benefits to GRPC. The reconsidered determination notified Petitioner that
he could request a hearing before an Administrative Law Judge (ALJ). CMS Ex. 4.

Petitioner requested a hearing to dispute the reconsidered determination. In response to
my Acknowledgment and Pre-hearing Order (Order), CMS filed a brief (CMS Br.) and
four exhibits (CMS Exs. 1-4) as its pre-hearing exchange. As his pre-hearing exchange,
Petitioner filed a brief (P. Br.) and the written direct testimony for one witness, which
Petitioner attached to his witness list.

IL. Decision on the Written Record

Petitioner did not object to CMS’s proposed exhibits. See Order § 7. Therefore, I admit
CMS Exs. 1-4 into the record.

My Order advised the parties that they must submit written direct testimony for each
proposed witness and that an in-person hearing would only be necessary if the opposing
party requested an opportunity to cross-examine a witness. Order §{j 8-10; CRDP

§§ 16(b), 19(b). CMS did not offer any witnesses that Petitioner could request to cross-
examine. Petitioner offered an affidavit from Amy O’Brien, a vice president of Great
River (O’Brien Affidavit). CMS neither objected to Ms. O’Brien’s testimony nor
requested to cross-examine her; therefore, I admit her testimony into the record.
Accordingly, I issue this decision based on the written record. Order {fj 9, 11; CRDP

§ 19(d).

III. Issue

Whether CMS had a legitimate basis for establishing August 11, 2014, as the effective
date of Petitioner’s reassignment of Medicare benefits to GRPC.

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

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

§ 424.520(d) and may permit limited retrospective billing under 42 C.F.R. § 424.521.

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

§ 1395u(b)(3)(B)(ii). In certain circumstances, a supplier who has received an
assignment of benefits may reassign those benefits to an employer, or to an individual or
entity with which the supplier has a contractual arrangement. 42 U.S.C. § 1395u(b)(6);
42 C.F.R. § 424.80(b)(1)-(2). Although not addressed by the Act or regulations, CMS

' My findings of fact and conclusions of law are set forth in italics and bold font.

> Petitioner is considered a “supplier” for purposes of the Act and the regulations. See
42 U.S.C. § 1395x(d),(u); 42 C.F.R. § 498.2; see also 42 C.F.R. § 400.202.
instructs its employees that reassignments of benefits may only occur between enrolled
suppliers and that “[t]he effective date of reassignment is the date on which the individual
began or will begin rendering services with the reassignee.” Medicare Program Integrity
Manual (MPIM) § 15.5.20.

1. Petitioner and GRPC were enrolled in the Medicare program on
April 1, 2014, the date on which Petitioner began providing services
with GRPC.

The record in this case is sparse. However, Amy O’Brien, the vice president at Great
River responsible for provider enrollment in the Medicare program, gave uncontroverted
testimony concerning the enrollment of Petitioner and GRPC. Further, Petitioner and an
authorized representative from GRPC signed a certification that the statements made on
the CMS-855R are “true, accurate and complete.” CMS Ex. | at 7. CMS has not
disputed those statements, which were made subject to civil and criminal liability.

Ms. O’Brien testified that Petitioner “enrolled in Medicare as a participating provider on
or before 1990 and has remained in good standing with billing privileges since,” and that
Petitioner has been employed by Great River since 1999, primarily practicing at the
Burlington Center. O’Brien Affidavit § 2. Petitioner continues to primarily work from
the Burlington Center. O’Brien Affidavit § 5.

Great River owns and operates GRPC, and GRPC “enrolled in Medicare as a
participating provider on or before 1987 and it has remained in good standing with billing
privileges since.” O’Brien Affidavit § 4.

In Petitioner’s hearing request, Ms. O’Brien stated the following as background to the
present case:

As [Great River] transitioned to a new electronic health
record on April 1, 2014 in order to comply with a multitude
of new CMS requirements, we had a small oversight occur.
We failed to complete a new form for one of our 14 Family
Practice physicians. This oversight was not done in
negligence, as we knew that we needed to complete
enrollment forms to move these physicians from one Tax ID#
to our common Tax ID# that we would be using in our new
system as we combined all of our practices into one billing
system. [Petitioner] was already providing services under our
Tax ID number at one of our RHC’s in the system, so our
credentialing specialist did not think that she needed to do an
enrollment form for [Petitioner]. What she did not know was
that the RHC has it’s (sic) own PTAN and that billing
[Petitioner] under our tax ID required that we fill out a form
including the additional PTAN as well.

Request for Hearing at 1 (emphasis in original). Petitioner and a GRPC representative
completed and signed a CMS-855R on September 3, 2014, in which they indicated that
the effective date for the reassignment to GRPC was April 1, 2014. CMS Ex. | at 5-6.
Petitioner and Great River filed with WPS the completed CMS-855R form on September
10, 2014. O’Brien Affidavit 3; CMS Exs. 1, 3.

2. The effective date for Petitioner’s reassignment of Medicare benefits
to GRPC is April 1, 2014, the date on which Petitioner commenced
providing services with GRPC.

Petitioner, an enrolled supplier, filed a CMS-855R to reassign Medicare benefits to
GRPC, an entity also enrolled in the Medicare program. Although not addressed by the
Act or regulations, CMS instructs its employees that reassignments of benefits may only
occur between enrolled suppliers and that “[t]he effective date of reassignment is the date
on which the individual began or will begin rendering services with the reassignee.”
MPIM § 15.5.20. In the present case, Petitioner began rendering services with GRPC on
April 1, 2014. CMS Ex. | at 5-6; CMS Ex. 3; Request for Hearing at 1. All of the other
physicians located at the Burlington Center “transitioned successfully” because they filed
their CMS-855R forms earlier than Petitioner. See Request for Hearing at 1-2. Under
CMS’s manual provisions, Petitioner should also have received a reassignment effective
date of April 1, 2014, even though he filed his CMS-855R later than his colleagues.

From the outset of this matter, CMS has conflated enrollment as a supplier in the
Medicare program with the reassignment of benefits. The initial determination indicates
that Petitioner’s application for initial enrollment in the Medicare program was approved.
CMS Ex. 2. But, there is absolutely no evidence in the record that Petitioner filed an
initial enrollment application (Form CMS-8551) with the CMS-855R or that he needed to
do so. Despite this, the reconsidered determination cites and quotes the initial enrollment
effective date provisions (including retrospective billing privileges) in 42 C.F.R.

§§ 424.520(d) and 424.521(a) to uphold the original effective date determination (i.e., an
effective date as of the date the CMS-855R was filed with a 30-day retrospective billing
period). CMS Ex. 4 at 1-2. In its brief in this case, CMS argues that the enrollment
regulations apply to the determination of the effective date of reassignment. CMS Br. at
4-5. However, CMS did not explain why the regulations governing enrollment should be
applied to a case where the reassignor and reassignee of Medicare benefits are both
already enrolled in the Medicare program and there is otherwise no other requirement to
submit a new enrollment application.
The present case is nearly the same as another one decided by an ALJ, and Iam
persuaded that the reasoning in that case is correct. The ALJ stated:

In this case, WPS erred by treating Petit:

ioner's application for

the reassignment to RenalCare and the notice of change of
enrollment information as a new enrollment by Petitioner,
even though he was already enrolled and there was no basis

on which to terminate his prior
requirement that he voluntarily do

enrollment and no
so. Therefore, the

effective date of enrollment and the authorized period for

retroactive billing are not at issue in

this case. Rather, the

issue to be resolved is the correct effective date of the

reassignment.

Parthasarathy Srinivasan, M.D., DAB CR2875, at 7 (

2013). After an exhaustive

discussion of the legal authorities related to reassignments, the ALJ concluded that the

effective date provision in MPIM § 15.5.20 (i.e., the

late on which the supplier began

providing services with the reassignee) applied because there was no need for an initial
enrollment by the supplier. Jd. at 7-16; see also Middlesex Rheumatology and Crispin
Abarientos, M.D., DAB CR3660 (2015) (applying effective date provisions from the
enrollment regulations because the reassignee was not previously enrolled in the

Medicare program and the earliest effective date for t
date of enrollment for the reassignee).

In the present case, there was no need for either the re

reassignment was the effective

assignor or the reassignee to enroll

in the Medicare program because they were already enrolled and there was no other

change that required a new enrollment application. T!

erefore, the correct effective date

of reassignment in this case is April 1, 2014, the date on which Petitioner commenced

providing services with GRPC.

V. Conclusion

For the reasons explained above, I reverse CMS’s determination and order that
Petitioner’s effective date of reassignment of Medicare benefits to GRPC be April 1,

2014.

/s/
Scott Ander:
Administrat

‘son
ive Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Syed Rahman,
(OI File No.: H-14-42256-9),

Petitioner,
v.
The Inspector General.
Docket No. C-15-797
Decision No. CR3955
Date: June 11, 2015
DECISION

Petitioner, Syed Rahman, appeals the determination of the Inspector General for the U.S.
Department of Health and Human Services (1.G.) to exclude him from participating in
Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1)
of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)) for the minimum mandatory
period of five years. I find the I.G. is authorized to exclude Petitioner, and the statute
mandates the minimum five-year exclusion, which is effective 20 days from the October
31, 2014 notice letter. See 42 C.F.R. § 1001.2002(b).

I. Background

The LG. notified Petitioner, by letter dated October 31, 2014, that he was being excluded
pursuant to section 1128(a)(1) of the Act from participation in Medicare, Medicaid, and
all federal health care programs for a minimum period of five years. The I.G. advised
Petitioner that the exclusion was based on his conviction in the Rockland County
Supreme Court of the State of New York, of a criminal offense related to the delivery of
an item or service under the Medicare or State health care program. I.G. Ex. 1.
Petitioner timely filed his request for hearing. I convened a prehearing telephone
conference with the parties, the results of which I summarized in my Order and Schedule
for Filing Briefs and Documentary Evidence dated January 28, 2015.

Pursuant to that order, I asked the parties to answer the questions on the prepared short-
form briefs sent to them, together with any additional arguments and supporting
documents that the parties would mark as exhibits. The LG. filed a brief together with
exhibits (I.G. Exs.) 1 through 9. Petitioner submitted his brief (P. Br.) together with six
exhibits, P. Exs. 1-6. The LG. then submitted a reply brief (I.G. Reply). Absent any
objection, I admit all exhibits to the record.

Petitioner indicated that he wanted to present testimony of several witnesses. P. Br. at
10, 11. The L.G. objected to an in-person hearing because the testimony Petitioner
proposes is not relevant to the I.G.’s basis for exclusion, which is the sole issue before
me. LG. Reply at 2-4. The I.G. specifically objected to Petitioner’s proposed witnesses
and their expected testimony because Petitioner proposed them for the purpose of
challenging and attempting to re-litigate Petitioner’s underlying criminal conviction. I
find that there are no material facts in dispute, and the testimony that Petitioner wishes to
present is not relevant to these proceedings because they amount to a collateral attack of
the underlying offense to which Petitioner already voluntarily pled guilty. See 42 C.F.R.
§ 1001.2007(d). Therefore, the record is now closed, and I decide this case based on the
written record.

IL. Discussion
A. Issue

The scope of my review here is limited. 42 C.F.R. § 1001.2007(a)(1) and (2). The only
issue before me is whether the I.G. has a legal 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.' If I find that the I.G. was authorized to exclude
Petitioner, then I must uphold the I.G.’s exclusion because it is for the minimum
mandatory period of five years pursuant to the statute. Act § 1128(c)(3)(B); 42 C.F.R.
§ 1001.2007(a)(2).

' Petitioner mistakenly quoted language from section 1128A(a)(1) of the Act, not section
1128(a)(1), and argued that the language of this provision is inapplicable to him and not a
basis for exclusion. Section 1128A(a)(1) is the section of the Act allowing the Secretary
to impose civil money penalties against a person who presents a false or fraudulent claim.
Here, the LG. actually excluded Petitioner pursuant to section 1128(a)(1), which
mandates that the Secretary exclude from participation anyone convicted of a program-
related criminal offense.
Section 1128 of the Act provides:

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

(1) CONVICTION OF PROGRAM-RELATED CRIMES.—Any
individual or entity that has been convicted of a criminal offense
related to the delivery of an item or service under title XVIII or
under any State health care program.

B. Findings of Fact and Conclusions of Law

1. Petitioner pled guilty to one count of grand larceny in the fourth degree
in violation of N.Y. Penal Law § 155.30(1).

Since September 1978, Petitioner held a license to practice pharmacy in New York. LG.
Ex. 2. At all relevant times, Petitioner was the vice president and supervising pharmacist
of Prescription Plus Corporation. I.G. Ex. 3 at 13, 16-17; LG. Ex. 4 at 11; LG. Ex. 5. His
co-defendant in the underlying criminal conviction was also a licensed pharmacist
authorized to practice in New York. I.G. Exs. 5, 6. The co-defendant served as a
managerial agent of Kwik Aid Pharmacy, Inc., and Petitioner previously had employed
her at another pharmacy. I.G. Ex. 3 at 14. On or about March 30, 2008, the co-defendant
informed Petitioner that she was unable to service Medicaid beneficiaries through Kwik
Aid Pharmacy because both she and Kwik Aid had been excluded from the New York
State Medicaid program. I.G. Ex. 3 at 14-15; LG. Ex. 5 at 66-7. Petitioner conspired
with the co-defendant to evade these exclusions by agreeing that the co-defendant would
continue servicing her Medicaid clients at Kwik Aid and have Petitioner submit Kwik
Aid’s claims to Medicaid through Prescription Plus. I.G. Ex. 3 at 15-20; I.G. Ex. 4 at 11-
13; I.G. Ex. 5. The co-defendant provided Petitioner with Medicaid recipient
information, which Petitioner and Prescription Plus used to file false claims with
Medicaid. I.G. Ex. 5 at 67. Petitioner then remitted payments received on these
Medicaid claims to the co-defendant and Kwik Aid. I.G. Ex. 3 at 18; I.G. Ex. 5 at 67-73.
This continued from on or about March 30, 2008 to on or about December 1, 2009. I.G.
Ex. 3 at 15; LG. Ex. 5.

On March 20, 2013, a 40-count indictment was filed in the Rockland County Supreme
Court charging Petitioner with various health care fraud-related offenses, including grand
larceny in the second degree, a Class C felony. LG. Ex. 5 at 4-5; LG. Ex. 7. On
November 22, 2013, Petitioner appeared in court and pled guilty to an amended Count 1
of the indictment: grand larceny in the fourth degree. I.G. Ex. 3; I.G. Ex. 4 at 7-17; LG.
Ex. 8. The court accepted Petitioner’s plea, and on March 28, 2014, sentenced Petitioner
to five years of probation and 210 hours of community service. I.G. Ex. 3 at 26; LG. Ex.

4 at 27-28; LG. Ex. 8. The court also ordered Petitioner to pay $679,386 in joint and
several restitution to New York State Medicaid plus a 5% surcharge to the Westchester
County Department of Probation through the Medicaid Fraud Control Unit Restitution
Fund. I.G. Ex. 4 at 17-24, 33; I.G. Ex. 8; I.G. Ex. 9.

2. Petitioner was convicted of a criminal offense for purposes of section
1128(a)(1) of the Act.

The Secretary of Health and Human Services must exclude from participation in the
Medicare and Medicaid programs any individual convicted of a criminal offense related
to the delivery of an item or service under Medicare or a state health care program. Act
§1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)). The Secretary delegated this authority to the
LG. 48 Fed. Reg. 21662 (May 13, 1983); see also 42 C.F.R. § 1001.101(a). An
individual is considered convicted of a criminal offense when: (1) a judgment of
conviction has been entered against him or her in a federal, state, or local court whether
an appeal is pending or the record of the conviction is expunged; (2) there is a finding of
guilt by a court; (3) a plea of guilty or no contest is accepted by a court; or (4) when the
individual has entered into any arrangement or program where judgment of conviction is
withheld. Act § 1128(i) (42 U.S.C § 1320a-7(i)).

Petitioner, with advice of his counsel, voluntarily agreed to plead guilty to one count of
grand larceny in the fourth degree, a felony. Petitioner’s plea was predicated upon his
knowing submission of false claims, through Prescription Plus, to the New York State
Medicaid program, for prescription drugs that had in actuality been furnished by his
excluded co-defendant and Kwik Aid Pharmacy. The court accepted his plea and
sentenced him to probation, community service, and payment of restitution, jointly and
severally with the co-defendant, of $679,386 to the New York State Medicaid program.
1.G. Ex. 3 at 26, LG. Ex. 4 at 17-24, 27-28, 33; 1.G. Exs. 8 and 9. Petitioner’s entry of a
guilty plea and the court’s acceptance of that plea constitutes a “conviction” within the
meaning of section 1128(i)(3) of the Act. 42 U.S.C. § 1320a-7(i)(3); see also 42 C.F.R.
§ 1001.2. I therefore find that Petitioner was convicted of a criminal offense within the
meaning of the exclusion statute.

3. Petitioner’s conviction requires exclusion under section 1128(a)(1)
because his criminal conduct related to the delivery of an item or service
under Medicaid.

Here, the underlying facts of the scheme establish that Petitioner’s criminal offense
related to the delivery of an item or service under a state health care program, in this case,
the New York State Medicaid program. Petitioner pled guilty to grand larceny in the
fourth degree based upon his submission, through Prescription Plus, of false claims to
Medicaid for medications that his pharmacy had not furnished. He knowingly submitted
the claims for prescription drugs to Medicaid on behalf of his co-defendant and Kwik
Aid.

A conviction of a criminal offense is related to the delivery of a health care item or
service under Medicare or a state health care program if there is a “common-sense
connection or nexus between the offense and the delivery of an item or service under the
program.” Scott D. Augustine, DAB No. 2043, at 5-6 (2006) (citations omitted). It is
well established that submitting false Medicaid claims is “related to” the delivery of an
item or service of health care. Juan de Leon, Jr., DAB No. 2533 (2013) (concluding that
submission of “false and fraudulent Medicare and Medicaid claims” is related to the
delivery of an item or service of health care); Gregory J. Salko, M.D., DAB No. 2437
(2012) (characterizing the proposition that an offense does not have to result in the actual
delivery of an item or service in order to be “related to” delivery as “repeatedly
confirmed”); Michael Travers, M.D., DAB No. 1237 (1991), aff'd, Travers v. Sullivan,
791 F. Supp. 1471, 1481 (E.D. Wash. 1992) and Travers v. Shalala, 20 F.3d 993 (9th Cir.
1994); Jack W. Greene, DAB No. 1078 (1989) aff'd, Green v. Sullivan, 731 F. Supp. 835
(E.D. Tenn. 1990) (concluding a conviction for submitting a false bill is “directly related
to the delivery of the item or service because the submission of a bill or claim for
Medicaid reimbursement is the necessary step, following the delivery of the item or
service, to bring the item within the purview of the program’) (internal quotations
omitted). Additionally, the fact that the court ordered Petitioner to pay restitution to the
New York State Medicaid Program (1.G. Exs. 8, 9) is further evidence of a nexus to the
Medicaid program. Therefore, the circumstances underlying Petitioner’s conviction
support the existence of a nexus between his conviction and the delivery of an item or
service under Medicaid.

Although Petitioner now strenuously contends that he never submitted false claims,
Count 1 of the indictment charged that Petitioner, along with his co-defendants,
“knowingly submitted and caused to be submitted . . . false claims for the provision of
prescription medications to Medicaid recipients.” I.G. Ex. 5 at 4. The only difference
between the original charge and Amended Count 1—the offense to which Petitioner pled
guilty—was a reduction in the value of the property unlawfully obtained from more than
$50,000 to more than $1,000. I.G. Ex. 3 at 5. Having already admitted that he presented
false claims to the Medicaid program, Petitioner cannot now challenge that fact.

Petitioner voluntarily, in consultation with his attorney, agreed to plead guilty to the
charges and understood that as a result he was subject to probation, community service,
and the payment of considerable restitution. He nevertheless sets forth numerous
arguments all of which amount to collateral attacks on his conviction. Primarily he
argues that he is innocent and pled guilty because he had “no choice.” The applicable
regulation explicitly precludes any collateral attack on Petitioner’s conviction:

When the exclusion is based on the existence of a criminal conviction . . . where
the facts were adjudicated and a final decision was made, the basis for the
underlying conviction . . . is not reviewable and the individual or entity may not
collaterally attack it either on substantive or procedural grounds in this appeal.

42 C.F.R. § 1001.2007(d). Statutory and regulatory authority require exclusion under the
circumstances if the elements of section 1128(a)(1) are met. Thus, I must uphold the
exclusion and may not consider Petitioner’s collateral attacks on his underlying criminal
conviction.

4. Petitioner must be excluded for the statutory minimum period of five
years.

An exclusion imposed under section 1128(a) of the Act must be for a minimum period of
five years. Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).
Because I conclude that a basis exists to exclude Petitioner pursuant to section
1128(a)(1), then exclusion of Petitioner for the minimum period of five years is
mandatory and reasonable as a matter of law.

/s/
Joseph Grow
Administrative Law Judge

> Petitioner submitted as evidence a transcript of the court proceedings concerning his
acceptance of the plea agreement and the entering of his plea of guilty to the negotiated
reduced charge. P. Ex. 1. Those proceedings establish that the judge ensured that
Petitioner understood he waived his right to appeal under the terms of his plea
acceptance. P. Ex. | at 20-27. Although Petitioner alleges he did not realize that
accepting the plea would result in his exclusion, that is not a legal basis for me to reverse
the exclusion. See, e.g., Tamara Brown, DAB 2195, at 10 (2008).


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Janet R. Constantino,
(OI File No. H-12-42047-9),

Petitioner,
v.
The Inspector General.
Docket No. C-15-721
Decision No. CR3949
Date: June 10, 2015
DECISION

Petitioner, Janet Constantino, appeals the determination of the Inspector General for the
U.S. Department of Health and Human Services (I.G.) to exclude her from participating
in Medicare, Medicaid, and other federal health care programs pursuant to section
1128(a)(2) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(2)) for a period of
five years. I find that there is a legal basis for the I.G. to exclude Petitioner, and an
exclusion for the minimum period of five years is mandatory pursuant to section
1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)).

I. Background and Procedural History

On November 28, 2014, the LG. notified Petitioner that she was being excluded, effective
20 days from the date of the L.G.’s letter, from Medicare, Medicaid, and all federal health
care programs pursuant to section 1128(a)(2) of the Act for the minimum statutory period
of five years. The I.G. based this exclusion on Petitioner’s conviction in the Family
Court of the First Circuit, State of Hawaii, of a criminal offense related to the neglect or
abuse of patients in connection with the delivery of a health care item or service. LG.

Ex. 1.
On December 17, 2014, Petitioner, who was represented by counsel, filed a timely
request for a hearing, and the case was assigned to me. I ordered the parties to file briefs
and their proposed exhibits including the written direct testimony of any proposed
witnesses. Prehearing Order dated December 31, 2014 (PHO). I also directed the parties
to answer the questions on the short form briefs I provided with the PHO and instructed
the parties that they could also make additional arguments. PHO 3. A. The LG. filed
his short form brief together with additional arguments (I.G. Br.) and four exhibits
identified as I.G. Exs. 1-4. Petitioner filed a brief, titled Reply Brief (P. Br.), but did not
file the short form brief as I directed. Petitioner also did not file any exhibits. The I.G.
submitted a reply. Petitioner did not object to the 1.G.’s exhibits. I therefore admit the
1.G.’s exhibits into the record. Neither party proposed any witnesses or submitted any
direct written testimony. Thus, an in-person hearing is not necessary, and I decide this
matter based upon the parties’ written submissions.

IL. Discussion
A. Issue

The sole issue in this case is whether there is a legal basis under section 1128(a)(2) of the
Act for the LG. to exclude Petitioner from participation in Medicare, Medicaid, and other
federal health care programs. If I find a legitimate basis for the exclusion, I am required
to uphold the mandatory five-year exclusion.

B. Findings of Fact and Conclusions of Law

I. The 1G. had a legal basis for excluding Petitioner under section
1128(a)(2) of the Act.

The essential elements necessary to support an individual’s exclusion based on section
1128(a)(2) of the Act are: (1) the individual must have been convicted, under Federal or
State law, of a criminal offense; (2) the conviction must have been related to the neglect
or abuse of patients; and (3) the patient neglect or abuse to which an excluded
individual’s conviction related must have occurred in connection with the delivery of a
health care item or service. Act §1128(a)(2) (42 U.S.C. § 1320a-7(a)(2); see also 42
C.F.R. § 1001.101(b). An exclusion based on section 1128(a)(2) is mandatory, and the
1.G. must impose it for a minimum period of five years. Act § 1128(c)(3)(B) (42 U.S.C.
§ 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).
a. Petitioner was convicted of a criminal offense.

After an investigation of an abuse complaint by the State of Hawaii Medicaid Fraud
Control Unit, Petitioner was charged on April 23, 2012 with the criminal misdemeanor
offense of Endangering the Welfare of an Incompetent Person in violation of Hawaii
Revised Statutes (Haw. Rev. Stat.) § 709-905. I.G. Ex. 4; LG. Ex. 2. The complaint
stated:

On or about November 1, 2010 to and including February 3,
2011, in the City and County of Honolulu, State of Hawai’i,
JANET CONSTANTINO, did knowingly act in a manner
likely to be injurious to the physical or mental welfare of
[F.H.], a person unable to care for himself, because of
physical and/or mental disease, disorder or defect . . .

LG. Ex. 2.

The incompetent person referenced in the complaint as F.H. was a Medicaid and Social
Security recipient who lived in a community care family foster home. I.G. Ex. 4 at 1-2.
Petitioner was a registered nurse and F.H.’s case manager assigned to provide care for
F.H. LG. Ex. 4 at 2. As such, Petitioner was obligated to visit and check on the person’s
care and condition monthly while F.H. resided in the family foster home. I. G. Ex. 4 at
18. Petitioner entered a plea of no contest, and on May 15, 2012, the Family Court of the
First Circuit, State of Hawaii, deferred acceptance of Petitioner’s plea for one year
subject to Petitioner’s compliance with the terms and conditions of the deferral and
payment of a $1000 fine and a $30 contribution to the Crime Victim Compensation Fund.
LG. Ex. 3.

For purposes of exclusion from Federal health care programs, an individual is
“convicted” when a plea of nolo contendere or no contest is accepted by a court or when
a judgment of conviction is withheld under deferred adjudication. Act § 1128(i)(3)-(4)
(42 U.S.C. § 1320a-7(i)(3)-(4)); 42 C.F.R. § 1001.2. Here, Petitioner entered a plea of no
contest, and the court deferred its acceptance of Petitioner’s plea. Both of these are
situations specifically contemplated by the Act for exclusion purposes when determining
whether there was a relevant conviction.

Petitioner argues that she was not aware of, or counseled about, the consequences of
entering either a guilty plea or a nolo contender plea “vis a vis the consequent action”
taken by the I.G. because under the laws of the State of Hawaii she is not considered
convicted. P. Br. at 1. Petitioner also contends that her plea of nolo contendere does not
constitute an admission of guilt, and thus the I.G.’s exclusion action violates the
fundamental concept of due process. P. Br. at 2.
While Petitioner may not be considered “convicted” under Hawaii law, here I am
required to apply the federal definition of “convicted” under the Act. The Departmental
Appeals Board (Board) expressly addressed this contention in a previous exclusion case:

If there were no definition of ‘convicted’ in the Act, then
Petitioner’s arguments about whether a conviction exists . . .
for state law purposes would be relevant. However, Congress
has defined for the ALJ and this Board what ‘convicted’
means for purposes of section 1128 and that definition is
binding on us.

Carolyn Westin, DAB No. 1381 at 6 (1993), aff'd, Westin v. Shalala, 845 F.Supp. 1446
(D. Kan. 1994); see also Henry L. Gupton, DAB No. 2058, at 7-8 (2007), aff’d sub nom,
Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Tenn. 2008) (citing the legislative history of
section 1128(i) of the Act, the Board explained that the goals that may support a state’s
deferred adjudication program are distinct from the goal of Congress to protect federal
health care programs from untrustworthy individuals through mandatory exclusions and
explaining as “well established” the principle that a “conviction” includes “diverted,
deferred and expunged convictions regardless of whether state law treats such actions as
a conviction”).

Thus, I find Petitioner’s plea and deferred adjudication constitutes a “conviction” within
the meaning of sections 1128(a)(2) and 1128(i)(3) and (4) of the Act and 42 C.F.R.
§ 1001.2.

b. Petitioner’s conviction is related to patient neglect.

The second essential element of a section 1128(a)(2) exclusion requires that the
underlying conviction be related to patient abuse or neglect. The relevant regulation
defines a patient as:

any individual who is receiving health care items or services,
including any item or service provided to meet his or her
physical, mental or emotional needs or well-being (including a
resident receiving care in a facility as described in part 483 of
this chapter), whether or not reimbursed under Medicare,
Medicaid and any other Federal health care program and
regardless of the location in which such item or services is
provided.

42 C.F.R. § 1001.2. The complaint against Petitioner, to which she pled no contest,
charged her with Endangering the Welfare of an Incompetent Person, a violation of Haw.
Rev. Stat. § 709-905. The Medicaid Fraud Unit’s Investigative Report on which the
complaint was precipitated explained that Petitioner, a registered nurse, was the case
manager for F.H., a 92 year-old female patient residing in a community care foster home.
Petitioner was responsible for visiting and checking on the care and condition of F.H.
monthly while she resided in the family foster home. I.G. Ex. 4 at 18. During the time
that F.H. was under Petitioner’s care, she developed a late stage decubitus ulcer in the
sacral area that was so severe it prompted a referring hospital’s staff to contact the
Hawaii Department of Human Services Adult Protective Services. I.G. Ex. 4 at 1, 3-4,
18-20. The Department of Human Services Adult Protective Services’ investigation
concluded that there was evidence of neglect to F.H. 1.G. Ex. 4 at 3. Asa result, the
community care family foster home where F.H. resided and the case management
company, Harvest Care Management, for whom Petitioner worked, both had their
licenses revoked due to the finding of neglect. 1.G. Ex. 4 at 18.

Petitioner acknowledges that the complaint “charges that an individual’s care was
violated.” P. Br. at 1. Based on the offense to which Petitioner pled no contest, the
conduct underlying her conviction as set forth in the investigative reports, and the nature
of Petitioner’s employment, especially her obligations with respect to F.H., I conclude
that Petitioner’s conviction is directly related to neglect of her patient.

c. Petitioner’s offense was committed in connection with the
delivery of a health care item or service.

The third essential element for a section 1128(a)(2) exclusion requires that the patient
neglect or abuse occurs in connection with the delivery of a health care item or service.
For an offense to be “in connection with the delivery of a healthcare item or service,”
there need only be a “common sense connection or nexus” between the offense and the
delivery of the health care item or service. See Kevin J. Bowers, DAB No. 2143 (2008),
aff'd Bowers v. Inspector General of the Dep’t of Health & Human Servs., No. 1:08-CV-
159, 2008 WL 5378338 (S.D. Ohio Dec. 19, 2008). The Board has previously held that
the “words ‘in connection with’ in section 1128(a)(2) require only a minimal nexus
between the abuse and the delivery of a health care service.” Bruce Lindberg, D.C, DAB
No. 1386, at 8 (1993).

Here, Petitioner was charged with her criminal offense because of her employment as a
registered nurse and case manager responsible for checking monthly on the care and
condition of F.H., a patient. It was her failure to provide the expected and proper care
and services to F.H. that resulted in the findings of neglect and Petitioner’s subsequent
conviction of the criminal offense. I.G. Ex. 2, 4. Petitioner’s employer, Harvest Care
Management, also had its license revoked by the State of Hawaii Adult Protective
Services due to findings of neglect found during their investigation of the care provided
F.H. LG. Ex. 4 at 3, 18. I find, therefore, the existence of the nurse/case manager-patient
relationship with F.H. establishes the nexus that the neglect of F.H was in connection
with the delivery of a health care item or service.
I do not find merit to Petitioner’s defense that her offense did not implicate Medicare,
Medicaid, or any other Federal health care program and that the office of the LG. inserted
“itself in a case . . . in which no direct relationship has been made between the asserted
act and a violation of statute or regulation with respect of any program funded by the
Federal government.” P. Br. at 1, 2. For purposes of exclusion under section 1128(a)(2),
the existence of a connection between the offense and a Federal health care program is
irrelevant. Pursuant to 42 C.F.R. § 1001.102 (b), which implements the mandatory
exclusion provisions under 1128(a)(2) of the Act, a health care item or service “includes
the provision of any item or service to an individual to meet his or her physical, mental,
or emotional needs or well-being, whether or not reimbursed under Medicare, Medicaid,
or any Federal health care program.” Thus, no reimbursement by a Federal health care
program is required to uphold this type of mandatory exclusion.

d. Ido not have authority to review Petitioner’s constitutional
objections to the exclusion process.

Petitioner’s objections to the constitutionality of the exclusion process are beyond the
scope of my review. My jurisdiction in an exclusion case is limited by statute and
regulation, and in the case of a mandatory five-year exclusion, I am limited to
determining only whether there is a legal basis for the I.G.’s exclusion action. 42 C.F.R.
§ 1001.2007(a)(2). I have found the LG. has presented a legitimate and mandatory basis
for exclusion, and I am unable to find invalid or refuse to follow Federal statutes or
regulations. 42 C.F.R. § 1005.4(c)(1).

II. Conclusion

Based upon Petitioner’s conviction relating to patient neglect, the I.G. had a legal basis to
exclude Petitioner from participation in Medicare, Medicaid, and other federal health care
programs, and I sustain the five-year mandatory exclusion. The exclusion became
effective 20 days after November 28, 2014, the date of Petitioner’s notification letter.

See 42 C.F.R. § 1001.2002(b).

/s/
Joseph Grow
Administrative Law Judge