Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Union Hospital, Inc.,
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-512
Decision No. CR2422

Date: September 1, 2011

DECISION

I grant summary judgment in favor of the Centers for Medicare and Medicaid
Services (CMS) and against Petitioner, Union Hospital, Inc. I find that the
undisputed material facts establish that three entities affiliated with Petitioner —
Associated Physicians & Surgeons Clinic, LLC (AP&S), Providence Medical
Group, LLC (PMG), and The Hope Center (Hope) — do not qualify as provider-
based facilities that are part of Petitioner for Medicare reimbursement purposes.

I. Background

On December 17, 2010, CMS notified Petitioner that it had inappropriately billed
the Medicare program for services provided incident to physicians’ services at
AP&S, PMG, and Hope. In its notice to Petitioner, CMS asserted that Petitioner
could only bill for services that were performed at a hospital or at an off-site
location that qualified under Medicare regulations as a department of a hospital.
CMS advised Petitioner that services provided at these three entities did not satisfy
Medicare reimbursement criteria for provider-based reimbursement because these
entities were not a department of Petitioner.
Petitioner requested reconsideration of this determination. On reconsideration,
CMS again ruled against Petitioner. Petitioner then requested a hearing, and the
case was assigned to me for a hearing and a decision.

CMS moved for summary judgment. With its motion CMS filed proposed
exhibits that it identified as CMS Exhibit (Ex.) 1 -CMS Ex. 21. Petitioner
opposed CMS’s motion. It filed proposed exhibits that it identified as P. Ex. 1 — P.
Ex. 9. [receive all of the parties’ exhibits into the record.

II. Issue, Findings of Fact, and Conclusions of Law
A. Issue

The issue is whether AP&S, PMG, and Hope qualify as a department, or
departments, of Petitioner for Medicare billing purposes.

B. Findings of Fact and Conclusions of Law

I find that the undisputed facts establish that neither AP&S, PMG, nor Hope
qualify as a department of Petitioner because none of these entities is operated
under the same license as is Petitioner.

It is in the financial interest of a hospital such as Petitioner to claim reimbursement
under Medicare for services performed in its facilities, or in facilities that it owns
or operates. Equally, it is in the interest of a hospital to claim reimbursement for
services that are provided by facilities that are affiliated with it but that are not
under its direct ownership or control. Recognizing that fact, the Secretary of the
Department of Health and Human Services has determined that there must be rules
that clearly define the circumstances under which a hospital may bill services as
“provider-based.” Not to do so would “risk increasing program payments and
beneficiary coinsurance with no commensurate benefit to the Medicare program or
to beneficiaries ....” 65 Fed. Reg. 18,434-01, 18504 (Apr. 7, 2000). Thus,
Medicare Part B will only pay for hospital services and supplies furnished incident
to a physician’s services to outpatients, if the services are furnished in a hospital or
in a facility or location that is a “department” of a hospital.

The term “department” is defined at 42 C.F.R. § 413.65(a)(2) to be:

A facility or organization that is either created by, or acquired by, a
main provider for the purpose of furnishing health care services of
the same type as those furnished by the main provider under the
name, ownership, and financial and administrative control of the
main provider . .. A department of a provider comprises both the
specific physical facility that serves as the site of service of a type
for which payment could be claimed under the Medicare or
Medicaid program, and the personnel and equipment needed to
deliver the services at that facility... .

The regulations presume that a free-standing facility that is owned by a hospital
but that is not located on the hospital campus is not a department of that hospital.
42 C.F.R. § 413.65(b)(4). The presumption that a free-standing facility is not a
hospital department is rebuttable, but the burden falls squarely on the hospital
seeking to establish that facility as a department to prove that the facility satisfies
all applicable criteria for department status. Id.

Those criteria are set forth at 42 C.F.R. § 413.65(d). A facility or entity must
satisfy all of the criteria stated in this regulation to qualify as a department.
Nothing in the regulation permits a facility or an entity to be qualified as a
department of a hospital, if it satisfies less than all of the regulatory criteria. Nor
are there provisions in the regulation for waiver of the requirement that all criteria
be met.

The undisputed facts establish that Petitioner is a Medicare participating hospital
in the State of Indiana. AP&S, PMG, and Hope are free standing facilities also
located in Indiana. Prior to September 2006, these entities were independent
medical oncology groups housed in buildings that were not on Petitioner’s
campus. In September 2006, Petitioner entered into agreements with each of
them. CMS Ex. 6 at 2. The stated purpose of these agreements — described by
Petitioner’s chief financial officer as “management service agreements” — was to
enable each of the three entities to provide services to the public as a department
of Petitioner. CMS Ex. 6 at 1, 2.

The regulatory presumption is that AP&S, PMG, or Hope, given that they are free-
standing, are not departments of Petitioner, even if they have management service
agreements with Petitioner and even if the agreements state as a purpose that the
entities become a department of Petitioner. Petitioner may overcome that
presumption, only if it proves that the three entities meet all of the regulatory
criteria for department status.

One of these criteria is that the entity for which department status is sought must
be operated under the same license as the hospital, except in the situation where
State law requires that the entity be licensed separately. 42 C.F.R. § 413.65(d)(1).
Indiana law does not require that an entity such as AP&S, PMG, or Hope, be
licensed separately from Petitioner. See 410 IND. ADMIN. CODE 15-1.3-1(c), 410
IND. ADMIN. CODE 15-1.3-2; CMS Ex. | at 3, CMS Ex. 21, ff 1,2,5.
Consequently, these entities must be operated under the same license as Petitioner
to be a department or departments of Petitioner for Medicare reimbursement
purposes.

The undisputed facts establish that, during the years 2007-2010 (the time period
that is at issue in this case), none of the three entities were included on Petitioner’s
State license to operate an acute care hospital. CMS Ex. 8— CMS Ex. 11.
Therefore, Petitioner, AP&S, PMG, and Hope failed to satisfy the regulatory
requirement that the entities be operated under Petitioner’s license, and these
entities may not be classified as a department or departments of Petitioner for
Medicare reimbursement purposes.

Petitioner argues that I should not hear and decide the licensure issue. To do so,
according to Petitioner, would deny it due process. Petitioner asserts that CMS
failed to cite the issue of licensure in its reconsideration determination. CMS
found other failures by Petitioner and the three entities to comply with the
requirements of 42 C.F.R. § 413.65(d) but, on reconsideration, failed to make a
specific finding that Petitioner, AP&S, PMG, and Hope were not operated under
the same license. That omission, according to Petitioner, is a favorable finding on
the licensure issue. However, according to Petitioner, even if that omission is not
a favorable finding, the failure by CMS to make a finding on reconsideration as to
the licensure issue absolutely bars it from raising that issue now.

I find this argument to be without merit. Nothing bars CMS from raising issues
before me not decided at reconsideration, so long as it gives Petitioner adequate
notice and Petitioner has opportunity to be heard on those issues. Columbus
Nursing and Rehab Ctr., DAB No. 2398, at 9 n.4 (2011). CMS raised the issue of
licensure in its motion for summary judgment. Petitioner had 30 days to address
the issue. That is ample notice and more than ample opportunity for Petitioner to
frame a defense to CMS’s allegations. That is especially so, because, even if the
issue of licensure was not addressed in the reconsideration determination, it was
clearly a basis for CMS’s initial determination, and Petitioner knew that CMS had
at one point found that Petitioner and the three entities had failed to meet the
“same license” criterion of the regulation.

Petitioner does not contend that there is any dispute of fact as to whether
Petitioner, AP&S, PMG, and Hope were operated under the same license.
Effectively, it concedes that the three entities were licensed separately from
Petitioner. However, it argues that, even if AP&S, PMG, and Hope were not
operated under the same license as Petitioner, there exist facts that would show
that these entities essentially operated under the same terms and conditions as
Petitioner’s license. In effect, Petitioner argues that AP&S, PMG, and Hope were
functioning under circumstances that were equivalent to being operated under
Petitioner’s license. That, according to Petitioner, is de facto compliance with the
same license requirement of the regulation.

Petitioner argues that it has facts to prove that it had requested the State of Indiana
to include the three entities as part of Petitioner’s hospital license. It argues also
that the American Osteopathic Association (AOA) had confirmed the operation of
the three entities under standards deemed by CMS to verify compliance with the
conditions of participation for hospitals. Petitioner’s Brief at 18. Thus, according
to Petitioner, it operated AP&S, PMG, and Hope in a manner that was
indistinguishable from the way in which these entities would be operated, were
they to be licensed in common with Petitioner. Jd.

This argument fails as a matter of law. The regulation does not recognize an
equivalent status to a common license. Thus, a facility does not establish itself to
be a department of a hospital by proving that the manner in which it was operated
was equivalent to being operated under the same license as the hospital. Nor may
a facility argue that it met all the criteria for a common license but did not share a
license for purely technical reasons. Finally, a facility may not argue that it should
be “deemed” to be licensed in common with a hospital because it met the
standards of a private accreditation body such as AOA.

The issue of equivalence was addressed and decided by the Departmental Appeals
Board (Board) in Physicians’ Hosp. in Anadarko, DAB No. 2101 (2007). The
Board held in that case that the plain meaning of the regulation, as well as the
regulation’s preamble, made it evident that there is no exception (other than that
stated in the regulation) to the rule that a subordinate facility had to be operated
under the same license as a hospital in order to qualify as a department of the
hospital. Thus, the regulation does not recognize the concept of “equivalence” to
common licensure. Physicians’ Hosp. in Anadarko, DAB No. 2101 (2007).

CMS argues in its motion that the three entities did not satisfy other regulatory
criteria for operation as a department of Petitioner. For example, CMS asserts that
AP&S, PMG, and Hope did not satisfy the regulatory requirement for department
status that the subordinate facility be held out to the public and other payers as
being part of the main provider (Petitioner). CMS’s Brief at 15-19. I do not
address this argument or other arguments concerning additional regulatory criteria
for department status because it is unnecessary that I do so. The undisputed facts
establish that Petitioner, AP&S, PMG, and Hope were not operated under the
same license, and that is enough to show, as a matter of law, that Petitioner and the
three subordinate facilities cannot overcome the regulatory presumption that the
facilities were not a department or departments of Petitioner.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Jewish Home of Eastern Pennsylvania
(CCN: 39-5103),
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-10-654
Decision No. CR2421

Date: August 30, 2011

DECISION

Petitioner, Jewish Home of Eastern Pennsylvania (Petitioner or facility), is a long-term
care facility, located in Scranton, Pennsylvania, that participates in the Medicare
program. Based on a survey completed January 14, 2010, the Centers for Medicare and
Medicaid Services (CMS) determined that the facility was not in substantial compliance
with Medicare program requirements and imposed a penalty. Petitioner appealed.

CMS now moves for summary judgment, pointing out that Petitioner does not challenge
any of the survey’s deficiency findings, but instead argues survey bias and related claims.
Petitioner raised identical arguments in earlier appeals to the Departmental Appeals
Board (Board) and the Third Circuit Court of Appeals — with no success.

For the reasons set forth below, I grant CMS’s motion for summary judgment.

Background

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

The Secretary contracts with state survey agencies to conduct periodic surveys to
determine whether skilled nursing facilities are in substantial compliance. Act § 1864(a);
42 C.F.R.§ 488.20. The regulations require that each facility be surveyed once every
twelve months and more often, if necessary, to ensure that identified deficiencies are
corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a), 488.308.
Here, following a survey completed on January 14, 2010, CMS determined that the
facility was not in substantial compliance with the following Medicare participation
requirements:

© 42 C.F.R. § 483.10(b)(11) (Tag F157 -- notification of changes);

© 42 C.F.R. § 483.15(f)(1) (Tag F248 -- activities);

© 42C.F.R. § 483.25(c) (Tag F314 -- pressure sores);

© 42 C.F.R. § 483.25(f)(1) and (f)(2) (Tags F319 and F320 -- mental and
psychosocial functioning);

e 42 C.F.R. § 483.35(i) (Tag F371 -- sanitary conditions);
e 42C.F.R. § 483.60(c) (Tag F428 -- drug regimen review);
e 42C.F.R. § 483.60(b), (d), and (e) (Tag F 431 -- pharmacy services);

e 42 C.F.R. § 483.65(a) (Tag F441 -- infection control); and

© 42 C.F.R. § 483.75(1)(1) (Tag F514 -- clinical records).

CMS Exhibit (Ex.) 1. CMS subsequently determined that the facility returned to
substantial compliance on February 12, 2010. CMS imposed against the facility a civil
money penalty of $600 per day for 29 days of substantial noncompliance, from January
14 through February 11, 2010 ($17,400 total). CMS Ex. 2.

Petitioner appealed.
The parties have filed their pre-hearing briefs (CMS Br.; P. Br.) and proposed exhibits
(CMS Exs. 1-34; P. Exs. 1-9).

While this matter was pending, decisions were issued by the Court of Appeals for the
Third Circuit and the Board in Petitioner’s appeals of earlier survey findings: Jewish
Home of E. Pa. v. CMS, 2011 WL 477818 (3rd Cir. 2011) and Jewish Home of E. Pa.,
DAB No. 2380 (2011). In those cases, the Court and the Board addressed the issues
Petitioner raised in this appeal. Therefore, in an order dated June 3, 2011, I directed the
parties to submit status reports that: 1) addressed the impact, if any, of the Court and
Board decisions on this matter; 2) identified the material facts in dispute, if any; and 3)
specified the issues remaining before me.

CMS responded with a motion for summary judgment (CMS MSJ) with three
attachments, marked CMS Exs. A-C. Petitioner filed a status report (P. Status Rep.) and
a brief in opposition to summary judgment (P. Opp.) with two attachments (P. Attachs. 1-
2).

Discussion

I. CMS is entitled to summary judgment because
Petitioner has not challenged its determinations that the
facility was not in substantial compliance with specific
Medicare program requirements. Those determinations
are therefore final and binding and provide a sufficient
basis for imposing a penalty.’

Summary judgment. Summary judgment is appropriate here because this case presents
no issue of material fact, and its resolution turns on questions of law. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Livingston Care Ctr. v. United States
Dep't of Health and Human Servs., 388 F.3d 168, 173 (6th Cir. 2004). See also Illinois
Knights Templar Home, DAB No. 2274 at 3-4 (2009) (citing Kingsville Nursing Ctr.,
DAB No. 2234 at 3-4 (2009)). Although Petitioner opposes summary judgment, none of
the issues it preserved turns on a question of fact. Instead, Petitioner raises constitutional
and other legal arguments, most of which I have no authority to review.

'My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion
captions of this decision.
Petitioner’s Appeal. In a submission dated May 17, 2010, Petitioner appealed, raising
what it characterizes as constitutional and statutory issues.” Specifically, it complained
that: 1) in setting the CMP, CMS considered the facility’s history of noncompliance,
which, in Petitioner’s view, is impermissible until the facility has exhausted all appeals of
earlier survey findings; 2) the CMP impermissibly takes into account alleged non-
compliance based on the facility’s Quality Assurance privilege found at 42 C.F.R. §
483.75(0)(3) and (4);° 3) a provision of the federal regulation governing the amount of
the CMP (42 C.F.R. § 488.438(f)(4)) violates the Act; 4) CMS imposed a CMP greatly in
excess of the state agency’s recommendation; and 5) the CMP “is based on violations of
Equal Protection princip[les].” Hearing Request at 3-5. Included among its
“constitutional and statutory” claims, Petitioner also asserted generally that CMS “lacks
substantial evidence to support the citations” of noncompliance or the “level of
noncompliance upon which the CMP is based.” Hearing Request at 5.

With respect to the specific citations of noncompliance, Petitioner did not “identify the
specific issues, and the findings of fact and conclusions of law” with which it disagreed,
nor did it “specify the basis for contending that those findings and conclusions [were]
incorrect,” as required by the 42 C.F.R. § 498.40(b). Instead, for each of the deficiencies
cited, except one, it argued, generally, that the survey report form “does not contain
substantial evidence of a violation of the regulation,” promises to introduce evidence to
establish its compliance and “decrease its culpability,” and/or claims that it satisfied the
cited requirement. Hearing Request at 5-9. Petitioner did not mention at all the
deficiencies cited under 42 C.F.R. § 483.10(b)(11) (Tag F157 — notification of changes).

The Board has determined that an inadequate hearing request does not compel an
appeal’s dismissal Carlton at the Lake, DAB No. 1829 (2002); Alden Nursing Ctr. —
Morrow, DAB No. 1825 (2002). But a petitioner must eventually articulate the bases for
its appeal. In these proceedings, my pre-hearing order directed Petitioner to do so with
its pre-hearing exchange. See discussion below.

Petitioner’s pre-hearing submissions. In an order dated May 24, 2010, I directed the
parties to file pre-hearing exchanges, which would include proposed exhibits,
declarations of proposed witnesses, and pre-hearing briefs. My order specified that a pre-
hearing brief “must contain any argument that a party intends to make” and warned that I

> Petitioner earlier sought a stay of the appeal period or an extension of time in which to
file. In an order dated April 29, 2010, I found no good cause for extending or staying the
matter but granted Petitioner an additional ten days in which to appeal. Order, April 29,
2010.

* Petitioner only lists the argument concerning a Quality Assurance privilege in its
submission of May 17, 2010 and does not discuss this argument in its pre-hearing brief or
its brief in opposition to CMS’s motion for summary judgment.
“may exclude an argument and evidence that relates to such argument if a party fails to
address it in its pre-hearing brief.” Acknowledgment and Initial Pre-Hearing Order at 4,
47) (May 24, 2010).

CMS’s pre-hearing exchange included comprehensive discussions of five of the
deficiencies cited (42 C.F.R. §§ 483.10(b)(11), 483.25(c), 483.35(i)(2), 483.60(b)(d) and
(e), and 483.65). Its submission included detailed factual allegations and legal
arguments, supported by facility documents, surveyor notes and testimony, as well as
the written testimony of two expert witnesses and publications setting forth generally
accepted standards of care.

In light of CMS’s submissions, to avoid summary judgment, Petitioner would have to
furnish evidence of specific facts showing that a dispute exists. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see also Vandalia Park,
DAB No. 1939 (2004); Lebanon Nursing and Rehab. Ctr., DAB No. 1918 (2004).
Petitioner, however, did not respond to CMS’s specific arguments or evidence relating to
the facility’s noncompliance. Indeed, I see no indication that Petitioner intended to
challenge any specific deficiency finding. Instead, it proffered four arguments: 1) the
CMP should be stricken, and CMS’s exhibits and testimony should be excluded because
“they are all the product of selective enforcement that violates equal protection
principles”; 2) CMS cited one of the deficiencies (42 C.F.R. § 483.25(c) — Tag F314) ata
scope and severity level greater than recommended by the state agency; 3) CMS erred in
calculating the CMP; and 4) CMS may not impose and I may not review a CMP, until the
facility has exhausted all appeals of past allegations of noncompliance, apparently up to —
and including — Supreme Court review.

CMS is entitled to summary judgment because, as a matter of law, Petitioner cannot
prevail in this forum on any of the issues it preserved in this appeal.

Selective enforcement/equal protection. First, Petitioner argues that CMS has imposed a
CMP that is “the result of selective enforcement in violation of Equal Protection
Principles,” so I must exercise discretion afforded me by 42 C.F.R. § 498.61 to “exclude
or suppress such evidence.” P. Br. at 4. Petitioner does not specify any particular
exhibits or testimony that should be excluded, but it presumably refers to any evidence
that supports the imposition of a CMP.

As a threshold matter, inasmuch as Petitioner did not appeal any of the deficiencies cited,
CMS’s determination that it was not in substantial compliance with Medicare program
requirements is final and binding, without regard to any of CMS’s proffered evidence. 42
C.F.R. § 498.20(b). So, the question of whether I should “exclude or suppress such
evidence” is simply irrelevant to the case before me.
In any event, Petitioner made the same argument -- even relying on the same evidence --
in two prior appeals. The Board and the Court of Appeals for the Third Circuit have
rejected its claims. Jewish Home of E. Pa., DAB No. 2380, at 6-8 (2011); Jewish Home
of E. Pa., DAB No. 2254 at 13-15 (2009) aff'd, Jewish Home of E. Pa. v. CMS, 2011 WL
477818 at 8-9 (3rd Cir. 2011). In those appeals, Petitioner relied on evidence from 2005
and 2006, and said that it was “in the process” of comparing the data from the January
2010 survey, but, because so many deficiencies were cited in January 2010, it would take
“approximately 60 days to complete the queries.” P. Br. at 5-9. Petitioner submitted this
argument and its evidence more than nine months after the date of the survey and five
months after I issued my pre-hearing order. Petitioner thus had ample time in which to
gather its evidence. In any event, Petitioner did not submit the promised data.

Petitioner also relied on allegations that a state surveyor made biased remarks during an
October 2004 survey. P. Ex. 2; P. Br. at 9-10. Petitioner made the same claims in its
earlier appeals to the Board and the Third Circuit. The Court of Appeals characterized
Petitioner’s reliance on the surveyor’s remarks as “misplaced.” It found the remarks
“clearly taken out-of-context,” as well as “not relevant or facially discriminatory.” 2011
Jewish Home of E. Pa., WL 477818 at 9. The Court’s decision resolves the issue.

Change in scope and severity. Next, Petitioner complains that CMS did not follow the
state agency’s recommendation that the deficiency cited under 42 C.F.R. § 483.25(c)
(Tag F314 — pressure sores) be cited at scope and severity level D (an isolated instance of
noncompliance that caused no actual harm, but with the potential for more than minimal
harm) and instead cited it at level G (an isolated instance of noncompliance that caused
actual harm). First, CMS plainly has the authority to determine the scope and severity of
deficiencies, and, where its opinion conflicts with that of the state agency, CMS prevails.
See 42 C.F.R. § 488.452. In any event, I have no authority to review that determination.
An Administrative Law Judge (ALJ) may review CMS’s scope and severity findings only
if a successful challenge would affect the range of the CMP or if CMS has made a
finding of substandard quality of care that results in the loss of approval of a facility’s
nurse aide training program. 42 C.F.R. § 498.3(b)(14); 42 C.F.R. § 498.3(d)(10); Cedar
Lake Nursing Home, DAB No. 2344, at 9 (2010); Evergreen Commons, DAB No. 2175
(2008); Aase Haugen Homes, DAB No. 2013 (2006). Here, the per-day penalty is in the
same lower range whether the deficiencies are cited at a D or a G level of scope and
severity. (42 C.F.R. § 488.438(a)(ii)). Petitioner does not allege, nor does it appear that
CMS found substandard quality of care resulting in the loss of approval of the facility’s
nurse aide training program. CMS Ex. 2. Petitioner is therefore not entitled to review of
the scope and severity finding.

CMS’s procedures for calculating the CMP. Petitioner faults the method by which CMS
determined the CMP, arguing that the agency arrived at the amount without considering
the facility’s culpability. I note first that a facility’s culpability can only increase the
penalty; absence of culpability is not a mitigating factor. 42 C.F.R. § 488.438(f)(4).

Thus, CMS’s purported failure to consider the facility’s culpability could only have
benefited Petitioner. Moreover, I have no authority to review CMS’s internal decision-
making processes. The Board has consistently rejected the notion that an ALJ should
consider whether CMS followed the correct procedures in setting the amount of the CMP.

The ALJ resolves [the question of whether the amount of the
CMP is reasonable] de novo in the sense that the
determination is based on the evidence as it is developed
before the ALJ and not on how CMS evaluated the evidence
as it stood at whatever point CMS made its assessment.

Emerald Oaks, DAB No. 1800 at 13(2001), accord Woodland Oaks Healthcare Facility;
DAB No. 2355 at 21 (2010); CarePlex of Silver Spring, DAB No. 1683 (1999).

Delays in reviewing the reasonableness of a CMP. Facility history is a factor I consider
in deciding whether a CMP is reasonable. 42 C.F.R. § 488.438(f). In Petitioner’s view,
the facility history cannot be assessed until all avenues of appeal have been exhausted.
Thus, in its pre-hearing brief, Petitioner argued that I could not decide the reasonableness
of the CMP until the Third Circuit decided its appeals of 2005 and 2006 survey findings,
and the Board decided its appeal of 2007 and 2008 survey findings. P. Br. at 24-25.
Now that the Third Circuit and the Board have resolved those cases in favor of CMS, and
the Third Circuit has denied its motion for rehearing en banc (CMS Ex. A), Petitioner
says that it plans to appeal its losses to the United States Supreme Court and the Third
Circuit respectively, and that, until those appeals are resolved, presumably by the
Supreme Court, I may not review the reasonableness of the CMP. P. Opp. at 3-4.

Petitioner does not support its position with any persuasive authority or rational
argument. Moreover, its position is wholly impracticable and would defeat the
underlying purposes of imposing CMPs. The CMP should be at a level that might
reasonably be expected to induce the facility to correct its deficiencies and maintain
substantial compliance. CarePlex of Silver Spring, DAB No. 1638, at 8. To that end,
CMS (and the ALJ) consider the factors set forth in 42 C.F.R. § 488.438(f), which
include the facility’s history of noncompliance. Under Petitioner’s theory, CMS (and the
ALJ) would be faced with two unpalatable choices: 1) ignore the regulation and
disregard facility history in determining the amount of the CMP; or 2) for any facility
with a history of deficiencies, wait until all appeals have been exhausted before
determining the amount of the CMP. So, inasmuch as Petitioner here is still appealing
deficiencies found in 2005, CMS could not have imposed on Petitioner any CMPs for the
last six years. Not only would this encourage delay and meritless appeals, it would make
unworkable a regulatory scheme that relies on the imposition of CMPs to compel
facilities to correct their deficiencies and maintain substantial compliance.

2. The penalty imposed -- $600 per day -- is not
unreasonably high.

To determine whether a CMP is reasonable, I apply the factors listed in 42 C.F.R. §
488.438(f): 1) the facility’s history of noncompliance; 2) the facility’s financial
condition; 3) factors specified in 42 C.F.R. § 488.404; and 4) the facility’s degree of
culpability, which includes neglect, indifference, or disregard for resident care, comfort
or safety. The absence of culpability is not a mitigating factor. The factors in 42 C.F.R.
§ 488.404 include: 1) the scope and severity of the deficiency; 2) the relationship of the
deficiency to other deficiencies resulting in noncompliance; and 3) the facility’s prior
history of noncompliance in general and specifically with reference to the cited
deficiencies.

As noted above, I consider whether the evidence supports a finding that the amount of the
CMP is at a level reasonably related to an effort to produce corrective action by a
provider with the kind of deficiencies found, and in light of the section 488.438(f)
factors. I am neither bound to defer to CMS’s factual assertions, nor free to make a
wholly independent choice of remedies without regard for CMS’s discretion. Barn Hill
Care Ctr., DAB No. 1848, at 21 (2002); Cmty. Nursing Home, DAB No. 1807, at 22 et
seq. (2002); Emerald Oaks, DAB No. 1800, at 9 (2001); CarePlex of Silver Spring, DAB
No. 1638, at 8.

In light of the facility’s dismal history, CMS has imposed a remarkably modest penalty —
$600 per day — which is at the low end of the penalty range for per-day CMPs ($50-
$3,000). 42 C.F.R. §§ 488.408(d), 488.438(a)(1).

In every annual survey since 2005, the facility has been out of substantial compliance
with program requirements. CMS Ex. 30 at 4 (Van Wieren Decl. § 9); CMS Ex. 30 at 6-
9. Many of the deficiencies cited during the January 2010 survey are recurring problems,
including:

e 42 C.F.R. § 483.10(b)(11) (Tag F157 — notification of changes), cited in
October 2006;

e 42 C.F.R. § 483.25(c) (Tag F314 — pressure sores), cited in February
2009 and November 2007;

e 42 C.F.R. § 483.35(i) (Tag F371 — sanitary conditions), cited in
February 2009, November 2007, and October 2006);

e 42C.F.R. § 483.60 (Tag F431 — pharmacy services), cited in February
2009
e 42C.F.R. § 483.65(a) (Tag F441 — infection control), cited in October
2006; and

e 42 CFR. § 483.75(1)(1) (Tag F514 — clinical records), cited in October
2006.

CMS Ex. 30 at 6-9.

CMS has, over the years, imposed penalties ranging from $350 per day (2005) to $600
per day (2007-2008). Jewish Home of E. PA, DAB No. 2254 at 1 (2009). Yet, none of
these penalties were sufficient to produce ongoing corrective action. In its efforts to
compel ongoing compliance, CMS could therefore justifiably impose significantly higher
penalties.

By itself, the facility history more than justifies the penalty imposed.

With respect to the remaining factors, Petitioner does not claim that its financial
condition affects its ability to pay this relatively small CMP. The sheer number of
deficiencies cited at scope and severity levels D, E (pattern of substantial noncompliance
that caused no actual harm, with the potential for more than minimal harm), F
(widespread substantial noncompliance that caused no actual harm, with the potential for
more than minimal harm), and G also independently justifies the penalty imposed.

Conclusion

Petitioner has not challenged CMS’s determination that, from January 14 through
February 11, 2010, it was not in substantial compliance with Medicare program
requirements. Nor has it challenged any material facts underlying the amount of the
penalty imposed. CMS is therefore entitled to summary judgment. I sustain its
determination that the facility was not in substantial compliance with Medicare program
requirements and affirm the $600 per-day penalty.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Lopatcong Center
(CCN: 31-5202),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-09-322
Decision No. CR2420

Date: August 26, 2011

DECISION

Petitioner, Lopatcong Center, was not in substantial compliance with program
participation requirements from November 6, 2008 through December 23, 2008, due to
violations of 42 C.F.R. §§ 483.70(f) and 483.75, which posed immediate jeopardy.
There is a basis for the imposition of enforcement remedies. A $3,050 per day civil
money penalty (CMP) for the period November 6 through December 23, 2008, a total
CMP of $146,400, is reasonable.

I. Background

Petitioner is located in Phillipsburg, New Jersey, and participates in Medicare as a skilled
nursing facility (SNF) and Medicaid as a nursing facility (NF). On December 24, 2008,
the Centers for Medicare and Medicaid Services (CMS) completed a federal comparative
survey of Petitioner’s facility. CMS found that Petitioner was not in substantial
compliance with program participation requirements and that there was immediate
jeopardy for Petitioner’s residents. CMS notified Petitioner by letter dated January 15,
2009, that it was imposing the following enforcement remedies: $3,050 per-day CMP,
effective November 6, through December 23, 2008, for forty-eight days' of immediate
jeopardy; a $200 per day CMP, effective December 24, 2008 and continuing until
Petitioner achieved substantial compliance or was terminated; a denial of payment for
new admissions if Petitioner did not achieve substantial compliance by March 24, 2009;
and termination of Petitioner’s provider agreement, unless Petitioner achieved substantial
compliance by June 24, 2009. CMS advised Petitioner by letter dated March 23, 2009,
that Petitioner returned to substantial compliance effective January 30, 2009. Therefore,
the $200 per day CMP accrued from December 24, 2008 through January 29, 2009, a
period of 37 days, for a total of $7,400. CMS also notified Petitioner that the DPNA was
rescinded and the termination would not be effectuated. P. Ex.5.

Petitioner requested a hearing before an administrative law judge (ALJ) on March 12,
2009. The case was originally assigned to ALJ Alfonso Montano for hearing and
decision. An Acknowledgement, an Order, and a Notice of Hearing were issued at his
direction. On June 29, 2010, a hearing was convened in Trenton, New Jersey before
Judge Montano, and a transcript (Tr.) of the proceedings was prepared. CMS offered
CMS Exhibits (Exs.). 1 through 14, and they were admitted as evidence. Tr. at 9.
Petitioner offered Petitioner’s exhibits (P. Exs.) 1 through 10, which were admitted as
evidence. Tr. at 10. The parties discussed at hearing (Tr. at 14) that they had prepared a
stipulation of fact related to background of the survey, and Petitioner cited to a joint
stipulation in its post-hearing brief, but no joint stipulation was received from the parties
for filing. CMS called Surveyor Ellita Nezbeth, Surveyor Barbara Ann Capers-Medwick,
and Surveyor Joaquin Perez as witnesses. Petitioner called Elaine Bell, Petitioner’s
Administrator, Lynn Sysock, Petitioner’s Director of Nursing (DON), and Chris Bogoly,
Petitioner’s Maintenance Director, as witnesses. The parties filed post-hearing briefs
(CMS Br. and P. Br.) and post-hearing reply briefs (CMS Reply and P. Reply).

' The CMS notice incorrectly stated that the $3,050 per day CMP was effective through

December 24, 2008, for 47 days. However, it is clear from the context that the notice
was intended to advise Petitioner that the $3,050 was in effect from November 6, 2008
through December 23, 2008, a period of 48 days, and that the $200 per day CMP began
to accrue on December 24, 2008. CMS Exhibit (CMS Ex.) 1. An Amended Notice was
provided by letter dated February 3, 2009, with handwritten corrections. CMS Ex. 3, at
3. CMS also issued a notice dated March 23, 2009, that correctly indicates that the
$3,050 per day CMP accrued from November 6, 2008 through December 23, 2008, a
period of 48 days, and that the total accrued CMP was $146,400. P. Ex. 5.
Judge Montano left the Departmental Appeals Board in August 2010, and this matter was
reassigned to me. I have reviewed the transcript of the hearing, the documentary
evidence, and the pleadings of the parties. I conclude that a supplemental hearing or
additional briefing is not necessary.

II. Discussion
A. Issues

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

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 Social Security Act (Act) and at 42 C.F.R. Part 483. Section
1819(h)(2) of the Act authorizes the Secretary of Health and Human Services (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 been less than six
months of noncompliance. The Act also grants the Secretary authority to impose other
enforcement remedies, including a discretionary DPNA, CMPs, appointment of
temporary management, and other remedies such as a directed plan of correction. Act §
1819(h)(2)(B).

> 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 their participation requirements established by sections 1919(b), (c), and (d) of the
Act.
The Secretary has delegated to CMS and the states the authority to impose remedies
against a long-term care facility that is not in substantial compliance with federal
participation requirements. A facility is in “substantial compliance” so long as no
identified deficiency poses a greater risk to resident health or safety than the potential for
causing minimal harm. 42 C.F.R. § 488.301. “Noncompliance” is any deficiency that
causes a facility to not be in substantial compliance. 42 C.F.R. § 488.301. 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. Part 483, subpart B. 42 C.F.R. §
488.301. CMS or 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.

A CMP that is imposed against a facility on a per day basis will fall into one of two
ranges of penalties. 42 C.F.R. §§ 488.408, 488.438. The upper range of CMPs, $3,050
per day to $10,000 per day, is reserved for deficiencies that pose immediate jeopardy to a
facility’s residents and, in some circumstances, for repeated deficiencies. 42 C.F.R. §
488.438(a)(1)(i), (d)(2). “Immediate jeopardy means 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.” 42 C.F.R. § 488.301.
The lower range of a CMP, $50 per day to $3,000 per day, is reserved for deficiencies
that do not constitute immediate jeopardy, but either cause actual harm to residents or
cause no actual harm but have the potential for causing more than minimal harm. 42
C.F.R. § 488.438(a)(1)(ii).

Petitioner was notified in this case that it may be ineligible for approval to conduct a
nurse aide training and competency evaluation program (NATCEP) for a period of two
years and that any prior approval could be withdrawn. Pursuant to sections 1819(b)(5)
and 1919(b)(5) of the Act, SNFs and NFs may only use nurse aides who have completed
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 that the Secretary established and a process for reviewing and re-
approving those programs using criteria the Secretary set. Pursuant to sections 1819(f)(2)
and 1919(f)(2) of the Act, 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 SNF or NF that has been: (1) 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) assessed a
CMP of not less than $5,000; or (3) 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” is identified by the situation 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 and
there is no actual harm. 42 C.F.R. § 488.301. There is no evidence that Petitioner had or
desired a NATCEP, and the parties raise no issues related to NATCEP approval in this
case.

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 ade novo proceeding. Residence at Salem Woods, DAB No. 2052 (2006); Cal
Turner Extended Care, 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). A facility has a right to appeal a
“certification of noncompliance leading to an enforcement remedy.” 42 C.F.R. §§
488.408(g)(1), 488.330(e), 498.3. However, the choice of remedies and 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 NATCEP.
42 C.F.R. § 498.3(b)(14), (d)(10)(i). 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).
ALJ Review of a CMP 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.
Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing &
Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr. v.
Thompson, 129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800; Cross

Creek Health Care Ctr., DAB No. 1665 (1998); see Hillman Rehab. Ctr., DAB No. 1611
(1997), aff'd, Hillman Rehab. Ctr. v. U.S., 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.

CMS surveyors conducted a federal comparative monitoring survey of Petitioner’s
facility from December 18 through December 24, 2008. The federal survey followed a
survey conducted by the state agency from November 7 through 17, 2008. The CMS
surveyors cited the following deficiencies in the Statement of Deficiencies (SOD) for the
survey that was completed on December 24, 2008: 42 C.F.R. §§ 483.13(c) (Tag F226);
483.25(h) (Tag F323); 483.35(1) (Tag F371), 483.60(b), (d), (e) (Tag F431); 483.65(b)(1)
(Tag F442); 483.65(b)(3) (Tag F444), 483.70(f) (Tag F463); and 483.75 (F490). The
deficiencies cited under Tags F323, F463, and F490 were alleged to pose immediate
jeopardy to Petitioner’s residents. The remaining deficiencies were alleged to pose a risk
for more than minimal harm. P. Ex. 1; CMS Ex. 2. Petitioner requested a hearing only
as to the three deficiencies that allegedly posed immediate jeopardy and the CMP based
on those deficiencies — the proposed $3,050 per day CMP for the period November 6
through December 23, 2008, a total CMP of $146,400. Petitioner does not dispute the
remaining deficiency citations or the $200 per day CMP that accrued from December 24,
2008 through January 29, 2009. Request for Hearing at 2; P. Br. at 5.

The specific issues are: (1) whether Petitioner violated 42 C.F.R. §§ 483.25 (Tag F323),
483.70(f) (Tag F463), and 483.75 (Tag F490) as alleged; (2) whether one or more of the
violations posed a risk for more than minimal harm; (3) whether the declaration of
immediate jeopardy based on one or more of the violations was clearly erroneous; and (4)
whether or not the imposition of a daily CMP in the higher range was authorized and, if
so, whether or not the CMP proposed is reasonable.* All three deficiencies are based
upon the same operative facts and the proposed CMP is the lowest authorized by 42
C.F.R. § 488.438 for a deficiency that poses immediate jeopardy. I conclude that it is not
necessary to analyze whether or not the facts support deficiency citations under both Tags
F323 and F463, as both alleged deficiencies are based on the same alleged facts, and a
single deficiency that poses immediate jeopardy is a sufficient basis for imposing the

> Petitioner does not dispute the reasonableness of the daily CMP of $200 based upon
the undisputed deficiencies.
CMP proposed by CMS in this case. Therefore, I do not analyze whether the problem
with Petitioner’s call system amounted to a failure to provide necessary supervision or
assistive devices in violation of 42 C.F.R. § 483.25(h) (Tag F323).

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.’ The fact that evidence is not
specifically discussed should not be considered sufficient to rebut the presumption that I
have 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.

1. Petitioner violated 42 C.F.R. § 483.70(f) (Tag F463).
2. Petitioner violated 42 C.F.R. § 483.75 (Tag F490).

3. Petitioner’s violation of the conditions for participation posed a risk
for more than minimal harm.

4. The declaration of immediate jeopardy was not clearly erroneous.
a. Facts

On November 6, 2008, a state agency survey team entered Petitioner’s facility and began
asurvey. Following the entrance meeting with the survey team, Petitioner’s
Administrator, Elaine Bell, was advised by Petitioner’s Maintenance Director, Chris
Bogoly, that the call bell system for the 60-bed first floor unit had malfunctioned. Due to
the malfunction, the lights and bells of the control panel at the nurses’ station stopped
working. The call lights above residents’ doors continued to function, but there was no
audible tone, light, or other indicator at the nurses’ station if a call bell was activated.
The system did not emit an audible sound in the hallway even when working properly.
Mr. Bogoly decided that he could not repair the system, and he called Oliver Sprinkler
Company (Oliver), a vendor who had previously repaired the system. Oliver assessed the
system on November 6, 2008, and determined that the system needed to be replaced. Tr.
at 162-63, 209-10; P. Ex. 9, at 2.

* “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.
Administrator Bell testified that 90 percent of the 57 first-floor residents were alert and
oriented and could notify staff of their needs. The 10 percent of the residents who were
not alert and oriented would not use the call bell system in any event. The unit manager
offered the alert and oriented residents tap bells, but only four accepted the bells
according to the surveyors. Tr. at 29, 36, 108, 164-65, 206.

Administrator Bell testified that other remedial measures included informing staff of the
malfunction of the system by reporting it on the 24-hour report (P. Ex. 8) so that staff
would be alerted to the need to monitor the call lights above residents’ doors. She
testified that the state survey team requested that the remedial measures be put in writing,
and a document titled “First Floor Call Bell Action Plan” was prepared that listed the
following remedial measures:

Since 11/6/08 call bells have been monitored visually to
ensure resident’s needs are being met.

Oliver Alarm Systems representative visited on 11/6/08 to
assess & troubleshoot. Main Nurses Station call bell box on
1st floor was found to be inoperable.

All call bells in resident rooms were checked to ensure visual
functioning in hallways.

Staff was educated on the need to observe for any activated
call bells.

4PM-11PM Daily an additional CNA has been assigned to
monitor call bells.

11PM-7AM Staff are conducting rounds on floor to ensure all
call bells are answered.

Tr. at 164-66, 199-200; P. Ex. 7; CMS Ex. 8. No similar plan was prepared for the
second floor. Tr. at 199, 218.

Administrator Bell testified that the state survey team found the remedial measures
acceptable. She testified that she was not aware of any complaints by residents. Tr. at
166-67. No deficiency was cited by the state surveyors related to Petitioner’s
nonfunctional call bell system. P. Ex. 6, Tr. at 218. However, the evidence shows that
on about November 12, 2008, the state surveyors threatened a deficiency citation, unless
Petitioner could provide a date by which the system would be repaired or replaced. P.
Ex. 9, at 1. Administrator Bell testified that Petitioner’s quality assurance team found no
injuries related to not having a fully functioning call bell system. She testified that nurses
and supervisors were instructed to ensure call lights were monitored. During the day
shift, she believed fewer residents were in their rooms and there were sufficient staff
members around to adequately monitor call lights above doors. But, during the evening
and night shifts, a staff member was specifically designated to rove the halls and monitor
lights above doors. She opined that the remedial measures adopted were as effective as a
functional call light system because the nurses’ station was not constantly staffed
anyway. Tr. at 168-71.

DON Lynn Sysock’s testimony was consistent with the testimony of Administrator Bell.
She testified that she knew that staff responded to the call lights above residents’ doors,
as she checked herself to see that the lights were being answered, the residents were not
complaining, and there was no increase in adverse clinical outcomes. Tr. at 227-31. She
testified that no call bell action plan was prepared for the second floor call bell system
because the problems with that system were identified on December 22, 2008, during the
federal survey. Tr. at 235.

Administrator Bell testified that, when the federal survey commenced on December 18,
2008, the surveyors asked about the call bell system and she shared the plan she provided
to the state surveyors. She testified that the federal surveyors did not indicate the plan
was unacceptable until they notified her about the immediate jeopardy determination on
December 23, 2008. The declaration of immediate jeopardy provoked the preparation of
a second more detailed revision of the plan. The revised plan required designating two
staff members on every shift to sit in the halls with two-way radios and watch for call
lights above doors. If a call light was activated, the monitoring staff advised nursing staff
members who were also equipped with two-way radios. CMS Ex. 7. The federal
surveyors found the revised plan acceptable to abate immediate jeopardy, but Petitioner
did not return to compliance with the participation requirement until after installation of
the new call bell system. Tr. at 171-73, 207.

Documents show that Petitioner’s call bell system malfunctioned on November 6, and
Oliver determined that the unit at the nurse’s station needed to be replaced. On
November 12, Petitioner was concerned that the state agency was threatening to cite a
deficiency if there was no date for completion of the repair. Petitioner decided to give
the surveyors a letter from Oliver that explained the company was working to find a part.
P. Ex. 9, at 1-2. On November 18, 2008, Petitioner’s Maintenance Director, Chris
Bogoly, advised a corporate official that a vendor, System Sales, had visited the facility
and would provide a quotation for a replacement system. The corporate official advised
Mr. Bogoly to hold on the System Sales quotation as the corporate office had a different
system in mind, and Mr. Bogoly was instructed to contact the vendor, SymTech
Solutions, for a quotation for the cost for replacement. P. Ex. 9, at 4-5. On November
20, 2008, System Sales provided Petitioner a quotation for a replacement system. P. Ex.
9, at 3. Petitioner’s Administrator Bell urged proceeding quickly in an email. P. Ex. 9, at
10

6. On November 24, 2008, a corporate official requested that SymTech Solutions
proceed as quickly as possible, as funding would be found to pay for the replacement of
the system. P. Ex. 9, at 8. SymTech visited the facility on December 3, 2008. P. Ex. 9,
at 9, 11. SymTech provided its quotation on December 4, 2008, and stated that
installation would be expedited. P. Ex. 9, at 12-13. On December 8, 2008, Mr. Bogoly
requested guidance from his corporate office regarding submitting the SymTech
quotation and a request for funding, which he subsequently sent to the corporate office on
December 8 and 9. P. Ex. 9, at 14-18. Another vendor submitted a quote dated
December 12, 2008. P. Ex. 9, at 19. The decision to proceed with the SymTech proposal
was made and communicated on December 18, 2008, the first day of the federal survey.
The request was characterized as an emergency and the need for replacement of the
system was characterized as being urgent. P. Ex. 9, at 20-23. SymTech acknowledged
the order on December 19, 2008 and estimated that the new system would be installed by
January 16, 2009. P. Ex. 9, at 24. The call bell system was replaced and operational as
of December 31, 2008. Tr. at 180; P. Ex. 9, at 27. Maintenance Director Bogoly’s
testimony was consistent with the history reflected in P. Ex. 9. Tr. at 244-53. He also
testified that problems with the second floor call lights were not discovered until the
federal survey. Tr. at 271.

b. Analysis

A long-term care facility must be designed, constructed, equipped, and maintained to
protect the health and safety of its residents, personnel, and the public. 42 C.F.R. §
483.70. The regulation specifically requires:

Resident Call System. The nurse’s station must be equipped
to receive resident calls through a communication system
from —

(1) Resident rooms; and

(2) Toilet and bathing facilities.

42 C.F.R. § 483.70(f) (emphasis added). The State Operations Manual (SOM), app. PP,
Tag F463, advises surveyors that the intent of the regulation is that residents in their
rooms or bath and toilet areas have a means of directly contacting caregivers. If there is a
central nurses’ station, the means of communication may be by audible or visual signals
and may be wireless. If there is no central nurses’ station, the regulation may be satisfied
by other electronic systems that provide direct communication from the resident to
caregivers. The SOM further advises that the regulatory requirement is satisfied only if
all portions of the system are functioning and calls are being answered. Care Ctr. of
Opelika, DAB No. 2093, at 4-5 (2007).

The regulations also require that a long-term care facility be administered in a manner
that enables it to use its resources effectively and efficiently to attain or maintain the
11

highest practicable physical, mental, and psychological well-being of each resident. 42
C.F.R. § 483.75 (Tag F490).

The surveyors allege that Petitioner violated 42 C.F.R. § 483.70(f) (Tag F463) because
Petitioner failed to ensure that the call bell systems on the first and second floors were
maintained and functioning properly, affecting 54 residents on the first floor and 5

residents on the second floor. CMS Ex. 2, at 16-17.

There is no dispute that the call bell system on Petitioner’s first floor was not functioning
as it was designed to function.> The undisputed evidence shows that, when the call bell
system was activated in a resident’s room on the first floor, the light above the resident’s
door lighted, but the light on the control board at the nurses’ station did not light and
there was no audible sound at the nurses’ station. The undisputed evidence shows that
the malfunction began on November 6, 2008, and it continued through the federal survey
until the system was replaced on December 31, 2008. It is also undisputed that staff at
the nurses’ station could not see all the rooms or the call lights above the rooms due to
the configuration of the first floor. CMS Ex. 10. The participation requirement
established by 42 C.F.R. § 483.70(f) requires that: (1) the nurse’s station be equipped to
receive resident calls; (2) through a communication system from resident rooms; and (3)
through a communication system from toilet or bath facilities. The evidence shows that
Petitioner had a centralized nurses’ station on the first floor. Under the interpretive
guidance of the SOM, app. PP, Tag F463, the means of communication could be by
audible or visual signals. The evidence shows that Petitioner had no audible or visual
communication between resident rooms and bath/toilet facilities between November 6
and December 31, 2008, a violation of the regulation. Petitioner’s instructions to staff to
monitor call lights above doors, the use of tap bells, and the subsequent use of walkie-
talkies did not remedy the regulatory violation as neither approach satisfied the
requirement of the regulation that the nurses’ station be equipped to receive resident calls
from their rooms, bathrooms, or toilet rooms. The evidence also shows that there was no
system for resident calls to be made directly to nursing staff, the alternative permitted by
the more liberal interpretation of the regulation found in the SOM. The unrebutted and
credible testimony of the surveyor is that long-term care facility residents are subject to
more than minimal harm if they require assistance with toileting, transfers, or other

> Tt is undisputed that during the federal survey call-lights were not functioning for
several rooms on the second floor. The evidence shows that the failure on the second
floor was not related to the failure on the first floor and that repairs were promptly made
on the second floor. The failure of the system on the first floor is sufficient alone to
support my conclusions. Thus, further discussion of the call light problems on
Petitioner’s second floor is unnecessary.

12

activities of daily living but are unable to call for and receive assistance. Tr. at 42-45.
Accordingly, I conclude that CMS has made a prima facie showing of a deficiency based
on a violation of 42 C.F.R. § 483.70(f) that posed a risk for more than minimal harm to
the Petitioner’s first-floor residents.

Lalso find that CMS made a prima facie showing of a violation of 42 C.F.R. § 483.75
(Tag F490) that posed a risk for more than minimal harm. The regulation requires that a
long-term care facility be administered in a manner that enables it to use its resources
effectively and efficiently to attain or maintain the highest practicable physical, mental,
and psychological well-being of each resident. In this case, there is no dispute that it took
56 days for Petitioner to replace the malfunctioning call bell system on the first floor.
Petitioner used 29 days to collect bids or quotations for repair or replacement, but then it
took only 27 days for funding to be approved, the contract to be awarded, and installation
to be completed. The fact that it took 29 days for Petitioner to decide the system was
broken beyond repair and to collect bids shows that Petitioner was not proceeding
diligently, effectively, or efficiently. Petitioner’s lack of diligence, effectiveness, and
efficiency, following the state survey, is particularly apparent when one considers that
Petitioner only required 27 days to fund, contract for, and install the new system when
the federal surveyors expressed interest. Petitioner’s evidence does not show it was
impossible to proceed more expeditiously with replacement of the call bell system.
Furthermore, the evidence shows that between November 6 and December 24, 2008,
Petitioner failed to devise and adopt an adequate alternative system for direct
communication to the central nurses’ station or between residents and caregivers. The
risk for more than minimal harm was present to the same extent and for the same reason
it was present due to the violation of 42 C.F.R. § 483.70(f).

Because CMS made a prima facie showing of deficiencies, the burden is upon Petitioner
to rebut the prima facie case or to establish an affirmative defense. In this case,
Petitioner does not attempt to establish an affirmative defense. Rather, the gist of
Petitioner’s approach is to rebut the prima facie showing by showing that it took
sufficient steps to eliminate the risk for more than minimal harm.

Petitioner argues that CMS seeks to hold Petitioner strictly liable for the failure of its call
bell system. P. Br. at 2, 10; P. Reply at 12. This is no defense for Petitioner. Strict
liability is “[Iiability that does not depend on actual negligence or intent to harm, but that
is based on the breach of an absolute duty to make something safe.” Black’s Law
Dictionary 934 (18th ed. 2004). The regulation clearly requires that Petitioner have a
resident call system with nurses’ stations equipped to receive resident calls through a
communication system from resident rooms and toilet and bath facilities. There are no
exceptions to the requirement listed in the regulation. 42 C.F.R. § 483.70(f). Petitioner
agrees to comply with participation requirements as a condition for entering a provider
agreement with the Secretary. 42 C.F.R. §§ 424.500, 424.505, 424.520(d)(3), 483.1,
483.5(a), 488.330(b) and (f). Whether or not failure of the call system was due to some
13

neglectful act, intentional act, or unintentional act or failure by Petitioner is not the issue.
The absence of neglect, or an act by Petitioner, is no defense or excuse for a failure to
comply with participation requirements established by the regulations. Petitioner
violated the regulatory requirement, when the call bell system malfunctioned. The
regulatory violation continued until the new system was installed and became operational
on December 31, 2008.

The regulatory violation standing alone, however, does not amount to noncompliance as
Petitioner remains in substantial compliance so long as no deficiency, i.e., violation of a
condition of participation, poses a risk for more than minimal harm to one or more
residents. 42 C.F.R. § 488.301. Petitioner does not deny that the system malfunctioned
from November 6 to December 31, 2008. Therefore, Petitioner must necessarily show
that there was no risk for more than minimal harm to credibly argue that it remained in
substantial compliance with this program participation requirement despite the regulatory
violation. Petitioner attempts to make the required showing in this case arguing that its
staff intervened immediately to attempt repairs, protect residents, and obtain a
replacement system when it became clear the old system could not be repaired.
Petitioner also argues that no resident complained and no resident suffered any injury or
was inconvenienced, as staff responded even more quickly than usual due to heightened
attentiveness. P. Br. at 1-2, 4, 8-9.

Petitioner has failed to show by a preponderance of the evidence that its remedial
measures, from November 6 through December 23, 2008, ensured that there was no risk
for more than minimal harm. The remedial actions Petitioner’s staff implemented on
November 6, 2008 were: checking to ensure call lights above resident doors on the first
floor functioned; issuing tap bells to alert and orient residents, but only 4 of 54 or 57
residents on the first floor accepted the bells; instructing staff to monitor call lights above
doors; assigning a CNA during the 4:00 p.m. to 11:00 p.m. shift to walk the halls
monitoring call lights above doors; and instructing staff on the 11:00 p.m. to 7:00 a.m.

shift to conduct rounds and monitor call lights. Tr. at 29, 36,
P. Ex. 7; CMS Ex. 8. Petitioner should have ensured that cal
worked and that staff monitored the call lights even when the
properly. Thus, the only interventions specifically to address
bell system at the nurses’ station were issuing tap bells to the
a CNA to walk the halls during the evening shift. Issuing tap
intervention in this case as too few residents accepted the bel
show whether those bells were placed in the residents’ rooms

108, 164-66, 199-200, 206;
lights above resident doors
call bell system functioned
the malfunction of the call
four residents and assigning
bells was not an effective

s, and the evidence does not
and toilet and bath

facilities. The remedy of having a CNA roam the halls may have been sufficient, if done

for every shift by two CNAs (one for each leg of the “L” shaped hall), and the CNAs

were given no duties other than watching for call lights and a

erting nursing staff of calls.

However, Petitioner assigned only one CNA to walk the halls, rendering that intervention

ineffective. While the CNA walked in one leg of the “L” shay

not observe rooms in the other leg of the hall. CMS Ex. 10, at 1.

ped hallway, he or she could
Furthermore,
14

Petitioner did not show that the CNA was not allowed or expected to deliver care in
addition to monitoring call lights. Allowing or expecting the monitoring CNA to deliver
care and services rendered the intervention ineffective, as the CNA delivering care in a
room could not reliably monitor lights in the hallway.

Between November 6 and December 24, 2008, during the day shift, Petitioner
implemented no interventions or remedies to address the malfunctioning call bell system,
except telling staff that the system was not working and reminding staff to pay particular
attention to the lights above the doors. The testimony of Administrator Bell and DON
Sysock revealed that the system at the nurses’ station was often not relied upon, as the
nurses’ station was often not occupied. Thus, staff must already have been watching for
lights above the doors to determine whether residents needed assistance. However, staff
responsiveness to either the call bell system at the nurses’ station or the call lights above
doors is in question based on the testimony of the DON and the Administrator. Both the
DON and Administrator testified that simply reminding staff to pay attention to the call
lights resulted in improvement in staff responding to call lights — both testified that
residents were happier, and there were fewer adverse incidents. The evidence that staff
was attending more diligently to the door lights and being more responsive did not
remedy the malfunctioning system at the nurses’ station. Rather, the reminder to staff to
pay attention to the call lights was simply an instruction to the staff that they should do
their jobs. Further, the testimony of the Administrator and the DON regarding the
effectiveness of the intervention was effectively rebutted, as the surveyors testified that
they were concerned because they observed several times during the day shift that there
were no staff present in the hallways to observe call lights. Tr. at 98-99, 129-30.

The fact that the Administrator and the DON did not consider the call bell system at the
nurses’ station particularly useful or important is troubling. The testimony is also not
helpful to Petitioner. The fact that Petitioner, as a matter of practice, did not ensure that
the nurses’ station was staffed, and the call bell system monitored and responded to when
it was working, is no excuse for Petitioner not promptly repairing or developing an
appropriate remedy to minimize the risk for harm associated with residents being unable
to contact nursing staff. Certainly, the regulatory requirement that Petitioner have a
system includes the requirement that the system be appropriately monitored. Petitioner’s
failure to ensure that the call bell system was effectively used for the benefit of its
residents supports that conclusion that Petitioner violated 42 C.F.R. § 483.75.

It is undisputed that the state agency did not cite Petitioner for this violation during the
state survey in November 2008. The evidence does not establish why no deficiency was
cited. Even if I infer that the state agency was satisfied with Petitioner’s efforts to
resolve the problem, I nevertheless conclude that CMS is not bound by the state agency
action or inaction in this case. See 42 C.F.R. § 488.452(a). The state agency’s failure to
cite Petitioner is no defense for Petitioner.
15

The surveyors declared that there was immediate jeopardy in this case, beginning
November 6, 2008 and continuing until December 24, 2008, when Petitioner
implemented its revised plan to use walkie-talkies and dedicated staff. Surveyor Nezbeth
explained that the declaration of immediate jeopardy was based upon Petitioner not
ensuring that staff and residents could communicate with the central nurses’ station in the
event of an emergency, including emergencies involving serious injury or death. Tr. at
66-67, 71, 75. Petitioner failed to show that the determination that there was immediate
jeopardy was clearly erroneous. Immediate jeopardy exists if the facility’s
noncompliance has caused, or is likely to cause, “serious injury, harm, impairment, or
death to a resident.” 42 C.F.R. § 488.301. CMS’s determination as to the level of a
facility’s noncompliance, which includes an immediate jeopardy finding, must be upheld
unless it is “clearly erroneous.” 42 C.F.R. § 498.60(c). The Board has previously
concluded that the regulation imposes upon Petitioner a heavy burden to show that the
CMS determination that there was immediate jeopardy is clearly erroneous. Magnolia
Estates Skilled Care, DAB No. 2228, at 23 (2009) (and cases cited therein). The
surveyor’s testimony establishes that there was a likelihood of serious injury, harm, or
death of a resident due to the resident’s and/or staffs’ inability to summon help when the
call bell system malfunctioned. The surveyor’s testimony is credible and unrebutted. I
conclude that there was a likelihood of serious harm or death, if a resident was unable to
summon staff via the call bell system in case of an emergency medical situation.
Petitioner’s interventions did not minimize or eliminate the risk until the revised plan was
implemented on December 24, 2008. I conclude that Petitioner has not met the heavy
burden to show that the declaration of immediate jeopardy was clearly erroneous.

5. Other issues raised by Petitioner are without merit or are not within
my authority to decide.

Petitioner argues that the allocation of the burden of persuasion in this case, according to
the rationale of the Board in the prior decisions cited above, violates the Administrative
Procedures Act, 5 U.S.C. § 551 et. seq., specifically 5 U.S.C. § 556(d). Request for
Hearing at 4; Petitioner’s Prehearing Brief (P. P. Br.) at 10; P. Br. at 12, n. 5. Pursuant to
the scheme for the allocation of burdens adopted by the Board in its prior cases, CMS
bears the burden to come forward with the evidence and to establish a prima facie
showing of the alleged regulatory violations in this case by a preponderance of the
evidence. If CMS makes its prima facie showing, Petitioner has the burden of coming
forward with any evidence in rebuttal and the burden of showing by a preponderance of
the evidence that it was in substantial compliance with program participation
requirements. Petitioner bears the burden to establish by a preponderance of the evidence
any affirmative defense. The allocation of burdens suggested by the Board is not
inconsistent with the requirements of 5 U.S.C. § 556(d), as CMS is required to come
forward with the evidence that establishes its prima facie case. Furthermore, the
evidence is not in equipoise in this case, the allocation of burden of persuasion did not
affect my decision, and Petitioner suffered no prejudice.

16

Petitioner also argues that the Medicare Act is violated and Petitioner is deprived of due
process if CMS is not required to submit evidence to prove it considered the regulatory
criteria established by 42 C.F.R. §§ 488.404 and 488.438(f). Request for Hearing at 4;
P. Br. at 10; P. Br. at 12 n.5. I reviewed the evidence related to the regulatory factors de
novo and perceive no prejudice to Petitioner because I did not require CMS to submit
evidence related to its consideration of the regulatory factors.

6. The CMP of $3,050 per day is reasonable.

I have concluded that Petitioner was not in substantial compliance with program
participation requirements due to violations of 42 C.F.R. § 483.70(f) (Tag F463) and 42
C.F.R. § 483.75 (Tag F490) and that the declaration of immediate jeopardy related to
those violations is not clearly erroneous. Thus, CMS has the authority to impose one or
more of the enforcement remedies listed in 42 C.F.R. § 488.406, including a CMP. In
cases where the deficiencies pose immediate jeopardy, CMS is authorized to impose a
daily CMP for the number of days of noncompliance, but the CMP must be in the upper
range of $3,050 to $10,000 per day. 42 C.F.R. § 488.438(a)(1)(i), (d)(2).

The only enforcement remedy at issue is the proposed CMP of $3,050 per day from
November 6, 2008 through December 23, 2008. I previously concluded that the
declaration of immediate jeopardy for this entire period was not clearly erroneous.
Therefore, the minimum CMP authorized under the regulations is $3,050, and, as a
matter of law, the proposed CMP is reasonable.

II. Conclusion

For the foregoing reasons, I conclude that Petitioner was not in substantial compliance
with program participation requirements from November 6 through December 23, 2008,
and the imposition of a CMP of $3,050 per day for that period is reasonable.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Shalbhadra Bafna, M.D.,
(NPI: 1497921621),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-498
Decision No. CR2419

Date: August 23, 2011

DECISION

Based upon the written record of this case, including the materials submitted by both the
Centers for Medicare and Medicaid Services (CMS) and Petitioner, Shalbhadra Bafna,
M.D., I conclude that the undisputed evidence establishes that CMS properly enrolled
Petitioner as a provider in the Medicare program effective November 11, 2010.

I. Background

Petitioner filed a hearing request and challenged the effective date of his enrollment in
the Medicare program. Petitioner alleges that he should have been enrolled as of an
earlier date than November 11, 2010, the date when CMS’s contractor determined that
Petitioner was eligible for enrollment, and asks that his Medicare billing privileges be
reactivated effective September 1, 2010. The case was assigned to me for a hearing and a
decision.

CMS subsequently filed a pre-hearing brief (CMS Br.) and moved for summary
judgment. Petitioner opposed CMS’s motion and filed a response (P. Br.). CMS filed
eleven proposed exhibits, which it designated CMS Exhibit (Ex.) 1 - CMS Ex. 11.
Petitioner filed seven proposed exhibits, which he designated P. Ex. 1 — P. Ex. 7. I
receive all of the parties’ proposed exhibits into the record of this case.

Neither party proffered direct testimony of any proposed witnesses or indicated that they
would call witnesses at a hearing. Thus, I decide this case based on the written record.

II. Issue, Finding of Fact, and Conclusion of Law
A. Issue
The issue in this case is whether:

1. CMS’s contractor and CMS properly determined Petitioner’s effective
date of Medicare enrollment to be November 11, 2010.

B. Finding of Fact and Conclusion of Law
I make the following finding of fact and conclusion of law (Finding).

I. CMS correctly determined that the effective date of Petitioner’s
Medicare enrollment is November 11, 2010.

The effective date of a physician’s enrollment in Medicare is governed by regulations at
42 C.F.R. § 424.520(d). The effective date of enrollment for a physician may only be the
later of two dates: the date when the physician filed an application for enrollment that
was subsequently approved by a Medicare contractor charged with reviewing the
application on behalf of CMS; or the date when the physician first began providing
services at a new practice location. Jd. The regulations do not empower CMS or me to
grant an earlier effective date, nor may I waive the regulations’ criteria.

The undisputed facts of this case are as follows. On October 18, 2010, Wisconsin
Physicians Service Insurance Corporation (WPS), a Medicare contractor operating on
CMS’s behalf, notified Petitioner that his Medicare Provider Transaction Access Number
(PTAN) and his associated National Provider Identifier (NPI) were deactivated effective
October 16, 2010, due to twelve consecutive months of non-billing. CMS Ex. 1. In the
deactivation notice, WPS advised Petitioner that he could reactivate his Medicare billing
privileges by submitting a Medicare enrollment application via the online Provider
Enrollment, Chain, and Ownership System (PECOS) or via mail. Jd. On November 11,
2010, Petitioner filed an enrollment application. CMS Ex. 2, CMS Ex. 3; P. Brat 1. On
February 3, 2011, WPS informed Petitioner that the application he submitted was
incomplete and advised Petitioner that he needed to submit additional information. CMS
Ex. 4. Petitioner timely submitted the requested information on February 8, 2011. CMS
Ex. 5. On February 17, 2011, WPS informed Petitioner that his Medicare enrollment
application was approved and that his billing privileges were reactivated effective
November 11, 2010. CMS Ex. 6. Petitioner was dissatisfied with this determination and
requested reconsideration. On May 17, 2011, WPS issued a reconsideration decision and
affirmed the decision to grant Petitioner a reactivation date of Medicare billing privileges
effective November 11, 2010. CMS Ex. 10.

The undisputed facts establish that the earliest date when CMS could have approved
Petitioner’s application was November 11, 2010. 42 C.F.R. § 424.520(d). Petitioner
does not assert that there are any facts that would entitle him to an earlier enrollment date
pursuant to the requirements of 42 C.F.R. § 424.520(d). Notably, he does not contend
that he filed a valid application on any date prior to November 11, 2010. Petitioner also
does not deny that his Medicare enrollment was properly deactivated.

Instead, Petitioner argues that his November 11, 2010 application was submitted as a
“new enrollee” in Medicare. P. Br. at 1. Petitioner further claims that he received
information by “voice communication” indicating that he did not need to file a separate
application for a new practice location. Jd. Petitioner also asserts that he began seeing
patients at the Behavior Center of Michigan on September 12, 2010, and this entity
submitted an application for Medicare participation on Petitioner’s behalf, without his
nowledge. P. Br. at 2. Petitioner attaches this application, dated October 27, 2010,
seeking assignment of benefits from Petitioner to Behavior Center of Michigan effective
September 19, 2010. P. Ex. 1. Petitioner argues, however, that this application is invalid
because his signature was forged by someone else. P. Br. at 2-4. Despite asserting that
the Behavior Center of Michigan application is forged, Petitioner subsequently argues
that it would have been better if CMS has processed that application so he “could have
been saved all of this trouble and agony.” P. Br. at 3. Petitioner also makes several
assertions regarding the unfairness of the delay in the processing his application.
Petitioner claims he repeatedly called CMS while awaiting the assignment of his PTAN
without positive results and contends that his application was “not looked after
expeditiously.” P. Br. at 2.

Even if true, Petitioner’s arguments provide no ground for me to grant Petitioner an
earlier effective date. The regulation does not distinguish between “new enrollee” and
“reactivation” applications, when determining the effective date of a physician’s
participation in Medicare. Nor does the issue of Petitioner’s practice location affect the
effective date of his Medicare participation. Petitioner received an effective date based
upon the date he filed a valid application, and his practice location had nothing to do with
CMS’s effective date determination. Also, Petitioner now wants a previous forged, hence
invalid, application to be used to establish an effective date of Medicare participation
prior to November 11, 2010. Obviously, Petitioner cannot have it both ways. If the prior
application is forged, as Petitioner contends, then CMS could not process it. Thus,
Petitioner cannot receive an effective date based upon the filing of this application.
Petitioner also states that CMS delayed the processing of his application but has provided
no evidence to support this assertion. Moreover, this is an equitable argument that I have
no jurisdiction to hear and decide. None of Petitioner’s arguments show as a matter of
fact that he filed a valid application on an earlier date than CMS determined or that the

contractor or CMS incorrectly applied the regulatory criteria.

Petitioner received the earliest possible effective date of Medicare participation under the
applicable regulations. Despite the fact that the application received by the CMS
contractor on November 11, 2010 was incomplete and required Petitioner to provide
additional information, CMS granted Petitioner an effective date based upon the date
CMS originally received it. The CMS contractor approved Petitioner’s application on
February 17, 2011, effective November 11, 2010, shortly after receiving the additional
information from Petitioner on February 8, 2011.

Petitioner points to no source of authority for me to grant him an exemption from
regulatory compliance. Moreover, I have no authority to declare statutes or regulations
invalid or ultra vires. 1866/CPayday.com, L.L.C., DAB No. 2289, at 14 (2009) (“An
ALJ is bound by applicable laws and regulations and may not invalidate either a law or
regulation on any ground.”). Thus, I have no authority to address Petitioner’s arguments
or to change Petitioner’s Medicare enrollment date based upon equitable considerations.
Nor do I have authority to consider a challenge to the way in which this Department
implements regulations.

Petitioner submitted an application that was subsequently approved by the contractor on
November 11, 2010, and CMS’s determination of Petitioner’s effective date of Medicare
enrollment was entirely consistent with regulatory requirements.

/s/
Steven T. Kessel
Administrative Law Judge