Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Decision No. CR 1651
Centers for Medicare & Medicaid
Services.

In the Case of: )
)

Gulf Pointe Specialty Hospital, ) Date: September 17, 2007
(CCN 45-2043) )
)
Petitioner, )
)

-V.- ) Docket No. C-07-528

)
)
)
)

DECISION DISMISSING REQUEST FOR HEARING

I dismiss the hearing request of Petitioner, Gulfe Pointe Specialty Hospital because it has
no right to a hearing.

I. Background

Petitioner is a hospital located in Houston, Texas. It participates in the Medicare

program. Its participation in Medicare is governed by section 1866 of the Social Security
Act and by implementing regulations. Also, its right to a hearing in this case is governed
by regulations at 42 C.F.R. Part 498.

On March 20, 2007 Petitioner was surveyed for compliance with Medicare participation
requirements. Based on the results of that survey the Centers for Medicare & Medicaid
Services (CMS) determined that Petitioner no longer met participation requirements. On
April 17, 2007 CMS notified Petitioner that some of Petitioner’s deficiencies constituted
a serious and immediate threat to patient health and safety. It warned Petitioner that its
participation in Medicare would be terminated if these deficiencies were not corrected.
On May 17, 2007 CMS advised Petitioner that it had determined that Petitioner had
corrected those deficiencies constituting a serious and immediate threat to patient health
and safety. CMS also told Petitioner that it continued to remain out of compliance with
Medicare participation requirements, albeit at a level of noncompliance that did not

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constitute a serious and immediate threat to patients, and it gave Petitioner until July 16,
2007 to correct those remaining deficiencies. CMS advised Petitioner that its
participation in Medicare would be terminated if it did not correct the remaining
deficiencies by that date.

Petitioner requested a hearing and the case was assigned to me for a hearing and a
decision. I issued a pre-hearing order instructing the parties to file pre-hearing exchanges
of proposed exhibits and briefs. However, on July 16, 2007, CMS notified Petitioner that
it had rescinded its determination to impose remedies against it. CMS then moved to
dismiss Petitioner’s hearing request on the ground that no basis for a hearing continued to
exist. Petitioner filed no reply to the motion.

II. Discussion

It is axiomatic that no right to a hearing exists where there is no remedy determination to
contest. Arcadia Acres, DAB No. 1607 (1997); Rafael Convalescent Hospital, DAB No.
1616 (1997). Where CMS determines to impose a remedy hearing rights are created.
However, those rights are extinguished if CMS determines to rescind that remedy.

I must dismiss a hearing request where the party requesting a hearing has no right to one.
42 C.F.R. § 498.70(b). Petitioner no longer has a right to a hearing in this case because
the unchallenged facts are that CMS rescinded its remedy determination. Consequently, I
dismiss Petitioner’s hearing request.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Meadowbrook Manor — Naperville, ) Date: September 14, 2007

)
Petitioner, )
)

-Vv.- ) Docket No. C-06-614

) Decision No. CR1648
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose remedies against Petitioner, Meadowbrook Manor — Naperville. These remedies
include: civil money penalties of $300 per day for each day of periods that ran from
January 13, 2006 through April 24, 2006 and from April 26, 2006 through June 11, 2006;
and, a one-day immediate jeopardy level civil money penalty of $3,050 that CMS
determined to impose for April 25, 2006. The remedies also include a denial of payment
for new admissions for a period beginning on April 13, 2006 and running through June
11, 2006, and directed in-service training.

I. Background

Petitioner is a skilled nursing facility doing business in the State of Illinois. It participates
in the Medicare program and its participation is governed by sections 1819 and 1866 of
the Social Security Act (Act) as well as by regulations at 42 C.F.R. Parts 483 and 488.
Additionally, there are regulations which govern my hearing and decision in this case.
These are at 42 C.F.R. Part 498.

Petitioner was surveyed several times between January and June 2006 in order to
determine whether it was complying with Medicare participation requirements. At
several of these surveys Petitioner was found not to be complying substantially with
participation requirements. CMS based its remedy determinations on these
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noncompliance findings. The surveys at which noncompliance was found were
completed on: January 13, 2006 (January 13 survey); January 27, 2006 (January 27
survey); February 2, 2006 (February 2 survey); March 17, 2006 (March 17 survey); April
7, 2006 (April 7 survey); and April 28, 2006 (April 28 survey).

Petitioner requested a hearing and the case was assigned to me for a hearing and a
decision. I issued an initial pre-hearing order which directed the parties to file pre-

earing exchanges including briefs and proposed exhibits that included the written direct
testimony of all proposed witnesses. The parties complied with the exchange
requirements. In its pre-hearing brief CMS asserted that Petitioner’s hearing request was
untimely as to the determination to impose denial of payments for new admissions against
Petitioner.

scheduled an in-person hearing. However, prior to the hearing and after a telephone
pre-hearing conference, the parties agreed that the case could be heard and decided based
on their written exchanges. Therefore, I cancelled the hearing but directed the parties to
file additional briefs. In its brief CMS, among other things, moved that Petitioner’s
earing request be dismissed in part due to its allegedly untimely challenge of the denial
of payment remedy. Petitioner opposed this motion.

With its pre-hearing exchange CMS filed 67 proposed exhibits which it identified as
CMS Ex. 1-CMS Ex. 67. Additionally, CMS filed a lengthy collection of documents, not
marked as exhibits, which it labeled “Prior Statements and Other Miscellaneous
Documents ....” With its exchange Petitioner filed 11 proposed exhibits which it
identified as P. Ex. 1—-P. Ex. 11.

Neither party objected to my receiving into evidence any of the proposed exhibits. I
receive into evidence CMS Ex. 1-CMS Ex. 67 and P. Ex. 1—P. Ex. 11. I do not receive
into evidence CMS’s “Prior Statements and Other Miscellaneous Documents . . .”
because CMS did not move that these documents be admitted into evidence.

II. Issues, findings of fact and conclusions of law
A. Issues

At first blush this case would appear to be complicated by the numerous surveys and the
several noncompliance findings that were made at these surveys on which CMS based its
remedy determinations. In fact, it is not so complicated because Petitioner does not
challenge much of what CMS determined to be noncompliance and, moreover, the parties
have stipulated as to the findings of the February 2 survey.
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In fact, Petitioner does not challenge CMS’s determination to impose civil money
penalties against it, in amounts of $300 per day, from January 13 through January 26,
2006. Nor does it challenge CMS’s determination to impose civil money penalties
against it from March 17 through June 11, 2006 (which consist of penalties of $300 per
day from March 17 through April 24, a $3,050 immediate jeopardy penalty for April 25,
and penalties of $300 per day from April 26 through June 11). Thus, all that is at issue
ere are the $300 daily penalties that CMS determined to impose from January 27
through March 16, 2006 and the denial of payment for new admissions that CMS
determined to impose beginning April 13, 2006 and running through June 11, 2006.'

Petitioner offers no substantive challenge to the deficiency findings that were made at the
January 13 survey. It challenges only CMS’s determination that Petitioner failed to
correct the January 13 deficiency findings until February 12, 2006, arguing that it should
e “deemed” to have corrected the January 13 findings by January 27, 2006.
Consequently, the only issue emerging from the January 13 survey is whether Petitioner
corrected its deficiencies by January 27, 2006, as it contends, or not until February 12,
2006, as was determined by CMS.

Petitioner challenges the two deficiency findings that were made at the January 27 survey.
The issues which emerge from this survey are whether Petitioner failed to comply
substantially with one or more participation requirements as of that survey, and the date
or dates when Petitioner corrected any deficiencies that might have existed as of the date
of the survey.

As for the February 2 survey (a Life Safety Code survey), as I note above, the parties
agree that Petitioner attained compliance with all of the deficiencies that were identified
at that survey by February 3, 2006, the day after the survey. That leaves open only the
issue of whether Petitioner was noncompliant on February 2 with any of the regulations
that were cited on that date. However, it would be unnecessary for me to address those
findings if I conclude that Petitioner’s noncompliance at earlier surveys (January 13 and
January 27) was not corrected prior to the March 17 survey or, alternatively, if I conclude
that deficiencies found at the March 17, April 17, or April 28 surveys originated prior to
February 2, 2006 and continued through June 11, 2006.

' The remedies that CMS determined to impose against Petitioner also included
directed in-service training. Petitioner has not challenged CMS’s authority to impose this
remedy. Additionally, Petitioner lost approval of its nurse aide competency evaluation
and training program for a two-year period as a consequence of the immediate jeopardy
deficiency finding made at the April 28 survey. It has not challenged this outcome.
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Petitioner does not challenge the findings of noncompliance that were made at the March
17, April 7, and April 28 surveys, including the finding of immediate jeopardy that was
made at the April 28 survey. Consequently, the noncompliance findings and the remedy
determinations made on the basis of these findings (including the imposition of a $3,050
immediate jeopardy level civil money penalty) are not at issue in this case.

In summary, what remains to be decided in this case is the following:

1. Whether Petitioner corrected all of the deficiencies that were found at the
January 13 survey by January 27, 2006, as it contends;

2. Whether Petitioner failed to comply with one or more participation
requirements as of the January 27 survey and, if so, the duration of its
noncompliance with these requirements;

3. Whether there was a continuous period of noncompliance beginning in January
2006 and extending until June 11, 2006; and

4. Whether Petitioner timely challenged CMS’s determination to impose the
remedy of denial of payment for new admissions and, if Petitioner failed to do so,
it established good cause for its untimely challenge of that remedy.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this
case. I set forth each Finding below as a separate heading and I discuss it in detail.

1. Petitioner did not prove that it corrected the deficiencies that were
identified at the January 13 survey before February 12, 2006.

It is well established that the burden falls entirely on the noncompliant facility to prove
the date when it corrected its deficiencies. Where a facility challenges CMS’s
determination as to the date when compliance is attained — as is the case with Petitioner —
a finding of noncompliance as of a particular date establishes a presumption that the
noncompliance continues until the facility alleges and establishes that it has corrected the
noncompliance. Regency Gardens Nursing Center, DAB No. 1858, at 9-10 (2002).

CMS’s determination that Petitioner was not complying substantially with participation
requirements as of January 13, 2006 included finding: a failure by Petitioner to
investigate resident injuries of an unknown source in contravention of the requirements of
42 C.F.R. § 483.13(c); and a failure to provide adequate supervision and assistance
devices to residents to protect them against sustaining accidents in contravention of the
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requirements of 42 C.F.R. § 483.25(h)(2). CMS Ex. 3, at 1-7. Petitioner contested
neither of these findings. Rather, it has focused on the date when CMS determined that
Petitioner corrected these two deficiencies, February 12, 2006. According to Petitioner,
this compliance date is incorrect. Petitioner asserts that, in fact, it corrected the January
13 deficiencies by January 27, 2006. Petitioner’s brief on remaining issues at 3;
Petitioner’s reply brief at 2.

Petitioner offers no affirmative evidence to prove that it corrected its deficiencies by
January 27. It points to nothing to establish the measures it implemented by that date in
order to attain compliance. Indeed, Petitioner averred in its own submissions that it had
not corrected the January 13 deficiencies prior to February 12, 2006. On February 2,
2006 Petitioner’s administrator signed and filed a plan of correction which represented
that the completion date for all corrections of the January 13 deficiencies would be
February 12. CMS Ex. 3, at 1, 8-9.

Notwithstanding, Petitioner argues that it should be “deemed” to have attained
compliance by January 27 solely because the surveyors who conducted the January 27
survey of Petitioner’s facility failed to cite the two January 13 deficiencies as ongoing in
their survey report. Petitioner’s brief on remaining issues at 2.

Petitioner bases this argument on the language of a CMS program memorandum. S & C-
01-23, August 5, 2001. P. Ex. 1, at5. The document is an advisory document to
surveyors which contains the following hypothetical question and response:

17Q: A complaint survey starts a certification cycle. One month later, the State
conducts a standard survey but does not recite the violations found a month
earlier. The State does not technically conduct a revisit because the plan of
correction dates are later. If it is determined that the deficiencies do not
exist at the time of the standard survey, should [a Form CMS-2567B] be
prepared to clear the original deficiencies? Would the clearing of the tags
be considered a revisit and count toward the 2-revisit policy?

17A: The fact that the standard survey did not find the same regulatory
deficiencies as those cited during the complaint survey establishes that
those deficiencies have been corrected and so a [Form CMS-2567B] should
be prepared to clear the original deficiencies. The standard survey is not
considered a revisit and should not be included in the revisit count. That is
because the intent of a standard survey is not the same as that of a revisit;
the standard survey is broader in scope and performed to evaluate the
facility’s compliance with a comprehensive set of requirements.

Petitioner’s brief on remaining issues at 3; P. Ex. 1, at 5.
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According to Petitioner this document must be read unequivocally to mean that, where a
report of standard survey (the January 27 survey report) does not state that deficiencies
from a prior complaint survey (the January 13 survey) persist then, and as a matter of law,
the deficiencies from the prior survey must be deemed to have been corrected as of the
date of the standard survey.

I find this argument to be unpersuasive. First, the hypothetical stated in the program
memorandum departs from the facts of this case and, for that reason, the guidance given
by that document is inapplicable to this case. In the hypothetical question the
noncompliant facility has prepared and submitted a plan of correction prior to the
standard survey stating correction dates that occur after that survey. The question
emanating from this circumstance is whether the surveyors should prepare a specific form
showing that the deficiencies had been cleared if, at the standard survey they find that the
deficiencies were, in fact, cleared. The answer given to that hypothetical is that, in that
very narrow circumstance, the surveyors should prepare a specific form showing that the
deficiencies were cleared.

Here, Petitioner did not file a plan of correction prior to the standard survey. It filed the
plan of correction nearly a week after the date of the standard survey. Under that
circumstance it would be entirely reasonable — indeed, expected — that the surveyors who
conducted the standard survey on January 27 would not consider whether Petitioner had
attained compliance with previously cited deficiencies. More important, there is nothing
in the report of the January 27 survey to suggest that the surveyors actually did look at the
issue of continuing noncompliance. The report is entirely consistent with the fact that
Petitioner did not submit its plan of correction for the January 13 deficiencies until a later
date and, so, did not trigger a revisit to consider whether those deficiencies had been
corrected until after the January 27 standard survey.

Had the surveyors found at the January 27 survey that the January 13 deficiencies had
been cleared, then, pursuant to the guidance cited by Petitioner they should have prepared
a form stating that finding. It is not unreasonable to infer from their failure to prepare
such a form that they made no such finding on January 27.

Furthermore, the document cited by Petitioner does not in any sense describe the /egal or
evidentiary significance of a survey report. It merely consists of guidelines to surveyors
as to how to fill out a report. Assuming that the document should be read to instruct
surveyors to document continuing noncompliance at a standard survey that follows a
complaint survey, it does not mean that a failure by surveyors to do so means,
axiomatically, that noncompliance has been corrected. It means only that the surveyors
failed to follow the guidelines in preparing follow-up documentation.
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Finally, I find Petitioner’s argument to be without merit because it exalts form over
substance. In this case the undisputed facts are that Petitioner did not even allege that it
had corrected the January 13 deficiencies before February 12, 2006. In light of that, it
would be absurd to deem Petitioner to have attained compliance at an earlier date simply
because the January 27 survey report fails to discuss the issue of correction of pre-
existing deficiencies.

2. Petitioner manifested additional deficiencies as of January 27, 2006.

The surveyors who conducted the January 27 survey found two instances of failure by
Petitioner to comply substantially with participation requirements in addition to those that
were cited on January 13. Specifically, they found that Petitioner failed to comply: with
the requirements of 42 C.F.R. § 483.15, which mandates that a skilled nursing facility
provide care for its residents in a manner and in an environment that promotes
maintenance or enhances each resident’s quality of life; and with 42 C.F.R. § 483.25(b),
which requires a facility to ensure that residents receive proper treatment and assistive
devices to maintain vision including, if necessary, assisting the resident in making
necessary appointments, and arranging transportation to and from the office of a
practitioner specializing in vision care.

As I discuss below CMS offered persuasive proof showing that Petitioner failed to
comply substantially with these two regulations. I find that Petitioner did not
affirmatively rebut that evidence.

a. Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.15.

CMS’s evidence concerning Petitioner’s failure to comply with 42 C.F.R. § 483.15(e)(1),
which requires skilled nursing facilities to provide reasonable accommodation of
individual needs and preferences, except where the health or safety of the individual or
other residents would be endangered, relates to the care that Petitioner gave to a resident
who is identified as Resident # 28 in the report of the January 27 survey. CMS Ex. 17, at
1, 6-13, 15-16. The evidence offered by CMS concerning the care that Petitioner gave to
Resident # 28 is powerful proof that Petitioner failed to address this resident’s
communications needs and failed to show an overall sensitivity and understanding of the
need to deal on an individualized basis with communication-impaired residents.

The resident is an elderly, demented individual with severely impaired vision.
Petitioner’s staff assessed the resident as being incapable of effective verbal
communication with the staff due to the aforementioned deficits but also due to a
language barrier. Resident # 28 is Korean and, evidently, understands and speaks very
little English. Jd. On September 30, 2005 Petitioner’s staff determined that:
She is rarely understood and responds to simple direct communication only.
She would answer yes, no or sometimes nod her head and give you a smile.
[She] is Korean speaking but appears to understand little English. Resident
is not able to verbalize needs all the time but would reply with 1 word when
talked to....

CMS Ex. 17, at 25 (emphasis added). Petitioner’s staff concluded that it was necessary to
prepare a care plan to address the resident’s communication problem. Id.

However, the evidence offered by CMS shows that Petitioner did not, after making this
assessment, prepare a care plan to address the resident’s communication problem.
Petitioner’s staff prepared an activities care plan for Resident # 28 but this document
actually predates the September 30, 2005 assessment. And, it is evident from the face of
the September 30 assessment that Petitioner’s staff concluded that more needed to be
done in order to facilitate communications with Resident # 28. CMS Ex. 17, at 25.
Consequently, the staff’s own assessment of the resident shows that pre-existing efforts to
facilitate communication were inadequate.

Moreover, the pre-existing activities care plan is, on its face, inadequate to address the
problems that the staff identified on September 30, 2005. The interventions that were
identified in the activities care plan consisted of the following:

1) Provide activity calendar monthly.

2) Invite and encourage resident to actively participate in activities.

3) Assist resident to activities areas.

4) Use gestures, hand over hand assist/touch when explaining the programs.
5) Mech. Soft/NTL diet.

6) Praise and thank for all efforts made.

CMS Ex. 17, at 36. Only one of the six items in the activities plan addresses specifically
the resident’s communication problem. And, that item was designed only to assist the
resident in the context of engaging in the facility’s activities. There was nothing in the
activities plan that addressed the broader question of the resident’s ability to
communicate. For example, there was no care plan established for dealing with needs
and desires that the resident might express while in her room or when she was receiving
medical treatment from Petitioner’s nursing staff for her various infirmities.

The inadequacy of Petitioner’s efforts to address the resident’s communication problem
become more apparent when that problem is seen in the context of the medical care that
Petitioner’s staff gave to the resident. For example, the staff prepared a pain management
plan for Resident # 28. The plan instructed the staff to encourage the resident to verbalize
her feelings and concerns, to answer her questions and concerns carefully and accurately,
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and to explain procedures and interventions in order to motivate the resident to be
cooperative and to educate her about pain and pain management. CMS Ex. 17, at 39. On
its face the plan assumes that the resident is an individual who is capable of effective
communication with Petitioner’s staff. The plan did not account for the resident’s
language and communications barriers nor did it explain how Petitioner’s staff would
surmount these barriers.

Furthermore, the evidence offered by CMS shows that Petitioner’s staff failed to provide
the resident with even the assistance that it represented that it was providing to her. A
surveyor asked a member of Petitioner’s staff how the staff communicated with the
resident and the employee responded that there was a communications board in the
resident’s room. CMS Ex. 10, at 1-2. I take notice that a “communications board” is a
device on which a communications-impaired resident may post images which correspond
to the resident’s needs of the moment. However, when the surveyor went to the
resident’s room to look at the communications board she found none to be present. Jd. at
2.

On January 26, 2006 the day before the completion of the January 27 survey, Petitioner’s
staff presented the surveyors with a new care plan for Resident # 28. CMS Ex. 17, at 67.
The plan represented, among other things, that Petitioner’s staff would thoroughly assess
the resident’s communication strengths and deficits, that it would provide a translator to
assist the resident in communicating, and that the translator would assist Petitioner’s staff
in developing a personalized communications board. /d. But, none of these promised
measures had been implemented by the completion of the January 27 survey.

Petitioner’s response to CMS’s case is unconvincing. First, Petitioner avers without
offering any supporting evidence that it accommodated the needs of Resident # 28.
Petitioner’s brief on remaining issues at 3. In connection with this assertion Petitioner
argues that CMS’s allegations refer to services and approaches that a hypothetical
resident might benefit from but which Petitioner did not offer to Resident # 28. Jd. at 3-4.
According to Petitioner, there is no evidence that Resident # 28 needed such services and
approaches. To the contrary, according to Petitioner, Resident # 28 communicated non-
verbally with Petitioner’s staff successfully to meet her needs. Id.; see P. Ex. 7, at 1-2.

This argument and the evidence that supports it — a declaration by one of Petitioner’s
nurses — is wholly unpersuasive. See P. Ex. 7. The evidence adduced by CMS,
consisting of Petitioner’s own treatment records, shows that Petitioner’s staff was
concerned that Resident # 28 was unable to verbalize her needs and to communicate
effectively. CMS Ex. 17, at 25. The staff determined in September 2005 that this
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problem was so significant that it required specialized care planning for the resident’s
communication needs. Jd. Consequently, to assert now that the resident communicated
adequately with Petitioner’s staff belies Petitioner’s own assessment of what needed to be
done for the resident.

Furthermore, the declaration on which Petitioner relies is internally inconsistent and, for
that reason, not credible. On the one hand, it asserts that, when Petitioner’s staff talks to
Resident # 28: “she looks at us and smiles”, suggesting that she is unable to communicate
anything beyond the most simple expressions of emotion. P. Ex. 7, at 1. But, on the
other hand, and without explanation, the declaration states that staff and the resident
“communicate together non-verbally, and well enough to provide her needs.” Jd. The
declaration offers no explanation how this non-verbal communication works given that
the resident apparently does no more than look at the staff and smile when approached.
How, for example, does the resident describe or explain her symptoms, her feelings of
pain, or anything beyond her most simple needs and desires? In that respect Petitioner
offered nothing to derogate from its own assessment that the resident needed more
assistance than Petitioner’s staff was giving to her.

Second, Petitioner contends that it was offering appropriate and effective communication
with Resident # 28 consistent with guidelines in the State Operations Manual.
Petitioner’s brief on remaining issues at 4. But, Petitioner offers no explanation as to
exactly what it did to provide this allegedly appropriate and effective communication.’
And, it does not directly respond to CMS’s evidence that its staff recognized a need to do
more to assist the resident but failed to do so.

Finally, Petitioner argues that, if it was deficient, its deficiency posed no possibility of
more than minimal harm to the resident. It contends, without offering supporting
evidence, that the resident lived at its facility for more than two years without
experiencing harm. I find that assertion not only to be unsupported but to be contradicted
by the evidence offered by CMS. Resident # 28 was in plain need of assistance by
Petitioner’s staff and the staff, in fact, recognized that need. For example, the staff saw a

> Petitioner argues that it was not required by law to provide Resident # 28 with a
translator and that CMS may not measure its compliance in terms of whether Petitioner
provided or failed to provide one to the resident. However, CMS did not mandate that
Petitioner provide the resident with a translator. The decision to do that was made
independently by Petitioner to address the resident’s communication needs. Petitioner’s
failure to implement this decision, along with several others concerning the resident’s
needs, by the completion of the January 27 survey is evidence that it had not implemented
its own corrective actions by the end of the survey. But, the choice of precisely what
corrective actions to take lay with Petitioner, not CMS.
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need to enable the resident to communicate her complaints of pain so that the staff could
treat her. The failure to address the resident’s communication problem left this resident in
a walled-in state, unable adequately to express her concerns, her complaints, or her
symptoms. The potential for harm to the resident is obvious given Petitioner’s failure to
address her communication needs.

b. Petitioner failed to comply substantially with the requirements
of 42 C.F.R. § 483.25(b).

CMS premises its case for Petitioner’s failure to comply with the requirements of 42
C.F.R. § 483.25(b) on evidence relating to the care Petitioner’s staff gave to a resident
who is identified as Resident # 16 in the report of the January 27 survey. This evidence
provides strong support for CMS’s allegations and establishes Petitioner’s noncompliance
with the regulatory requirement — that residents receive proper treatment and assistive
devices to maintain vision including assistance in making necessary appointments and
arranging transportation to and from appointments — if not rebutted.

Resident # 16 is an individual with numerous physical and mental impairments. Her
problems include dementia, an unsteady gait and a history of falls. CMS Ex. 16, at 1, 3,
6. Petitioner’s staff observed that she tended to wander as a consequence of her
dementia.

The resident wore eyeglasses and her vision was assessed by Petitioner’s staff in October
2005 as adequate so long as she wore them. CMS Ex. 10, at 3; CMS Ex. 16, at 4.
However, in September 2005, the resident’s eyeglasses were broken and they were
neither repaired nor replaced. P. Ex. 8, at 1. On repeated occasions Petitioner’s staff
documented that the resident’s vision was impaired and that she needed new eyeglasses.
CMS Ex. 10, at 3; CMS Ex. 16, at 4. On several occasions prior to January 2006,
Petitioner’s staff documented that the resident was on an ophthalmology consult list to
assist her in getting new eyeglasses. Id.

But, during the months prior to the survey, Resident # 16 did not receive a consultation
with an ophthalmologist nor did she receive new eyeglasses. And, the evidence offered
by CMS is devoid of anything to show that Petitioner’s staff provided the resident with
assistance in getting her vision checked or in getting new eyeglasses. As CMS asserts,
the record shows that, in fact, it was Petitioner’s policy not to make appointments on a
resident’s behalf or to provide transportation so that the resident might obtain eyeglasses
off-premises. One of Petitioner’s nurses states:
12

When residents have broken glasses or need to see an eye doctor, nursing
staff puts the resident’s name and need in a book for service appointments.
There is this “consult book” on each floor. Nurses write in residents’ needs
for optometry, podiatry, and dentistry in the consult books. Nurses also
have the ability to write in minor concerns for follow-up in the consult
book, even without a physician’s order.

For eye doctor visits, residents may go out to the eye doctor’s office or we
have eye doctors who come to the facility to see residents. Whether a
resident goes out of the facility or stays in to see the eye doctor is up to the
resident and family and is their choice.

P. Ex. 8, at 1.

As I discuss above, Resident # 16 was known to wander. During the January 27 survey
she was observed by a surveyor wandering in Petitioner’s facility and bumping into
objects. CMS Ex. 55, at 2.

The regulation at issue imposes the explicit duty on a facility to assist a resident in
making an appointment with a vision specialist and, where necessary, with transporting
the resident to and from the specialist. The evidence supplied by CMS shows clearly that
Petitioner failed to comply with this obligation in providing care for Resident # 16. Fora
period of nearly six months, in advance of the January 27 survey, Resident # 16 wandered
Petitioner’s facility without eyeglasses. She was prone to, and in fact did, bump into
objects as she wandered. Petitioner’s staff knew that the resident’s vision was impaired,
knew that her eyeglasses were broken, and yet, did not assist the resident in making an
appointment with a vision specialist or in transporting the resident to a specialist. Indeed,
it was Petitioner’s policy, contrary to regulatory requirements, that it not do so. The
resident’s history and behavior supports the conclusion that, at a minimum, Petitioner’s
staff should have alerted the resident’s family concerning her vision problems and need
for immediate attention. Yet, Petitioner’s records do not show such communication prior
to the January 27 survey.

Petitioner’s response to CMS’s evidence is to argue that Resident # 16 had cataracts that
the resident’s family decided not to address with corrective surgery. Petitioner’s brief on
remaining issues at 5; see P. Ex. 8, at 1-2. It asserts that the resident’s eye doctor
concluded that corrective eyeglasses would not help the resident in view of her
uncorrected cataracts. Jd. Therefore, according to Petitioner, there is nothing that
Petitioner could have done to assist the resident.

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I find this argument to be unpersuasive. Whether Resident # 16 had cataracts that would
have made corrective eyeglasses useless begs the question of whether Petitioner complied
with its obligations under 42 C.F.R. § 483.25(b). Because the issue is irrelevant to my
decision I make no finding that the resident would benefit or would not have benefitted
from corrective eyeglasses. The issue here is, as I have stated, whether Petitioner
provided the resident with required assistance and not whether that assistance would have
produced good results had it been provided.

The whole point of the regulation is that a facility owes a duty to provide assistance to its
vision-impaired residents to assure that these individuals receive appropriate clinical
attention and whatever care their condition merits. Here, the evidence is that Petitioner
failed to do anything to assist the resident prior to the January 27 survey, despite knowing
that the resident had broken her eyeglasses and that she could not see adequately without
them. Petitioner’s staff did not know at the time when it was not providing necessary
assistance that the resident had cataracts or that her cataracts would interfere with the
benefits provided by corrective eyeglasses. Petitioner’s vision was not assessed until
after the completion of the January 27 survey. P. Ex. 4, at 3, 6-7.

Petitioner’s argument is essentially an effort by it to shrug off its obligations by saying
that its assistance would have been of no benefit to the resident had it been given. But,
the regulation does not give a pass to a facility that fails to comply with its duties based
on a retrospective finding that its assistance would not have helped. The “no harm no
foul” logic used by Petitioner is no excuse for its failure to comply with regulatory
requirements. The regulation imposes on a facility the affirmative duty to provide
assistance regardless of the outcome of that assistance. The regulation’s requirements are
based on residents’ needs and not on outcomes.

Petitioner could not have known that the resident would not benefit from new eyeglasses
without the resident being assessed by an optometrist or ophthalmologist. And, during
the entire five-month period that the resident was without glasses she wandered
Petitioner’s facility, bumping into objects as a consequence of her impaired vision. The
potential for harm to this resident from Petitioner’s failure to provide mandated assistance
is evident.

Petitioner argues also that it complied with the requirements of 42 C.F.R. § 483.25(b) by
putting Resident # 16’s name on its ophthalmology consult list in September, October,
November, and December 2005. Petitioner’s pre-hearing brief at 9; CMS Ex. 10, at 3;
CMS Ex. 16, at 4. According to Petitioner it assisted the resident, not only by
recommending her to see an eye doctor but by giving her the choice to see an eye doctor
in the facility. Id.
14

But, Petitioner did nothing to assist Resident # 16 to see an eye doctor aside from putting
er on a list of names of individuals who would benefit from such a visit. It did not assist
er in scheduling a visit outside of the facility. In fact, and without explanation,

Petitioner’s staff dropped the resident’s name from the ophthalmology consult list in

January 2006. CMS Ex. 10, at 3; CMS Ex. 16, at 4. It did not specifically discuss with

the resident’s family prior to the January 27 survey the need for the resident to see an eye

doctor. And, it made no effort to arrange for a visit between an eye specialist and the
resident at the facility. Simply putting the resident’s name on a list of people who would
enefit from consultation plainly wasn’t enough in this case and Petitioner’s staff knew or
should have known that by virtue of the resident’s continued wandering without
corrective glasses.

Finally, Petitioner argues that the resident’s family was reluctant to pursue vision
treatment. Petitioner’s pre-hearing brief at 9. However, the evidence relied on by
Petitioner to support this contention relates to a visit that Resident # 16 made to an
optometrist after completion of the January 27 survey. P. Ex. 4, at 3. Petitioner points to
nothing prior to the survey showing discussions between Petitioner’s staff and the
resident’s family concerning her vision and her need for treatment.

3. Petitioner did not prove that it corrected the deficiencies that were
established as of January 27, 2006 prior to February 16, 2006.

CMS determined that Petitioner did not correct the deficiencies that were identified at the
January 27 survey prior to February 16, 2006. Petitioner offered no affirmative proof to
establish that it corrected these two deficiencies prior to that date. Therefore, I find that
the deficiencies that were identified on January 27 persisted until February 16, 2006.

4. Itis unnecessary that I decide whether Life Safety Code deficiencies
existed as of February 2, 2006 because, as of that date, Petitioner
remained noncompliant with other participation requirements.

As I discuss in the Issues section of this decision, the parties stipulated that on February 3,
2006 Petitioner corrected the Life Safety Code deficiencies that were identified at the
February 2 survey. It is unnecessary that I decide whether there were Life Safety Code
deficiencies extant on February 2 because, on that date, Petitioner had not corrected
deficiencies that were identified at the January 13 and 27 surveys. Consequently,
Petitioner was continuously noncompliant at least from January 13 until February 16,
2006.
15

5. Noncompliance identified at the April 7 survey and not challenged by
Petitioner predates February 16, 2006.

The noncompliance finding made at the April 7 survey, which Petitioner does not contest,
is that Petitioner failed to comply substantially with requirements stated at 42 C.F.R.

§ 483.13(c). The regulation, among other things, requires that a facility thoroughly
investigate all allegations of resident neglect or abuse. 42 C.F.R. § 483.13(c)(2), (3).
Petitioner’s noncompliance with this requirement consisted of its persistent failure to
investigate reported incidents of missing money and credit cards belonging to residents.
These incidents originated with a reported loss on January 6, 2006, and continued through
at least March 2006. CMS Ex. 33, at 2.

The dates of these reported incidents and Petitioner’s acknowledged failure to investigate
them establish noncompliance with the regulatory requirement beginning in January
2006. Petitioner’s noncompliance with 42 C.F.R. § 483.13(c) predated the January 13
survey and continued through the period after February 12 and 16, 2006, the dates when
Petitioner corrected the deficiencies that were identified at the January 13 and 27 surveys,
until June 12, 2006, the date when CMS determined that Petitioner had corrected the
deficiency identified at that survey. CMS Ex. 46, at 3.

Petitioner argues that CMS may not rely on the January 6, 2006 onset of noncompliance
that was identified at the April 7 survey as a basis for imposing remedies because CMS:
“never alleged ‘past noncompliance’ for any survey at issue in this case.” Petitioner’s
reply brief at 5. However, the onset of noncompliance resulting from the deficiency
identified at the April 7 survey — and not challenged by Petitioner — is stated in the report
of that survey. CMS Ex. 33, at 2. Petitioner was put on notice by that report that CMS
was asserting a deficiency as of April 7, 2006 that had its onset on January 6, 2006.

6. Itis undisputed that Petitioner did not correct the deficiency that was
identified at the April 24 survey until June 12, 2006.

As I discuss in the Issues section of this decision, Petitioner did not challenge the
deficiencies that were identified at the April 7 and April 24 surveys. CMS found that
Petitioner corrected these deficiencies effective June 12, 2006, and Petitioner did not
challenge this determination.*

> The noncompliance finding that was made at the April 24 survey was that
Petitioner manifested an immediate jeopardy level deficiency as of that date. CMS
determined that Petitioner corrected the immediate jeopardy on April 25, 2006, but found
that noncompliance at a non-immediate jeopardy level continued until June 12, 2006.
16

7. Petitioner was noncompliant with at least one Medicare participation
requirement throughout the period beginning January 13 and running

through June 11, 2006. CMS was therefore justified in imposing all of
the remedies that it determined to impose.

My Findings in this decision demonstrate that, at no time during the period that ran from
January 13 through June 11, 2006 was Petitioner in compliance with all Medicare
participation requirements. The overlapping periods of noncompliance establish a
continuous period of noncompliance extending throughout the entire period for which
CMS determined to impose remedies. In summary, my Findings establish that:

+ Petitioner’s noncompliance established at the January 13 survey continued until
February 12, 2006.

+ Additional deficiencies were established as of the January 27 survey and these
were not corrected prior to February 16, 2006.

* The noncompliance that was identified at the April 7 survey began on January 6,
2006 and continued until June 12, 2006.

* The deficiency that was identified at the April 24 survey continued until June 12,
2006."

CMS determined to impose civil money penalties of $300 for each day of Petitioner’s
noncompliance beginning with January 13 and running through June 11, 2006, with the
exception of a single day — April 25, 2006 — for which CMS imposed an immediate
jeopardy level penalty of $3,050. Petitioner has not challenged the reasonableness of the
daily penalty amounts nor has it challenged CMS’s finding of immediate jeopardy on
April 25. Consequently, I sustain all of the civil money penalties that CMS determined to
impose.

Additionally, I sustain CMS’s determination to impose the remedy of denial of payment
for new admissions for the April 13—June 11, 2006 period. Petitioner was noncompliant
with participation requirements throughout this period and CMS may impose the remedy
for denial of payment for new admissions for each day that a facility is out of compliance.
42 C.F.R. § 488.417(a).

* In addition Petitioner does not challenge CMS’s determination that, as of the
March 17 survey, Petitioner was noncompliant with an additional participation
requirement. The record is unclear as to the date when CMS determined that Petitioner
corrected the deficiency that was identified on March 17.
17

Petitioner argues that CMS determined to impose denial of payment for new admissions
pursuant to the requirements of 42 C.F.R. § 488.417(b). This section mandates
imposition of the remedy for, among other reasons, the circumstance in which a facility is
noncompliant for three or more continuous months. Petitioner argues that there was no
point during the January 13 - June 11 period when it was out of compliance for three
continuous months and, therefore, CMS has no authority to impose mandatory denial of
payment for new admissions against it. Additionally, according to Petitioner, CMS may
not now rely on the discretionary authority to impose a denial of payment for new
admissions stated in 42 C.F.R. § 488.417(a) because CMS elected to impose a mandatory
denial of payment and cannot now change the basis for its remedy determination.
Petitioner’s reply brief at 5.

I find Petitioner’s argument without merit for the following reasons. First, Petitioner did
not timely challenge CMS’s determination to impose the remedy and has offered no good
cause for its failure to do so. 42 C.F.R. § 498.70(c). As a consequence I dismiss its
hearing request insofar as it challenges CMS’s imposition of the remedy of denial of
payment for new admissions. CMS imposed the remedy of denial of payment on January
23, 2006 and sent notice on that date to Petitioner of its determination. In order to be
entitled to challenge this determination Petitioner should have filed a hearing request by
no later than March 28, 2006, 65 days after the mailing date of the notice. In fact, it did
not file its hearing request until August 7, 2006, more than four months after its deadline
for challenging the denial of payments remedy.*

Petitioner has not shown good cause for filing its hearing request untimely. It argues that
CMS should, in effect, be estopped from moving to dismiss Petitioner’s request insofar as
it addresses the denial of payments remedy because, according to Petitioner, CMS waited
too long to move to dismiss. Petitioner’s argument notwithstanding, there is nothing in
the regulations governing hearings that places a time limit on CMS’s right to move to
dismiss an untimely hearing request.

Second, even if I were to grant Petitioner a hearing on its challenge to imposition of
denial of payment, Petitioner has shown no basis in fact or law to defeat CMS’s
imposition of the remedy. Petitioner’s assertions to the contrary, it was deficient for more
than three continuous months. Its period of unbroken noncompliance extends over a
period of more than five months. Moreover, the regulations permit CMS to impose denial
of payment as a remedy even where the conditions for mandatory imposition of the

> Arguably, CMS gave Petitioner an additional right to challenge the denial of
payments remedy by sending it an additional notice regarding the imposition of that
remedy on May 9, 2006. But, Petitioner’s August 17 hearing request is untimely with
respect to the May 9 notice, as well.
18

remedy have not been met.® I would sustain CMS’s imposition of the remedy, therefore,
even if there had been a “gap” in the period of Petitioner’s noncompliance, as it alleges,
because it was unquestionably noncompliant on each of the days for which CMS imposed
the remedy.

/s/
Steven T. Kessel
Administrative Law Judge

° Tam unpersuaded by Petitioner’s argument that CMS may not rely on the
discretionary denial of payment authority conferred by 42 C.F.R. § 488.417(a) because it
“elected” to impose a mandatory denial of payment. The authority to impose a
discretionary denial of payment is available to CMS at any time. Moreover, I have no
authority to challenge CMS’s election of remedies. Consequently, I may not preclude
CMS from relying on its inherent discretionary authority to impose a denial of payment
for new admissions so long as a basis exists for imposing the remedy — as is the case here
— even if CMS chooses to rely on that authority at a date after making its initial
determination.


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

In the Case of:

Grace Care Center
(CCN: 45-5901),

Date: September 14, 2007

Petitioner,

Docket No. C-07-363

Decision No. CR1647

Centers for Medicare &
Medicaid Services.

a )

DECISION DISMISSING REQUEST FOR HEARING

dismiss the hearing request of Petitioner, Grace Care Center, because it has no right to a
earing.

I. Background

Petitioner is a skilled nursing facility located in Wichita Falls, Texas. It participates in
the Medicare program. Its participation in Medicare is governed by sections 1866 and

819 of the Social Security Act and by implementing regulations at 42 C.F.R. Parts 483
and 488. Also, its right to a hearing in this case is governed by regulations at 42 C.F.R.
Part 498.

On January 18 and February 15, 2007, Petitioner was surveyed for compliance with
Medicare participation requirements (January and February surveys). Based on the
results of that survey the Centers for Medicare & Medicaid Services (CMS) determined
that Petitioner no longer met participation requirements. It determined to impose
remedies against Petitioner consisting of civil money penalties in the following amounts:
two per-instance civil money penalties of $2,000 each to remedy deficiencies identified at
2

the January survey; and a single per-instance civil money penalty of $7,500 to remedy
deficiencies identified at the February survey. Petitioner requested a hearing to challenge
the deficiency findings that were made at the two surveys and CMS’s remedy
determinations, and the case was assigned to me for a hearing and a decision.

However, on May 23, 2007, CMS notified Petitioner that it was rescinding the $7,500
civil money penalty that it had determined to impose to remedy deficiencies identified at
the February survey. On August 6, 2007, CMS advised Petitioner that it had rescinded
the two $2,000 per instance civil money penalties that it had determined to impose to
remedy deficiencies identified at the January survey. As a consequence, CMS is no
longer demanding that any remedies be imposed against Petitioner.

On August 20, 2007 CMS moved to dismiss Petitioner’s hearing request. Petitioner did
not file any opposition to the motion.

II. Discussion

It is axiomatic that no right to a hearing exists where there is no remedy determination to
contest. Arcadia Acres, DAB No. 1607 (1997); Rafael Convalescent Hospital, DAB No.
1616 (1997). Where CMS determines to impose a remedy hearing rights are created.
However, those rights are extinguished if CMS determines to rescind that remedy.

I must dismiss a hearing request where the party requesting a hearing has no right to one.
42 C.F.R. § 498.70(b). Petitioner no longer has a right to a hearing in this case because
the unchallenged facts are that CMS rescinded its remedy determination. Consequently, I
dismiss Petitioner’s hearing request.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Alexander Scott Kirschner, ) Date: September 10, 2007

)
Petitioner, )
)

-Vv.- ) Docket No. C-07-357

) Decision No. CR1646
The Inspector General. )
)

DECISION

sustain the determination of the Inspector General (I.G.) to exclude Alexander Scott
Kirschner, Petitioner, from participation in Medicare, Medicaid, and all other federally-
funded health care programs for a minimum period of five years. I find that a basis exists
for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Social Security Act (Act).
Further, I find that an exclusion for a minimum period of five years is mandatory pursuant
to section 1128(c)(3)(B) of the Act.

I. Procedural History

By letter dated March 30, 2007, the I.G. notified Petitioner that he was being excluded for
a period of five years from participating in the Medicare, Medicaid and all other federal
ealth care programs. The I.G. informed Petitioner specifically that he was being
excluded pursuant to section 1128(a)(1) of the Act based on his conviction in the U.S.
District Court, Southern District of Florida, Ft. Lauderdale, of a criminal offense related
to the delivery of an item or service under the Medicare or a State health care program,
including the performance of management or administrative services relating to the

delivery of items of services under any such program. Petitioner timely appealed the
.G.’s action.

2

This case was assigned to me for hearing and decision. I held a prehearing conference on
May 2, 2007. During that conference, the parties agreed that this case could be decided
on the parties’ written submissions. P. Br. at 2. I therefore set a briefing schedule. The
LG. filed his brief (I.G. Brief) with attached exhibits | through 5 (1.G. Exs. 1-5).
Petitioner filed his response (P. Brief) without any exhibits. The LG. filed a reply brief
(I1.G. Reply). Petitioner did not object to the I.G. exhibits and I receive them into
evidence.

If. Undisputed Facts

Petitioner stipulated to the following facts before the United States District Court,
Southern District of Florida. I1.G. Ex. 4. From May 2003 and continuing thorough
August 2004, he was a licensed physical therapist who was engaged by Paul Feldman,
another licensed physical therapist to prepare “canned” physical therapy treatment notes
for individuals purportedly receiving physical therapy services through Northwood
Physical Therapy , Inc. and Advanced Technologies. The “canned” physical therapy
notes he prepared reflected subjective and objective findings regarding the purported
physical therapy prior to the dates of the reflected physical therapy sessions. As a result,
the canned notes did not reflect the actual subjective and objective findings of actual
physical therapy sessions. Petitioner regularly prepared canned notes reflecting 18
sessions of physical therapy per patient. Petitioner was then instructed by Feldman to
personalize the canned notes using basic patient identifying information provided to
Petitioner by Feldman and others. After Petitioner prepared the canned notes, they were
used by others in support of false claims submitted to the Medicare program for non-
rendered and/or otherwise non-reimbursable physical therapy services. In an effort to
conceal a portion of the payments Feldman received for his participation in the
preparation of the canned notes, Feldman asked Petitioner to receive the payments in his
name and then pay over the funds to Feldman in cash. On a number of occasions,
Petitioner received checks made payable in his name which represented payments
intended for Feldman. Petitioner would subsequently negotiate the checks and provide
Feldman the payment due him in cash. He stipulated that he did each of these acts
knowingly and intentionally and not as a result of mistake or accident. Jd.

Petitioner pleaded guilty to one count of Misprision of Felony, to wit, the knowing and
willful making and using of false, fictitious and fraudulent writings and documents in
connection with the delivery of or payment for health care benefits, items or services, in
violation of Title 18, United States Code, Section 1035; did conceal such felony by
assisting in the preparation of the false, fictious and fraudulent writings, and by acting as
a conduit for payments to another person who was creating the false, fictitious and
fraudulent writings; and did not as soon as possible make known such felony to some
judge or other person in civil or military authority under the United States, in violation of
Titles 18, United States Code, Section 4. I.G. Ex. 3.
3

As part of the plea agreement, Petitioner agreed to the entry of an order of victim
restitution to Medicare in the amount of $18,794. I.G. Ex. 5, at 2. On May 26, 2006, a
judgment of conviction was entered against Petitioner, and he was sentenced to four
months imprisonment and upon release, he was placed on supervised release for one year.
1.G. Ex. 2, at 2-3.

III. Issues, findings of fact and conclusions of law
A. Issues

The scope of my review under section 1128(a)(1) is limited to two issues: (1) whether the
LG. has authority to exclude Petitioner on the ground that Petitioner was convicted of a
criminal offense within the meaning of section 1128(a)(1) of the Act; and (2) whether the
length of the exclusion imposed by the I.G. is unreasonable. There are no issues of
material fact in dispute in this case. Petitioner solely contends that the I.G. does not have
a basis for excluding Petitioner because he did not deliver any item or render any service
under the Medicare or a state health care program. Thus, the only issue in dispute is
whether Petitioner was convicted of a criminal offense related to the delivery ofa health
care item or service under the Medicare program within the meaning of section
1128(a)(1) of the Act. IfI so find, then his exclusion is mandatory under section
1128(a)(1) for a minimum period of five years. Act, section 1128(c)(3)(B). The I.G.
imposed the statutory minimum five-year period of exclusion in this case. As the I.G. is
required by law to impose the minimum statutory exclusion, there is no issue related to
the reasonableness of the period of exclusion in this case.

B. Findings of fact and conclusions of law

I make the following findings of fact and conclusions of law (Findings) to support my
decision in this case. I set forth each Finding as a separate heading. I discuss each
Finding in detail.

1. The I.G. has the authority to impose an exclusion
because Petitioner was convicted of a criminal offense
within the meaning of section 1128(a)(1) of the Act.

Section 1128(a)(1) provides:
The Secretary [of Health and Human Services] shall exclude the following

individuals . . . from participation in any Federal health care program (as defined
in section 1128B(f)):
4

(1) Conviction of program-related crimes. —Any individual . . . that has been
convicted of a criminal offense related to the delivery of an item or service under
title XVII [Medicare] or under any State health care program.

Section 1128(i)(3) of the Act provides that an individual is “convicted” for purposes of
section 1128(a) “when a plea of guilty or nolo contendere by the individual or entity has
been accepted by a Federal, State, or local court.” Petitioner’s guilty plea, and the
acceptance of the guilty plea and the entry of a judgment based on that plea by the United
States District Court for the Southern District of Florida, constitutes a conviction of a
criminal offense under section 1128(i)(3) of the Act. IG. Ex. 2. Accordingly, I conclude
that Petitioner was “convicted” of a criminal offense within the meaning of section
1128(a)(1).

also find that Petitioner was convicted of a criminal offense related to the delivery of an
item or service under the Medicare program. Petitioner’s principal defense in this case is
that his conviction of a criminal offense is not related to the delivery of an item or service
under the Medicare program. Petitioner argues that he “did not deliver any item or render
any service under the Medicare or a state health care program.” P. Brief at 5-6. He
claims that he performed more of a bookkeeping role in which he plugged in numbers and
information he received from Feldman; he never submitted or signed any document used
to defraud Medicare. Moreover, he claims he never received any payment directly from
any federal agency.

The I.G. convincingly demonstrates that Petitioner’s conviction is related to the delivery
of an item or service under the Medicare program. The Departmental Appeals Board
(Board or DAB) has held that a criminal offense is program-related for purposes of an
exclusion under section 1128(a)(1) if there exists a “nexus” or “common sense
connection” linking the offense for which the Petitioner has been convicted with the
delivery of an item or service under a covered program. Andrew Anello, DAB No. 1803
(2001); Berton Siegal, D.O., DAB No. 1467 (1994). The Board has also held that
offenses other than the actual delivery of an item or service “are also ‘related’ because
they concern acts that directly and necessarily follow under the health care programs from
the delivery of the item or service.” Niranjana B. Parikh, DAB No. 1334 (1992). Here,
Petitioner prepared fictitious physical therapy treatment notes utilized in support of false
claims submitted to the Medicare program for nonrendered and/or otherwise
nonreimbursable physical therapy services. These fraudulent treatment notes are
undisputedly linked to the delivery of an alleged item or service under Medicare.
Moreover, I agree with the I.G. that the Plea Agreement, Information and Judgment
unambiguously connect Petitioner to a conviction of an offense related to the delivery ofa
health care item or service under Medicare. See I.G. Exs. 5 (Plea Agreement), 3
(Information), 2 (Judgment). The Information to which Petitioner plead guilty charged
Petitioner with “having knowledge of the actual commission of a felony cognizable by
5

court of the United States, to wit, the knowing and willful making and using of false,
fictitious and fraudulent writings and documents in connection with the delivery of or
payment for health care benefits, items or services.” I.G. Ex 3 (emphasis added).
Petitioner pleaded guilty to that Information and was adjudicated guilty and sentenced to
four months in prison, supervised release of one year after release from prison, and was
ordered to pay restitution to the Medicare program in the amount of $18,794. I.G. Ex. 2;
1G. Ex. 5, at 2.

Moreover, the DAB pointed out in Anel/o, DAB 1803, that section 1128(a)(1) has been
applied to petitioners convicted of violating the federal prohibition against misprison of a
felony. The DAB found that the petitioner’s plea to a misprison of a felony constituted a
conviction of a criminal offense related to the delivery of an item or service under
Medicare. Finally, the fact that Petitioner was sentenced to pay restitution to the
Medicare program is additional evidence that the criminal offense to which he pled guilty
was related to the delivery of an item or service under Medicare. The restitution to
Medicare illustrates that a detrimental fraud was perpetrated against the program. The
payment of restitution to Medicare alone is support for finding that the conviction here
was program related. See Donald J. Purcell, II, M.D., DAB CR572, at 8 (1999).

The I.G.’s arguments in this case are sound and convincing. Based on my review of all of
the evidence in this case, I conclude that Petitioner was convicted of a crime that was
related to the delivery of an item or service under the Medicare program. I further find
that the preponderance of the evidence establishes that Petitioner was properly excluded
under section 1128(a)(1) of the Act.

2. Section 1128(c)(3)(B) of the Act requires the I.G. to
exclude Petitioner for at least a minimum period of five
years.

Section 1128(c)(3)(B) of the Act provides:

... in the case of an exclusion under subsection [1128](a), the minimum period of
exclusion shall be not less than five years... .

The Act clearly specifies a minimum of five years for an exclusion under section 1128(a).
The I.G., the Secretary, and I have no discretion or authority to shorten the five-year
minimum exclusion dictated by the Act. Thus, there is no issue of reasonableness as to
the period of exclusion in this case.
IV. Conclusion

For the reasons set forth above, I sustain the I.G.’s exclusion of Petitioner from
participation in Medicare, Medicaid, and all federal health care programs for a period of
five years pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the Act.

/s/
Alfonso J. Montano
Administrative Law Judge


Department of Health And Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
Rosa Maria Martinez, M.D., } Date: September 4, 2007
Petitioner, , ) Docket No. C-07-124
-Ver ) Decision No. CR1645
The Inspector General. , )
)
DECISION

I sustain the determination of the Inspector General (1.G.) to exclude Petitioner, Rosa
Maria Martinez, M.D., from participating in the Medicare, Medicaid, and all other federal
health care programs, until reinstated to the health care program which originally took the
action against her. I base my decision on the documentary evidence, the applicable law
and regulations, and the arguments of the parties. It is my finding that Petitioner has been
suspended, excluded or otherwise sanctioned by the State of Washington Department of
Social and Health Services (DSHS) Medicaid program, a State health care program, for
reasons bearing on her professional competence, professional performance or financial
integrity, within the meaning of section 1128(b)(5) of the Social Security Act (Act).

By letter dated September 29, 2006, the I.G. notified Petitioner that she was being
excluded from participation in the Medicare, Medicaid, and all federal health care
programs as defined in section 1128B(f) of the Act until reinstated to the health care
program which originally took the action against her. The I.G. informed Petitioner that
her exclusion was imposed under section 1128(b)(5) of the Act, because she was
“suspended, excluded or otherwise sanctioned by the Washington Department of Social
and Health Services, a Federal program involving the provision of health care or a State
health care program, for reasons bearing on [her] professional competence, professional
performance or financial integrity.” I.G. Ex. 1.
2

Petitioner filed a request for hearing dated November 6, 2006, and received by the
Departmental Appeals Board on December 1, 2006.

Pursuant to a telephone prehearing conference held on April 18, 2007, I issued an order
establishing briefing deadlines based on the parties’ agreement that this case could be
resolved on the basis of written submissions, without the need for an in-person hearing.

Pursuant to that order, the I.G. filed a brief on May 16, 2007, accompanied by four
proposed exhibits. I have admitted these into the record as I.G. Exs. 1-4, without
objection. Petitioner failed to file her brief that was due on or before June 18, 2007.
Consequently, I issued an order to show cause on June 29, 2007, admonishing her that if
she failed to comply with the order or show good cause within 10 days of the date of my
order, I would dismiss the case for abandonment. On July 1, 2007, Petitioner responded,
essentially indicating that she would not submit a response brief. I therefore issued a
letter on July 13, 2007, closing the record and informing the parties that I would move
forward to the issuance of a decision based on the submissions already in the record.

After a review of the applicable law and regulations, the documentary evidence of record,
and the arguments presented before me, it is my decision to sustain the determination of
the LG. to exclude Petitioner from participating in the Medicare, Medicaid, and all federal
health care programs, until she is reinstated to the health care program which originally
suspended her.

ISSUE

Whether the I.G. had a basis upon which to exclude Petitioner from participation
in the Medicare, Medicaid, and all federal health care programs as defined in
section 1128B(f) of the Act.

APPLICABLE LAW AND REGULATIONS

Sections 1128(b)(5)(A) and (B) of the Act authorize the I.G. to exclude an individual who
has been suspended or excluded from participation, or otherwise sanctioned, under any
federal program, or a state health care program, for reasons bearing on the individual’s
professional competence, professional performance, or financial integrity. According to
section 1128(c)(3)(E) of the Act, the minimum term of exclusion of an individual who is
excluded pursuant to section 1128(b)(5) shall not be less than the period during which he
or she is excluded or suspended from a federal or state health care program.
3

The Act defines “[f]ederal health care program” as “(1) any plan or program that provides
health benefits, whether directly, through insurance, or otherwise, which is funded
directly, in whole or in part, by the United States Government . . .; or (2) any State health
care program, as defined in section 1128(h).” Act, section 1128B(f).

The regulations promulgated at 42 C.F.R. §§ 1001.601 and 1001.1901(b) mirror the
statutory measures set forth in the Act.

Pursuant to 42 C.F.R. § 1001.2007, an individual or entity excluded under section
1128(b)(5) of the Act may file a request for a hearing before an administrative law judge.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. Petitioner was a physician providing medical services to Medicaid patients in the
State of Washington. I.G. Exs. 3 and 4.

2. On April 7, 2004, pursuant to Wash. Admin. Code § 388-502-0030, the DSHS’s
Medical Assistance Administration (MAA) suspended Petitioner’s “Core Provider
Agreement” with the Washington Medicaid program based on a MAA medical
audit’s finding of “disconcerting patterns” of prescribing high doses of controlled
substances, which represented a serious threat to the health and safety of their
Medicaid clients and placed them at risk. I.G. Ex. 3.

3. On December 16, 2005, after conducting a dispute conference with Petitioner,
considering documentation outlining the reasons for the April 7, 2004 Medicaid
contract suspension of Petitioner, and her response to that suspension, the DSHS
sent Petitioner its “Contract Termination Dispute Decision,” which notified
Petitioner that the earlier decision of DSHS was affirmed, the contracts were
appropriately suspended in the interest of protecting the health and safety of its
Medicaid clients, and it was appropriate to terminate Petitioner’s contracts with
DSHS as provided in Wash. Admin. Code § 388-502-0030. I.G. Ex. 4, at 1-3.

4. Petitioner’s contract termination from the Washington Medicaid program was
based on four reasons: (1) Petitioner’s medical records showed a pattern of
prescribing narcotics and controlled substances in doses and combinations that
exceeded safe levels and accepted medical practice; (2) Petitioner’s medical
records did not justify the services billed to Medicaid; (3) Petitioner re-dispensed
narcotics and other drugs without proper documentation in violation of federal
law; and (4) Petitioner’s billing patterns for office visits were significantly higher
than the average for similar providers. I.G. Ex. 4, at 1-3.

4

The DSHS decision informed Petitioner that her Medicaid contract termination
was based on the same concerns that led to the contract suspension on April 7,
2004. I.G. Ex. 4, at 3. The decision also informed Petitioner that DSHS would
continue to deny payment for her prescriptions unless she was reenrolled with the
Medicaid program. I.G. Ex. 4, at 3.

On September 29, 2006, the Department of Health and Human Services advised
Petitioner that she was being excluded from participation in the Medicare,
Medicaid, and all federal health care programs pursuant to section 1128(b)(5) of
the Act for reasons bearing on her professional competence, professional
performance, or financial integrity. I.G. Ex. 1.

Petitioner’s termination from participation in the Washington Medicaid program
constitutes an exclusion or suspension or other sanction within the meaning of
section 1128(b)(5)(B) of the Act.

The Washington Medicaid program is a state health care program, within the
meaning of sections 1128(h) and 1128(b)(5)(B) of the Act.

Petitioner’s contracts with the Washington Medicaid program were terminated for
reasons bearing on her professional competence, professional performance, or
financial integrity, within the meaning of section 1128(b)(5)(B) of the Act. I.G.
Exs. 1, 3, and 4.

There is a basis for excluding Petitioner under section 1128(b)(5)(B) of the Act.

An exclusion imposed in accordance with section 1128(b)(5) of the Act will not be
for a period of time less than the period during which the individual is excluded or
suspended from a federal or state health care program. 42 C.F.R.

§ 1001.601(b)(1).

Petitioner is excluded from Medicare, Medicaid, and all federal health care
programs until she has been reinstated to the Washington State DSHS Medicaid
program, the health care program that originally disciplined her. I.G. Ex. 1.

CONCLUSION

It is my decision that the LG. was authorized to exclude Petitioner pursuant to

section 1128(b)(5) of the Act. Additionally, I conclude that the indefinite period of
exclusion imposed by the I.G. is the minimum period mandated by section 1128(c)(3)(E)
of the Act.

/s/
José A. Anglada
Administrative Law Judge