Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Nimesh M. Patel, D.P.M.,
(OI file No. M-10-40526-9),

Petitioner,
v.
The Inspector General.
Docket No. C-14-389
Decision No. CR3251

Date: June 5, 2014

DECISION

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

I. Background

The I.G. notified Petitioner, by letter dated October 31, 2013, that he was being excluded,
pursuant to section 1128(a)(1) of the Act, from participating in Medicare, Medicaid, and
other federal health care programs for the minimum mandatory period of five years. The
1.G. advised Petitioner that the exclusion was based on his conviction in the United States
District Court, Middle District of Florida, Tampa Division, of a criminal offense related
to the delivery of an item or service under Medicare or a state health care program. I.G.
Exhibit (Ex.) 1.
Petitioner timely filed a request for hearing, asserting that the I.G. erroneously excluded
him under the mandatory section of the exclusion statute (section 1128(a)(1)) when,
instead, the I.G. should have excluded him under the permissive section of the statute at
section 1128(b)(7) (42 U.S.C. § 1320a-7(b)(7)) based on his conviction for violating the
anti-kickback statute (Act § 1128B(b)(1)(B); 42 U.S.C. § 1320a-7b(b)(1)(B)).

I convened a prehearing conference with the parties, which I summarized in my January
23, 2014 Order and Schedule for Filing Briefs and Documentary Evidence (Scheduling
Order). Pursuant to that Scheduling Order, I asked the parties to answer the questions on
the short-form briefs sent to them, together with any additional arguments and supporting
documents they wished to present. The I.G. filed his short-form brief (I.G. Br.) together
with six exhibits (I.G. Exs. 1-6). Petitioner filed a brief unaccompanied by exhibits (P.
Br.). The LG. filed a reply (I.G. Reply). Neither party requested an in-person hearing.
Petitioner did not object to the exhibits the I.G. filed, and I admit them to the record.
Therefore, the record is now closed, and I decide the case based on the written record.

IL. Discussion
A. Issue

The scope of my review is limited. 42 C.F.R. § 1001.2007(a)(1) and (2). The only issue
properly before me is whether the I.G. had a basis to exclude Petitioner from participating
in Medicare, Medicaid, and all other federal health care programs pursuant to section
1128(a)(1) of the Act. If I find that the I.G. was authorized to exclude Petitioner under
section 1128(a)(1), then I must uphold the I.G.’s exclusion because it is for the minimum
mandatory period of five years. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

Section 1128(a)(1) of the Act requires that an individual be excluded where: 1) the
individual has been convicted of a criminal offense; and 2) the criminal offense is related
to the delivery of an item or service under Medicare or a state health care program.

B. Findings of Fact and Conclusions of Law

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

a. Petitioner was convicted of a criminal offense.

Section 1128(i) of the Act defines a conviction as: 1) when a judgment of conviction has
been entered against an individual by a federal, state, or local court, regardless of whether
there is an appeal pending or whether the judgment of conviction or other record relating
to the criminal conduct has been expunged; 2) when there has been a finding of guilt
against an individual by a federal, state or local court; 3) when a plea of guilty or nolo
contendere by an individual has been accepted by a federal, state, or local court; and 4)
when an individual has entered into participation in a first offender, deferred
adjudication, or other arrangement or program where judgment of conviction has been
withheld.

I find that the record reflects that Petitioner was convicted of a criminal offense pursuant
to section 1128(i)(1)-(3) of the Act. Specifically, on January 14, 2012, the United States
Attorney for the Middle District of Florida, Tampa Division, filed a one-count
information against Petitioner. I.G. Ex. 3. The information charged, that from on or
about January 2009 through on or about June 3, 2011, Petitioner,

... did knowingly and willfully solicit and receive remuneration, including
kickbacks and bribes, directly and indirectly, overtly and covertly, in cash and in
kind, in return for ordering, and arranging for and recommending the ordering, of
a good, service, and item which had been paid for in whole and in part by a federal
health care benefit program, that is, the Medicare Part B program.

All in violation of Title 42, United States Code, Sections 1320a-7b(b)(1)(B) and
Title 18, United States Code, Section 2.

1G. Ex. 3, at 1. On January 15, 2013, a plea agreement was filed with the court. I.G. Ex.
2. On July 9, 2013, the court “adjudged” Petitioner guilty on count one of the
information. I.G. Ex. 4. On the same day, the court entered a criminal judgment against
Petitioner, finding him guilty of “[s]oliciting and receiving remuneration, including
kickbacks and bribes, in return for ordering, arra[ng]ing for, and recommending the
ordering of, a good, service, and item that was paid for by a Federal Health Benefit
Program.” I.G. Ex. 5, at 1. The court ordered Petitioner to pay a $5,000 fine and a $100
assessment. I.G. Ex. 5, at 3. On July 11, 2013, the court also ordered Petitioner to pay
$8,000 as a forfeiture money judgment, the amount of the proceeds he obtained as a
result of his criminal offense. I.G. Ex. 6, at 1-2.

b. Petitioner’s criminal offense is related to the delivery of an item
or service under Medicare.

A conviction is related to the delivery of an item or service under Medicare if there is a
commonsense connection or nexus between the offense and the delivery of an item or
service under Medicare. Berton Siegel, D.O., DAB No. 1467 (1994).

Petitioner does not dispute the facts behind his conviction. P. Br. at 2. These facts are set
forth in a plea agreement that Petitioner executed on February 10, 2012. LG. Ex. 2. In

the plea agreement, Petitioner pleaded guilty to one count of an information charging him
with violating the anti-kickback statute. Act § 1128B(b)(1)(B); I.G. Exs. 2, 3; P. Br. at 3.
The plea agreement specifically states that Petitioner worked as a Doctor of Podiatric
Medicine for Access Health Care, LLC, in and around Hernando and Pasco Counties,
Florida. Many of his patients were Medicare beneficiaries. In or around January 2009,
Petitioner entered into a business relationship with B.V., a sales representative for ABH,
a company that supplies a synthetic skin substitute for treating conditions such as foot
ulcers. At some point during this relationship, B.V. offered to provide Petitioner with
various gifts and gratuities (gift cards, or cash equivalents, and tickets to sporting events)
in return for Petitioner’s use of ABH products to treat his patients, including Medicare
beneficiaries. Petitioner admitted that he accepted gifts and gratuities from B.V. equaling
approximately $8,000. I.G. Ex. 2, at 2, 7, 4-15; P. Br. at 2-3.

Petitioner’s conviction is for soliciting and receiving remuneration in return for ordering
and arranging for the orders of goods, services and other items that the Medicare program
reimbursed. I.G. Exs. 2, 3,4, 5. Such conduct is clearly program related. Similarly, the
Board has previously concluded that a conviction pursuant to section 1128B(b)(1)(B), as
occurred here, constitutes a conviction related to the delivery of an item or service under
Medicare or Medicaid. Boris Lipovsky, M.D., DAB No. 1363 (1992); Niranjana B.
Parikh, M.D., et. al., DAB No. 1334 (1992).

2. The I.G. does not have the authority to exclude Petitioner under
section 1128(b)(7) of the Act in lieu of section 1128(a)(1).

Although admitting he was convicted of a criminal offense, Petitioner disputes that the
1.G. is authorized to exclude him under section 1128(a)(1). Petitioner argues instead that,
based on the plain language of the Act and Congressional intent, the LG. is only
authorized to exclude him for an anti-kickback violation under the permissive exclusion
authority of section 1 128(b)(7).' P. Br. at 5. Petitioner concedes that there is “substantial
authority to the contrary,” but argues that such authority is “directly opposed to the plain
language of the statute” and that the case law requiring exclusion under section
1128(a)(1) is “wrongly decided.” Petitioner asserts that section 1128(a)(1) is a “catch-all
provision” and that it is a basic tenet of statutory interpretation that a statute addressing a
matter in specific terms controls over a statute addressing the issue in general terms,
unless Congress intended differently. P. Br. at 5-6.

' Section 1128(b)(7) of the Act (42 U.S.C. § 1320a-7(b)(7)) permits exclusion where the
1.G. has determined that the individual knowingly or willfully solicited or received
remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or
covertly, in cash or in kind, for purchasing, leasing, ordering, or arranging for or
recommending purchasing, leasing, or ordering any good, facility, service, or item for
which payment may be made in whole or in part under a federal health care program.
Act § 1128B(b)(1)(B).
Petitioner’s argument is unavailing. The Board has reviewed the legislative history
behind section 1128(a)(1) and determined that the Congressional intent is clear.
Congress intended section 1128(a)(1) to require a five-year exclusion for criminal
offenses relating to the Medicare and Medicaid programs, strengthening the law then
existing which, while mandating exclusion, did not set a minimum length of exclusion for
program-related criminal offenses. See Jack W. Greene, DAB No. 1078, at 8 (1989),
aff'd sub nom Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990). As the
Board held in Boris Lipovsky, “where a conviction falls within the terms of section
1128(a)(1), it is governed by that section. The fact that the conviction also meets the
more inclusive elements of section 1128(b) . . . does not remove it from the ambit of
section 1128(a)(1) and the I.G. must impose a mandatory exclusion.” Boris Lipovsky,
DAB No. 1363; Niranjana B. Parikh, M.D. et. al., DAB No. 1334. Congress omitted the
word “conviction” under section 1128(b)(7), thus authorizing permissive exclusion for
prohibited kickback activities that may not result in a conviction. Here, where
Petitioner’s conviction, which directly involved Medicare beneficiaries, falls within the
ambit of section 1128(a)(1), the LG. has no discretion to consider a permissive exclusion.

3. I cannot consider mitigating or aggravating factors because the LG.
imposed the minimum mandatory exclusion.

Petitioner discusses several aggravating and mitigating factors that I cannot consider here
because the I.G. imposed the minimum five-year mandatory exclusionary period. These
include Petitioner’s characterization of the facts emphasizing the absence of harm to
patients (42 C.F.R. § 1001.102(b)(3)); his otherwise clean criminal record (42 C.F.R. §
1001.102(b)(6)); that his criminal conduct did not include intentional improper billings
(42 C.F.R. § 1001.102(b)(7)); and that he assisted federal officials in similar ongoing
criminal investigations (42 C.F.R. § 1001.102(c)(3)). Iam, however, only authorized to
consider aggravating and mitigating factors where the I.G. has imposed more than the
minimum mandatory period of exclusion.

III. Conclusion

I find the I.G. was authorized to exclude Petitioner under section 1128(a)(1) because he
was convicted of an offense related to the delivery of an item or service under Medicare.
The five-year exclusion the I.G. imposed is mandatory pursuant to section 1128(c)(3)(B)
as a matter of law.

/s/
Joseph Grow
Administrative Law Judge


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

Christopher Switlyk,
(O.I. File No. H-13-40939-9),

Petitioner,
v.

The Inspector General.

Docket No. C-14-342

Decision No. CR3250

Date: June 2, 2014
DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner,
Christopher Switlyk, from participating in Medicare, State Medicaid programs, and all
other federally funded health care programs for a period of at least 20 years.
I. Background
Petitioner, a pharmacist, requested a hearing to challenge his exclusion. I ordered the
parties to file briefs and proposed exhibits. The I.G. filed a brief, a reply brief, and six

exhibits that are identified as I.G. Exhibit (Ex.) 1 - I.G. Ex. 6.' Petitioner filed a brief and
numerous exhibits.” I receive the parties’ exhibits into evidence.

' LG. Ex. 6 is a rebuttal exhibit consisting of an affidavit from a police official
concerning the degree of cooperation that Petitioner gave to prosecuting authorities. I
would not normally receive an exhibit like this because the I.G. filed it after the deadline
that I set for filing exhibits. However, Petitioner opened the door by alleging that his
cooperation with prosecuting authorities led to the conviction of other individuals and/or
the opening of new investigations based on the information he provided.

> | ordered the parties to number their exhibits sequentially using numbers and not letters
to identify their exhibits. Petitioner ignored my order and used an idiosyncratic system of
Petitioner also requested that I convene an in-person hearing in order to take his
testimony and that of a psychologist who, ostensibly, would testify about Petitioner’s
mental condition during the period when he committed the crimes that led to his
conviction. I find no justification for doing so. Petitioner has not offered anything by
way of testimony that he has not already provided in his exhibits. As for the
psychologist’s possible testimony, I reject that for two reasons. First, I directed both
parties to provide me with the written direct testimony of any proposed witness.
Petitioner did not do so nor has he explained why he failed to do so. Second, I find no
relevance in the psychologist’s proposed testimony. For reasons that I explain below,
Petitioner has made no showing that the proposed testimony would establish a mitigating
factor that might justify reducing the length of his exclusion.

Finally, Petitioner effectively requested that I stay this case pending proceedings that he
alleges will result ultimately — and at some indefinite point in the future — in his receiving
a reduced prison sentence. I decline to do so. Petitioner could seek reopening and
revision of this decision if, at some point in the future his prison sentence is reduced
substantially. However, and as I discuss below, even a reduction of several years of
Petitioner’s sentence would not cause me to reduce his exclusion given the gravity of
Petitioner’s crimes and the evidence of aggravation that exists in this case.

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

The issues are whether the I.G. proved a statutory basis for excluding Petitioner and
whether the length of the exclusion that the I.G. determined to impose is reasonable.

B. Findings of Fact and Conclusions of Law

The L.G. excluded Petitioner under the authority of section 1128(a)(4) of the Social
Security Act (Act). This section mandates the exclusion of any individual who is
convicted of a felony relating to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance.

his own invention to identify his exhibits. His exhibits are as follows: 3B-A, 3B-B, 3B-
C, 3B-D, 3B-E, 3B-F, 3C-A(1), 3C-A(2), 3C-A(3), 3C-A(4), 3C-A(5), 3C-A(6), 3C-
A(7), 3C-A(8), 3C-A(9), 3C-A(10), 3C-A(11), 3C-A(12), 3C-A(13), 3C-B(1), 3C-B(2),
3C-B(3), 5A-1, SA-2, 5A-3, 5B-1, 5C-1, SC-2, 5D-1, 5D-2, 5D-3, 5D-4, and SD-5. I
contemplated rejecting these exhibits and directing Petitioner to re-file them with proper
identification. However, I have decided to accept them as identified by Petitioner in the
interest of saving time.
On December 14, 2010, Petitioner and several other individuals were charged with
engaging in a massive conspiracy to sell controlled substances — principally Oxycodone —
unlawfully from several pharmacies that they owned and operated in the Tampa, Florida
area. 1.G. Ex. 2. The indictment charged Petitioner and his co-conspirators with selling
controlled substances unlawfully and without any regard for their customers’ actual
medical conditions. /d. at 7— 8. Petitioner and his co-conspirators were charged with
using or causing to be used blank prescription forms upon which unauthorized persons
would fill in the controlled substance and dosage and forge the signature of the
physicians in whose names the prescriptions were written. Jd. at 8. The indictment
charged Petitioner and his co-conspirators with generating false records in order to
support the illegal sales of controlled substances. Jd. The defendants were also charged
with unlawfully distributing controlled substances via individuals who were not
authorized to fill prescriptions. /d. at 9. Petitioner and his co-conspirators were
additionally charged with making false statements to hide their unlawful conspiracy. Jd.

Petitioner subsequently pled guilty to Counts One, Five, and Six of the Indictment. 1.G.
Ex. 3. Count One is the conspiracy that I have described. Counts Five and Six allege
unlawful monetary transactions of greater than $10,000 using funds derived from the
conspiracy specified in Count One. Jd. Judgment of Conviction was subsequently
entered against Petitioner. I.G. Ex. 4.

The evidence overwhelmingly establishes that Petitioner was convicted of an 1128(a)(4)
felony and that the I.G. is required to exclude him. One does not need to analyze
Petitioner’s conviction beyond noting that he was convicted of a felony for conspiring to
acquire, maintain, and sell controlled substances unlawfully. I.G. Ex. 4. That crime falls
precisely within the ambit of section 1128(a)(4).

An individual who is excluded pursuant to section 1128(a)(4) must be excluded for a
minimum of five years. Act § 1128(c)(3)(B). The I.G. excluded Petitioner for at least 20
years. The remaining question, then, is whether an exclusion of 20 years is reasonable
when measured against the facts of this case.

I find that an exclusion of at least 20 years is amply justified. Indeed, I would have
sustained exclusion for more than that period, had the I.G. chosen to impose a lengthier
exclusion, and had the L.G. properly identified all of the aggravating factors that are
established by the evidence in this case.

Section 1128 is at bottom a remedial statute with a principal purpose of protecting
federally funded health care programs and these programs’ beneficiaries and recipients
from untrustworthy individuals. Manocchio v. Kusserow, 961 F.2d 1539, 1542-3 (11th
Cir. 1992); 133 Cong. Rec. 14,177; Raymond Lamont Shoemaker, DAB No. 2560, at 9
(2014). The ultimate question that must be answered in any case where the length of

exclusion is at issue is: how lengthy a period of exclusion is reasonably necessary in
order to protect against the possibly damaging actions of an untrustworthy individual?

The Secretary of the United States Department of Health and Human Services has
published regulations that serve as guidelines for answering this question. The
regulations, published at 42 C.F.R. Part 1001, establish aggravating and mitigating
factors that must be considered in deciding whether the length of exclusion is reasonable.
The factors are not a formula for deciding the length of exclusion. Rather, they serve as
tules of evidence. Evidence that falls within the ambit of an aggravating factor or a
mitigating factor may be weighed in order to decide what exclusion length is reasonable.
57 Fed. Reg. 3298, 3314-15 (Jan. 29, 1992). Evidence that does not fall within the ambit
of an aggravating or a mitigating factor is irrelevant and may not be considered.

The aggravating and mitigating factors that relate to an exclusion imposed pursuant to
section 1128(a)(4) are found at 42 C.F.R. § 1001.102(b) and (c). In this case the I.G.
asserts that Petitioner’s 20-year exclusion is justified based on evidence relating to one of
the regulation’s aggravating factors, that being the one stated at 42 C.F.R.

§ 1001.102(b)(5): “[t]he sentence imposed by the court [that adjudicated the criminal
case] included incarceration.” The I.G. points to the 108-month (nine-year) prison
sentence imposed by the adjudicating Court and argues that this is an extraordinarily long
sentence for the type of crime he committed. From that, he reasons that the prison
sentence alone shows Petitioner to be extraordinarily untrustworthy and that, therefore,
justifies a 20-year exclusion.

I agree with the I.G. that the very lengthy prison sentence imposed on Petitioner in and of
itself evidences that Petitioner is a highly untrustworthy individual. A 20-year exclusion
strikes me as not unreasonable in light of that.

Petitioner argues that his sentence may very well be reduced, for a number of reasons,
and that his exclusion period must be reduced commensurately.* I find Petitioner’s
arguments to be speculative. At best, he can say that his sentence may be reduced and
not that it will be reduced. Furthermore, even if Petitioner’s sentence ultimately is
reduced by two or even three years, the length of prison time that Petitioner would
nevertheless have to serve is still very substantial and justifies the exclusion imposed
here.

The LG. also cites evidence relating to a second aggravating factor, which is stated at
42 C.F.R. § 1001.102(b)(9). LG. Br. at 6-7; see I.G. Ex. 5. Under that subsection an
aggravating factor exists if, among other things, an excluded individual is subject to
adverse State administrative action based on the same facts as are the basis for the

3 [also note that Petitioner was sentenced to three concurrent terms of incarceration, 108
months of incarceration for each guilty plea. I.G. Ex. 4.
exclusion. Petitioner’s pharmacist’s license was suspended in Florida based on the facts
of his conviction. I.G. Ex. 5. The LG. asserts that this suspension satisfies the regulatory
criteria for an additional aggravating factor, but notes that it was not used as a basis for
lengthening Petitioner’s exclusion. I.G. Br. at 7. | agree with the LG. that the adverse
state action against Petitioner’s license is an aggravating factor that supports the
exclusion imposed against Petitioner. Indeed, that license suspension actually is a second
statutory ground for excluding him. Act § 1128(b)(4). Nonetheless, I do not rely on the
suspension of Petitioner’s license as a basis for the 20-year exclusion.

But, it is the facts that the I.G. doesn’t discuss that explain why Petitioner received such a
lengthy prison sentence and that provide overwhelming support, in addition to the
evidence and aggravating factor that I have cited, for an exclusion of at least 20 years. In
pleading guilty Petitioner admitted to having perpetrated a conspiracy to sell controlled
substances unlawfully for a period of about five years. I.G. Ex. 2 at 5; I.G. Ex. 3.
Moreover, in pleading guilty Petitioner acknowledged that his crimes had resulted in ill-
gotten revenues of about $11 million and he agreed to forfeit well over $2 million in cash
and other valuables. I.G. Ex. 3 at 10-12. This undisputed evidence relates to two
aggravating factors not cited by the I.G. First, Petitioner committed his crimes over a
period of a year or more. 42 C.F.R. § 1001.102(b)(2). Second, the financial impact of
Petitioner’s crimes exceeded $5,000. 42 C.F.R. § 1001.102(b)(1). And, the evidence
establishes the presence of yet another aggravating factor, that being the adverse physical
and psychological impact that Petitioner’s crimes had on individuals. 42 C.F.R.

§ 1001.102(b)(3). That adverse impact may easily be inferred from Count One of the
indictment, to which Petitioner pled guilty, which avers that Petitioner and his co-
conspirators sold Oxycodone to individuals essentially without regard to these
individuals’ true need for this controlled substance. I.G. Ex. 2 at 7— 8. I take notice that
Oxycodone is an addictive drug that has the potential for tremendous adverse physical
and psychological effects on individuals when consumed without a proper prescription
and physician supervision.

I would have found these additional aggravating factors to be independent grounds
supporting a 20-year exclusion in this case (or even a longer period of exclusion) had the
1.G. cited them and urged me to do so. I have no idea why the I.G. failed to rely on these
factors and I do not rely on them as independent bases for the 20-year exclusion in this
case. But, the evidence that relates to these factors also is relevant to explaining why
Petitioner received such a lengthy prison sentence and it is therefore relevant to
establishing Petitioner’s untrustworthiness to provide care for that reason.

The evidence reveals the true magnitude of Petitioner’s crimes. Even if I do not consider
this evidence as establishing additional aggravating factors due to the I.G.’s inexplicable
failure to allege them, it provides a great deal of explanation as to why Petitioner received
the very lengthy prison sentence that he received. Petitioner is manifestly untrustworthy
to deal with program funds, beneficiaries and recipients. Indeed, the facts that I have
recited, just when considered as an explanation for Petitioner’s prison sentence, suggest
that, if anything, the I.G. was overly lenient in excluding Petitioner for only 20 years.

Petitioner and his co-conspirators were, effectively, drug dealers. Their crimes are only
technically different from the crimes committed by large-scale sellers of street narcotics.

Petitioner argues that there are mitigating factors present in his case that the I.G. did not
take into consideration and that justify reducing the length of his exclusion. He asserts,
first, that he has cooperated extensively with prosecuting officials and that this
cooperation should be a basis for reducing his exclusion. See 42 C.F.R. § 1001.102(c)(3).
This subsection defines as a mitigating factor cooperation that leads to: other individuals
being convicted or excluded from Medicare, State Medicaid programs, or other federally
funded health care programs; the identification of program vulnerabilities or weaknesses
through the investigation of other cases; or the imposition of a civil money penalty
against others. To support his assertion Petitioner has provided a list of persons whose
conduct Petitioner allegedly has discussed with authorities. However, even if Petitioner
has cooperated with authorities he has provided no evidence that this cooperation has
resulted in any of the outcomes identified in the subsection. Therefore, he has not offered
evidence that establishes the presence of the mitigating factor described in the subsection.

The I.G. offered as rebuttal evidence the sworn declaration of Jeffrey Shearer, a detective
for the Tampa, Florida police department. I.G. Ex. 6. Detective Shearer was in charge of
the investigation that led to Petitioner’s indictment and conviction and he makes it clear
that Petitioner’s cooperation has not led either to the opening of new investigations or to
the prosecution or conviction of others. Indeed, Detective Shearer describes Petitioner as
a manifestly untrustworthy and, in the end, deceptive witness. Although this evidence is
certainly relevant, I find it to be unnecessary to decide that Petitioner failed to establish
the presence of cooperation as a mitigating factor. For that reason I have not held open
the record of this case for possible cross-examination of Detective Shearer by Petitioner.

Petitioner also asserts that he suffers from psychological problems that reduced his
culpability. See 42 C.F.R. § 1001.102(c)(2). But, Petitioner’s psychological problems,
whatever they may be, do not establish a mitigating factor because Petitioner has not
shown that these problems influenced the judge who sentenced him to find that
Petitioner’s psychological condition reduced his culpability.

Moreover, I would not reduce the exclusion from the 20-year minimum determined by
the I.G. even if Petitioner were to prove the presence of both of the mitigating factors that
he alleges. As I have stated, the regulatory aggravating and mitigating factors provide no
formula that dictates the length of an exclusion in any case. Mitigating evidence may be
a basis to offset aggravating evidence but the regulations do not state that it must offset
aggravating evidence where it is present. In this case Petitioner’s crimes were so
outrageous that even the presence of one or two mitigating factors would not be a
legitimate basis to reduce the length of the exclusion below 20 years.

Finally, Petitioner argues that in other, similar cases, individuals have received shorter
exclusions than he received. He contends that his exclusion is unreasonable when
compared with the exclusions imposed in other cases.

A comparative standard is not used to determine whether an exclusion is reasonable. An
exclusion is reasonable when it is supported by the facts of the case. In this case the facts
more than amply support the 20-year exclusion that the I.G. determined to impose.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Reverence Home Health and Hospice
(NPI: 1649524331),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-449
ALJ Ruling No. 2014-34

Date: June 3, 2014

ORDER OF REMAND

Petitioner, Reverence Home Health and Hospice, challenges the effective date of
enrollment as a supplier in the Medicare program. Palmetto GBA National Supplier
Clearinghouse (Palmetto NSC), an administrative contractor acting on behalf of the
Centers for Medicare & Medicaid Services (CMS), granted Petitioner enrollment but with
a later effective date than Petitioner requested. Petitioner requested reconsideration.
Because Palmetto NSC did not properly issue a reconsidered determination, I remand this
case for Palmetto NSC to assign this matter to a hearing officer and issue a reconsidered
determination.

I. Background

Petitioner acquired an existing Durable Medical Equipment, Orthotics, Prosthetics and
Supplies (“DMEPOS”) supplier of infusion pharmacy services and sought to obtain
Medicare billing privileges under its ownership. On February 5, 2013, Petitioner filed a
Form CMS-855S enrollment application (change of ownership) with Palmetto NSC.
CMS Exhibit (Ex.) 1. Palmetto NSC initially denied Petitioner’s enrollment application.
CMS Ex. 3. In response, Petitioner timely filed both a corrective action plan (CAP) and a
request for reconsideration. CMS Ex. 4; CMS Ex. 5 at 1-2. Palmetto NSC subsequently
accepted Petitioner’s CAP and granted Petitioner enrollment effective October 9, 2013.
CMS Ex. 6. Petitioner pursued its reconsideration request, seeking an enrollment
effective date of January 1, 2013. P. Ex. 1. Ina November 14, 2013 email, Nancy
Parker, Director of Palmetto NSC, informed Petitioner that it could not grant the
requested effective date. CMS Ex. 7 at 2.

On December 11, 2013, Petitioner requested a hearing before an administrative law
judge, challenging the October 9, 2013 effective date. CMS Ex. 8. This case was
assigned to me for a hearing and decision. In response to my December 24, 2013
Acknowledgment and Prehearing Order, CMS filed a motion to dismiss or in the
alternative a motion for summary judgment (CMS Br.) with eight proposed exhibits
(CMS Exs. 1-8). Petitioner filed an opposition to the CMS motions (P. Br.) and two
proposed exhibits (P. Exs. 1-2). CMS filed a reply brief (CMS Reply). Petitioner
objected to CMS Ex. 7. P. Br. at 8. CMS agreed that CMS Ex. 7 should be excluded and
withdrew the exhibit from consideration. CMS Reply at 2. There were no other
evidentiary objections. Accordingly, I admit CMS Exs. 1-6 and 8, and P. Exs. 1-2 into
the record.

II. Discussion

By regulation, an administrative law judge may hear and issue a decision in cases where a
party has requested a hearing from a “reconsidered determination.” 42 C.F.R.

§ 498.5(/)(2); see Denise A. Hardy, D.P.M., DAB No. 2464, at 4-5 (2012). A party may
request reconsideration only in cases where CMS or its contractor has issued an “initial
determination.” 42 C.F.R. § 498.5()(1). An “initial determination” includes, among
other things, the “effective date of a Medicare provider agreement or supplier approval.”
Id. § 498.3(b)(15).

CMS originally moved for dismissal of Petitioner’s hearing request contending that
Petitioner did not request nor receive a reconsidered determination. CMS Reply Br. at

1. However, following submission of Petitioner’s prehearing exchange, CMS conceded
that Petitioner did request reconsideration (P. Ex. 1 at 3-5), which was denied (P. Ex. 2 at
1); therefore, CMS withdrew its motion to dismiss. CMS Br. at 2. CMS notes that
Palmetto NSC never issued a formal reconsidered determination and would not object to
remand if Petitioner requests it. However, CMS argues that I should decide this case on
the merits because Palmetto NSC made it clear that it would issue an unfavorable
reconsidered determination if I remanded this matter. CMS Br. at 2 n.1.

In a provider or supplier enrollment case, it is the reconsidered determination that is the
predicate for administrative law judge jurisdiction. See Hiva Vakil, M.D., DAB No.
2460, at 4-5 (2012) (holding that a supplier cannot obtain administrative law judge
review of the initial determination; the supplier may only obtain administrative law judge
review when there is a reconsidered determination); see also 42 C.F.R. §§ 498.5()(2),
498.20(b)(1), 498.24(c), 498.25(b)(2). Based on a review of the documents submitted in
this case, I cannot conclude that an email from Nancy Parker, the Director of Palmetto
NSC, is a reconsidered determination. Due to the confusion at Palmetto NSC concerning
reconsideration of this matter (CMS Reply Br. at 1-2) it is unclear that Palmetto NSC
fully considered the matter as required by 42 C.F.R. § 498.24(b). Further, it is unclear
whether the email constitutes a determination as specified in 42 C.F.R. § 498.24(c). It is
unlikely that the email from Palmetto NSC was intended as a reconsidered determination
because it failed to state the law and regulations that Petitioner failed to meet or provide
notice of Petitioner’s right to a hearing, as required by 42 C.F.R. § 498.25(a)(2)-

(3). Further, in enrollment cases, a reconsidered determination must be issued by a
“contractor hearing officer not involved in the initial determination.” 42 C.F.R.

§ 405.803. Based on the documents submitted by the parties, there is no reason to
believe that Ms. Parker, as the Director of Palmetto NSC, is also a hearing officer.
Finally, because a hearing officer may decide this case differently than Ms. Parker and
because the contractor can exercise discretion that I do not have the authority to exercise,
see Letantia Bussell, DAB No. 2196, at 13 (2008), it is necessary for this case to be
remanded.

III. Remand Order

As explained above, the contractor failed to issue a reconsideration determination as
required by the regulations. I am remanding the case under 42 C.F.R. § 498.56(d) in
order for Palmetto NSC to assign this matter to a hearing officer. The hearing officer
must consider the evidence admitted into the record of this case and render a reconsidered
determination. The reconsidered determination will provide a notice that Petitioner has a
right to request a hearing before an administrative law judge.'

It is so ordered.
/s/

Scott Anderson
Administrative Law Judge

' Because 42 C.F.R. § 405.803 permits CMS’s regional office to render reconsidered
determinations, the appropriate CMS regional office may assume jurisdiction over this
case and issue the reconsidered determination in place of a Palmetto NSC hearing officer.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.

Vicente Cruz
d/b/a ENR Market,

Respondent.

Docket No. C-14-870
FDA Docket No. FDA-2014-H-0378

Decision No. CR3249

Date: May 30, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) initiated the above-captioned matter when it
filed an Administrative Complaint for Civil Money Penalties (Complaint) with the
Departmental Appeals Board, Civil Remedies Division (CRD) and the Food and Drug
Administration’s (FDA) Division of Dockets Management. CTP previously initiated a
civil money penalty action, CRD Docket Number C-13-1017, FDA-2013-H-0844,!
against Respondent, which ended when Respondent admitted the previous violations and

' CTP filed an Administrative Complaint for Civil Money Penalties with the CRD dated
August 9, 2013 (August 9, 2013 Complaint). CTP attached the August 9, 2013
Complaint to the Complaint it filed when it initiated the present matter.
CRD closed the case. ? CTP seeks to impose civil money penalties under the Federal
Food, Drug, and Cosmetic Act (Act) and the Act’s implementing regulations.

The Complaint alleges the following facts. Respondent owns an establishment that sells
tobacco products and is located at 431 Zion Street, Hartford, Connecticut 06106.
Complaint § 3. CTP documented violations while conducting three inspections of the
establishment. Complaint § 9.

In the civil money penalty action that CTP initiated on August 9, 2013, CTP alleged that
Respondent committed three violations of regulations found at 21 C.F.R. pt. 1140.
Complaint § 10. These violations occurred on August 7, 2012, and January 29, 2013.
Complaint § 10. Vicente Cruz settled the claims against Respondent when:

[He] admitt[ed] that the violations described in the Complaint filed in FDA Docket
Number FDA-2013-H-0844, CRD Docket Number C-13-1017 occurred, waiv[ed]
his ability to contest the violations in the future, and stat[ed] that he understood
that the violations may be counted in determining the total number of violations
for purposes of future enforcement actions.

Complaint § 11. As a result, CRD closed the case on September 19, 2013. Complaint
qi.

During a subsequent inspection of Respondent’s establishment, FDA-commissioned
inspectors documented that “a person younger than 18 years of age was able to purchase
a package of Newport Box 100s cigarettes on October 21, 2013, at approximately 9:52
AM[.] The inspectors also documented that Respondent was “selling individual
cigarettes... .” Complaint 1.

In compliance with 21 C.F.R. §§ 17.5 and 17.7, CTP served Respondent with the
Complaint on April 4, 2014, via United Parcel Service. Respondent previously admitted
that it had committed three violations of 21 C.F.R. pt. 1140. Compliant fj 10-11. CTP
charged Respondent with new violations of 21 C.F.R. § 1140.14(a) (sale of tobacco
products to a minor) and 21 C.F.R. § 1140.14(d) (breaking or otherwise opening a
cigarette package to sell or distribute individual cigarettes). Complaint § 1. CTP asked

> Although the August 9, 2013 Complaint shows Respondent as “Vicente Cruz d/b/a
ENR Grocery or EnR Market” instead of “Vincente Cruz d/b/a ENR Market,” I note that
Respondent is Mr. Cruz regardless of the name under which he is doing business.
The CRD to impose a $5,000 civil money penalty based on five alleged violations of the
regulations in a 36-month period. Complaint § 13.

The Complaint provided detailed instructions related to filing an answer and requesting
an extension of time to file an answer. Complaint J 14-18, 20-22. The Complaint stated
that failure to file an answer could result in the imposition of a civil money penalty

against Respondent. Complaint § 19. Further, after CTP filed the Complaint, CRD sent
Respondent an Initial Order informing Respondent of the requirement to file an answer to
avoid a default judgment. CRD sent a form answer along with the Initial Order that
Respondent could fill out and file with CRD. Respondent neither filed an answer nor
requested an extension of time within the 30-day time period prescribed in 21 C.F.R.

§ 17.9.

If a respondent does not file an answer within 30 days of a properly served complaint, the
regulations provide that:

[T]he presiding officer shall assume the facts alleged in the complaint to be
true, and, if such facts establish liability under the relevant statute, the
presiding officer shall issue an initial decision within 30 days of the time
the answer was due, imposing:

(1) The maximum amount of penalties provided for by law for the

violations alleged; or

(2) The amount asked for in the complaint, whichever amount is smaller.

21 C.F.R. § 17.11(a). Further, a failure to file a timely answer means that “the
respondent waives any right to a hearing and to contest the amount of the penalties and
assessments” imposed in the initial decision. 21 C.F.R. § 17.11(b).

Accepting the facts alleged in the Complaint as true, I find that those facts establish
Respondent’s liability under the Act. See 21 U.S.C. §§ 333(f)(9), 387c(a)(7)(B), 387£(d);
21 C.F.R. §§ 1140.1(b), 1140.14. I also find that CTP’s request to impose a $5,000 civil
money penalty is permissible. See 21 C.F.R. § 17.2.
4
Therefore, Respondent is directed to pay a civil money penalty in the amount of $5,000.

This initial decision becomes final and binding upon both parties 30 days after the date of
its issuance. 21 C.F.R. § 17.11(b).

It is so ordered.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.
Eddie Grocery Market Inc.,
Respondent.

Docket No. C-14-858
FDA Docket No. FDA-2014-H-0376

Decision No. CR3248

Date: June 3, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) initiated the above-captioned matter when it
filed an Administrative Complaint for Civil Money Penalties (Complaint) with the
Departmental Appeals Board, Civil Remedies Division (CRD) and the Food and Drug
Administration’s (FDA) Division of Dockets Management. CTP seeks to impose civil
money penalties under the Federal Food, Drug, and Cosmetic Act (Act) and the Act’s
implementing regulations.

The Complaint alleges the following facts. Respondent owns an establishment that sells
tobacco products and is located at 446 South 52nd Street, Philadelphia, Pennsylvania
19143. Complaint § 3. CTP documented violations during two inspections of the
establishment. Complaint § 9. During one of the inspections, an FDA-commissioned
inspector observed that “a person younger than 18 years of age was able to purchase a
package of Newport Menthol Gold Box cigarettes on May 28, 2013, at approximately
5:11 PM.” Complaint § 10.
2
On June 20, 2013, CTP issued a warning letter to Respondent specifying the violation
that the inspector observed. The letter warned Respondent that if it failed to correct the
violation, civil money penalties could be imposed on it and that it was Respondent’s
responsibility to ensure compliance with the law. Complaint § 10.

Although United Parcel Service records show that an individual named “Hernandez”
signed for the warning letter, CTP did not receive a response. Complaint § 11.

During a subsequent inspection, FDA-commissioned inspectors documented the
following at Respondent’s establishment: “a person younger than 18 years of age was
able to purchase a package of Newport Menthol Gold Box cigarettes on October 20,
2013, at approximately 3:29 PM.” Complaint § 1.

In compliance with 21 C.F.R. §§ 17.5 and 17.7, CTP served Respondent with the
Complaint on April 4, 2014, via United Parcel Service. CTP filed a United Parcel
Service delivery notification document which indicates that an individual named “Cruz”
signed for the Complaint. CTP charged Respondent with violating 21 C.F.R.

§ 1140.14(a) (sale of tobacco products to a minor). Complaint f{ 1, 10. CTP asked the
CRD to impose a $250 civil money penalty based on two alleged violations of the
regulations in a 12-month period. Complaint § 13.

The Complaint provided detailed instructions related to filing an answer and requesting
an extension of time to file an answer. Complaint J 14-18, 20-22. The Complaint stated
that failure to file an answer could result in the imposition of a civil money penalty
against Respondent. Complaint § 19. Further, after CTP filed the Complaint, CRD sent
Respondent an Initial Order informing Respondent of the requirement to file an answer to
avoid a default judgment. CRD sent a form answer along with the Initial Order that
Respondent could fill out and file with CRD. Respondent neither filed an answer nor
requested an extension of time within the 30-day time period prescribed in 21 C.F.R.

§ 17.9.

If a respondent does not file an answer within 30 days of a properly served complaint, the
regulations provide that:

[T]he presiding officer shall assume the facts alleged in the complaint to be
true, and, if such facts establish liability under the relevant statute, the
presiding officer shall issue an initial decision within 30 days of the time
the answer was due, imposing:

(1) The maximum amount of penalties provided for by law for the

violations alleged; or

(2) The amount asked for in the complaint, whichever amount is smaller.
3
21 C.F.R. § 17.11(a). Further, a failure to file a timely answer means that “the
respondent waives any right to a hearing and to contest the amount of the penalties and
assessments” imposed in the initial decision. 21 C.F.R. § 17.11(b).

Accepting the facts alleged in the Complaint as true, I find that those facts establish
Respondent’s liability under the Act. See 21 U.S.C. §§ 333(f)(9), 387c(a)(7)(B), 387£(d);
21 C.F.R. §§ 1140.1(b), 1140.14. I also find that CTP’s request to impose a $250 civil
money penalty is permissible. See 21 C.F.R. § 17.2.

Therefore, Respondent is directed to pay a civil money penalty in the amount of $250.
This initial decision becomes final and binding upon both parties 30 days after the date of
its issuance. 21 C.F.R. § 17.11(b).

It is so ordered.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Proteam Healthcare, Inc.
(PTAN: 45-7916),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-398
Decision No. CR3246

Date: May 29, 2014

DECISION

Palmetto GBA (Palmetto), an administrative contractor acting on behalf of the Centers
for Medicare & Medicaid Services (CMS), revoked the Medicare billing privileges of
Petitioner, Proteam Healthcare, Inc., because Petitioner failed to comply with Medicare
enrollment requirements. Petitioner disputed the revocation and requested a hearing. For
the reasons stated below, | affirm CMS’s determination to revoke Petitioner’s billing
privileges.

I. Background

In 2004, Petitioner filed an application (Form CMS-855A) for enrollment in the Medicare
program as a home health agency (HHA). See CMS Exhibit (Ex.) 20, at 3-4. Karibi
Briggs, Petitioner’s Chief Financial Officer, signed the Certification Statement on the
application agreeing to the following “Additional Requirements for Medicare
Enrollment”:
I agree to abide by the Medicare laws, regulations and
program instructions that apply to [HHAs]. The Medicare
laws, regulations, and program instructions are available
through the Medicare contractor. I understand that payment
of a claim by Medicare is conditioned upon the claim and the
underlying transaction complying with such laws, regulations,
and program instructions (including, but not limited to, the
Federal anti-kickback statute and the Stark law), and on the
supplier’s compliance with all applicable conditions of
participation in Medicare.

CMS Ex. 20, at 3-4. On December 22, 2005, CMS enrolled Petitioner as a Medicare
provider. CMS Ex. 20, at 1-2.

On June 24, 2013, Palmetto issued an initial determination revoking Petitioner’s
Medicare billing number and provider agreement “for noncompliance with enrollment
requirements.” CMS Ex. 1, at 1. Specifically, Palmetto alleged that Petitioner:

failed to abide by Medicare laws, regulations, and program
instructions by failing to obtain valid physician orders when it
submitted claims using Dr. Bernadette Iguh’s NPI [National
Provider Identifier] for Medicare patients from November 1,
2009 through October 12, 2012. Dr. Iguh signed an
attestation indicating that she neither provided any Part B
services to or [sic] referred these beneficiaries for home
ealth services provided by [Petitioner]. In addition,
Petitioner] provided Medical records for 12 beneficiaries. A
review of the 12 records delivered by [Petitioner] showed
some of the records listed Dr. Lguh [sic] as the patient’s
physician. Often, the records included an additional
physician with Dr. Iguh. Two records included Dr. Iguh with
Drs. Albert Chen and Mario Bertoni, and one set of the
records showed Dr. Iguh and Dr. Bertoni. Several sets of
records did not mention Dr. Iguh’s name at all, instead listing
Drs. Mario Bertoni, Albert Chen, and Augustine Egbunike,
either all together or in pairs.

CMS Ex. 1, at 1. Palmetto notified Petitioner it could file a corrective action plan (CAP)
and/or reconsideration request. CMS Ex. 1, at 2.

Petitioner submitted a CAP in which it stated that it “completed a review of the billing
records for all patients billed with Dr. Iguh’s NPI number and cancelled the RAP
[Request for Anticipated Payment] and reimbursed the final claims for all beneficiaries
without valid physician orders.” CMS Ex. 2, at 3. Petitioner indicated the action it
intended to take in the future to ensure that it would have physician orders for each
patient. On August 28, 2013, Palmetto denied Petitioner’s CAP stating that Palmetto was
not satisfied that it “has corrected or established prospective compliance with Medicare
ome health referral laws, regulations, and program instructions.” CMS Ex. 3, at 2.

On September 30, 2013, Petitioner filed a timely request for reconsideration in which
Petitioner argued that: the initial determination failed to specify the specific legal basis
for revocation; the factual basis for revocation, i.e., failure to obtain valid orders from
physicians, is a condition for Medicare payment and not enrollment as a Medicare
provider; and that, despite what Petitioner admitted in its CAP, Petitioner had physician
orders for all of its patients, although “[s]ome of these patients were never seen by Dr.
Iguh, while others were originally seen by Dr. Iguh before she stopped seeing home
ealth patients. Those patients who were seen by Dr. Iguh before she decided to stop
seeing home health patients were seen by other physicians after that point, and their
orders were signed by their new physician.” CMS Ex. 3, at 3-6. Petitioner submitted
documentation in support of the latter argument.

On October 9, 2013, CMS’s Center for Program Integrity issued a reconsideration
determination in which it upheld the initial determination stating that:

Dr. Iguh reviewed the Plans of Care, Verbal Face-To-Face
forms and prescriptions provided to CMS by [Petitioner] and
she stated that the signatures on the Plans of Care , Face-To-
Face, Prescriptions and Verbals Orders were not her
signatures. Dr. Iguh also attested that on these documents the
signature was not hers and signed an attestation to that effect
for each patient’s documentation.

She indicated, for [Petitioner], the beneficiaries she has
neither seen nor referred by placing her initials beside the
names of 12 beneficiaries on the attestation forms identifying
fraudulent activity. Petitioner has argued against these
allegations but with no proof that combat’s such allegations.

CMS Ex. 3, at 9-10.

Petitioner filed a timely request for hearing (RFH) with the Departmental Appeals Board
(DAB), Civil Remedies Division (CRD) on December 9, 2013. In its RFH, Petitioner
asserts that CMS failed to provide sufficient notice of the basis for revocation because it
did not cite to the law, rule, or program instruction involving enrollment that Petitioner
violated. RFH at 3-4. Further, Petitioner argues that CMS’s basis for revocation, i.e.,
indicating on claims that Dr. Iguh ordered HHA services for Petitioner’s patients, when
she did not, is a condition for Medicare payment and not an enrollment requirement.

RFH at 4-5. Finally, Petitioner asserts that while it did not have an order from Dr. Iguh
for the patients in question, Petitioner did have an order from other physicians for each of
these patients. RFH at 5-6.

The director of CRD administratively assigned this case to me for hearing and decision.
In response to my Acknowledgment and Pre-hearing Order (Order), CMS filed a brief
(CMS Br.) and 21 exhibits (CMS Exs. 1-21) as its pre-hearing exchange. Petitioner filed
a brief (P. Br.) and two exhibits (P. Exs. 1-2) as its pre-hearing exchange.

II. Decision on the Record

Petitioner did not object to any of CMS’s proposed exhibits. See Order § 7. Therefore, I
admit CMS Exs. 1-21 into the record. CMS did not object to Petitioner’s proposed
exhibits; however, because those exhibits duplicate CMS’s exhibits (compare CMS Ex.
3, at 3-11 with P. Exs. 1 and 2), I will not admit them into the record.

My Order advised the parties that they must submit written direct testimony for each
proposed witness and that an in-person hearing would only be necessary if the opposing
party requested an opportunity to cross-examine a witness. Order §j 8-10; Vandalia
Park, DAB No. 1940, at 28-30 (2004); Pacific Regency Arvin, DAB No. 1823, at 8
(2002) (holding that the use of written direct testimony for witnesses is permissible so
long as the opposing party has the opportunity to cross-examine those witnesses).'
Neither CMS nor Petitioner offered any proposed witnesses or written direct testimony.
Consequently, I will not hold an in-person hearing in this matter and I will decide this
matter based on the written record. Order § 11.

III. Issue

Whether CMS had a legitimate basis to revoke Petitioner’s Medicare billing privileges
based on Petitioner’s failure to comply with Medicare enrollment requirements under
42 CFR. § 424.535(a)(1).

IV. Jurisdiction

I have jurisdiction to decide the issue in this case. 42 C.F.R. §§ 498.3(b)(17), 498.5(1)(2);
see also 42 U.S.C. § 1395cc(j)(8).

' Administrative decisions cited in this decision are accessible on the internet at:
http://www.hhs.gov/dab/decisions/index.html.
V. Findings of Fact, Conclusions of Law, and Analysis”

The Social Security Act (Act) authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations governing the enrollment process for providers and
suppliers. 42 U.S.C. §§ 1302, 1395cc(j). Under the Secretary’s regulations, a provider or
supplier that seeks billing privileges under the Medicare program must “submit
enrollment information on the applicable enrollment application. Once the provider or
supplier successfully completes the enrollment process . .. CMS enrolls the provider or
supplier into the Medicare program.” 42 C.F.R. § 424.510(a). CMS may revoke a
provider or supplier’s Medicare billing privileges for a variety of reasons including if it is
“determined not to be in compliance with the enrollment requirements described in
[section 424.535], or in the enrollment application applicable for its provider or supplier
type....” Id. § 424.535(a)(1).

HHAs are providers for Medicare purposes. 42 U.S.C. § 1395x(u). The term “home
health services” is defined as “items and services furnished to an individual, who is under
the care of a physician . . . under a plan (for furnishing such items and services to such
individual) established and periodically reviewed by a physician . . .” Jd. § 1395x(m).
Home health services are covered by Medicare only if “a physician . . . certifies . . . that .
. . home health services . . . are or were required because the individual is or was confined
to his home . . . and needs or needed skilled nursing care... .” Id. § 1395f(a)(2)(C); see
also 42 U.S.C. § 1395n(a)(2)(A). The certifying physician is required to know the
Medicare beneficiary’s medical status and, therefore, there must be a face-to-face
encounter with the individual. 42 C.F.R. § 424.22(a); Medicare Benefit Policy Manual,
CMS Pub. 100-102, Ch. 7 (Home Health Services), § 30.5.1.1. The face-to-face
encounter must be “related to the primary reason the patient requires home health
services ....” 42 C.F.R. § 424.22(a)(1)(v).

Home health services must be furnished while the individual is under the care of a
physician, and a physician must establish and periodically review a plan of care for
furnishing the services. Id. § 424.22(a)(iii), (iv). A physician and HHA must review a
Medicare beneficiary’s plan of care at regular intervals. Jd. § 484.18(b). Also, HHAs are
required to “promptly alert the physician” to significant changes that suggest a need to
alter the plan of care. Jd. HHAs consults with the individual’s physician to obtain
approval of any “additions or modifications to the original plan” of care. Id. § 484.18(a).

> My numbered findings of fact and conclusions of law are set forth in italics and bold
font.
1. Petitioner submitted claims for Medicare reimbursement in which it incorrectly
indicated that Dr. Iguh ordered home health services for 12 Medicare
beneficiaries.

From 2009 to 2012, Petitioner submitted claims for home health services for 12
beneficiaries indicating Dr. Iguh’s NPI as the physician who ordered home health
services for those beneficiaries. CMS Ex. 1; 3; 4; 7. During an inquiry into those claims,
Dr. Iguh attested that she never provided orders for those 12 beneficiaries. CMS Exs. 1;
3; 5; 6. Petitioner at first agreed that it did not have any physician orders for home health
services for the 12 beneficiaries. CMS Ex. 2. However, Petitioner later submitted
documentation that physicians other than Dr. Iguh had ordered the home health services.
CMS Exs. 7-19. CMS Exs. 3; 8-19.

2. CMS had a legitimate basis to revoke Petitioner’s Medicare billing privileges
because Petitioner’s claims for reimbursement failed to comply with the
requirements stated in Petitioner’s Medicare enrollment application, thus
causing Petitioner to be non-compliant with provider enrollment requirements.

Petitioner asserts that CMS erroneously accuses Petitioner of failing to obtain a
physician’s order for the home health services that it provided to the 12 beneficiaries
CMS has identified. Petitioner avers instead that it made a “scrivener’s error” on the
claims it filed for reimbursement when it indicated Dr. Iguh’s NPI as the ordering
physician when, in fact, other physicians actually ordered the home health services.
Petitioner argues that its error in misidentifying the NPI of the physicians who actually
ordered the home health services is not a basis for the revocation of billing privileges
because the requirement that HHAs provide the NPI of the physician who ordered the
ome health services is a “condition for payment” under the regulations and not an
enrollment requirement. Petitioner indicates that to allow CMS to consider non-
compliance with any Medicare law, rule, or program instruction as a basis for revocation
renders pointless the enumerated grounds for revocation in 42 C.F.R. § 424.535(a)
because all of these grounds would be subsumed under the enrollment requirements.
Further, Petitioner believes that CMS’s position impermissibly blurs Medicare enrollment
requirements and billing requirements. P. Br. at 5-6, 8-10.

I disagree with Petitioner. CMS may “revoke a currently enrolled provider or supplier’s
Medicare billing privileges and any corresponding provider agreement or supplier
agreement” for reasons including, as relevant here:

(1) Noncompliance. The provider or supplier is determined not to be in
compliance with the enrollment requirements described in this section, or in the

enrollment application applicable for its provider or supplier type... .

42 C.F.R. § 424.535(a) (emphasis added).
The Certification Statement on Petitioner’s Medicare enrollment application provides
“Additional Requirements for Medicare Enrollment,” one of which requires compliance
with Medicare laws, regulations and program instructions that apply to HHAs. CMS Ex.
20, at 3-4. Although Petitioner believes that this requirement is too broad and would
allow revocation for any violation of applicable laws, rules, and program instructions, the
Secretary acted within her authority to impose such requirements. 42 U.S.C.

§ 1395x(0)(8) (authorizing the Secretary to establish requirements for HHA participation
“as the Secretary finds necessary for the effective and efficient operation of [the
Medicare] program.”). Petitioner’s belief that there are too many requirements for HHAs
is not a defense.

Further, Petitioner cannot claim that it was not on notice of the additional enrollment
requirements in the enrollment application because CMS placed those requirements on
the Certification Statement above the place for the signature of Petitioner’s authorized
official. In fact, the first sentence on the Certification Statement states that “[t]his section
is used to officially notify the provider of additional requirements that must be met and
maintained in order for the provider to be enrolled in the Medicare program.” CMS Ex.
20, at 3-4 (emphasis added). In the portion of the Certification Statement for the
authorized official’s signature, it states: “I have read the contents of this application. My
signature legally and financially binds this provider to the laws, regulations, and program
instructions of the Medicare program.” CMS Ex. 20, at 3-4. Petitioner was on notice that
its continued right to be an enrolled provider was subject to its full compliance with all
Medicare laws, regulations, and program instructions.

Although Petitioner believes that there is a strict separation of enrollment requirements
and billing requirements, this is not so with regard to revocation of Medicare billing
privileges. In the provision on the Certification Statement imposing compliance with
Medicare laws, regulations, and program instructions as an enrollment requirement, it
states as the second sentence in that provision that: “I understand that payment of a claim
by Medicare is conditioned upon the claim and the underlying transaction complying
with such laws, regulations, and program instructions . . . and on the provider’s
compliance with all applicable conditions of participation in Medicare.” CMS Ex. 20, at
3-4. Therefore, the provision in the enrollment application that is at the center of this
case expressly binds the participation and payment requirements together.*

Petitioner also contends that it never received appropriate notice of the specific legal
basis for revocation and that CMS’s factual basis (i.e., that Petitioner did not have

> This holding is implicit in Improving Life Home Care, LLC, DAB No. CR3076 (2014),
Universal Health Provider Corp., DAB CR2747 (2013), Hoyos Home Health Care Inc.,
DAB CR2746 (2013), and JFA Universal Home Care, Inc., DAB CR2745 (2013).
physicians’ orders for the 12 beneficiaries identified by CMS) is erroneous. Palmetto and
Petitioner both initially believed that Petitioner did not have any physician orders for the
claims it filed. CMS Exs. 1, at 1; 2, at 2. However, Petitioner changed its position in its
reconsideration request and provided evidence that physicians other than Dr. Iguh
ordered the home health services for the beneficiaries in question. Based on this
information, CMS slightly adjusted its factual basis for the revocation to Petitioner’s
failure to obtain a valid physician order “when it submitted claims using Dr. Bernadette
Iguh’s NPI for Medicare patients.” CMS Ex. 3, at 9. I interpret CMS’s statement to be
that CMS’s revocation of Petitioner’s enrollment was now based on Petitioner providing
the NPI of a physician who did not order the home health services in question. CMS’s
position appears to be that it is not dispositive that physicians ordered the home health
services to the 12 beneficiaries in question, but rather that Petitioner filed claims with the
NPI of a physician who did not order the home health services in question.*

As Petitioner points out, the regulations expressly require that “[t]he claim for a provider
of home health services must contain the legal name and the National Provider Identifier
(NPI) of the ordering physician.” 42 C.F.R. § 424.507(b)(ii). Petitioner failed to provide
this information on its claim and, in fact, provided incorrect information in its place.
Petitioner claims that this was merely a mistake; however, even an unintentional error
with regard to claims may serve as a basis for revocation if the relevant regulation does
not require fraudulent or dishonest intent. See Louis J. Gaefke, D.P.M., DAB No. 2554,
at 7 (2013).

In Gaefke, a supplier billed Medicare for beneficiaries who were deceased at the time
services were alleged to have been rendered and billed for services that could not have
been physically rendered to the identified beneficiaries. The supplier’s primary defense
was that it provided all of the services in question to Medicare beneficiaries; however, it
misidentified the real beneficiaries with deceased ones and simply made other errors.
Gaefke, DAB No. 2554 at 3. However, even accepting the supplier’s defense as true, the
supplier was still held “responsible for the accuracy of his claims for Medicare
reimbursement” because “Medicare suppliers and providers certify that they are

* Ina provider or supplier enrollment case, it is the reconsidered determination upon
which administrative law judge review is predicated. See Hiva Vakil, M.D., DAB No.
2460, at 4-5 (2012) (holding that a supplier cannot obtain administrative law judge
review of the initial determination; the supplier may only obtain administrative law judge
review when there is a reconsidered determination); see also 42 C.F.R. §§ 498.5(/),
498.20(b)(1), 498.24(c), 498.25(b)(2). So long as an issue was considered in a
reconsidered determination, it is an issue that can be considered by an administrative law
judge in a provider or supplier enrollment case. See 42 C.F.R. § 498.56(a)(2); see also
Neb Group of Ariz., LLC, DAB No. 2573, at 7 (2014) (stating that a petitioner’s right to
appeal is “from the reconsidered determination, not the initial determination”).
responsible for the accuracy of their claims for reimbursement. . . .” Id. at 6.° This
reasoning applies to Petitioner because it needed to make such a certification on the
claims it filed. CMS Ex. 21, at 2.

Although CMS need not assert or prove that Petitioner’s actions in the 12 claims in
question involve fraud, CMS indicated that it identified Petitioner’s errors due to a
“questionable or suspicious pattern[] that could indicate fraudulent activity.” CMS Ex. 3,
at 10. Whether CMS believes that the number of claims submitted in this matter with
incorrect information is of sufficient concern to revoke Petitioner’s billing privileges is
not an issue for review. However, “[r]epeatedly making those same errors reduces their
credibility as ‘accidental’ and establishes a pattern of improper billing that suggests a
lack of attention to detail.” Howard B. Reife, D.P.M., DAB No. 2527, at 6 (2013).

Therefore, based on the record in this case, I conclude that CMS had a legitimate basis to
revoke Petitioner’s Medicare billing privileges because Petitioner failed to comply with
Medicare enrollment requirements, as stated in the enrollment application Petitioner
signed, when it incorrectly indicated on claims for reimbursement that Dr. Iguh had
ordered home health services for 12 beneficiaries when Dr. Iguh had not done so.

VI. Conclusion

For the reasons stated above, I affirm CMS’s determination to revoke Petitioner’s
Medicare billing privileges.

/s/
Scott Anderson
Administrative Law Judge

> Although the Gaefke case involved a different legal basis for revocation (i.e., 42 C.F.R.
§ 424.535(a)(8)), elements of its reasoning are sufficiently analogous to this case.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Michael MacCormac, M.D.,
(NPI: 1659377943), (PTAN: 050000300)

Petitioner,
v.
Centers for Medicare & Medicaid Services
Docket No. C-13-566
Ruling No. 2014-31

Date: May 22, 2014

ORDER OF REMAND AND DISMISSAL

I remand this case to the Centers for Medicare & Medicaid Services (CMS) to reconsider
the new issue of CMS’s current policy to reactivate billing privileges effective the date of
deactivation, in accordance with 42 C.F.R. § 424.540(c), and to process Petitioner’s
application for reactivation of his billing privileges.

I. Background

Petitioner is a physician with Lynchburg Anesthesia Associates located in Richmond, VA
and has been enrolled as a Medicare supplier for more than 20 years. On September 30,
2011, Palmetto GBA (Palmetto), the Medicare contractor, informed Petitioner that he
must revalidate his enrollment information. CMS Exhibit (Ex.) 6. The notice stated that
if Petitioner chose to revalidate his enrollment through the paper-based system, he was
required to download the appropriate and current CMS-855 Medicare Enrollment
application from the CMS website. CMS Ex. 6 at 1-2. The notice warned that Petitioner
must complete and submit all required materials within 60 days or he would face
deactivation. CMS Ex. 6 at 1. In response, on February 10, 2012, Petitioner submitted
an enrollment application Form CMS-855I to Palmetto but used an outdated version of
the application. CMS Ex. 4. On February 28, 2012, Palmetto accepted Petitioner’s
untimely revalidation request but instructed him to submit the information on the current
CMS-855I application form. CMS Ex. 7. The notice provided Petitioner 30 days to
submit the updated application for revalidation and warned that Palmetto would reject his
application if he failed to do so. CMS Ex. 7, citing 42 C.F.R. § 424.525.

On April 4, 2012, Palmetto sent Petitioner an e-mail, referencing its February 28, 2012
notice, and informed Petitioner that Palmetto still had not received the correct version of
his CMS-855] application. CMS Ex. 8. Palmetto explained that it was going to issue
Petitioner a “Do Not Forward” (DNF) letter, and Petitioner would be permitted to submit
the correct application within ten days of the letter, or Palmetto would terminate his
provider number. CMS Ex. 8. On April 6, 2012, Palmetto issued the DNF letter to
Petitioner. This letter instructed Petitioner to submit the correct application or otherwise
Palmetto would deactivate Petitioner’s Provider Transaction Access Number (PTAN).
CMS Ex. 9. On April 13, 2012, Palmetto warned Petitioner that it planned to deactivate
Petitioner’s billing privileges effective April 16, 2012, based on his failure to furnish the
documentation for his revalidation. CMS Ex. 10. On April 16, 2012, Palmetto
deactivated Petitioner’s Medicare billing privileges. CMS Ex. 10.

On October 17, 2012, Petitioner submitted the correct version of the CMS-855I
application required for revalidation, which Palmetto received on October 19, 2012.
CMS Ex. 11; CMS Ex. 14 at 3. Petitioner identified this October 2012 application as a
revalidation request. CMS Ex. 11 at 1, 2. However, by this time, Palmetto did not allow
Petitioner to revalidate because Palmetto had deactivated Petitioner’s billing privileges in
April 2012. CMS Ex. 14 at 3. Palmetto processed Petitioner’s October 19, 2012
application as a new enrollment application. CMS Ex. 14 at 3. Palmetto approved
Petitioner’s application and issued him a new effective date based on Palmetto’s receipt
of the application, effective October 19, 2012, with retrospective billing privileges
beginning September 19, 2012.' CMS Ex. 13 at 2; see 42 C.F.R. §§ 424.520(d),

424.521 (a).

' The contractor refers to September 19 as the “effective date” presumably to refer to the
date when Petitioner may retrospectively bill for Medicare services. CMS Ex. 13 at 2.
For providers and suppliers initially enrolling, the “effective date” would ordinarily be
the date the contractor received the enrollment application that it eventually approved.
See 42 C.F.R. § 424.520(d). CMS may, however, permit a provider or supplier to
retrospectively bill for services for up to 30 days prior to that effective date. 42 C.F.R.

§ 424.521(a). In this case, although Petitioner was seeking reactivation, the contractor
considered September 19 as the effective retrospective billing date and October 19 as the
effective date of Petitioner’s reactivation. See 42 C.F.R. § 424.521(a).
Petitioner requested contractor reconsideration. CMS Ex. 1. On February 4, 2013,
Palmetto issued an unfavorable redetermination, upholding the effective date. CMS Ex.
2. Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
March 13, 2013. The case was assigned to me for hearing and decision and on March 26,
2013, I issued an Acknowledgment and Prehearing Order (Prehearing Order). On April
30, 2013, CMS filed a motion for summary judgment (CMS Br.) with fourteen exhibits
(CMS Exs. 1-14). On June 4, 2013, Petitioner filed a memorandum in opposition to the
CMS motion for summary judgment (P. Br.). On June 4 and 7, 2012, Petitioner filed
exhibits (P. Exs.) 1 through 3.” The parties have not objected to the proffered exhibits,
and I admit them to the record.

II. Discussion

Suppliers such as Petitioner must enroll in the Medicare program to receive payment for
covered Medicare items or services. 42 C.F.R. § 424.505. The regulations at 42 C.F.R.
Part 424, subpart P, establish the requirements for a supplier to enroll in the Medicare
program. 42 C.F.R. §§ 424.510 - 424.516; see also Social Security Act (Act)

§ 1866(j)(1)(A) (authorizing the Secretary of the U.S. Department of Health and Human
Services to establish by regulation the process for enrolling providers and suppliers in the
Medicare program). A provider or supplier that seeks billing privileges under Medicare
must “submit enrollment information on the applicable enrollment application.”

42 C.F.R. § 424.510(a). “Once the provider or supplier successfully completes the
enrollment process ... CMS enrolls the provider or supplier into the Medicare program.”
42 C.F.R. § 424.510(a), (d). Once the application for enrollment as a provider or supplier
is approved, the enrollee is issued a National Provider Identifier (NPI) number and a
PTAN to use for billing Medicare and supplier inquiries. Medicare Program Integrity
Manual (MPIM), CMS pub. 100-08, ch. 15 § 15.9.1 (rev. 416, eff. March 18, 2013).

To maintain Medicare billing privileges, a provider or supplier (other than a DMEPOS
supplier) must resubmit and recertify the accuracy of its enrollment information at least
every 5 years. 42 C.F.R. § 424.515. This process is called revalidation. CMS reserves
the right to perform off cycle revalidations in addition to the regular 5—year revalidations
and may request that a provider or supplier recertify the accuracy of the enrollment
information when warranted to assess and confirm the validity of the enrollment
information maintained by CMS. 42 C.F.R. § 424.515. “Off cycle” revalidations may be
triggered as a result of random checks, information indicating local health care fraud
problems, national initiatives, complaints, or other reasons that cause CMS to question

2 Initially, Petitioner filed an unsigned declaration on June 4, 2013, as P. Ex. 2. Then on
June 7, Petitioner filed a signed version of the declaration as an amended P. Ex. 2. CMS
did not object to either filing.
the compliance of the provider or supplier with Medicare enrollment requirements. 42
C.F.R. § 424.515(d). To revalidate its enrollment, a supplier must submit an enrollment
application and meet the requirements outlined at 42 C.F.R. §§ 424.510 through 424.515.
The supplier must submit the appropriate enrollment application to CMS with complete
and accurate information and supporting documentation within 60 calendar days of
CMS’s notification to resubmit and certify the accuracy of the supplier’s enrollment
application. 42 C.F.R. § 424.515(a)(2).

Beginning July 16, 2012, CMS was authorized to deactivate an enrolled provider or
supplier’s Medicare billing privileges if the enrollee failed to comply with revalidation
requirements, within 90 days of CMS’s notice to revalidate. 42 C.F.R. § 424.540(a)(3);
77 Fed. Reg. 29,002, 29,030 (May 16, 2012). If CMS deactivates a provider or supplier’s
Medicare billing privileges, CMS cannot pay the enrollee for items or services it provides
to Medicare beneficiaries. 42 C.F.R. § 424.555(b). The purpose of deactivating a
provider or supplier’s Medicare billing privileges is to protect the enrollee from misuse of
its billing privileges and also to protect the Medicare Trust Funds from unnecessary
overpayments. 42 C.F.R. § 424.540(c). Further, deactivation of Medicare billing
privileges does not have any effect upon the provider or supplier’s participation
agreement or any conditions of participation. 42 C.F.R. § 424.540(c).

Reactivation of an enrolled provider or supplier’s billing privileges is governed by

42 C.F.R. § 424.540(b). The process by which a deactivated enrollee reactivates its
billing privileges depends upon the reason CMS deactivated that provider or supplier. If
CMS deactivates a provider or supplier’s billing privileges for an untimely revalidation,
such as in this case, the enrolled provider or supplier may apply for CMS to reactivate its
Medicare billing privileges by submitting a new enrollment application. 42 C.F.R.

§ 424.540(a)(3), (b)(1).

Here, Palmetto deactivated Petitioner’s billing privileges after he failed to timely
revalidate his enrollment information. Petitioner subsequently submitted an outdated
application for revalidation. Palmetto eventually deactivated him and required him to
reactivate his Medicare billing privileges with a new enrollment application. Palmetto
eventually accepted Petitioner’s application and issued him a new billing number.
However, Palmetto granted Petitioner billing privileges effective from the date Palmetto
received the new enrollment application.

The CMS policy in effect at the time of Petitioner’s October 2012 reactivation
application instructed the contractor to establish the reactivation effective date to be the
date of filing of the enrollment application that was subsequently approved. MPIM, ch.
15 § 15.27.1(B)(2) (rev. 412, eff. April 30, 2012). Accordingly, Palmetto established
Petitioner’s reactivation effective October 19, 2012. However, CMS subsequently
modified this policy to reflect that: “If the contractor approves a provider or supplier’s
reactivation application . . . the reactivation effective date shall be the provider or
supplier’s date of deactivation. ...” MPIM, ch. 15 § 15.27.1.2 (rev. 474, eff. October 8,
2013) (emphasis added).

As previously stated, the purpose of deactivation is to protect the enrolled provider or
supplier from misuse of their billing privileges as well as to protect the Medicare Trust
Funds from unnecessary overpayments. 42 C.F.R. § 424.540(c). When CMS deactivates
an enrolled provider or supplier’s Medicare billing privileges, the action “does not have
any effect on a provider or supplier’s participation agreement or any conditions of
participation.” Jd.

The CMS policy in effect at the time of Petitioner’s October 19, 2012 reactivation
application does not seem to comply with the regulation governing deactivation that was
in effect at that time, and CMS appears to have addressed this with its new policy. The
regulations and new CMS policy suggest that suppliers who subsequently reactivate their
information should not be subject to a period of ineligible reimbursements due to
deactivations.

Ill. Order

I may remand a case to CMS for reconsideration of a new issue and a new determination.
42 C.F.R. § 498.56(d); see Lynn Ann Vaughan, M.D., DAB CR3174 (2014) (remanding a
similar request for hearing where a previously enrolled supplier was provided a later
effective date upon reactivation). I therefore remand and dismiss Petitioner’s request for
hearing and instruct the contractor to reconsider Petitioner’s reactivation date in
accordance with 42 C.F.R. § 424.540(c) and the changes in CMS’s deactivation and
reactivation policy. If CMS completes its reconsideration on this case more than 60 days
from the date of this Order, and Petitioner desires my further review, Petitioner may file a
request for hearing referring to this case with a copy of this Order attached.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Mostafa Elyaman, M.D.,
(PTAN: HP005Z)
(NPI: 1780814913)
Petitioner,
v.
Centers for Medicare & Medicaid Services

Docket No. C-14-526
Decision No. CR3245

Date: May 28, 2014

DECISION

Petitioner, Mostafa Elyaman, M.D., is a physician who applied for enrollment in the
Medicare program. The Centers for Medicare and Medicaid Services granted his
application, effective October 15, 2013 (with a billing date of September 15, 2013).
Petitioner now challenges that effective date. CMS has moved for summary judgment,
which Petitioner has not opposed.’

For the reasons set forth below, I grant CMS’s motion.” I find that CMS appropriately
granted Petitioner’s enrollment effective October 15, 2013.

' Moreover, because neither party has proposed any witnesses, an in-person hearing
would serve no purpose. See Acknowledgment and Pre-hearing Order at 5-6 ( 8-10).

> With its motion and brief in support (CMS Br.), CMS submitted 18 exhibits (CMS Exs.
1-18). Petitioner submitted his hearing request with four documents (P. Exs. ).
Discussion

CMS properly determined the effective date for
Petitioner’s Medicare enrollment, because the evidence
establishes that he submitted his subsequently-approved
enrollment application on October 15, 2013, and his
effective date can be no earlier than the date he filed that
enrollment application.®

To receive Medicare payments for services furnished to program beneficiaries, a
Medicare supplier must be enrolled in the Medicare program. 42 C.F.R. § 424.505.
“Enrollment” is the process used by CMS and its contractors to: 1) identify the
prospective supplier; 2) validate the supplier’s eligibility to provide items or services to
Medicare beneficiaries; 3) identify and confirm a supplier’s owners and practice location;
and 4) grant the supplier Medicare billing privileges. 42 C.F.R. § 424.502. To enroll in
Medicare, a prospective supplier must complete and submit an enrollment application.

42 C.F.R. §§ 424.510(d)(1), 424.515(a). An enrollment application is either a CMS-
approved paper application or an electronic process approved by the Office of
Management and Budget. 42 C.F.R. § 424.502.

When CMS determines that a physician meets the applicable enrollment requirements, it
grants him Medicare billing privileges, which means that he can submit claims and
receive payments from Medicare for covered services provided to program beneficiaries.
For physicians and nonphysician practitioners, the effective date for billing privileges “is
the Jater of the date of filing” a subsequently approved enrollment application or “the
date an enrolled physician . . . first began furnishing services at a new practice location.”
42 C.F.R. § 424.520(d) (emphasis added).

If a physician meets all program requirements, CMS allows him to bill retrospectively for
up to “30 days prior to their effective date if circumstances precluded enrollment in
advance of providing services to Medicare beneficiaries.” 42 C.F.R. § 424.521 (a)(1).

Here, Petitioner Elyaman is a physician working for a Florida group practice, Absolute
Quickcare, LLC. On February 26, 2013, he filed an enrollment application (form CMS-
855B) with the Medicare contractor, First Coast Service Options, Inc. CMS Ex. 1.
Shortly thereafter, however, the practice withdrew his application, explaining that it had
submitted the wrong one. CMS Ex. 4 at 2, CMS Ex. 5.

Months later, Petitioner submitted a new application (form CMS-8551), which First Coast
received on October 15, 2013. CMS Ex. 6 at 2-34, CMS Ex. 7. In an accompanying

> | make this one finding of fact/conclusion of law.
letter, the practice’s office manager attributed the delay in re-filing to a
miscommunication between the practice and the company it then employed to handle
Medicare enrollments. CMS Ex. 6 at 1. First Coast ultimately approved this October 15
application. CMS Exs. 13, 15. Thus, pursuant to 42 C.F.R. § 424.520(d), Petitioner’s
effective date of enrollment is October 15, which allows him to bill retrospectively to
September 15, 2013.

Petitioner complains that he began providing services to Medicare beneficiaries at
Absolute Quickcare on February 19, 2013 and has incurred outstanding claims that total
$9,348.04, for which the practice will not be reimbursed. This may be unfortunate, but it
does not entitle him to an earlier effective date.

Nor is Petitioner entitled to a February 26 effective date, based on his first application.
CMS points out that he filed the wrong form and argues that this necessarily precluded
him from receiving a February effective date. I disagree. CMS may reject a defective
enrollment application if the applicant fails to furnish complete information within 30
days from the date the contractor requests it. 42 C.F.R. § 424.525(a)(1). Consistent with
the regulation, the Medicare Program Integrity Manual (MPIM) makes clear that a
contractor may reject an application that is on the wrong form, if the applicant does not
submit a new or corrected application within 30 days of the contractor’s request. The
manual specifically instructs CMS contractors to develop, rather than return, any such
wrong application. MPIM, CMS Pub. 100-08, ch. 15 § 15.8.2A (rev. 415, eff. Apr. 13,
2012). These provisions do not apply here, however, because Petitioner did not correct
his error. Instead, he voluntarily withdrew the application, which means that it cannot be
considered a “subsequently approved enrollment application,” entitling him to an earlier
effective date.

Conclusion

Because Petitioner’s approved enrollment application was filed on October 15, 2013, the
contractor properly granted his Medicare enrollment effective that date.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2014-H-0382)

Complainant
v.
Pedro A. Torres d/b/a 19th Food Market,
Respondent.
Docket No. C-14-874
Decision No. CR3244

Date: May 28, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an
administrative complaint on Respondent, Pedro A. Torres d/b/a 19th Food Market,
at 1600 South 19th Street, Philadelphia, Pennsylvania 19145, and by filing a copy
of the complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The complaint alleges that 19th Food Market
impermissibly sold cigarettes to minors, thereby violating the Federal Food, Drug,
and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations,
21 C.F.R. Part 1140. CTP seeks to impose a $250 civil money penalty against
Respondent 19th Food Market.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on April 7, 2014, CTP served the
complaint on Respondent 19th Food Market by United Parcel Service. In the
complaint and accompanying cover letter, CTP explained that, within 30 days,
Respondent should pay the penalty, file an answer, or request an extension of time
in which to file an answer. CTP warned Respondent that, if it failed to take one of
these actions within 30 days, the Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering it to pay the full amount of the
proposed penalty.

Respondent 19th Food Market has neither filed an answer within the time
prescribed, nor requested an extension of time within which to file an answer.
Pursuant to 21 C.F.R. § 17.11, Lassume that the facts alleged in the complaint (but
not its conclusory statements) are true. Specifically:

e At Respondent’s business establishment, 1600 South 19th Street,
Philadelphia, Pennsylvania 19145, on May 30, 2013, at approximately 5:48
PM, an FDA-commissioned inspector observed Respondent’s staff sell a
package of Newport Menthol Gold Box cigarettes to a person younger than
18 years of age;

e Ina warning letter issued on June 13, 2013, CTP informed Respondent of
the inspector’s May 30, 2013 observation, and that such actions violate
federal law, 21 C.F.R. § 1140.14(a). The letter further warned that if
Respondent failed to correct its violation, the FDA could impose a civil
money penalty or take other regulatory action;

e At Respondent’s business establishment, 1600 South 19th Street,
Philadelphia, Pennsylvania 19145, on October 30, 2013, at approximately
6:06 PM, FDA-commissioned inspectors documented Respondent’s staff
selling a package of Newport Menthol Gold Box cigarettes to a person
younger than 18 years of age.

These facts establish Respondent’s liability under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if sold or distributed in violation of regulations issued under section
906(d) of the Act. 21 U.S.C. § 387f(d); see 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R.
§ 1140.1(b). The Secretary issued the regulations at 21 C.F.R. Part 1140 under
section 906(d) of the Act. 21 U.S.C. § 387(a); see 21 U.S.C. § 387f(d)(1); 75 Fed.
Reg. 13,229 (Mar. 10, 2010). Under 21 C.F.R. § 1140.14(a), no retailer may sell
cigarettes or smokeless tobacco to any person younger than 18 years of age.

A $250 civil money penalty is permissible under 21 C.F.R. § 17.2.
Order

For these reasons, I enter default judgment in the amount of $250 against
Respondent Pedro A. Torres d/b/a 19th Food Market. Pursuant to 21 C.F.R.

§ 17.11(b), this order becomes final and binding upon both parties after 30 days of
the date of its issuance.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Bird’s Song of North Carolina,
(NPI: 1871838409),
(PTAN: C148),

Petitioner,
v.
Centers for Medicare & Medicaid Services
Docket No. C-13-1079
Decision No. CR3243

Date: May 30, 2014

DECISION

Petitioner, Bird’s Song of North Carolina (Bird’s Song), is a mental health clinic whose
sole owner is Dr. Brenda Harris, a psychiatrist. Bird’s Song applied to enroll in the
Medicare program, and the Medicare contractor, acting on behalf of the Centers for
Medicare & Medicaid Services (CMS), granted its application effective February 19,
2013. CMS Exhibits (Exs.) 5, 7. Petitioner’s owner challenged that effective date and
sought enrollment beginning September 2, 2012, the date she began providing services at
Bird’s Song. CMS Ex. 6. Ina reconsidered determination, the contractor upheld the
February 19, 2013 effective date. CMS Ex. 7. Bird’s Song timely appealed, and the case
was assigned to me.

My Acknowledgement and Pre-Hearing Order (Pre-Hearing Order) advised the parties
that they must submit pre-hearing briefing including written direct testimony for each
proposed witness and that an in-person hearing would only be necessary if the opposing
party affirmatively requested an opportunity to cross-examine a witness. Pre-Hearing
Order J 8, 9; see Vandalia Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB
No. 1823, at 8 (2002) (holding that the use of written direct testimony for witnesses is
permissible as long as the opposing party has the opportunity to cross-examine those
witnesses). Although CMS proposes one witness, Petitioner did not request to cross-
examine the witness. Therefore I now close the record and decide the case upon the
written record. See Pre-Hearing Order, at 5-6 (§ 9-11).

For the reasons set forth below, I reverse the reconsidered determination and find that
December 20, 2012, is the appropriate effective date for the supplier’s Medicare
enrollment (with a retrospective billing date of November 20, 2012).

Findings of Fact and Conclusions of Law

1. Bird’s Song is entitled to a December 20, 2012 effective date pursuant to
CMS’s policy.

To receive Medicare payments for services furnished to program beneficiaries, a
Medicare supplier must be enrolled in the Medicare program. 42 C.F.R. § 424.505.
“Enrollment” is the process used by CMS and its contractors to: 1) identify the
prospective supplier; 2) validate the supplier’s eligibility to provide items or services to
Medicare beneficiaries; 3) identify and confirm the supplier’s owners and practice
location; and 4) grant the supplier Medicare billing privileges. 42 C.F.R. § 424.502. To
enroll in Medicare, a prospective supplier must complete and submit an enrollment
application. 42 C.F.R. §§ 424.510(d)(1), 424.515(a). An enrollment application is either
a CMS-approved paper application or an electronic process approved by the Office of
Management and Budget. 42 C.F.R. § 424.502. Ifa physician or physician organization
meets all program requirements, CMS allows retrospective billing for up to “30 days
prior to their effective date if circumstances precluded enrollment in advance of
providing services to Medicare beneficiaries.” 42 C.F.R. § 424.521(a)(1).

When CMS determines that a physician or physician organization meets the applicable
enrollment requirements, it grants Medicare billing privileges, which means that the
physician or physician organization may submit claims and receive payments from
Medicare for covered services provided to program beneficiaries. The effective date for
those billing privileges “is the /ater of the date of filing” a subsequently approved
enrollment application or “the date an enrolled physician . . . first began furnishing
services at a new practice location.” 42 C.F.R. § 424.520(d) (emphasis added). The
“date of filing” is the date that the Medicare contractor “receives” a signed provider
enrollment application that the Medicare contractor is able to process to approval.

73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008).

Here, Bird’s Song applied for Medicare enrollment, submitting Form CMS-855A, an
application form for enrollment in the Medicare Part A program, which the Medicare
contractor received on December 20, 2012. CMS Exs. 1-2. However, Petitioner should
have submitted a Form CMS-855B, an application for enrollment as a supplier in the
Medicare Part B program. On January 31, 2013, the Medicare contractor returned
Petitioner’s CMS-855A application and instructed Petitioner to submit a form CMS-
855B. CMS Ex. 2. On February 19, 2013, the contractor received Petitioner’s
application on the correct application form. CMS Ex. 3. The contractor subsequently
approved this application and granted Petitioner enrollment in the Medicare Part B
program with an “effective date” of January 20, 2013, 30 days prior to the receipt of
Petitioner’s February 19, 2013 CMS-855B application.| CMS Exs. 5, 7.

The contractor did not comply with agency policy when it returned Petitioner’s
application on January 31, 2013. The Medicare Program Integrity Manual (MPIM)
requires that, if the “wrong application was submitted (e.g., a Form CMS-855B was
submitted for Part A enrollment),” the contractor will develop the application, rather than
return it. MPIM CMS Pub. 100-08, ch. 15 § 15.8.2A (rev. 474, eff. October 8, 2013).
The manual further instructs the contractor to request the applicant to submit a new or
corrected complete application - including all necessary documentation - within 30
calendar days from the date the contractor requested the missing information or
documentation. See Medical Services of Suffolk County PC, DAB No. CR3149, at 3
(2014) (reversing a contractor’s effective date determination where a supplier first filed
the wrong application but then timely filed the correct application upon notification). If
the applicant fails to follow-up with the correct form, the contractor may reject the
application. MPIM, ch. 15 § 15.8.2A (citing 42 C.F.R. § 424.525(a)(1), (2)). Thus, when
an applicant initially files the wrong application but timely furnishes the correct
application, the contractor should not reject the initial application but should develop it
instead.

Bird’s Song resent the correct form within 30 days of the contractor’s request.
Accordingly, December 20, 2012, the date the contractor received Petitioner’s first
enrollment application, is the appropriate effective date for the Petitioner’s Medicare
enrollment.

2. Iam not authorized to grant Petitioner’s request for equitable relief:

Petitioner argues that a Medicare contractor representative incorrectly instructed its office
manager to file the wrong enrollment application. Petitioner also argues that a contractor
representative advised its new claims consultant that it would receive an effective date of
September 2, 2012, the start date of Petitioner’s practice. Hearing Request; P. Br. at 3.

' The contractor refers to January 20, 2013 as the effective date. CMS Ex. 5. However,
according to the regulation, February 19, 2013, would actually be the effective date of
enrollment, and January 20, 2013, would be the retrospective billing date. See 42 C.F.R.
§ 424.521 (a).
Petitioner’s assertion that it is entitled to an earlier effective date because it received
incorrect or misleading information from the contractor’s representatives amounts to a
claim of equitable estoppel. It is well-established by federal case law, and in
Departmental Appeals Board precedent, that: (1) estoppel cannot be the basis to require
payment of funds from the federal fisc; (2) estoppel cannot lie against the government, if
at all, absent a showing of affirmative misconduct, such as fraud; and (3) I am not
authorized to order payment contrary to law based on equitable grounds. See, e.g., Office
of Personnel Mgmt. v. Richmond, 496 U.S. 414 (1990); Heckler v. Cmty. Health Servs. of
Crawford County, Inc., 467 U.S. 51, 63 (1984); Oklahoma Heart Hosp., DAB No. 2183,
at 16 (2008); Wade Pediatrics, DAB No. 2153, at 22 n.9 (2008), aff'd, 567 F.3d 1202
(10th Cir. 2009); US Ultrasound, DAB No. 2302, at 8 (2010). Here, Petitioner has not
alleged affirmative misconduct by the government. It is also well-settled that those who
deal with the government are expected to know the law. See Heckler, 467 U.S. 51 at 63.
Accordingly, I must reject any equitable estoppel argument. Therefore Petitioner’s new
effective date, as discussed above, is December 20, 2012, and not September 2, 2012 as
Petitioner requests.

/s/
Joseph Grow
Administrative Law Judge