Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

David K. Caletri, M.D.

(NPI: 1730277831),
Petitioner
Vv.
Centers for Medicare and Medicaid Services.

Docket No. C-11-13

Decision No. CR2344

Date: April 1, 2011

DECISION

Petitioner, David K. Caletri, M.D., appeals the determination of the Centers for Medicare
and Medicaid Services (CMS) to revoke his enrollment and billing privileges as a
supplier in the Medicare program for non-compliance with Medicare enrollment
requirements under 42 C.F.R. Sections 424.535(a)(1) and 424.516(d)(1)(ii). For the
reasons set forth below, I find that a legitimate basis existed for CMS to revoke
Petitioner’s billing privileges, and I grant CMS’s motion for summary judgment.

I. Background

Petitioner is a physician who was licensed in, and practiced, radiation oncology in and
around Lafayette, Louisiana. CMS Exhibit (Ex.) 1 (setting forth Consent Order, Number
90-I-489 (Consent Order)); Petitioner Ex. 1. On December 14, 2009, Petitioner entered
into a Consent Order with the Louisiana State Board of Medical Examiners (State Board),
consenting to a 90 day license suspension, which was retroactive from August 7, 2009
until November 5, 2009. ' Id. at 2. Petitioner’s license suspension coincided with the
date that Petitioner entered inpatient treatment for a chemical dependency medical
condition. Petitioner’s Opposition to Respondent’s Motion for Summary Judgment and
Petitioner’s Cross-Motion for Summary Judgment (Petitioner’s Motion) at 2. In addition,
the Consent Order set forth that Petitioner’s license was “reinstated on probation” for five
years. CMS Ex. 1, at 3; Petitioner Ex. 1, at 3.

Petitioner failed to report his retroactive medical license suspension to CMS within 30
days after the effective date of December 14, 2009. See CMS Motion for Summary
Judgment (CMS Motion) at 4; Petitioner’s Motion at 5 (noting Petitioner “reasonably
assumed” Board would make “requisite notice” such that CMS “had constructive
knowledge of the Consent Order”). Instead, the State Board notified CMS’s Medicare
Contractor, Pinnacle Business Solutions, Inc. (Pinnacle), of the retroactive suspension by
letter, dated January 7, 2010. CMS Motion at 4; Petitioner’s Motion at 5. On February 5,
2010, Pinnacle subsequently notified Petitioner that it was revoking his Medicare billing
privileges, based on noncompliance with 42 C.F.R. § 424.535(a)(1) and 42 C.F.R. §
424.516(d)(1)(ii), effective August 7, 2011. CMS Ex. 3; Petitioner’s Ex. 3. Pinnacle
revoked Petitioner’s billing privileges for three years, which Pinnacle noted was the
length of time of Petitioner’s re-enrollment bar. /d. at 3. In addition, Pinnacle assessed
an overpayment of $14,936.14 against Petitioner, finding that he continued to furnish
services “after a final adverse action precluded enrollment in the Medicare program.” Jd.

Petitioner subsequently submitted a corrective active plan (CAP) request to Pinnacle on
February 22, 2010, which was within thirty days of the February 5, 2010 revocation letter.
Petitioner Ex. 4 (setting forth CAP request, dated February 22, 2010). Pinnacle denied
the CAP request on June 10, 2010, noting that Petitioner failed to report the suspension of
his medical license to CMS within thirty days. Petitioner Ex. 6 (setting forth CAP denial
letter, dated June 10, 2010). On March 30, 2010, Petitioner requested that Pinnacle
reconsider Petitioner’s revocation and reinstate his billing privileges. Petitioner Ex. 5.

On August 5, 2010, a Medicare Senior Enrollment Hearing Officer issued an unfavorable
reconsideration decision, finding that Petitioner’s enrollment and billing privileges in the
Medicare program were properly revoked. Petitioner Ex. 7.

Pursuant to 42 C.F.R. § 498.40, Petitioner timely filed a request for an Administrative
Law Judge (ALJ) hearing by letter dated October 4, 2010. I issued an Acknowledgment
and Pre-Hearing Order on October 19, 2010. CMS subsequently filed a motion for
summary judgment on November 18, 2010. CMS accompanied its submission with CMS
Exhibits 1-7. On December 20, 2010, my office received Petitioner’s Opposition to
Respondent’s Motion for Summary Judgment and Petitioner’s Cross-Motion for

' Petitioner acknowledged, approved, accepted, and consented to the entry of the Consent
Order on December 3, 2011. See CMS Ex. | at 8. The State Board then agreed to the
Consent Order on December 14, 2011, which I will use as its effective date.
Summary Judgment, dated December 16, 2010, and nine exhibits. I receive P. Exs. 1-7
and CMS Exs. 1-9 into the record.

II. Applicable Regulations

Medicare Part B pays for physicians’ services if a professional, “who is legally
authorized to practice by the State in which he or she performs the functions or actions,
and who is acting within the scope of his or her license,” furnishes them. 42 C.F.R. §
410.20(b). CMS may revoke the Medicare billing privileges of a currently enrolled
provider or supplier, if the provider or supplier is “determined not to be in compliance”
with Medicare enrollment requirements. 42 C.F.R. § 424.535(a)(1). The regulations
further specify, in part:

(d) Reporting requirements for physicians, nonphysician
practitioners, and physician and nonphysician practitioner
organizations. Physicians, nonphysician practitioners, and physician
and nonphysician practitioner organizations must report the
following reportable events to their Medicare contractor within the
specified timeframes:
(1) Within 30 days—

(i) A change of ownership;

(ii) Any adverse legal action; or

(iii) A change in practice location.

42 CER. § 424.516(d)(1).

The regulations define “final adverse action” to include “[s]uspension or revocation of a
license to provide health care by any State licensing authority.” 42 C.F.R. § 424.502.
CMS may revoke an enrolled supplier or provider’s Medicare billing privileges if that
provider or supplier fails to report to the Medicare contractor an adverse legal action or
change in practice location within thirty days, in compliance with the reporting
requirements of 42 C.F.R. § 424.516(d)(1)(ii) and 42 C.F.R. § 424.516(d)(1)(iii). In
addition, a provider that does not comply with the reporting requirements of 42 C.F.R. §
424.516(d)(1)(ii) “is assessed an overpayment back to the date of the final adverse
action.” 42 C.F.R. § 424.565.

III. Issue

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

A. A Legitimate Basis Exists for CMS to Revoke Petitioner’s Enrollment
in Medicare.

As noted above, Petitioner entered into a Consent Order, which took effect on December
14, 2009, to retroactively suspend his medical license for ninety days, from August 7,
2009 to November 5, 2009. Petitioner asserts, however, that the record “clearly
establishes [that] there has been no evidence submitted by CMS that Dr. Caletri ever
actually was suspended from his practice a single day in real time between August 7,
2009 through November 6, 2009.” Petitioner Motion at 7. Petitioner argues that the
Consent Order “fails to establish any real time suspension,” such that “CMS failed to
have sufficient basis to revoke his Medicare privileges.” Jd. at 8.

Petitioner further opines:

Please understand that during the suspension of Dr. Caletri’s medical
license he received no notice from Pinnacle regarding his
noncompliance for Medicare billing purposes, he also had
completely ceased all activities related to his care and treatment of
patients and did not submit any Medicare billings for this time
period. Dr. Caletri resumed Medicare billing only after the
Louisiana Board of Medical Examiners reinstated his license to
practice medicine as provided by the Consent Order. Consequently,
Dr. Caletri conducted no act that was not in compliance with 42
CFR. § 424.535(a)(1).

Petitioner’s Hearing Request at 2.

CMS may revoke the billing privileges of a participating Medicare provider for
noncompliance with Medicare enrollment requirements. Such noncompliance includes
the surrender of a physician’s license to practice medicine. Here, Petitioner voluntarily
surrendered his medical license retroactively when he acknowledged, approved, accepted,
and entered into the December 14, 2010 Consent Order. Once Petitioner failed to meet
the licensing requirement of 42 C.F.R. § 410.20(b), a legitimate basis arose for CMS to
revoke Petitioner’s billing privileges for noncompliance with Medicare enrollment
requirements effective to the date of the license suspension. 42 C.F.R. § 424.535(g).
Petitioner’s arguments regarding a “real time suspension” are unavailing. Petitioner’s
license was suspended. The fact that the suspension occurred retroactively does not
diminish the fact that the suspension actually occurred and carries consequences.
Accordingly, I conclude that a legitimate basis exists to revoke Petitioner’s billing
privileges and enrollment in Medicare, pursuant to 42 C.F.R. § 424.535(a)(1), effective
August 7, 2009. I also uphold the basis for CMS’s finding that Petitioner is responsible
for any resultant overpayment occurring after this date.

While I find that CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment
solely due to his noncompliance with 42 C.F.R. § 424.535(a)(1), I also examine whether
an additional basis for revocation exists due to Petitioner’s failure to report the
suspension of his medical license. See Houston v. CMS, DAB CR2071, at 4 (2010)
(“License suspension and failure to inform CMS of a change in circumstances are
independent grounds for revocation of enrollment. Either basis, standing alone, is
sufficient authority for CMS to revoke Petitioner’s enrollment.”). Petitioner does not
dispute that he failed to report that his medical license was suspended. Instead, Petitioner
presumed that the State Board would notify CMS of the suspension, which it did on
January 7, 2010. However, the fact that CMS learned about the suspension from a source
other than Petitioner did not relieve Petitioner of his duty to inform CMS of the change in
his circumstances, especially because no evidence exists to show that Petitioner was
aware that the State Board reported the suspension to CMS within 30 days. Petitioner
does not dispute that suspension of his license constitutes an adverse legal action, as 42
C.F.R. § 424.502 contemplates, that he was explicitly required to report. Petitioner’s
failure to report provides an additional basis to revoke his enrollment, even if CMS may
have learned about the license suspension from another source. Accordingly, I conclude
that a basis also exists to revoke Petitioner’s billing and enrollment privileges, pursuant to
42 CFR. § 424.535(a)(9).

B. Petitioner’s Due Process Rights Were Not Denied

Petitioner asserts that CMS violated the requirements of 42 C.F.R. § 424.535(a)(1),
which provides, in part, “[a]ll providers and suppliers are granted an opportunity to
correct the deficient compliance requirement before a final determination to revoke
billing privileges.” Petitioner’s Motion at 8. Petitioner asserts that he should have been
given the opportunity to correct any deficiencies that may have existed before his
Medicare enrollment was revoked.

CMS did provide Petitioner the opportunity to submit a CAP. Pinnacle subsequently
denied the CAP on June 10, 2010, explaining that Petitioner did not report his license
suspension to CMS within 30 days. CMS Ex. 6. Pinnacle’s decision not to reinstate
Petitioner based on the CAP is not subject to appeal. See DMS Imaging, Inc., DAB No.
2313, at 7-8 (2010) (“The hearing officer conducting the reconsideration (and the
ALJ...) are limited to reviewing the basis for revocation set out in the initial notice, not
the merits of any contractor decision that correction action under a CAP was
unacceptable.”); Emmanuel Brown, M.D. and Simeon K. Obeng, M.D. v. CMS, DAB
CR2145, at 7 (2010) (noting that CAP evaluation is unappealable).
B. Summary Judgment is Appropriate.
The Board stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there
is no genuine issue as to any material fact, and the moving party is
entitled to judgment as a matter of law. .. . The party moving for
summary judgment bears the initial burden of showing that there are
no genuine issues of material fact for trial and that it is entitled to
judgment as a matter of law. . . . To defeat an adequately supported
summary judgment motion, the non-moving party may not rely on
the denials in its pleadings or briefs, but must furnish evidence of a
dispute concerning a material fact — a fact that, if proven, would
affect the outcome of the case under governing law. .. . In
determining whether there are genuine issues of material fact for
trial, the reviewer must view the evidence in the light most favorable
to the non-moving party, drawing all reasonable inferences in that
party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations

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

The issue in this case turns on the interpretation and application of the regulations that
govern revocation of enrollment in Medicare. The material facts are not in dispute.
Petitioner does not deny that he entered into a Consent Agreement on December 14, 2009
that resulted in the suspension of his medical license. Petitioner does not deny that he
failed to report to CMS that his medical license was suspended. I have accepted all facts
that Petitioner asserted as true and drawn all inferences in his favor. However, in doing
so, I could reach no different result under the law. I conclude summary judgment is
appropriate, as a legitimate basis existed for CMS to revoke Petitioner’s enrollment in
Medicare.
Vv. Conclusion

CMS had the authority to revoke Petitioner’s enrollment and billing privileges for
noncompliance with Medicare enrollment requirements under 42 C.F.R. § 424.535(a)(1)
and 424.516(d)(1)(ii). I therefore grant the CMS motion for summary judgment.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Blessing Okuji
Petitioner
Vv.

The Inspector General.
Docket No. C-11-21
Decision No. CR2343
Date: March 23, 2011
DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Disposition affirming the I.G.’s determination to exclude Petitioner Blessing Okuji from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years. The I.G.’s Motion and determination to exclude Petitioner are based
on section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(1). The
facts in this case mandate the imposition of a five-year exclusion. Accordingly, I grant
the I.G.’s Motion for Summary Disposition.

I. Procedural Background

Between June and October, 2005, Blessing Okuji was employed by a business called the
Holistic Home Care Agency (Holistic). During that period, and acting as an employee of
Holistic, she provided healthcare-related services to a Medicaid recipient named J. Lee in
J. Lee’s home in Kings County, New York. Holistic billed the New York Medical
Assistance Program, that State’s Medicaid program, for those services as if they had been
provided by a nurse, although Petitioner was unlicensed to practice as a nurse in the State
of New York.
2

On November 6, 2008 the Grand Jury sitting for the Supreme Court of the State of New
York, County of Kings, handed up an Indictment charging Petitioner with two felonies,
Grand Larceny in the Third Degree, in violation of N.Y. PENAL LAW § 155.35, and
Unauthorized Practice of a Profession (Nursing), in violation of N.Y. EDUC. LAW

§ 6512(1). Petitioner reached a plea agreement with prosecutors, and on May 7, 2009,
appeared with counsel in the Supreme Court of the State of New York, County of Kings,
and pleaded guilty to one count of Criminal Trespass in the Second Degree, a
misdemeanor, in violation of N.Y. PENAL LAW § 140.15. She was granted a conditional
discharge and was ordered to pay restitution in the sum of $3000 to the New York State
Medicaid Fraud Restitution Fund.

Section 1128(a)(1) of the Act mandates the exclusion of “[a]ny individual or entity that
has been convicted of a criminal offense related to the delivery of an item or service
under . . . any State health care program” for a period of not less than five years. On
September 30, 2010 the I.G. notified Petitioner that she was to be excluded pursuant to
the terms of section 1128(a)(1) of the Act for a period of 5 years.

Acting through counsel, Petitioner timely sought review of the L.G.’s action by letter of
October 8, 2010.

I convened a prehearing conference by telephone on October 22, 2010, pursuant to

42 C.F.R. § 1005.6, in order to discuss procedures best suited for addressing the issues
presented by the case. By Order of October 26, 2010, as amended by my Orders of
December 21, 2010 and January 31, 2011, I established a schedule for the submission of
documents and briefs.

The record in this case closed for purposes of 42 C.F.R. § 1005.20(c) with the proffer of
Petitioner’s Exhibit 1 on March 16, 2011.

The evidentiary record on which I decide the issues before me contains seven exhibits.
The I.G. proffered seven exhibits marked I.G. Exhibits 1-7 (I.G. Exs. 1-7). Petitioner
proffered one exhibit marked Petitioner’s Exhibit 1 (P. Ex. 1). In the absence of
objection, I have admitted all proffered exhibits.

II. Issues

The legal issues before me are limited to those set out at 42 C.F.R.
§ 1001.2007(a)(1). In the context of this record, they are:
3

a. Whether the L.G. has a basis for excluding Petitioner from participating
in Medicare, Medicaid, and all other federal health care programs pursuant
to section 1128(a)(1) of the Act; and

b. Whether the five-year length of the proposed period of exclusion is
unreasonable.

The controlling authorities require that these issues be resolved in favor of the I.G.’s
position. Section 1128(a)(1) of the Act mandates Petitioner’s exclusion, for her predicate
conviction and its nexus to the New York Medical Assistance Program has been
established. A five-year period of exclusion is the minimum period established by
section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B), and is therefore as a
matter of law not unreasonable

III. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the exclusion from
participation in Medicare, Medicaid, and all other federal health care programs of any
individual or entity convicted of a criminal offense related to the delivery of an item or
service under title XVIII of the Act (the Medicare program) or any state health care
program. The terms of section 1128(a)(1) are restated in similar language at 42 C.F.R.
§ 1001.101(a). Neither the statute nor the regulation distinguishes between felony and
misdemeanor convictions as predicates for exclusion.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual... by a... State. . . court, regardless
of . .. whether the judgment of conviction or other record relating to criminal conduct has
been expunged,” section 1128(i)(1) of the Act; “when there has been a finding of guilt
against the individual... by a... State... court,” section 1128(i)(2) of the Act; “when a
plea of guilty or nolo contendere by the individual . . . has been accepted by a... State
... court,” section 1128(i)(3) of the Act; or “when the individual . . . has entered into
participation in a... deferred adjudication ... program where judgment of conviction
has been withheld,” section 1128(i)(4) of the Act, 42 U.S.C. §§ 1320a-7(i)(1)-(4). These
definitions are repeated at 42 C.F.R. § 1001.2.

An exclusion based on section 1128(a)(1) is mandatory and the I.G. must impose it for a
minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-
7(c)(3)(B). The regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory
provision.
IV. Findings and Conclusions
I find and conclude as follows:

1. On her accepted plea of guilty on May 7, 2009, in the Supreme Court of the State of
New York, County of Kings, Petitioner Blessing Okuji was found guilty of one count of
Criminal Trespass in the Second Degree, a misdemeanor, in violation of N.Y. PENAL
LAW § 140.15. LG. Exs. 3, 4, 6, 7.

2. Petitioner was sentenced on her guilty plea in the Supreme Court on December 14,
2009. As part of her sentence, Petitioner was ordered to pay restitution in the sum of
$3000 to the New York State Medicaid Fraud Restitution Fund. I.G. Exs. 3, 4, 6, 7.

3. The accepted plea of guilty, finding of guilt, and judgment of conviction described
above constitute a “conviction” within the meaning of sections 1128(a)(1) and 1128(i)(1),
1128(i)(2), and 1128(i)(3) of the Act, and 42 C.F.R. § 1001.2.

4. A nexus and a common-sense connection exist between the criminal offense to which
Petitioner pleaded guilty and of which she was convicted, as noted above in Findings 1,
2, and 3, and the delivery of an item or service under the New York State Medical
Assistance Program, a state health care program. I.G. Exs. 3, 4, 5; Berton Siegel, D.O.,
DAB No. 1467 (1994); Alexander Nepomuceno Jamias, DAB CR1480 (2006).

5. By reason of Petitioner’s conviction, a basis exists for the I.G.’s exercise of authority,
pursuant to section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), to exclude
Petitioner from participation in Medicare, Medicaid, and all other federal health care
programs.

6. Because the five-year period of Petitioner’s exclusion is the mandatory minimum
period provided by law, it is therefore not unreasonable. Section 1128(c)(3)(B) of the
Act; 42 C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).

7. There are no disputed issues of material fact and summary disposition is
therefore appropriate in this matter. Michael J. Rosen, M.D., DAB No. 2096 (2007);
Thelma Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under Title XVIII of the Act (Medicare) or any state health care program.
Tamara Brown, DAB No. 2195 (2008); Thelma Walley, DAB No. 1367 (1992); Boris
Lipovsky, M.D., DAB No. 1363 (1992); Lyle Kai, R.Ph., DAB CR1262 (2004), rev'd on
other grounds, DAB No. 1979 (2005), aff’d sub nom. Kai v. Leavitt, Civ. No. 05-00514
(D. Haw. July 17, 2006); see also Russell Mark Posner, DAB No. 2033, at 5-6 (2006).
Petitioner has not seriously challenged the I.G.’s proof of the first element, but has
vigorously argued that the second element is not present. Nevertheless, the record before
me record demonstrates that there is objective proof of each, and that the I.G. has proven
both elements essential to this exclusion.

Court records of Petitioner’s conviction and its procedural history are before me as I.G.
Exs. 3, 5, 6, and 7. She was originally charged with two felonies, the details of which are
set out in an Indictment returned on or about November 6, 2008. I.G. Ex. 5. The first
charge alleged that Petitioner caused false claims to be submitted to the New York
Medical Assistance Program and paid to Holistic, and that the falsity of the claims lay in
the fact that “claimed care and services were performed . . . by an unlicensed person
practicing nursing.” I.G. Ex. 5, at 2. The second charge alleged that Petitioner was the
unlicensed provider of the care and services, and that she “held herself out as being able
to practice the profession of nursing.” I.G. Ex. 5, at 3. The two crimes were alleged to
have been committed over a period between June 28 and October 1, 2005, and the false
claims were alleged to have amounted to “over $3,000.00 to which neither the defendant
nor the company were entitled.” 1.G. Ex. 5, at 2. The Indictment was sought and
obtained by the Medicaid Fraud Control Unit (MFCU) of the New York State Attorney
General’s Office. I.G. Ex. 5.

Petitioner and her attorney negotiated a plea agreement with the MFCU. LG. Ex. 3. By
that agreement she pleaded guilty to one count of Criminal Trespass in the Second
Degree, a misdemeanor, in violation of N.Y. PENAL LAW § 140.15, and agreed to pay
restitution in the sum of $3000 to the New York State Medicaid Fraud Restitution Fund.
In return, the MFCU agreed not to pursue further the charges set out in the Indictment.
On May 7, 2009 — the same day the plea agreement was signed — Petitioner tendered
her guilty plea, and the court accepted the plea, found her guilty, and entered judgment of
conviction. I.G. Ex. 6. The court imposed a sentence of a one-year conditional discharge
on December 14, 2009, and required Petitioner to pay the $3000 restitution as she had
agreed in the plea agreement.

The facts recited in the two paragraphs immediately above establish the first essential
element, Petitioner’s conviction of a criminal offense. However, Petitioner has taken the
position here that her conviction is not related to the delivery of an item or service under
Medicare or any state health care program. She thus disputes the I.G.’s proof of the
second essential element. But her position ignores the substance of her plea agreement
and the objective links between that agreement, the charges she originally faced, and the
specific allegations of the charge to which she pleaded guilty. I.G. Ex. 3, at 1-3; LG. Ex.
5, at 2-3.
The plea agreement is clear in its recitation of the nexus between the charges in the
Indictment that arose from false claims made to New York’s Medicaid program for
services not rendered as claimed, and the charge on which Petitioner was convicted. The
plea agreement by its explicit language represented a reduction in the number and
seriousness of the charges in return for a guilty plea. The times of the events, the total
amount of the false claims, and the /ocus of the events charged all illustrate the
relationship of the charges to one another. That the reduced charge makes no direct
mention of Medicaid fraud is of no consequence here, for it is the relationship of the
admitted charge to the Medicaid program, rather than the state’s labeling of the admitted
offense, that matters. Michael S. Rudman, M.D., DAB No. 2171 (2008), aff'd sub nom.
Rudman vy. Leavitt, 578 F. Supp. 2d 812 (D. Md. 2008); Lyle Kai, R.Ph., DAB No. 1979
(2005), aff'd sub nom. Kai v. Leavitt, Civ. No. 05-005 14 (D. Haw. July 17, 2006). Were
it necessary to rely on those recitations, I should have no difficulty in finding as a matter
of fact that the crime of which Petitioner was convicted was related to the delivery of an
item or service under the New York State Medicaid program. But I need not — and I
explicitly do not — rely on them here. I rely instead on a much more direct line of proof.

I rely on that part of Petitioner’s sentence that required her to pay “criminal restitution in
the amount of $3000.00 to be paid to the ‘New York State Medicaid Fraud Restitution
Fund’ over a two-year period.” I.G. Ex. 3, at 3; see also 1.G. Exs. 4, 6. As Lhave
explained elsewhere, if an individual has been convicted of a criminal offense, then proof
that any sentence based on that conviction included the payment of restitution to a
protected program or the agency in charge of that program creates a rebuttable
presumption of a nexus or common-sense connection between the conviction and the
delivery of an item or service under the program. Alexander Nepomuceno Jamias, DAB
CR1480 (2006). The I.G. has proven the second essential element.

Petitioner offers two additional arguments against the exclusion. She asserts, and for
purposes of this Decision, I accept, that the State of New York’s Office of Medicaid
Inspector General has removed her from its list of disqualified providers, and has thus
approved her to be employed in a facility enrolled in the Medicaid program. P. Ex. 1.
That may very well be the case from the state’s perspective, based on state standards,
regulations, and proceedings. But the state’s decision to end its own exclusion of
Petitioner simply cannot limit or negate the application here of federal mandatory
statutory provisions or the mandatory federal regulations implementing them. The I.G.
‘as no discretion in the matter, and cannot be bound by the state’s action. And
Petitioner’s second additional argument, in which she invokes “justice and equity” and
“cries out for justice and to be allowed to work,” fails for the same basic reason: appeals
to what she sees as equity are not a defense to the mandatory imposition of this exclusion.
Henry L. Gupton, DAB No. 2058 (2007); Salvacion Lee, M.D., DAB No. 1850 (2002).
As the Departmental Appeals Board observed in Joann Fletcher Cash, DAB No. 1725
(2000), the precise point of the exclusion mechanism is to prevent untrustworthy

individuals from being involved with protected health care programs. That this exclusion
may have a dramatic impact on Petitioner's or any other excluded individuals’ future
employment opportunities is a logical consequence of any exclusion, including this one.

Because the I.G. has established a basis for Petitioner’s exclusion pursuant to section
1128(a)(1), her exclusion for five years is mandatory pursuant to section 1128(c)(3)(B) of
the Act. 42 U.S.C. § 1320a-7(c)(3)(B). That period is reasonable as a matter of law.

Summary disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). Resolution
of a case by summary disposition is particularly fitting when settled law can be applied to
undisputed material facts. Marvin L. Gibbs, Jr., M.D., DAB No. 2279 (2009); Michael J.
Rosen, M.D., DAB No. 2096 (2007). The material facts in this case are undisputed and
unambiguous. They support summary disposition as a matter of settled law, and this
Decision issues accordingly.

VI. Conclusion

For the reasons set forth above, the 1.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Blessing Okuji from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C.

§ 1320a-7(a)(1), is sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

St. Clair’s Home Health, Incorporated,
(CCN: 557025),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-11-50
Decision No. CR2341

Date: March 18, 2011

DECISION

Petitioner, St. Clair’s Home Health, Incorporated, is a home health agency (HHA) located
in Inglewood, California, that, until its termination on November 5, 2010, was certified to
participate in the Medicare program. Following surveys completed April 30, 2010 and
June 21, 2010, the Centers for Medicare and Medicaid Services (CMS) terminated St.
Clair’s program participation because it failed to maintain substantial compliance with
three conditions of participation, 42 C.F.R. sections 484.18, 484.30, and 484.48, and
because it failed to correct previously-cited deficiencies. Petitioner here appeals its
termination, and CMS moves for summary judgment.

For the reasons discussed below, I grant summary judgment. The undisputed facts
establish that St. Clair’s failed to maintain substantial compliance with all Medicare
conditions of participation, and CMS is therefore authorized to terminate its program
participation.
Background

An HHA is a public agency or private organization that “is primarily engaged in
providing skilled nursing services and other therapeutic services” to patients in their
homes. Social Security Act (Act) § 1861(0). It may participate in the Medicare program
as a provider of services if it meets that statutory definition and complies with certain
requirements, called conditions of participation. Act §§ 1861(0), 1891; 42 C.F.R. Part
484; 42 C.F.R. § 488.3. But if the provider fails to comply with the provisions of section
1861 or the relevant regulations, CMS, acting on behalf of the Secretary of Health and
Human Services, may terminate its provider agreement. Act § 1866(b)(2); 42 C.F.R.

§ 489.53(a)(1).

A “condition of participation” represents a broad category of home health services. Each
condition is contained in a single regulation, which is divided into subparts called
standards. 42 C.F.R. Part 484. Compliance with a condition of participation is
determined by the manner and degree to which the provider satisfies the standards within
the condition. 42 C.F.R. § 488.26(b). If deficiencies are of such character as to
“substantially limit the [HHA’s] . . . capacity to furnish adequate care or which adversely
affect the health and safety of patients,” the provider is not in compliance with conditions
of participation. 42 C.F.R. § 488.24(b). CMS may terminate program participation if the
HHA fails to meet even one condition of participation. Act §§ 1866(b)(2)(B),
1861(0)(6); 42 C.F.R. § 489.53(a)(3); Cmty. Home Health, DAB No. 2134 at 4 (2007).

CMS may also terminate an HHA that fails to correct its deficiencies within a reasonable
time (ordinarily no more than 60 days), even if those deficiencies are at the standard
(rather than the condition) level. 42 C.F.R. § 488.28.

To monitor compliance, CMS contracts with state agencies that periodically survey the
HHAs. 42 C.F.R. § 488.10.

Here, the California Department of Public Health (State Agency) completed St. Clair’s
recertification survey on April 30, 2010. CMS Ex. 2. Based on those survey findings,
CMS determined that the HHA was not in substantial compliance with five conditions of
participation and that its deficiencies posed immediate jeopardy to patient health and
safety. CMS Ex. 1. CMS thereafter authorized a follow-up survey, which the State
Agency completed on June 21, 2010. Based on those survey findings, CMS determined
that St. Clair’s was not in substantial compliance with three conditions of participation:
42 C.F.R. § 484.18 (acceptance of patients, plan of care and medical supervision); 42
C.F.R. § 484.30 (skilled nursing services); and 42 C.F.R. § 484.48 (clinical records).
CMS also determined that St. Clair’s had failed to correct significant deficiencies cited
during the April survey. CMS Ex. | at 2.

CMS terminated St. Clair’s Medicare participation for two independent reasons: 1) at the
time of the June survey, it was not in substantial compliance with all conditions of
participation; and 2) it did not correct all of the deficiencies identified during the April
survey.

Petitioner challenges the termination, and CMS now moves for summary judgment. With
its motion, CMS has submitted 24 exhibits. (CMS Exs. 1-24). Petitioner responded in a
letter dated December 21, 2010.

Issues
I consider first whether summary judgment is appropriate.

On the merits, the sole issue is whether CMS is authorized to terminate Petitioner’s
Medicare provider agreement.

Discussion

A. CMS is entitled to summary judgment because the undisputed facts establish
that St. Clair’s failed to maintain substantial compliance with all Medicare
conditions of participation and that it failed to correct previously-cited
deficiencies; CMS is therefore authorized to terminate its program
participation. '

Summary judgment is appropriate if a case presents no genuine issue of material fact, and
one party is entitled to judgment as a matter of law. The moving party may show the
absence of a genuine factual dispute by presenting evidence so one-sided that it must
prevail as a matter of law, or by showing that the non-moving party has presented no
evidence “sufficient to establish the existence of an element essential to [that party’s]
case and on which [that party] will bear the burden of proof at trial. Livingston Care Ctr.
v. Dep’t of Health & Human Servs., 388 F.3d 168, 173 (6th Cir. 2004) (quoting Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986)). To avoid summary judgment, the non-
moving party must then act affirmatively by tendering evidence of specific facts showing
that a dispute exists. See Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475
US. 574, 586 n. 11 (1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon
Nursing & Rehab. Ctr., DAB No. 1918 (2004).

' My findings of fact and conclusions of law are set forth, in italics and in bold, in the
discussion captions.
1. St. Clair’s was not in substantial compliance with 42 C.F.R.
§ 484.18 because its staff did not follow written plans of care
established by a doctor.

Patients are accepted for treatment based on a reasonable expectation that the patient’s
medical, nursing, and social needs can be met adequately by the HHA at the patient’s
residence. The care follows a written plan of care established and reviewed periodically
by adoctor. 42 C.F.R. § 484.18. The plan must be developed in consultation with
agency staff and must cover all pertinent diagnoses, including mental status, types of
services and equipment required, frequency of visits, prognosis, rehabilitation potential,
functional limitations, activities permitted, nutritional requirements, medications and
treatments, and safety measures to protect against injury, instructions for a timely
discharge or referral, and any other appropriate items. 42 C.F.R. § 484.18(a) (emphasis
added).

Here, CMS cites multiple instances in which St. Clair’s staff did not follow the patient’s
written care plan:

e Patient 8 had an open wound on his right leg. His care plan listed the wound and
“intractable pain” as his diagnoses. CMS Ex. 6 at 1. However, when Surveyor
Debra Moore, RN, HFEN (health facilities evaluator nurse), accompanied
Petitioner’s skilled nurse to the patient’s home on June 18, 2010, she observed him
sitting in a chair, short of breath and using oxygen from a concentrator set at 2
liters per minute per nasal canula. CMS Ex. 4 at 7-8 (Moore Decl. § 17); CMS Ex.
10 at 1-2. Surveyor Moore reviewed a history and physical examination report,
dated February 18, 2010, from the acute care hospital to which Patient 8 was then
admitted. The report documented Patient 8’s history of T-cell lymphoma, an
ulcerative lymphoma involving his right leg, chronic obstructive pulmonary
disease (COPD), and congestive heart failure (CHF). His oxygen saturation level
was very low — 60% on room air (normal oxygen saturation is 95-100%). CMS
Ex. 11 at 1-2; CMS Ex. 4 at 8 (Moore Decl. § 17). But, contrary to the
requirements of 42 C.F.R. § 484.18(a), his care plan did not mention his
respiratory impairments, nor any treatments ordered to address those problems.
CMS Ex. 6.

Apparently, at the exit conference, a non-licensed HHA employee told Surveyor
Moore that she had added respiratory information to Patient 8’s care plan. Of
course, even if done properly, making such a correction at the time of the survey
would not preclude termination. See Cmty. Home Health, DAB No. 2134 at 14
(finding irrelevant the HHA’s claim that it took “swift and decisive action” to
correct its deficiencies). Moreover, the unlicensed employee’s undated
handwritten note is plainly inadequate. Not only was it added by an unlicensed

employee, it also fails to include Patient 8’s respiratory diagnoses and other
factors required by the regulation. CMS Ex. 4 at 8 (Moore Decl. 418).

Patient 8’s care plan directed the skilled nurse to cleanse his leg wound with
normal saline and to apply Xeroform dressing, a sterile, non-adhering primary
dressing that provides a moist environment conducive to healing. Yet, Surveyor
Moore saw the skilled nurse apply Vaseline gauze instead of Xeroform. The care
plan did not include any orders or directions for Vaseline. CMS Ex. 6 at 1; CMS
Ex. 4 at 4 (Moore Decl. ¥ 9); CMS Ex. 10 at 1.

e Patient 12 had multiple pressure ulcers on his buttocks, feet, and legs. CMS Exs.
16, 22. His care plan directed the skilled nurse to cleanse wounds on his left foot
and right knee with normal saline, apply a Hydrogel dressing,” cover the wound
with gauze and Kerlix, and secure with tape. CMS Ex. 16. On June 16, Surveyor
Moore accompanied the HHA skilled nurse to Patient 12’s home. When the

skilled nurse removed the soiled dressing from the patient’s left leg, they saw that

the prior skilled nurse had applied a Xeroform dressing, rather than the ordered

Hydrogel. Surveyor Moore verified that the most recent physician order, dated

June 14, 2010, called for Hydrogel. CMS Ex. 22. Neither the skilled nurse nor St.

Clair’s administrator provided a credible, satisfactory explanation for this

deviation from the care plan and physician order. CMS Ex. 4 at 5 (Moore Decl.

1, 12).

e Patient 5 was diagnosed with sepsis and had decubitus ulcers on his legs and
buttocks. CMS Ex. 4 at 7 (Moore Decl. § 16). His care plan was purportedly
effective from May 30, 2010 to July 28, 2010 (but see § A3 below for a discussion
of the irregularities involved in the plan’s creation). Contrary to the requirements
of 42 C.F.R. § 484.18(a), the plan did not mention decubitus ulcers among Patient
5’s diagnoses or treatment. CMS Ex. 12 at 1-2. The plan finally mentions them in
the 60-day summary, which would have been prepared at the end of the
certification period: “[p]atient continues to have multiple decubitus ulcers on
right/left leg and buttocks.” CMS Ex. 12 at 2.

Patient 5’s care plan directed the skilled nurse to provide wound care to his
wounds. On June 17, 2010, the HHA skilled nurse and Surveyor Moore observed
that a new wound had developed on the patient’s left leg. Obviously, since the
wound was new, Patient 5’s physician was not aware of it and had not established
any treatment for it. Yet, without consulting Patient 5’s physician, the skilled

> Hydrogel dressings provide a moist wound environment, which helps to clean and
debride necrotic tissue. They are non-adherent and can be removed without trauma to the
wound. CMS Ex. 3 at 6-7.
nurse treated the wound with a Xeroform dressing. CMS Ex. 4 at 6 (Moore Decl.
49 13, 14); CMS Ex. 15.

All home health care and services should derive from the patient’s care plan. Those plans
must be comprehensive, and staff must follow their instruction. Where, as here, the plan
omits a serious diagnosis, the patient is unlikely to receive necessary care. Where, as
here, nursing staff disregard plan instructions or provide care in the absence of
instructions, the patient is put at risk. These circumstances substantially limit the HHA’s
capacity to furnish adequate care and adversely affect the health and safety of patients.

St. Clair’s was therefore not in substantial compliance with 42 C.F.R. § 484.18, and, on
that basis alone, CMS rightfully terminated its program participation.

2. St. Clair’s was not in substantial compliance with 42 C.F.R.
§ 484.30 because skilled nurses did not evaluate patient needs as
necessary.

The facility furnishes skilled nursing services by or under the supervision of a registered
nurse (RN) and in accordance with the plan of care. 42 C.F.R. § 484.30. Among other
requirements, the RN must regularly re-evaluate the patient’s nursing needs. 42 C.F.R.
§ 484.30(a).

As discussed above, Patient 8 suffered from COPD and CHF and required oxygen. He
told Surveyor Moore that he needed oxygen continuously, but he did not have portable
oxygen. When riding in a car to his doctor’s appointments, he told her, he “‘[stuck] his
head outside of the car window to get air.” CMS Ex. 4 at 9-10 (More Decl. § 21); CMS
Ex. 10 at 1. He asked Surveyor Moore to request from the HHA portable oxygen for his
wheelchair. As CMS observes, St. Clair’s nurses completely disregarded Patient 8’s
respiratory needs. No one evaluated his needs for oxygen, his knowledge of the hazards
related to oxygen use, his fire safety awareness, or his disease process. CMS Br. at 16-
17; CMS Ex. 4 at 10-11 (Moore Decl. § 23). The absence of an adequate assessment
means that Patient 8’s care needs were not identified and not addressed, which
substantially limited St. Clair’s capacity to furnish him adequate care and adversely
affected his health and safety. St. Clair’s was therefore not in substantial compliance
with 42 C.F.R. § 484.30, and, on that basis alone, CMS rightfully terminated its program
participation.

o

CMS also points out, accurately, that the RN failure to evaluate patient needs was cited
during the April 30, 2010 survey. CMS Br. at 18. The report form for that survey sets
forth in considerable detail RN failures to evaluate the nursing needs of two patients.
CMS Ex. 2 at 51-60. Among other particularly disturbing deficiencies, an RN supervisor
had not visited a patient but had signed an assessment form indicating that she had visited
and assessed the individual. Needless to say, the comprehensive assessment for that
patient was wholly inadequate. CMS Ex. 2 at 55. Petitioner promised to correct most of

its skilled nursing deficiencies no later than May 21, 2010.° Even if I concluded that the
deficiencies cited under skilled nursing services did not put the HHA out of compliance
at the condition level (which I emphatically do not), I would nevertheless sustain St.
Clair’s termination under 42 C.F.R. § 488.28 because Petitioner failed to correct a
standard-level deficiency.

3. St. Clair’s was not in substantial compliance with 42 C.F.R.

§ 484.48 because a patient’s clinical record did not contain vital

documents.
The HHA must maintain for each of its patients a clinical record containing pertinent past
and current findings in accordance with accepted professional standards. Among other
requirements, the record must contain appropriate identifying information: the
physician’s name; drug, dietary, treatment, and activity orders; signed and dated clinical
and progress notes; copies of summary reports sent to the attending physician; and a
ischarge summary.

At the time of the June survey, Patient 5’s current clinical record included neither a care
plan nor a comprehensive assessment. CMS Ex. 4 at 12. St. Clair’s office manager, a
clerical employee, told Surveyor Moore that she could assist with Patient 5’s missing
locuments. She apparently went into a separate office. After waiting for a few minutes,
Surveyor Moore followed her into that office and caught her on the computer creating
Patient 5’s care plan. She printed it out and handed it to the surveyor. A few minutes
later, the employee completed Patient 5’s comprehensive assessment. CMS Ex. 4 at 12
(Moore Decl. ff 26, 27); CMS Ex. 12 at 3-4. I have discussed above some of the
inadequacies of the care plan. Moreover, the plan was not signed by either a nurse or the
attending physician, not surprising in light of the means by which it was generated. CMS
Ex. 12 at 1.

Petitioner has not denied any of these assertions, although it points out that the office
manager has since died and is “not here to defend herself.” However, had these
documents been properly prepared and maintained in Patient 5’s clinical record, the
responsible professionals should have come forward to say so. St. Clair’s does not even
assert, much less provide evidence, to establish any dispute over these facts. CMS has
therefore shown that St. Clair’s failed to maintain for each of its patients, in accordance
with accepted professional standards, a clinical record containing critical documents.*
The inadequacy of its clinical record absolutely compromised St. Clair’s capacity to

> For one deficiency, it promised a completion date of June 3. CMS Ex. 2 at 60.

4 The irregular and inappropriate manner by which St. Clair’s employee generated the
care plan also violated 42 C.F.R. § 484.18, as well as 42 C.F.R. § 484.55 (comprehensive
assessment of patients).

furnish adequate care, which justifies CMS’s determination that it was not in substantial
compliance with 42 C.F.R. § 484.48, and this deficiency alone justifies the termination.

B. St. Clair’s must meet requirements for program
participation without regard to the quality of the survey or
the alleged bias of a surveyor.

As the above discussion shows, CMS presents compelling evidence — unrebutted by
Petitioner — that St. Clair’s was not in substantial compliance with the Medicare
conditions of participation. Far from coming forward with evidence showing a dispute of
any material fact, Petitioner has not even challenged CMS’s factual allegations. Instead,
Petitioner charges that one of the state surveyors is associated with its competitor and was
therefore biased. Petitioner also complains that, until CMS included it with its exhibits,
its administrator had not seen a one-page list of accusations that were made by an
anonymous complainer. See CMS Ex. 21 at 7.

Petitioner has provided absolutely no evidence to support its allegations of surveyor
misconduct. In any event, as CMS points out, the Board has repeatedly rejected, as
irrelevant, such attacks on survey performance. Comprehensive Prof’! Home Visits, DAB
No. 1934 at 13 (2004) (quoting Beechwood Sanitarium, DAB No. 1906 at 44 (2004)
(holding that “ ‘the appeals process is not intended to review the conduct of the survey
but rather to evaluate the evidence of compliance regardless of the procedures by which
the evidence was collected.’ . .. Consequently, the arguments concerning the surveyor’s
alleged attitude and knowledge of program requirements are unavailing.”)).

Conclusion

Because Petitioner does not dispute any of the underlying facts, which establish that St.
Clair’s was not in substantial compliance with all conditions of participation at the time
of the June 2010 survey, CMS had the authority to terminate its Medicare participation
and is entitled to summary judgment. Independent of that finding, because the
undisputed evidence establishes that St. Clair’s did not correct deficiencies cited during
the April 2010 survey, CMS had an alternative basis for terminating its program
participation. I therefore grant CMS’s motion for summary judgment.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Texas Rejuvenation Medical Supply
(Supplier Number 6206250001),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-10-977
Decision No. CR2340

Date: March 12, 2011

DECISION

I reverse the determination of the Centers for Medicare and Medicaid Services (CMS) to
revoke the Medicare supplier number of Petitioner, Texas Rejuvenation Medical Supply.
I find Petitioner was in compliance with the supplier standards because it has successfully
overcome CMS’s showing that Petitioner did not report its change of address within 30
days.

I. Background

Petitioner participated in the Medicare program as a supplier of durable medical
equipment, prosthetics, orthotics, and supplies (DMEPOS) in Houston, Texas. See 42
C.F.R. § 424.57. Ina letter dated May 6, 2010, the Medicare contractor, Palmetto GBA
National Supplier Clearinghouse (NSC), notified Petitioner that its supplier number
would be revoked pursuant to 42 C.F.R. §§ 405.874, 424.57(e), 424.535(a),
424.535(a)(5)(ii), and 424.535(g). The letter noted that a NSC inspector had attempted to
conduct a site inspection of Petitioner’s facility on April 22, 2010, but he was unable to
because Petitioner’s business was no longer located at the address on file with the NSC.
Therefore, NSC could not verify Petitioner’s compliance with the supplier standards and
found that Petitioner was not operational to furnish Medicare covered items and services
in violation of 42 C.F.R. § 424.535(a)(5)(ii).

Petitioner sought reconsideration on May 18, 2010. In its letter requesting
reconsideration, Petitioner noted that it had “submitted the required 855S form with
address change/update . . . to Medicare” and had “confirmed that this was received on
May 04, 2010 and is currently in process.” CMS Ex. 3.

In a reconsideration decision dated July 19, 2010, the Medicare Hearing Officer found
that Petitioner was out of compliance with Supplier Standard 8, dealing with on-site
inspections, and affirmed the revocation of Petitioner’s supplier number.' CMS Ex. 1, at
7. The Hearing Officer stated the following facts: (1) on April 22, 2010, an NSC
inspector attempted to conduct an inspection of Petitioner’s facility; (2) on May 4, 2010,
NSC received Petitioner’s change of address; (3) on May 6, 2010, NSC mailed Petitioner
a certified letter advising that its billing privileges would be revoked effective April 22,
2010; and (4) on June 1, 2010, NSC received Petitioner’s request for reconsideration.
The Hearing Officer explained that Supplier Standard 8 requires a supplier to “permit
CMS or its agents to conduct on-site inspections to ascertain the supplier’s compliance
with these standards” and requires the supplier location to “be accessible to beneficiaries
during reasonable business hours, and [have] a visible sign and posted hours of
operation.” CMS Ex. 1.

In explaining her decision, the Hearing Officer stated, “in the site investigation reports
and accompanying photographs taken by the inspector on April 22, 2010, [Petitioner] was
non-operational.” CMS Ex. 1, at 3. The Hearing Officer points to the inspector’s
statement in the investigation report that “this facility is no longer in business. There is
brown paper over all the windows and door. I called the leasing company and spoke with
George Adams who stated a Stephen Padgett returned the key to Mr. Adams on March
31, 2010.” CMS Ex. 1, at 7. The Hearing Officer stated also that NSC had received
notification of a change of address from Petitioner on the CMS-855S change of
information form on May 4, 2010. She noted that the document stated that the date of the
change was effective as of April 1, 2010, but that NSC had not received this information
until May 4, 2010, “which was after the 30 day time frame required in which to notify the
NSC of any changes.” CMS Ex. 1, at 7. The Hearing Officer concluded, “[t]he fact
remains that [Petitioner] did not provide complete information in the time-frame allotted
for the change of location.” CMS Ex. 1, at 7.

' The Hearing Officer also acknowledged having received documentation from
Petitioner showing that its surety bond had been reinstated with no lapse in coverage
(Petitioner’s surety bond had been revoked at some point in May or June 2010). The
Hearing Officer thus found that Petitioner was in compliance with the corresponding
Supplier Standard 26. CMS Ex. 1, at 7-8.
By letter dated September 14, 2010, Petitioner requested a hearing, asserting, among
other things, that it was in operation and in full compliance with Supplier Standard 8 on
April 22, 2010 and had timely filed a CMS-855S form within the 30-day time frame
notifying NSC of its change of address.

This appeal was initially assigned to Board Member Leslie A. Sussan pursuant to 42
C.F.R. § 498.44, which permits a Member of the Departmental Appeals Board (Board) to
hear appeals under Part 498. This case was subsequently transferred to me on October
25,2010. The parties were instructed to comply with the instructions and pre-hearing
exchange deadlines contained in Board Member Sussan’s Acknowledgment and Pre-
Hearing Order (Pre-Hearing Order) dated September 20, 2010. The Board Member
instructed the parties to submit sworn affidavits or written declarations, which would be
used as direct testimony, and no hearing would be convened if neither party requested to
cross-examine any of the witnesses for which direct testimony was submitted.

On October 21, 2010, CMS submitted a motion for summary judgment and supporting
brief (CMS Br.) and CMS Exhibits (CMS Exs.) 1-11. On November 20, 2010, Petitioner
submitted a response brief and eight witness affidavits of direct testimony marked as
Petitioner’s Exhibits (P. Exs.) 12-19. In the absence of any objections, I admit CMS Exs.
1-11 and P. Exs. 12-19.

II. Issue
The issues in this case are whether CMS:

1. Is entitled to summary disposition; and, if not,

2. Had a basis to revoke Petitioner’s Medicare supplier number.
III. Relevant Legal Authority

Pursuant to section 1834(j)(1)(A) of the Social Security Act (Act), a supplier of medical
equipment and supplies may not be paid for items provided to an eligible beneficiary
unless the supplier has a supplier number issued by the Secretary. To participate in
Medicare as a DMEPOS supplier and obtain a supplier number, an entity must meet the
26 supplier standards specified at 42 C.F.R. § 424.57(c)(1) through (26). Among these,
the regulation provides that a supplier —

(c)(2) ... provide complete and accurate information in response to
questions on its application for billing privileges. The supplier must
report to CMS any changes in information supplied on the
application within 30 days of the change.);
kA

(c)(7) Maintains a physical facility on an appropriate site. The
physical facility must contain space for storing business records
including the supplier’s delivery, maintenance, and beneficiary
communication records. For purposes of this standard, a post office
box or commercial mailbox is not considered a physical facility. In
the case of a multi-site supplier, records may be maintained at a
centralized location; [and]

(c)(8) Permits CMS, or its agents to conduct on-site inspections to
ascertain supplier compliance with the requirements of this section.
The supplier location must be accessible during reasonable business
hours to beneficiaries and to CMS, and must maintain a visible sign
and posted hours of operation[.]

42 CFR. § 424.57(c)(2), (c)(7), and (c)(8).

Ifa supplier is found not to meet the standards for suppliers in 42 C.F.R. § 424.57(b) and
(c), CMS, or its contractor NSC, will revoke the supplier’s billing privileges (i.e. supplier
number), effective 30 days after CMS or NSC mails the notice of revocation. See 42
C.F.R. § 424.57(d); see also 42 C.F.R. § 405.874(b)(2).

The revocation of a supplier number is governed by 42 C.F.R. § 424.535. CMS may use
an on-site review to determine whether a “supplier is no longer operational to furnish
Medicare covered items or services, or is not meeting Medicare enrollment
requirements ....” 42 C.F.R. § 424.535(a)(5). A supplier is operational when it “has a
qualified physical practice location, is open to the public for the purpose of providing
health care related services, is prepared to submit valid Medicare claims, and is properly
staffed, equipped, and stocked . . . to furnish these items or services.” 42 C.F.R. §
424.502.

If a physician, non-physician practitioner, or other provider or supplier is determined not
to be operational, the Medicare contractor shall revoke the Medicare billing privileges of
the provider or supplier, unless the provider or supplier has submitted a change
which notified the Medicare contractor of a change in practice location. Medicare
Program Integrity Manual (MPIM), ch. 15, § 22.1 (emphasis added).

42 C.F.R. Part 498 sets forth the procedures for hearings and appeals. Section 1866(j)(2)
of the Act allows providers and suppliers equal appeal rights as section 1866(h)(1)(A) of
the Act describes. In cases subject to Part 498, the Board has found that CMS must
establish a prima facie showing of a regulatory violation and the regulated entity then
bears the burden of showing by a preponderance of the evidence that it was compliant
with the Act or regulations, or that it had a defense. Evergreene Nursing Care Ctr., DAB
No. 2069, at 7-8 (2007); Batavia Nursing and Convalescent Inn, DAB No. 1911 (2004);
Batavia Nursing and Convalescent Ctr., DAB No. 1904 (2004); Emerald Oaks, DAB No.
1800 (2001); Cross Creek Health Care Ctr., DAB No. 1665 (1998). The Board has
found this allocation of the burden of going forward with the evidence and the burden of
persuasion properly applied in the DMEPOS supplier cases. MediSource Corp., DAB
No. 2011, at 2-3 (2006).

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

I set out my findings of fact and conclusions of law in the headings below, followed by
my supporting analysis.

A. CMS is not entitled to summary disposition.

CMS filed a motion for summary judgment. The Board has stated the standard for
summary judgment as follows:

Summary judgment is appropriate when the record shows that there
is no genuine issue as to any material fact, and the moving party is
entitled to judgment as a matter of law. .. . The party moving for
summary judgment bears the initial burden of showing that there are
no genuine issues of material fact for trial and that it is entitled to
judgment as a matter of law... . To defeat an adequately supported
summary judgment motion, the non-moving party may not rely on
the denials in its pleadings or briefs, but must furnish evidence of a
dispute concerning a material fact - - a fact that, if proven, would
affect the outcome of the case under governing law. In determining
whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the
non-moving party, drawing all reasonable inferences in that party’s
favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an ALJ in deciding a summary judgment motion differs from the ALJ’s role
in resolving a case after a hearing. The ALJ should not assess credibility or evaluate the
weight of conflicting evidence when resolving a summary judgment motion. Holy Cross
Vill. at Notre Dame, Inc., DAB No. 2291, at 4-5 (2009).

I deny CMS’s motion for summary judgment on the grounds that there exists a disputed
issue of material fact as to the date when Petitioner effectively moved from its old
address to its new address. CMS asserts that the effective date of Petitioner’s change of
address was April 1, 2010. Petitioner contends, however, that it moved its practice
location from its old address after closing on Friday April 2, 2010, and opened at the new
address on its next regularly scheduled operating day, Monday April 5, 2010. Petitioner
contends it submitted a CMS-855S form to NSC to update its address, and NSC received
the CMS-855S form on May 4, 2010, exactly 30 days after Petitioner claims its move
became effective. Based on the testimonial evidence from Petitioner, I find that a dispute
of material fact exists as to the effective date of Petitioner’s move. For this reason, I
conclude that CMS is not entitled to summary judgment.

I note that, in accordance with Board Member Sussan’s Pre-Hearing Order, CMS was
required to submit, 30 days after receipt of the Order, any written direct testimony as part
of its exchange of evidence and argument. With its motion for summary judgment, CMS
submitted 11 exhibits but chose not to submit a witness list or any written direct
testimony. Petitioner submitted eight witness affidavits of direct testimony with its
ordered evidentiary exchange and its response to CMS’s motion for summary judgment.
By electronic mail dated February 28, 2011, CMS advised me that it declined to cross-
examine any of Petitioner’s witnesses. Therefore, now that I deny CMS’s motion, I find
no need to hold an in-person hearing, and I decide this case on the full merits of the
written record in accordance with the Board Member’s Pre-Hearing Order.

B. Petitioner has rebutted CMS’s prima facie case and demonstrated
compliance with 42 C.F.R. § 424.57(c)(2), (c)(7), and (c)(8).

CMS contends that Petitioner violated three supplier standards, namely 42 C.F.R. §
424.57(c)(2), (c)(7), and (c)(8). In the reconsideration decision, the Medicare Hearing
Officer found that Petitioner was only out of compliance with Supplier Standard 8. CMS
Ex. 1, at 3, 7. However, in the decision, the Medicare Hearing Officer noted that NSC
had received Petitioner’s CMS-855S form on May 4, 2010, advising of a change of
address, and that the CMS-855S form stated that the effective date of the change was
April 1, 2010. The Medicare Hearing Officer found that Petitioner had submitted the
form “after the 30 day time frame required in which to notify the NSC of any changes.”
CMS Ex. 1, at 3, 7. Based on this finding by the Medicare Hearing Officer, it appears
that she also concluded that Petitioner was out of compliance with 42 C.F.R. §
424.57(c)(2) (Supplier Standard 2). Further, because the Medicare Hearing Officer notes
that the inspector found that Petitioner was no longer in business at its enrolled address
on April 22, 2010, I find that, while not expressly stated, her language is suggestive of a
finding that Petitioner was also out of compliance with 42 C.F.R. § 424.57(c)(7)
(Supplier Standard 7). CMS is now proceeding on arguments that Petitioner was out of
compliance with 42 C.F.R. § 424.57(c)(2), (c)(7), and (c)(8).

CMS contends that an NSC inspector visited Petitioner’s facility on Thursday, April 22,
2010, at its enrolled address at 13655 Bissonnet St., Ste. 106, Houston TX 77083 at 9:15
a.m. CMS alleges that the inspector was unable to conduct an inspection because
Petitioner’s office was vacant and closed for business, with no business hours posted.”
CMS Br. at 7. CMS asserts further that, on May 4, 2010, NSC received a CMS-855S
form from Petitioner that indicated a change of address. CMS argues that Petitioner
reported the effective date of its move as April 1, 2010, which essentially means 34 days
had passed from the move date versus the 30 day notice the regulations require. See
CMS Br. at 3-4.

In support of its position, CMS submits as evidence a note handwritten by the NSC
inspector that was attached to his report. The note states the following:

This facility is no longer in business. There is brown paper over all
the windows & door. I called the leasing company and spoke with
George Adams who stated a Stephen Padgett with PLEPHORE
[phone number omitted] returned the key to Mr. Adams on March
31, 2010. This # should be revoked immediately.

CMS Ex. 7, at 9.°

With its response brief, Petitioner submitted the witness affidavits of direct testimony for
eight individuals. These affidavits consist of the sworn statements of: Yvonne Lee (P.
Ex. 12); Stephen Padgett (P. Ex. 13); Larry Enzler (P. Ex. 14); Ryan Gober (P. Ex. 15);
Marcos Olmeda, III (P. Ex. 16); Carl Cole (P. Ex 17); Darlene Warren (P. Ex.18); and
Scheron Washington (P. Ex. 19).

The affidavit of Yvonne Lee, a partner with Plethore Management, Inc. (Plethore), which
contracts with Petitioner to manage its business, asserts that she prepared and submitted a
CMS-855S change of information application form notifying NSC that Petitioner had
moved its business to a new location. Ms. Lee’s direct testimony asserts:

Unbeknownst to me, I mistakenly indicated in Section 4.A of
[Petitioner’s] CMS-855s that the move was effective April 1, 2010.
In fact, [Petitioner] moved to the New Location and opened for
business effective April 5, 2010. My mistake was that I put the
effective date of the property lease for the New Location on the
CMS Form-855S, which was April 1, 2010, rather than the actual

> However, the inspector’s photo shows Petitioner’s business hours posted as Monday to
Friday, from 9 a.m. to 5 p.m. CMS Ex. 7, at 11.

> There is another handwritten note by the NSC inspector found at CMS Ex. 7, at 3. The
main difference between the notes is that the note found at CMS Ex. 7, at 9 contains
complete sentences, while the note at CMS Ex. 7, at 3 contains phrases. In both notes,
the inspector has written essentially the same information.
date [Petitioner] opened for business at the New Location, which
was April 5, 2010. I was not aware of this mistake until the
Medicare Hearing Officer issued her decision in July 2010.

P. Ex. 12, at 2.

Petitioner acknowledges therefore that it reported April 1, 2010 as the effective date of its
move, but it contends that this was an innocent mistake by Ms. Lee, who completed the
CMS-855S form. P. Br. at 5-6, 15, 19. Petitioner explains that Ms. Lee mistakenly
entered the effective date of Petitioner’s property lease for its new address, which was
April 1, 2010, rather than the actual date Petitioner opened for business at its new
address, which was April 5, 2010. P. Br. at 6; P. Ex. 12, at 2. Petitioner claims that there
was no intention on its part or on the part of its contracted management company to
deceive the Medicare program by making a false statement or misrepresentation on the
form. P. Br. at 19. Considering that this explanation went unchallenged by CMS and
that it is consistent with the other testimonial evidence discussed below, I will accept Ms.
Lee’s explanation as plausible with regard to the date error she reported on Petitioner’s
CMS-855S change of information form.

Petitioner’s testimonial evidence also supports that it operated at its original location up
until it opened for business at its new location on April 5, 2010.

In an affidavit, Stephen Padgett, Plethore’s CEO, asserts that he met with George Adams,
the property manager for Petitioner’s original location on or about March 25, 2010, at
which time they agreed that Petitioner would leave the keys to the “Old Location” on a
ledge outside its front door after it vacated the space over the weekend of April 3-4, 2010.
Mr. Padgett asserts further that he was traveling March 30, 2010 through April 2, 2010,
and he never met with or returned a key to the “Old Location” to Mr. Adams, on March
31, 2010, as the NCS inspector note suggests, or at any other time. Mr. Padgett states
that he visited the “New Location” on Saturday, April 3, 2010, to check on the status of
Petitioner’s move and that Petitioner moved to the “New Location” during the weekend
of April 3-4, 2010. Mr. Padgett states further that he observed that Petitioner was open
for business at the “New Location” on April 5, 2010. P. Ex. 13, at 2. According to Mr.
Padgett’s affidavit, “[a]ll phone service including [Petitioner’s] regular, business voice
and facsimile telephone lines were transferred from the Old Location to the Current
Location effective April 5, 2010,” and “[a]ll electric and water service was discontinued
at the Old Location as of April 5, 2010.” P. Ex. 13, at 2-3. Mr. Padgett also asserts that
he applied for, and was issued, a new sales tax permit for Petitioner to reflect the new
address with an effective date of April 5, 2010. P. Ex. 13, at 3.

The direct testimony of Larry Enzler, one of Petitioner’s managers, asserts that after
Petitioner closed for business at its original location on Friday, April 2, 2010, at its
regular closing time of 5 p.m., he assisted in moving Petitioner’s business to its new
address. Mr. Enzler states that he was assisted in the move the weekend of April 3-4,
2010, by Ryan Gober. Mr. Enzler claims that he “left the key on the doorsill on April 4,
2010.” P. Ex. 14, at 2.

The direct testimony of Ryan Gober states that Larry Enzler asked him for assistance
with Petitioner’s move, and he met Mr. Enzler at Petitioner’s former location on April 3,
2010, to assist with the move. Mr. Gober states that they completed the move on April 4,
2010. P. Ex. 15, at 2.

In an affidavit, Marcos Olmeda, III, a part owner of Plethore, asserts that he was present
on April 5, 2010, and observed that Petitioner was open for business at its new location.

Mr. Olmeda states that he was present when the telephone lines were set up and tested at
the new location on April 5, 2010. P. Ex. 16, at 2.

The direct testimony of Carl Cole, a delivery driver for Plethore, asserts that he was
present on April 5, 2010, and he observed that Petitioner was open for business at its new
location. P. Ex. 17, at 2.

In the direct testimony of Darlene Warren, Plethore’s intake coordinator, she states that
she was present on April 5, 2010, and observed that Petitioner was open for business at
its new location. P. Ex. 18, at 2.

In the direct testimony of Scheron Washington, the billing manager with Familia Care,
Inc., a company that contracts with Plethore, Mr. Washington asserts that he met with
Mr. Padgett on March 31, 2010 in Familia Care’s offices in Irving, Texas, as well as
periodically throughout the day on April 1 and 2, 2010. P. Ex. 19, at 2. This provides
further support to Mr. Padgett’s testimony that Mr. Padgett was out of town and did not
return a key to the property manager of the original location on March 31, 2010 in
Houston.

Petitioner’s affidavits contain support that Petitioner moved to a new address the
weekend of April 3-4, 2010, was operational at its original address on Friday April 2,
2010, and opened for business at its new address on April 5, 2010. These statements are
in direct conflict with CMS’s arguments that Mr. Padgett returned the key to the landlord
at the old address on March 31, 2010.

As stated above, CMS did not submit the direct testimony of any witness including its
inspector or the landlord who allegedly collected a key from Mr. Padgett on March 31,
2010. CMS also declined to cross-examine any of Petitioner’s affiants. Therefore, as
support for its contention that Petitioner moved on or around March 31, 2010, CMS relies
on the inspector’s note, which is hearsay evidence that I admitted. Because CMS did not
offer any witness testimony in support of the inspector’s note, I am unable to fully
ascertain the context of the statements that appear in the inspector’s note in contradiction

10

of Petitioner’s conflicting evidence. A written note by itself is not subject to cross-
examination as to its reliability.

Given that Petitioner was limited in exploring the inspector’s statements, I am compelled
to provide them less weight in the face of Mr. Padgett’s direct testimony that contradicts
them, especially considering several other witnesses’ affidavits corroborate Mr. Padgett’s
direct testimony.

Although I realize a potential for bias with Petitioner’s witnesses in that they all seem to
be affected by the financial livelihood of Petitioner, this was not something factually
explored because CMS declined to cross-examine the witnesses. Considering the number
of witnesses Petitioner produced, representing a diversity of business relationships to
Petitioner, and considering the consistency of their testimony, I am inclined to give
greater weight to Petitioner’s unchallenged testimonial evidence. I conclude that
Petitioner’s testimonial evidence has overcome CMS’s prima facie case showing of a
violation of the supplier standards and establishes that Petitioner moved to a new
location, without a break in its operations, effective April 5, 2010, and Petitioner properly
notified CMS within the required 30 days of its move.

V. Conclusion

For the reasons explained above, I reverse CMS’s determination to revoke Petitioner’s

Medicare billing privileges pursuant to 42 C.F.R. § 424.57(c)(2), (7), and (8) because I
find that Petitioner moved without a break in its operations and timely notified CMS of
its change of address within the required 30 days.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Enitan Osagie Isiwele
(OI File No. 6-08-40093-9),
Petitioner
Vv.

The Inspector General.
Docket No. C-10-974
Decision No. CR2339

Date: March 11, 2011

DECISION

Petitioner, Enitan Osagie Isiwele, was convicted on multiple counts of health care fraud
and one count of conspiracy to defraud the United States. Because of his convictions, the
Inspector General (1.G.) has excluded him for seventeen years from participation in the
Medicare, Medicaid, and all federal health care programs, as authorized by section
1128(a)(1) of the Social Security Act (Act). Petitioner now appeals. For the reasons
discussed below, I find that the I.G. properly excluded Petitioner and that the 17-year
exclusion falls within a reasonable range.

I. Background

Petitioner was a supplier of durable medical equipment who was convicted of health care
fraud (18 U.S.C. § 1347) and conspiracy to defraud the United States (18 U.S.C. § 371).
1.G. Exs. 2, 4. The District Court entered judgment against him on April 9, 2010. LG.
Ex. 3.

In a letter dated August 31, 2010, the I.G. notified Petitioner that he was excluded from
participation in Medicare, Medicaid, and all federal health care programs for a period of
17 years, because he had been convicted of a criminal offense related to the delivery of
an item or service under the Medicare or state health care program. The letter explained
that section 1128(a)(1) of the Act authorizes the exclusion. I.G. Ex. 1.

Each party submitted an initial brief (1.G. Br.; P. Br.). The I.G. submitted four exhibits
(LG. Exs. 1-4), and Petitioner submitted six exhibits (P. Exs. 1-6). The LG. submitted a
reply brief (I.G. Reply). Petitioner also moved to compel discovery, which the I.G.
opposed. I discuss below why Petitioner is not entitled to the discovery he seeks.

In the absence of an objection, I admit into evidence I.G. Exs. 1-4 and P. Exs 1-6.

I directed the parties to indicate in their briefs whether an in-person hearing is necessary
and, if so, to “describe the testimony that [it] wishes to present and provide the name of
any witness and a summary of each witness’ proposed testimony.” I specifically directed
the parties to explain why the testimony would be relevant. Order and Schedule for
Filing Briefs and Documentary Evidence, Attachment | (Informal Brief of IG § III) and
Attachment 2 (Informal Brief of Petitioner § IV) (October 4, 2010). The I.G. indicates
that an in-person hearing is not necessary. Petitioner, on the other hand, contends that an
in-person hearing is necessary, lists the witnesses he intends to call, and explains the
purpose of their testimony. Petitioner’s listed witnesses are individuals who assisted in
the prosecution of his criminal case. He contends that he “disputed the authenticity . ..
of [their] testimony and documents, and intends to introduce evidence contradicting their
assertions.” P. Br. at 5. As the following discussion explains, the issues he seeks to
address through these witnesses were resolved by the federal district court, and that
court’s judgment may not be collaterally attacked in this forum. 42 C.F.R.

§ 1001.2007(d); Joann Fletcher Cash, DAB No. 1725 (2000). By regulation, I must
exclude irrelevant or immaterial evidence. 42 C.F.R. § 1005.17(c). I am therefore
obligated to exclude the testimony that Petitioner proposes, so an in-person hearing
would serve no purpose.

For the same reason, I deny Petitioner’s motion to compel discovery. Petitioner seeks
billing records and related documents, purportedly generated by and in the possession of
the individuals who prosecuted his criminal case and/or their investigators. With respect
to the production of these documents, he says, “[t]he Petitioner asserted his innocence of
all charges and has repeated complaints as the evidence showed numerous irregularities
in the criminal proceeding.” Petitioner’s Motion to Compel Discovery at 2 (Jan. 7,
2011). The rule governing discovery here authorizes me to deny a motion compelling
discovery if I find that the discovery sought is irrelevant. 42 C.F.R. § 1005.7(e)(2).
Petitioner seeks documents that, in his view, will undermine his criminal conviction, but,
because he is barred from attacking his conviction in this forum, those documents are
irrelevant. I therefore deny his motion.
II. Issues

The issues before me are: 1) whether Petitioner was convicted of a criminal offense
related to the delivery of an item or service under Medicare or a state health care program
within the meaning of section 1128(a)(1), thus providing a basis for excluding him from
program participation; and 2) if so, whether the length of the exclusion (17 years) is
reasonable.

Petitioner raises Constitutional issues, which I have no authority to review.
HI. Discussion

A. Petitioner must be excluded from program participation
because he was convicted of a criminal offense related to
the delivery of an item or service under Medicare or a state
health care program within the meaning of section
1128(a)(1).

Section 1128(a)(1) of the Act mandates that the Secretary of Health and Human Services
exclude an individual who has been convicted under federal or state law of a criminal
offense related to the delivery of an item or service under Medicare or a state health care
program. 42 C.F.R. § 1001.101(a).

In this case, Petitioner, doing business as Galaxy Medical Supply, was a supplier of
durable medical equipment in the State of Texas. He participated in the Medicare and
Medicaid programs. After Hurricanes Rita and Katrina hit the Gulf Coast, the Centers for
Medicare and Medicaid Services (CMS), which administers those programs, authorized
an expedited claims process for replacing program beneficiaries’ previously-prescribed
equipment and supplies that were destroyed by the natural disasters. 1.G. Ex. 4 at 3-4.
This meant that suppliers could be paid for these types of claims “without all the
normally required paperwork and safeguards.” I.G. Ex. 4 at 4. Petitioner apparently took
advantage of the reduced oversight, and he was indicted on multiple counts of submitting
“false and fraudulent claims” to the Medicare and Medicaid programs, in violation of 18
U.S.C. § 1347, and two counts of conspiracy to pay or receive illegal remunerations, in
violation of 18 U.S.C. § 371. LG. Ex. 4. According to the indictment, he obtained
patient information from door-to-door solicitors and used that information to bill
Medicare and Medicaid for power wheelchairs and accessories for individuals who did
not qualify for them and had never possessed them. In billing, he falsely claimed that this
equipment replaced equipment lost as a result of a natural disaster. I.G. Ex. 4 at 4.
Petitioner stood trial in federal district court for the Eastern District of Texas, and, on

* My findings of fact and conclusions of law are set forth, in italics and bold, in the
discussion captions of this opinion.
March 19, 2009, a jury convicted him on sixteen counts of healthcare fraud and one count
of conspiracy to pay illegal remunerations. I.G. Ex. 2. The district court entered
judgment against him on April 9, 2010.

Thus, the court documents establish that Petitioner was convicted of offenses related to
the delivery of item or services under the Medicare and Medicaid programs, and he must
be excluded from program participation.

Petitioner, however, maintains that he is innocent of all charges and complains of
“numerous irregularities” in his criminal prosecution. P. Br. at 2. He offers as evidence
copies of requests for replacement wheelchairs, purportedly signed by program
beneficiaries, and suggests that these documents show that his billing was legitimate. P.
Exs. 1, 2, 3.

Federal regulations explicitly preclude any collateral attack on Petitioner’s conviction.

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

42 C.F.R. § 1001.2007(d); Joann Fletcher Cash, DAB No. 1725; Chander Kachoria,
R.Ph., DAB No. 1380 at 8 (1993) (“There is no reason to ‘unnecessarily encumber the
exclusion process’ with efforts to reexamine the fairness of state convictions.”); Young
Moon, M.D., DAB CR1572 (2007).

Petitioner was convicted of program-related crimes and must be excluded for a minimum
period of five years. I now consider whether the length of the exclusion, in excess of five
years, falls within a reasonable range.

B. Based on the aggravating factors present in this case, the
17-year exclusion falls within a reasonable range.

An exclusion under section 1128(a)(1) must be for a minimum period of five years. Act
§ 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2). Federal regulations set
forth criteria for lengthening exclusions beyond the five-year minimum. 42 C.F.R.

§ 1001.102(b). Evidence that does not pertain to one of the aggravating or mitigating
factors listed in the regulation may not be used to decide whether an exclusion of a
particular length is reasonable.
Among the factors that may serve as bases for lengthening the period of exclusion are the
following: 1) the acts resulting in the conviction, or similar acts, resulted in a financial
loss to Medicare and state health care programs of $5,000 or more; 2) the acts that
resulted in the conviction, or similar acts, were committed over a period of one year or
more; and 3) the sentence imposed by the court included incarceration. 42 C.F.R.

§ 1001.102(b). The presence of an aggravating factor or factors not offset by any
mitigating factor or factors justifies lengthening the mandatory period of exclusion.

Here, three aggravating factors justify significantly increasing the period of exclusion
beyond the five-year minimum:

Financial loss to Medicare (42 C.F.R. § 1001.102(b)(1)). Petitioner’s actions resulted in
a program financial loss well in excess of $5,000. The district court ordered him to pay
$201,397.34 in restitution to CMS. IG. Ex. 3 at 6. Restitution has long been considered
a reasonable measure of program losses. Jason Hollady, M.D., DAB No. 1855 (2002).
Because the financial losses were significantly in excess of the threshold amount for
aggravation (approximately forty times greater), the I.G. may justifiably increase
significantly the period of exclusion. See Jeremy Robinson, DAB No. 1905 (2004);
Donald A. Burstein, Ph.D., DAB No. 1865 (2003).

Duration of crime (42 C.F.R. § 1001.102(b)(2)). Based on the charges on which he was
convicted, Petitioner engaged in the acts that resulted in his conviction from on or about
June 2005 until April 2008. I.G. Ex. 4 at 4, 6.

Incarceration (42 C.F.R. § 1001.102(b)(5)). The sentence imposed by the criminal court
included a significant period of incarceration. The criminal court sentenced Petitioner to
more than eight years (97 months) in prison for each count, to be served concurrently. I
consider this significant jail time, which underscores the seriousness of his crimes. I.G.
Ex. 3 at 2.

So long as the period of exclusion is within a reasonable range, based on demonstrated
criteria, I have no authority to change it. Joann Fletcher Cash, DAB No. 1725 at 7
(citing 57 Fed. Reg. 3298, 3321 (1992)). In this case, Petitioner’s crime demonstrates
that he presents a significant risk to the integrity of health care programs. His fraudulent
scheme lasted for almost three years, costing the Medicare and Medicaid programs a
large amount of money. His actions were egregious enough to merit a significant period
of incarceration. Based on these factors, I find that the 17-year exclusion falls within a
reasonable range.

The parties agree that no mitigating factors offset the aggravating factors. I.G. Br. at 5;
P. Br. at 4.
IV. Conclusion

For these reasons, I conclude that the I.G. properly excluded Petitioner from participation
in Medicare, Medicaid, and all federal health care programs, and I sustain as reasonable
the 17-year exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge