Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Social Security Administration,
Inspector General,

Petitioner,

v.
M.S.R.,”
Respondent.
Docket No. C-15-2549
Decision No. CR4356

Date: November 5, 2015

DECISION

This case is dismissed pursuant to 20 C.F.R. § 498.202(f)(1) because Respondent did not
timely file her request for a hearing and has failed to demonstrate good cause for the late
filing.

I. Background and Facts

Counsel to the Inspector General (IG) of the Social Security Administration (SSA)
notified Respondent by letter dated December 18, 2014, that the IG proposed to impose a
civil money penalty (CMP) of $20,500.00 and an assessment in lieu of damages of
$36,732.20 (assessment) pursuant to section 1129 of the Social Security Act (the Act) (42
U.S.C. § 1320a-8). The notice advised Respondent that she could request a hearing
before an administrative law judge (ALJ) within 60 days of receipt of the notice.

* Respondent is identified only by her initials due to the mental health information
contained in this decision.
Respondent filed a request for hearing before an ALJ by letter postmarked April 15,
2015. Respondent states in her request for hearing that she was completing her house
arrest; she was under the care of psychologists and psychiatrists; and was admitted to the
hospital for major depression.

I convened a prehearing conference by telephone on June 23, 2015. The substance of the
conference is captured by my Scheduling Order and Notice of Hearing dated July 6,
2015. The IG requested during the conference the opportunity to file a motion to dismiss
the case because the request for hearing was not timely filed. Pursuant to 20 C.F.R.

§ 498.202(f)(1) I am required to dismiss a case when a request for hearing is not timely
filed and good cause for the late filing is not shown. Therefore, untimely filing in the
absence of good cause effectively deprives me of jurisdiction because dismissal is
required and resolution of the motion to dismiss must be resolved before further
development of the case.

The IG filed the motion to dismiss on July 31, 2015, with a supporting memorandum (IG
Br.). The IG refers in his memorandum to SSA exhibits 1 through 4, but no exhibits were
actually filed by SSA. The IG asserts that the December 18, 2014 notice was sent to
Respondent by certified mail, return receipt requested. The IG further asserts that the
return receipt shows that Respondent signed for the letter on December 30, 2014.

Respondent served on the IG her opposition to the IG motion to dismiss on about
September 16, 2015, but failed to file a copy with my office. The IG provided me a copy
on October 2, 2015. Respondent states that she did not timely file her request for hearing
because she was under house arrest and suffering from depression. Respondent
submitted some medical treatment records with her opposition.

II. Discussion
A. Applicable Law

Pursuant to title II of the Act, an individual who has worked in jobs covered by Social
Security for the required period of time, who has a medical condition that meets the
definition of disability under the Act, and who is unable to work for a year or more
because of the disability, may be entitled to monthly cash disability benefits. 20 C.F.R.
§§ 404.315-404.373. Pursuant to title XVI of the Act, certain eligible individuals are
entitled to the payment of Supplemental Security Income (SSI) on a needs basis. To be
eligible for SSI payments, a person must be: (1) 65 years of age or older; (2) blind; or (3)
disabled. Disability under both programs is determined based on the existence of one or
more impairments that prevent an individual from doing his or her past work or other
work that exists in substantial numbers in the economy for at least one year or that will
result in death. 20 C.F.R. §§ 416.202, 416.905, 416.906. Additionally, a person must
have limited income and resources to be eligible for SSI. 20 C.F.R. §§ 416.202,
416.1100. All assets, other than a car and a primary residence, are considered resources
when determining whether an individual has “limited” resources. 20 C.F.R. § 416.1210.
The income and resources of a spouse or other individuals in a household are also subject
to being considered. 20 C.F.R. §§ 416.1201-1204; 416.1802.

Section 1129(a)(1) of the Act authorizes the imposition of a CMP or an assessment
against:

(a)(1) Any person . . . who —

(A) makes, or causes to be made, a statement or
representation of a material fact, for use in determining any
initial or continuing right to or the amount of monthly
insurance benefits under title II or benefits or payments under
title VIII or XVI, that the person knows or should know is
false or misleading,

(B) makes such statement or representation for such use with
knowing disregard for the truth, or

(C) omits from a statement or representation for such use, or
otherwise withholds disclosure of, a fact which the person
knows or should know is material to the determination of any
initial or continuing right to or the amount of monthly
insurance benefits under title II or benefits or payments under
title VIII or XVI, if the person knows, or should know, that
the statement or representation with such omission is false or
misleading or that the withholding of such disclosure is
misleading ....

A material fact is a fact that the Commissioner of SSA (the Commissioner) may consider
in evaluating whether an applicant is entitled to benefits or payments under titles II, VIII,
or XVI of the Act. Act § 1129(a)(2).

Individuals who violate section 1129 are subject to a CMP of not more than $5000 for
each such false or misleading statement or representation. Violators are also subject to an
assessment in lieu of damages, of not more than twice the amount of the benefits or
payments made as a result of the statements or representations. Act § 1129(a)(1).

The Commissioner has delegated enforcement authority to the SSA IG as authorized by
section 1129(i) of the Act. In determining the amount of a CMP, the IG must consider:
(1) the nature of the subject statements and representations and circumstances under
which they occurred; (2) the degree of culpability of the person committing the offense;
(3) the person's history of prior offenses; (4) the person's financial condition; and (5) such
other matters as justice requires. Act § 1129(c); 20 C.F.R. §498.106.

Section 1129(b)(2) specifies that the Commissioner shall not decide to impose a CMP or
assessment against a person until that person is given written notice and an opportunity
for the determination to be made on the record after a hearing at which the person is
allowed to participate. The Commissioner has provided by regulations at 20 C.F.R. pt.
498 that a person against whom a CMP is proposed by the IG may request a hearing
before an ALJ of the Departmental Appeals Board of the Department of Health and
Human Services. The ALJ has jurisdiction to determine whether the person should be
found liable fora CMP. 20 C.F.R. § 498.215(a). The person requesting the hearing, that
is Respondent, has the burden of going forward and the burden of persuasion with respect
to any affirmative defenses and any mitigating circumstances. 20 C.F.R. § 498.215(b)(1).
The IG has the burden of going forward as well as the burden of persuasion with respect
to all other issues. The burdens of persuasion are to be judged by a preponderance of the
evidence. 20 C.F.R. § 498.215(c).

B. Issues
Whether Respondent’s case must be dismissed pursuant to 20 C.F.R.
§ 498.202(f)(1) because she did not timely file her request for hearing and
has failed to show good cause for the failure.
C. Analysis
My conclusions of law are set forth in bold followed by my analysis.

1. Respondent failed to timely file her request for hearing.

2. Respondent has failed to show good cause for her failure to timely
file her request for hearing.

3. Dismissal is required by 20 C.F.R. § 498.202(f)(1).

4. The CMP and assessment proposed by the IG are final. 20 C.F.R.
§ 498.109(c).

There is no dispute that the IG notified Respondent by letter dated December 18, 2014,
that the IG was imposing a CMP and assessment. Respondent does not deny that she
received the IG notice. Pursuant to 20 C.F.R. § 498.202(e), the notice is presumed to
have been received five days after the date of the notice, unless there is a reasonable
showing to the contrary. The IG concedes that the notice was not received until
December 30, 2014. IG Br. at 3. Respondent does not allege and has made no showing
of receipt of the IG notice after December 30, 2014.

The Act and regulations provide Respondent the right to request a hearing before an ALJ.
Under 20 C.F.R. § 498.202(c)(2) Respondent’s request for hearing had to be filed no
more than 60 days after the notice of the intent to impose the CMP and assessment was
received, unless Respondent can show good cause for me to allow her more time to file.
Documents submitted by mail are considered filed when they are mailed, which is usually
treated as the postmark date. 20 C.F.R. § 498.211(a)(4). Respondent received the IG
notice on December 30, 2014. Sixty days after December 30, 2014, was Saturday,
February 28, 2015. Therefore, Respondent had until Monday, March 2, 2015, to have her
request for hearing postmarked in order for it to be timely filed. 42 C.F.R. § 498.212(a).
Because Respondent’s request for hearing was not postmarked until April 15, 2015, it
was untimely and dismissal is required, unless Respondent has shown good cause for her
failure to timely file.

Respondent asserted in her request for hearing that she was under house arrest and under
psychiatric treatment for depression, and at one point, in the hospital. In her opposition
to the motion to dismiss, Respondent states she was under house arrest and suffering
from depression and she submitted some treatment records for me to consider. I
conclude that house arrest is not good cause for failure to timely file her request for
earing. Respondent does not state the period she was under house arrest. Further, she
does not assert that while under house arrest she was without writing supplies or unable
to obtain postage. Respondent does not assert that there was no pick-up and delivery to
er house by the United States Postal Service or that she was unable to have someone
mail a letter for her. The mere assertion that Respondent was under house arrest is an
inadequate basis for me to find good cause for her failure to mail her request for hearing
by March 2, 2015.

I also conclude that Respondent’s psychiatric condition was not good cause for failure to
timely request a hearing. The documents submitted by Respondent show that she was
ospitalized from January 29, 2015 to February 4, 2015. Therefore she had nearly a
month before her hospitalization and nearly a month after to file her request for hearing
timely. Respondent also submitted letters from her psychologist and psychiatrist for my
consideration. The correspondence indicates that Respondent suffers from major
depression with psychotic features and anxiety and that she receives both psychotherapy
and pharmacotherapy. Neither doctor opines that Respondent’s symptoms were so severe
between December 30, 2014 and March 2, 2015, that she was unable to understand the
December 18, 2015 IG notice or to file a request for hearing with my office. I am unable
to determine based on the medical documents submitted by Respondent that her
symptoms were so severe that they constitute good cause for her failure to timely request
a hearing.

I conclude that Respondent has failed to demonstrate good cause to excuse her late filing
of her request for hearing or for me to grant an extension of the period for filing the
request for hearing. Accordingly, I am required by 20 C.F.R. § 498.202(f)(1) to dismiss
this case and the CMP and assessment proposed by the IG are final. 20 C.F.R.

§ 498.109(c).

I. Conclusion
For the foregoing reasons, Respondent’s request for hearing is dismissed and the CMP

and assessment proposed by the IG are final.

/s/
Keith W. Sickendick
Administrative Law Judge


Departamento de Salud y Servicios Sociales

JUNTA DEPARTAMENTAL DE APELACIONES
Division de Recursos Civiles

Administracion de la Seguridad Social,
Inspector General,

Demandante,
c/
M.S.R.,
Demandado.
Expediente N.° C-15-2549

Fecha:

DECISION

Este caso fue desestimado conforme a lo dispuesto por el articulo 498.202(f)(1) del Titulo
20 del Cédigo de Reglamentos Federales, ya que la Demandada no _presentd
oportunamente su solicitud de audiencia y no proporciond una razon justificada
demostrable para la demora en la radicacion.

I. Antecedentes y hechos

El Asesor Legal del Inspector General (IG) de la Administracion del Seguro Social (SSA,
por sus siglas en inglés) notificd al Demandado mediante la imposicién de una sancion
pecuniaria (CMP, por sus siglas en inglés) de $20,500..00 ademas de una partida
compensatoria por dafios y perjuicios de $36,732.20 (partida) en conformidad con la
Seccidn 1129 de la Ley de Seguridad Social (Ley) (Seccion§ 1320a-8 del Titulo 42 del
U.S.C.). La notificacion le advertia a la Demandada que podia solicitar una audiencia ante
un juez de derecho administrativo (AU) dentro de los 60 dias posteriores a la recepcion de
la notificacion .

* La Demandada se identifica solo con sus iniciales debido a que esta decision
contiene informacion de salud mental.
La Demandada presento una solicitud de audiencia ante un AU mediante carta con
matasellos de correo con fecha 15 de abril de 2015. La Demandante declara en su
solicitud de audiencia que ella estaba cumpliendo su arresto domiciliario; que estaba bajo
el cuidado de los psicologos y psiquiatras; y fue hospitalizada a causa de una depresion
mayor.

Convoqué una audiencia preliminar telefonica para el 23 de junio de 2015. El contenido
de la conferencia se refleja en mi Orden de Programacién y Notificacion de Audiencia con
fecha 6 de julio de 2015. Durante la conferencia, el IG solicité que se le diera la
oportunidad de presentar una mocion para desestimar el caso porque la solicitud de
audiencia no se habia presentado oportunamente. Segtin lo dispuesto en el articulo
498.202(f)(1) del Titulo 20 del Codigo de Reglamentos Federales, cuando una solicitud de
audiencia no se presenta oportunamente, y no hay razon justificada demostrable para la
demora en la radicacion, yo estoy en la obligacion de desestimar el caso. Por lo tanto, las
solicitudes que no se presentan oportunamente, sin que haya una causa justificada, en la
practica me despojan de la jurisdiccion porque se exige la desestimacion y la solicitud de
desistimiento debe resolverse antes de seguir desarrollando el caso.

EI IG presento la mocion para desestimar el 31 de julio 2015 [, con un memorando de
respaldo (IG Br.). En su memorando, el IG se refiere a los elementos de prueba | a 4 de
SSA, pero en realidad la SSA no presenté elementos de prueba. EI IG afirma que el 18 de
diciembre de 2014 se envio una notificacion a la demandante por correo certificado con
acuse de recibo. El IG afirma, ademas, que el acuse de recibo indica que la Demandante
firm la carta el 30 de diciembre de 2014.

La Demandante le notificd al IG su oposicién a la solicitud de desistimiento del IG el 16
de septiembre de 2015, 0 alrededor de esa fecha, pero no radicé una copia en mi oficina.
EI IG me proporciono una copia el 2 de octubre de 2015. La Demandada afirma que no
presento oportunamente su solicitud de audiencia porque estaba bajo arresto domiciliario y
sufriendo de depresion . La Demandada presento algunos registros de tratamiento médico
con su oposicion.

Il. Discusion
A. Ley aplicable

Conforme a lo dispuesto en el Titulo II de la Ley, una persona que haya trabajado en
puestos de trabajo cubiertos por la Seguridad Social durante el periodo de tiempo
requerido, que tiene una condicién médica que cumpla con la definicion de discapacidad
conforme a la Ley, y que no pueda trabajar durante un afio o mas a causa de la
discapacidad, podria tener derecho a prestaciones econdmicas mensuales por
incapacidad. Articulos 404.315-404.373 del Titulo 20 del Codigo de Reglamentos
Federales. Conforme a lo dispuesto en el Titulo XVI de la Ley, determinadas personas
elegibles tienen derecho al pago de Seguridad de Ingreso Suplementario (SSI, por sus
siglas en inglés) en funcion a sus necesidades. Para tener derecho a los pagos de SSI,
una persona debe ser: (1) mayor de 65 afios de edad; (2) invidente; 0 (3) discapacitada.
La discapacidad en ambos programas se determina en base a la existencia de una o mas
3
discapacidades que impidan que la persona desempeiie el trabajo que desarrollaba u otro
trabajo que exista en un numero importante en la economia durante al menos un afio 0
que puede provocar la muerte. Articulos 416.202, 416.905, 416.906 del Titulo 20 del
Codigo de Reglamentos Federales. Ademas, una persona debe tener ingresos y
recursos limitados para tener derecho al SSI. Articulos 416.202, 416.1100 del Titulo 20
del Codigo de Reglamentos Federales. Todos los activos, diferentes a un automovil y
una vivienda principal, se consideran recursos para determinar si una persona tiene
recursos "limitados" . Articulos 416.1210 del Titulo 20 del Codigo de Reglamentos
Federales. Los ingresos y los recursos de un conyuge u otras personas en el hogar
también estan sujetos a consideracion. Articulos 416.1201-1204; 416.1802 del Titulo 20
del Codigo de Reglamentos Federales.

La Seccion 1129 (a) (1) de la Ley autoriza la imposicion de una CMP 0 el pago de
una partida:

(a)(1) A cualquier persona ...que -

(A) haga o cause que se haga una declaracion o
manifestacion de un hecho pertinente, para su uso en la
determinacion de cualquier derecho inicial o continuado, o el
importe de los beneficios mensuales del seguro conforme a lo
dispuesto en el Titulo II 0 los beneficios 0 pagos conforme lo
dispuesto en los Titulos VIII o XVI, que la persona sabe o
deberia saber que es falsa 0 engajfiosa,

(B) hace tal declaracion 0 manifestacion para tal uso sin
consideraciOn a su veracidad, o

(C) hace omisiones de una declaracién o manifestacion para
tal uso, o de otra manera oculta un hecho que la persona sabe
o deberia saber que es importante para la determinacion de
cualquier derecho inicial o continuado, o el importe de los
beneficios mensuales conforme a lo dispuesto en el Titulo II
o el importe de los beneficios 0 los pagos conforme a lo
dispuesto en los Titulos VIII o XVI, si la persona sabe, o
deberia saber, que la declaracion o manifestacion con tal
omisiOn es falsa 0 engafiosa o que el ocultamiento es
engafioso ....

Un hecho pertinente es un hecho que el Comisionado de la SSA (el Comisionado) puede
considerar en la evaluacién de si un solicitante tiene derecho a beneficios 0 pagos
conforme a lo dispuesto en los Titulos II, VIII, o XVI de la Ley. Ley§ 1129(a)(2).

Las personas que violen la seccién 1129 estan sujetas a una CMP de no mas de $ 5000 por
cada declaracion o manifestacién falsa o engafiosa. Los infractores también estan sujetos
al pago de una partida por dafios y perjuicios, de no mas de dos veces el importe de los
beneficios 0 pagos efectuados a raiz de las declaraciones 0 manifestaciones. Ley§ 1129 (a)

(1).
4

El Comisionado ha delegado la autoridad para la aplicacin al IG de la SSA segtin se
autoriza en la seccion 1129 (i) de la Ley. Para determinar la cuantia de una CMP, el IG
debe considerar: (1) la naturaleza de las declaraciones y manifestaciones sujetas y las
circunstancias en las que dieron; (2) el grado de culpabilidad de la persona que cometid
el delito; (3) los antecedentes de delitos anteriores de la persona; (4) la situacion
inanciera de la persona; y (5) otros asuntos que la justicia exija. Articulo 498.106 del
Titulo 20 del Codigo de Reglamentos Federales

La Seccion 1129 (b) (2) establece que el Comisionado no decidira imponer una CMP o el
pago de una partida a una persona hasta tanto dicha persona no reciba una notificacion por
escrito, y se ha dado oficialmente la oportunidad de obtener una decision después de una
audiencia en la que se permite que la persona participe. El Comisionado ha dispuesto
conforme a las regulaciones del articulo 498 del Titulo 20 del Codigo de Reglamentos
Federales, que una persona para la cual el IG ha propuesto una CMP puede solicitar una
audiencia ante un ALJ de la Junta Departamental de Apelaciones del Departamento de
Salud y Servicios Sociales. El UA tiene jurisdiccién para determinar si la persona debe ser
declarada responsable de un CMP. Articulo 498.215(a) del Titulo 20 del Codigo de
Reglamentos Federales La carga de seguir adelante y la carga de persuasion con respecto
a cualesquiera defensas afirmativas y circunstancias mitigantes que puedan presentarse,
recae en el Demandado que esté solicitando la audiencia. Articulo 498.215(b)(1) del
Titulo 20 del Codigo de Reglamentos Federales
EI IG tiene la carga de seguir adelante, asi como la carga de la persuasion con respecto a
todos los demas asuntos. Las cargas de persuasion han de ser juzgadas por una
preponderancia de la evidencia Articulo 498.215(c) del Titulo 20 del Cédigo de
Reglamentos Federales

B. Temas
Si el caso de la Demandada debe ser desestimado conforme a lo dispuesto en
el articulo 498.202 (1)(1) del Titulo 20 del Codigo de Reglamentos Federales
porque no presento oportunamente su solicitud de audiencia y no
proporciono una razon justificada comprobable para el incumplimiento.
C. Analisis
Mis conclusiones de ley se establecen en negrita y le siguen a mi anilisis.

1. La Demandada no present6é oportunamente su solicitud de audiencia.

2. La Demandada proporcion6o una razon justificada comprobable
para la demora en presentar su solicitud de audiencia.

3. La desestimacién la exige el articulo 498.202(1)(1) del Titulo 20 del
Codigo de Reglamentos Federales

4. La CMP y la partida propuestas por el IG son definitivas.
Articulo498.109(c) del Titulo 20 del Cédigo de Reglamentos
Federales
5

No se discute que el IG notificd a la Demandada mediante carta con fecha 18 de
diciembre de 2014, que el IG estaba imponiendo una CPM y una partida. La
Demandada no niega que recibio la notificacion de IG. Conforme con lo dispuesto en
el articulo 498.202 del Titulo 20 del Codigo de Reglamentos Federales, se presume que
la notificacion ha sido recibida cinco dias después de la fecha de la notificacion, salvo
que se demuestre razonablemente lo contrario. El IG admite que la notificacion no se
recibi6 sino hasta el 30 de diciembre de 2014, IG Br.a las 3. La Demandada no alega
ni ha evidenciado el recibo de la notificacion del IG después del 30 de diciembre de
2014.

La Ley y los reglamentos le otorgan al demandado el derecho de solicitar una audiencia
ante un AU. En el marco del articulo 498.202(c)(2) del Titulo 20 del Codigo Federal, la
solicitud de audiencia de la Demandada debio haber sido presentada no mas de 60 dias
posteriores al recibo de la notificacion de la intencién de imponer la CMP y la partida, salvo
que la Demandada pueda proporcionarme una razon justificada comprobable para que le
otorgue mas tiempo para la presentacion. Los documentos enviados por correo se
consideran presentados cuando se envian por correo , , que generalmente es la fecha del
matasellos. Articulo 498.211(a)(4) del Titulo 20 del Codigo de Reglamentos Federales. La
Demandada recibio la notificacion del IG el 30 de diciembre de 2014. Sesenta dias después
del 30 de diciembre 2014, era sabado, 28 de febrero de 2015. Por lo tanto, la Demandada
tenia hasta el lunes, 2 de marzo de 2015, para presentar su solicitud de audiencia con
matasellos para que fuera presentada oportunamente. Articulo . 498.212(a) del Titulo 42
del Codigo . Federal . Como el matasellos de la solicitud de audiencia 'de la Demandada no
se colocé sino hasta el 15 de abril de 2015, no fue oportuna y se hacia necesario un
desestimiento a menos que la demanda pudiera demostrar una razon justificada para la
demora en la presentacion.

La Demandada afirma en su solicitud de audiencia que estaba bajo arresto domiciliario y
bajo tratamiento psiquiatrico por depresion, y en un momento dado, en el hospital. En su
oposicion a la mocion para desestimar, la Demandada afirma que estaba bajo arresto
domiciliario y sufria de depresion, y presento unos registros de tratamiento médico para
mi consideracion. Mi conclusion es que el arresto domiciliario no es una razon
justificada para no presentar oportunamente su solicitud de audiencia. La Demandada no
indica el periodo durante el cual estuvo bajo arresto domiciliario. Ademas, no asevera si
mientras estuvo bajo arresto domiciliario no contaba con utiles para escribir 0 medios
para el franqueo . La Demandada no asevera si el Servicio Postal de los Estados Unidos
hacia recogidas o entregas a su casa 0 si no podia pedirle a alguien que le enviara una
carta por correo. La mera aseveracion de que la Demandada estaba bajo arresto
domiciliario es una base inapropiada para que yo pueda encontrar una razon justificada
para que no haya podido enviar su solicitud de audiencia por correo el 2 de marzo de
2015.

También he Ilegado a la conclusién de que la condicién psiquiatrica de la Demandada no
era una razon justificada para no haber presentado oportunamente la solicitud de
audiencia. Los documentos presentados por la Demandada indican que fue hospitalizada
del 29 de enero de 2015 al 4 de febrero de 2015. Por lo tanto tuvo casi un mes antes de su
hospitalizacion y casi un mes después de su hospitalizacion para haber presentado
oportunamente su solicitud de audiencia. La Demandada también presento cartas de su
6
psicologo y psiquiatra para mi consideracion. La correspondencia indica que la
Demandada sufre de depresién mayor con sintomas psicoticos y ansiedad y que recibe
ambas modalidades de tratamiento, psicoterapia y farmacoterapia. Ninguno de los
médicos opina que la sintomatologia de presentaba la Demandada entre el 30 de diciembre
de 2014 y el 2 de marzo de 2015, era tan grave como para no poder entender la
notificacion del 18 de diciembre de 2014 del IG o presentar la solicitud de audiencia ante
mi oficina. Me es imposible determinar a partir de los documentos médicos presentados
por la Demandada de que sus sintomas eran tan graves como para constituirse en una
razon justificada para no presentar oportunamente la solicitud de audiencia.

Concluyo que la Demandada no proporcioné una razon justificada comprobable para
excusar su demora en presentar la solicitud de audiencia o para que yo le conceda una
prorroga al plazo para la presentaciOn de la solicitud de audiencia. En consecuencia, el
articulo 498.202(f)(1) del Titulo 20 del Codigo de Reglamentos Federales me obliga a
desestimar este caso y la CMP y partida propuestas por el IG son definitivas. Articulo
498.109(c) del Titulo 20 del Codigo de Reglamentos Federales.

III. Conclusién

Por las razones anteriores, la solicitud de audiencia del demandado se ha desestimado y
la CMP y partida propuestas por el IG son definitivas.

Keith W. Sickendick Juez de
Derecho Administrativo


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Hartford County Cardiology, PC,
(PTAN: D100202572),
Petitioner,

v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-3222
Decision No. CR4400
Date: November 4, 2015

DECISION
I sustain the determination of the Centers for Medicare & Medicaid Services
(CMS) to assign Petitioner, Hartford County Cardiology, PC, an effective
participation date in the Medicare program of February 23, 2015.'

I. Background

Petitioner filed its hearing request in order to challenge its effective date of
participation in Medicare. It asserts that it should be assigned an effective
participation date of November 10, 2014. CMS filed a pre-hearing exchange that
included a brief and a proposed exhibit (CMS Ex. 1). The brief addressed the
merits of the case and, alternatively, CMS moved for summary judgment.
Petitioner filed a pre-hearing exchange that included a brief in opposition and
three proposed exhibits (P. Ex. 1 — P. Ex. 3).

' The case caption lists only Hartford County Cardiology, PC as a Petitioner.
Petitioners filed their hearing request on behalf of the corporate entity and Dr.
Thomas Freund, who is evidently a principal in the corporate entity. However,
neither CMS nor Petitioners have provided me with evidence or argument
concerning the effective date of Dr. Freund’s participation in Medicare. Given the
parties’ silence as to his effective participation date and the absence of any
evidence whatsoever addressing that issue, I conclude that Petitioner abandoned
the issue of the effective date of Dr. Freund’s participation and I dismiss the
hearing request to the extent that it demands a hearing on Dr. Freund’s behalf.
Neither CMS nor Petitioner filed written direct testimony of any proposed
witnesses. Thus, each side rested its case based on documentary evidence. I find
it unnecessary to decide whether summary judgment is appropriate. I am deciding
this case based on the parties’ written exchanges inasmuch as a hearing would not
develop the record additionally. I receive into the record CMS Ex. | and P. Ex. 1
—P. Ex. 3.

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

The issue is whether CMS had authority to assign an effective Medicare
participation date of February 23, 2015 to Petitioner.

B. Findings of Fact and Conclusions of Law

The effective date of participation for a participating Medicare physician or that
physician’s practice group is:

the later of the date of filing of a Medicare enrollment application
that was subsequently approved by a Medicare contractor or the date
an enrolled physician or nonphysician practitioner first began
providing services at a new practice location.

42 C.F.R. § 424.520(d). The effective date of participation is a critical date for
every provider or supplier that is subject to this regulation because it determines
the earliest date on which the Medicare program will reimburse that provider’s or
supplier’s items or services. CMS allows participating providers and suppliers to
claim reimbursement for covered items or services that were provided only up to
30 days prior to the effective participation date. Medicare will not reimburse
items or services provided prior to that 30-day grace period even if they would
otherwise qualify for reimbursement.

There is no dispute that Petitioner filed an application to participate in Medicare
on November 10, 2014. Nor is there any dispute that the application failed to
provide the Medicare contractor with all mandatory information that was a
prerequisite to processing it. Petitioner admits that the November 10 application
contained several statements that either were or subsequently became inaccurate.
Petitioner acknowledges that, on January 5, 2015, its representative called the
contractor to inquire about changing the name of the prospective provider, from
Hartford County Cardiology, Inc., to Hartford County Cardiology, PC.
Additionally, information in the November 10 application concerning Petitioner’s

practice location, its telephone number, and its fax number, was incorrect. On
January 22, 2015, the contractor sent Petitioner a letter in which it requested
additional information from it — including a copy of an Internal Revenue Service
filing from Petitioner, an updated certification form, and a completed CMS Form
588 EFT in the practice’s lawful business name — as a prerequisite to processing
Petitioner’s application. CMS Ex. 1 at 35.

By letter dated February 12, 2015 but received on February 23, 2015, Petitioner
voluntarily withdrew its November 10 application, citing errors and incomplete
information in that application. Petitioner’s hearing request at 3; CMS Ex. | at 36.
The contractor confirmed that withdrawal by letter dated February 26, 2015.
Petitioner filed a new application on February 23, 2015. The contractor eventually
accepted that application, and the contractor assigned Petitioner an effective date
of participation of February 23, 2015.

That effective participation date plainly conforms to regulatory requirements. The
February 23 application is the application “that was subsequently approved” by
the contractor. Thus, the earliest effective date that the contractor could assign to
Petitioner was February 23, 2015. There is no basis in law or in the facts as I have
described them that would allow for the establishment of an earlier effective
participation date.

Petitioner argues that there are equitable grounds for assigning it an effective
participation date of November 10, 2014. It contends that it never would have
withdrawn the November 10 application but for misleading information that
allegedly was provided to it by a contractor’s representative. The crux of
Petitioner’s argument is that a contractor’s representative told Petitioner that the
errors and omissions in the November 10 application necessitated that Petitioner
resubmit the application. Petitioner contends that, had it not been told that, it
would simply have amended its November 10 application to provide the contractor
with whatever information the contractor required. Then, according to Petitioner,
the contractor would have approved Petitioner’s November 10 application and
Petitioner would have been entitled to an effective participation date based on that
application rather than on the February 23, 2015 application. Petitioner
characterizes the allegedly incorrect instructions given to it by the contractor as
constituting “affirmative misconduct.”

I find Petitioner’s arguments to be unpersuasive both as a matter of law and as a
matter of fact. To begin with, the equitable doctrine of estoppel generally does not
apply to an act or omission by CMS or one of its representatives. Heckler v. Cmty.
Health Servs. of Crawford Cnty., Inc., 467 U.S. 51 (1984). Perhaps more
pertinent, nothing in the regulations governing cases involving CMS gives me the
authority to override regulatory requirements on equitable grounds. Indeed:
(N)either the . . . [administrative law judge] nor the [Departmental
Appeals] Board is authorized to provide equitable relief by
reimbursing or enrolling a supplier who does not meet statutory or
regulatory requirements.

Pepper Hill Nursing & Rehab. Ctr., DAB No. 2395, at 10 (2011). Thus, Petitioner
has not provided any legal basis for me to order CMS to grant it an earlier
effective participation date than February 23, 2015, even assuming its fact
assertions are true.

Moreover, the fact assertions made by Petitioner — when taken on their face — do
not add up to the kind of equitable claim that might qualify for relief in some
forum other than this one. Petitioner’s assertions notwithstanding, it has not
offered facts that — if true — establish “affirmative misconduct” by the contractor’s
representative. Assuming Petitioner’s narrative to be correct, all that it has
asserted is that a contractor’s representative supplied Petitioner with information
that is arguably misleading. Put simply, Petitioner is claiming that the contractor’s
representative advised it to withdraw its application when, in fact, it could simply
have amended it and preserved the November 10 filing date for purposes of later
establishing an effective participation date. I make no findings as to whether
Petitioner would have been able to amend its application as it contends. But, what
is obvious is that the contractor’s representative did not engage in “affirmative
misconduct.” Petitioner has offered nothing to show that the contractor’s
representative deliberately provided false information to Petitioner. At most, what
the representative might have told Petitioner arguably was incorrect. That does
not add up to a case of affirmative misconduct, even if true.

Finally, Petitioner has adduced no proof whatsoever to support its contentions. Its
contentions are naked assertions that are unsupported either by documents or
testimony. | afforded Petitioner the right to provide written direct testimony and
documents to support its arguments. But, it has not provided me with any
evidence that shows that a contractor’s representative said anything to Petitioner
about what Petitioner must do respecting its November 10 application. The record
is devoid of anything that evidences the purported statements of the contractor’s
representative. I make no findings of fact that accept Petitioner’s assertions as
true, given the total absence of supporting evidence.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Advance Rehabilitation Clinic,
(CCN: 23-6597)

Petitioner
v.

Centers for Medicare & Medicaid Services.
Docket No. C-15-1974
Decision No. CR4390

Date: November 4, 2015

DECISION

I sustain the determination made by the Centers for Medicare & Medicaid Services
(CMS) to terminate Petitioner’s participation as a provider of services in the Medicare
program.

I. Background

Petitioner, Advance Rehabilitation Clinic, operates a rehabilitation agency whose primary
location is in Farmington Hills, Michigan.' CMS Exhibit (CMS Ex.) | at 1.

The services offered by Petitioner include outpatient physical therapy services. CMS Ex.
2 at 1. A recertification survey completed by the Michigan Department of Licensing and
Regulatory Affairs (state agency) on October 8, 2014, found that the clinic was closed
during business hours and documented that Petitioner was not in compliance with one
condition of participation (CoP) at 42 C.F.R. Part 485, Subpart H (specifically 42 C.F.R.
§ 485.709). CMS Exs. 1, 2. Petitioner submitted a plan of correction, and the state

' Petitioner also operates an extension site in Clinton Township, Michigan. CMS Ex. 10
at 1.
agency conducted a revisit survey of Petitioner on November 20, 2014. CMS Exs. 3, 4.
The resurvey found that Petitioner was not in compliance with five CoPs: 42 C.F.R.

§§ 485.709 (administrative management), 485.711 (plan of care and physician
improvement), 485.719 (conditions), 485.725 (infection control), and 485.729 (program
evaluation). CMS Ex. 4. CMS notified Petitioner by letter dated December 4, 2014, that
it would be terminating Petitioner’s provider agreement effective January 6, 2015, based
on the findings of both surveys. CMS Ex. 5. Petitioner submitted a second plan of
correction on December 12, 2014. CMS Exs. 6, 7. At the request of CMS (CMS Ex. 8),
a second revisit survey was conducted on January 22, 2015. CMS Ex. 10. Following this
survey, CMS notified Petitioner that, effective February 22, 2015, its Medicare provider
agreement would be terminated. CMS Ex. 13. CMS explained that in addition to the
deficiencies addressed through the two previous surveys, the second revisit survey found
that Petitioner once again did not meet the CoPs for administrative management and
infection control. In its February 18, 2015 letter, CMS explained that it had “determined
that these deficiencies limit the capacity of [the] facility to render adequate care and
ensure the health and safety” of Petitioner’s patients. Jd.

Petitioner requested a hearing by letter dated April 7, 2015.” The case was assigned to
Administrative Law Judge Joseph Grow for hearing and decision on May 6, 2015, and
Judge Grow issued an Acknowledgment and Prehearing Order (Order) on that same
date.* CMS filed a motion for summary judgment and prehearing brief (CMS Br.),
accompanied by 20 exhibits. Petitioner filed a response (P. Br.). In the absence of any
objections, I admit CMS Exs. 1-20 into evidence.

Petitioner does not present anything more than a generic dispute with CMS’s
determination that it was not in substantial compliance with all Medicare conditions of
participation. Although CMS requests summary judgment, I am deciding this case on the
written record. CMS proposed two witnesses, but Petitioner did not ask to cross-examine
these witnesses as required by Judge Grow’s Order. A hearing therefore was
unnecessary. Order at 8-10. I find that CMS was authorized to terminate Petitioner’s
Medicare provider agreement. For purposes of judicial economy, | will focus my
discussion on the CoPs that were addressed in the second revisit survey which was
conducted after Petitioner submitted its second plan of correction.

II. Background Law

Medicare-participating facilities may be surveyed on behalf of CMS by state survey
agencies in order to assess compliance with federal participation requirements. 42 C.F.R.
pt. 488, subpt. A. CMS may determine that a provider does not qualify to participate in

> Petitioner was represented by counsel at the time of this filing, but is currently pro se.

> This case was reassigned to me on October 28, 2015.
Medicare and/or Medicaid programs if it is not in compliance with the CoPs. 42 C.F.R.
§ 488.24. CMS may terminate a provider agreement if it determines that the provider no
longer meets the CoPs. 42 C.F.R. § 489.53.

CMS, acting on behalf of the Secretary, may terminate a provider agreement based on the
provider’s failure to comply with the provisions of section 1861 or its failure to comply
with all applicable CoPs. Act § 1866(b)(2); 42 C.F.R. § 489.53(a); Cmty. Home Health,
DAB No. 2134, at 13 (2007). To monitor compliance, CMS contracts with state agencies
that conduct periodic surveys. Act § 1864(a); 42 C.F.R. § 488.20. For facilities that are
not skilled nursing facilities (SNFs), nursing facilities (NFs), or home health agencies, the
State Agency must survey “as frequently as necessary to ascertain compliance. ...” 42
CFR. § 488.20(b)(1).

Petitioner provides physical therapy services as a rehabilitation agency, which is defined
by regulation as an agency that:

(1) Provides an integrated interdisciplinary rehabilitation program designed to
upgrade the physical functioning of handicapped disabled individuals by
bringing specialized rehabilitation staff together to perform as a team; and

(2) Provides at least physical therapy or speech-language pathology services.

42 C.F.R. § 485.703. Section 1861(p)(4) of the Act specifies that a rehabilitation agency
must meet and maintain certain CoPs. 42 C.F.R. § 485.701. These CoPs are found in 42
C.F.R. Part 485, Subpart H. Each “condition of participation” is contained in a single
regulation, which is divided into subparts called standards. 42 C.F.R. pt. 485.
Compliance with a CoP is determined by the manner and degree to which the provider
satisfies the standards within the condition. 42 C.F.R. §§ 488.1; 488.26(b). If
deficiencies are of such character as to “substantially limit the provider’s . . . capacity to
furnish adequate care or which adversely affect the health and safety of patients,” the
provider is not in compliance with CoPs. 42 C.F.R. § 488.24(b). Noncompliance with
even one of the standards making up a CoP may constitute a violation of that CoP if the
violation is significant enough. Sonali Diagnostic Lab., DAB No. 2008 (2006); 42
CFR. § 488.26(b).

If a provider appeals CMS’s action, then CMS must on appeal make a prima facie case
that the provider has failed to comply substantially with participation requirements. Once
CMS has established its prima facie case, a provider must overcome CMS’s case by a
preponderance of the evidence. MediSource Corp., DAB No. 2011 (2006); Batavia
Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing &
Convalescent Ctr. v. Thompson, 143 Fed. Appx. 664 (6th Cir. 2005) (unpublished);
Hillman Rehab. Ctr., DAB No. 1611 (1997), aff'd, Hillman Rehab. Ctr. v. U.S. Dep’t of
Health & Human Servs., No. 98-3789 (GEB) (D.N.J. May 13, 1999). When a provider’s
Medicare participation is terminated because of alleged noncompliance, “the critical date
for establishing compliance is the survey date, not the subsequent effective date of the
termination.” Carmel Convalescent Hosp., DAB No. 1584, at 12 (1996); Rosewood
Living Ctr., DAB No. 2019, at 11 (2006). A provider’s efforts to bring itself into
compliance after the date of the resurvey is “completely irrelevant to the facility’s appeal
of [CMS’s] determination to terminate.” Carmel, DAB No. 1584, at 13.

The Act and regulations allow a provider the opportunity for a hearing before an
Administrative Law Judge (ALJ) in cases in which CMS has terminated its provider
agreement. The scope of the hearing is limited to whether the initial determination CMS
made is correct. 42 C.F.R. § 498.3(b)(8). The hearing is a de novo proceeding.
Anesthesiologists Affiliated, DAB CR65 (1990), aff'd, 941 F.2d 678 (8th Cir. 1991).

III. Findings and Discussion*

1. Petitioner failed to maintain substantial compliance with all
Medicare conditions of participation and CMS properly terminated
Petitioner’s participation in Medicare.

While Petitioner broadly argues in its brief that “some of these findings contain
inaccuracies,” it does not question the evidentiary basis for CMS’s determination that it
failed to comply with the CoPs. Likewise, in its request for hearing, which was filed by
its former counsel, Petitioner makes only vague assertions of error without specifically
identifying any findings of fact that it feels are erroneous with the reason(s) in support
thereof. See 42 C.F.R. §§ 498.40(b)(1) and (2) (requiring that a request for hearing
“Ti]dentify the specific issues and the findings of fact and conclusions of law with which
the affected parties disagrees” and that the affected party specify the basis why those
findings and conclusions are incorrect); see also Order, at | 4(c)(i) (directing the parties
to each file a “brief addressing all issues of law and fact’’). In both its request for hearing
and its brief, Petitioner has not asserted any specific allegation of error regarding CMS’s
determination that it failed to meet the CoPs. Petitioner has not contended that it was in
full compliance with the CoPs for administrative management and infection control at the
time of the January 2015 survey; rather, it has contended that a fourth survey is warranted
in order to assess whether, following submission of its third plan of correction in the span
of less than six months, it is now in compliance with the CoPs.

The CoP pertaining to administrative management, 42 C.F.R. § 485.709, requires that a
rehabilitation agency must have an effective governing body that is legally responsible
for the conduct of the agency, and that the governing body designate an administrator and
establish administrative policies. In the third survey, which was the second revisit
survey, CMS identified deficiencies under this CoP in the areas of “Administrator” and

+ My findings of fact and conclusions of law are listed in bold and italics.
“Patient care policies.” CMS Ex. 10; see 42 C.F.R. §§ 485.709(b) and (d). With regard
to administrative management, a clinic or rehabilitation agency’s governing body
“{a]ppoints a qualified full-time administrator” and “[d]esignates a competent individual
to act during temporary absence of the administrator.” 42 C.F.R. § 485.709(b).
Furthermore, “[p]ersonnel records include the qualifications of all professional and
assistant level personnel.” Petitioner did not meet the CoP for administrative
management at the second revisit on January 22, 2015.

At the time of the January 22, 2015 survey, the administrator was unavailable. CMS Ex.
10 at 1-5. Petitioner has admitted there was “confusion” on the part of Petitioner at the
time of the survey, in that the office staff gave the surveyors conflicting information
regarding who was actually designated to act as the administrator during the
administrator’s absence. CMS Ex. 14 at 1; P. Br. at 2. Petitioner has conceded that the
designated alternate administrator was at a different location and unable to meet with the
surveyors on January 22, 2015 (CMS Ex. 14 at 68). In its subsequent plan of correction,
Petitioner indicated that it would educate its staff “on the role and identity of the alternate
administrator prior to working their next shift.” CMS Ex. 14 at 2. In this second plan of
correction, Petitioner further stated that the “alternate administrator will also be re-
inserviced on his administrative responsibilities,” and that a second alternative
administrator who is “a full-time employee [and] not a therapist” would be hired. CMS
Ex. 14 at 2, 3.

With respect to the CoP for administrative management, the survey also revealed that
although Petitioner’s policy indicated that a physical therapist aide is a non-licensed
worker who has completed an on-the-job training program, the personnel files for two
physical therapist aides contained no documentation of training or competency to provide
services to patients. CMS Ex. 10 at 9-11. While Petitioner submitted a revised job
description and records pertaining to those individuals’ competency and training (CMS
Ex 14 at 7), these records were not available for review by the surveyors at the time of
second revisit survey on January 22, 2015.

Petitioner’s failure to meet the CoP of administrative management on January 22, 2015,
was the third consecutive occasion in which it failed to meet this CoP: Two previous
surveys in October and November of 2014 documented that Petitioner did not meet the
CoP of administrative management, as well. CMS Exs. 1, 4. At approximately 10:00 am
on October 8, 2014, a surveyor visited the office and determined that “the agency failed
to have an effective governing body that is legally responsible for the operation and
conduct of the agency, failed to designate an administrator, and failed to establish
administrative policies.” CMS Ex. 1 at 1, 3, 4. At that time, the clinic was closed during
the business hours that were listed on its website and there were no hours posted on the
door. The surveyor also observed that on October 8, 2014, a United States Postal Service
delivery notice, dated October 3, 2014, was on the door even though Petitioner’s website
indicated the clinic was open on Monday, Wednesday, Thursday, and Friday from 7:30
am to 7:30 pm. CMS Ex. 1 at 3.

Following this failed survey attempt during advertised business hours, Petitioner
submitted a plan of correction on October 22, 2014 (CMS Ex. 3), and a follow-up survey
was conducted on November 20, 2014. CMS Ex. 4. At that time, an administrator was
once again not available. CMS Ex 4 at 4. The surveyors also determined that “[t]he
clinic failed to ensure all contracted personnel were qualified to provide services to its
patients.” CMS Ex. 4 at 10. Specifically, the surveyors documented that of the two staff
members in the office at the time of the visit, one did not have a personnel record on file
and the other staff member’s records contained only a copy of a driver’s license and a
letter indicating that he was an independent contractor. CMS Ex. 4 at 5.

The January 22, 2015 survey also found deficiencies with respect to the CoP of infection
control. CMS Ex. 10 at 15-17. The CoP for infection control requires that “[t]he
infection control committee establishes policies and procedures for investigating,
controlling, and preventing infections in the organization and monitors staff performance
to ensure that the policies and procedures are executed.” 42 C.F.R. § 485.725(a). It
further requires that “[a]ll personnel follow written procedures of effective aseptic
techniques.” 42 C.F.R. § 485.725(b). Additionally, the CoP requires that “[l]inens are
andled, stored, processed, and transported in such a manner as to prevent the spread of
infection.” 42 C.F.R. § 485.725(c).

At the time of the third survey, conducted after Petitioner submitted its plan of correction
for the CoP of infection control, the surveyors again documented several infection control
deficiencies that violated the CoPs. First, surveyors documented that a refrigerator
contained a bottle of expired medication, ice packs used for treatment of patients, and
employees’ food and beverage items. CMS Ex. 10 at 4. The surveyors documented that
the clinic did not follow proper aseptic techniques for storage of cold packs. CMS Ex. 10
at 15-21. With regard to hot packs, the surveyors noted deficiencies, as well. Even
though the Petitioner’s policy was to clean the hydrocollator once per month and to
launder hot pack covers every other week, the surveyors could find no documentation of
when the hydrocollator was last cleaned and the hot pack covers were last laundered.
CMS Ex. 10 at 18-20. In response to surveyor questions, one employee stated that the
hydrocollator “was probably cleaned and emptied last month” and that he would “throw
Clorox in there occasionally.” CMS Ex. 10 at 18. Although the Administrator was out of
the clinic at the time of this survey, the Administrator, via a telephone conversation,
informed the surveyors that the cleaning log was posted on the wall. However, the
surveyors observed that the only log posted on the wall did not document cleaning of the
hydrocollator. CMS Ex. 10 at 19. Finally, although Petitioner’s policy was that linens
“are stored, processed, and transported in such a manner as to prevent the spread of
infection” and that “[u]sed linen will be stored in a closed lined hamper and will be

washed at the end of the day,” CMS Ex. 10 at 20-21, the surveyors documented that
“dirty linens were stored in an open, uncovered canvas hamper next to the
Hydrocollator.” CMS Ex. 10 at 21.

Petitioner had previously been given an opportunity to correct deficiencies that were
found to not meet the infection control CoPs. CMS Exs. 4, 6. After being notified that it
no longer met the CoPs for, inter alia, infection control and that its provider agreement
would terminate on January 6, 2015, Petitioner submitted a corrective action plan for
infection control in which it informed CMS that it had “inserviced” its employees
regarding infection control and that its infection control committee would inspect the
clinic to make sure it maintained a sanitary environment and prevented the transmission
of infection. CMS Ex. 6 at 16-17. CMS determined, at the November 2014 survey, that
Petitioner “failed to establish required infection control procedures for aseptic technique”
(CMS Ex. 4 at 16-17); nevertheless, the same deficiency was observed at the subsequent
January 2015 survey after Petitioner had submitted a plan of correction for this CoP.
CMS Ex. 6; CMS Ex. 10 at 17.

I find Petitioner was out of compliance with participation requirements at 42 C.F.R.
§§ 485.709 and 485.725 at the condition level. Moreover, if even one CoP is out of
compliance, CMS is justified in terminating Petitioner’s provider agreement. Here, I
sustain CMS’s determination of deficiencies at 42 C.F.R. §§ 485.709 and 485.725, and
find that the condition-level deficiencies alone justify CMS’s decision to terminate. I do
not address the other CoP deficiencies addressed by CMS at 42 C.F.R. §§ 485.711,
485.719, and 485.729, or other standard-level deficiencies addressed at the time of the
January 22, 2015 survey, because it is not necessary that I do so to sustain CMS’s
decision to terminate Petitioner’s provider agreement.’ Golden Living Ctr. — Frankfort,
DAB No. 2296, at 3 n.2 (2009); Cmty. Skilled Nursing Ctr., DAB No. 1987 (2005);
Batavia Nursing & Convalescent Ctr., DAB No. 1904.

Furthermore, I acknowledge that CMS has the discretion to give providers an opportunity
to correct deficiencies prior to termination. See 42 C.F.R. § 488.28 (noting that a
deficient provider may continue to participate only if the facility has “submitted an

> Owing to the significant number of deficiencies identified by CMS, I have focused on
the condition-level deficiencies in administrative management and infection control that
were not corrected by Petitioner despite having submitted a plan of correction pertaining
to both of those CoPs prior to the second revisit survey on January 22, 2015. I have taken
this approach out of judicial economy and I do not intend to minimize Petitioner’s other
failures, including standard-level deficiencies in the areas of safety of patients, 42. C.F.R.
§ 425.723, that were found at the time of the January 22, 2015 second revisit survey, and
condition-level deficiencies relating to the CoPs of plan of care and physician
involvement, conditions, and program evaluation that were found at the time of the
November 20, 2014 revisit survey.
acceptable plan of correction for achieving compliance within a reasonable time.” In this
case, CMS gave Petitioner two opportunities to correct its deficiencies. CMS Ex. 3, 6.
While Petitioner submitted a third plan of correction on March 2, 2015 (P. Ex. 14), CMS
was not required to afford Petitioner another opportunity to correct its condition-level
deficiencies before terminating its program participation. 42 C.F.R. §§ 488.24, 488.28.

A provider that is dissatisfied with an initial determination, such as the termination of a
provider agreement in accordance with 42 C.F.R. § 489.53, may request an ALJ hearing
pursuant to 42 C.F.R. Part 498. CMS’s rejection of a plan of correction (and in this case
a third plan of correction) however is not an initial decision that is reviewable by me. See
42 C.F.R. § 498.3; see also Apollo Behavioral Health Hosp., L.L.C., DAB 2561 at 8
(2014) (stating that “section 488.28 permits a provider found to have deficiencies to
submit an acceptable plan of correction only where CMS has determined that the
deficiencies are at /ess than the condition level” and that “section 488.28 provides no
opportunity to correct condition-level deficiencies”).

I agree with CMS that Petitioner’s deficiencies constitute condition-level noncompliance.
The deficiencies substantially limit Petitioner’s capacity to furnish adequate care and may
adversely affect the health and safety of patients. Petitioner’s administrative failures
show that it lacked the necessary control and oversight of its staff, despite having more
than one opportunity, to correct its deficiencies. Likewise, Petitioner continued to fail to
ensure that its infection control policies and procedures were followed.

Pursuant to 42 C.F.R. § 489.53(a), CMS may terminate a provider agreement with any
provider if CMS finds the provider no longer meets the appropriate CoPs. As I have
found Petitioner in violation of two conditions of participation, CMS is authorized to
terminate Petitioner’s provider agreement.

IV. Conclusion
For the reasons set forth above, CMS properly terminated Petitioner’s participation as a

provider of services in the Medicare program.

/s/
Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Samuel Gerson, M.D.,
(O.L. File No. H-14-42946-9),

Petitioner,
v.
The Inspector General.
Docket No. C-15-2574
Decision No. CR4373

Date: October 28, 2015

DECISION

The Inspector General (IG) of the United States Department of Health and Human
Services notified Petitioner, Samuel Gerson, M.D., that he was being excluded from
participation in Medicare, Medicaid, and all other federal health care programs for a
minimum period of five years under 42 U.S.C. § 1320a-7(a)(4). Petitioner requested a
hearing before an administrative law judge (ALJ) to dispute the exclusion. For the
reasons stated below, I conclude that the IG has a basis for excluding Petitioner from
program participation and that the five-year exclusion is mandated by law.

I. Background

By letter dated April 30, 2015, the IG notified Petitioner that he was being excluded from
Medicare, Medicaid, and all other federal health care programs for a period of five years,
pursuant to 42 U.S.C. § 1320a-7(a)(4). The IG advised Petitioner that the exclusion was
based on his felony conviction in the Superior Court of California, County of San Diego,
of “a criminal offense related to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance as defined under Federal or State law.” IG Exhibit
(Ex.) 1.
Petitioner timely filed a request for hearing (RFH) and this case was assigned to me for
earing and decision. On July 15, 2015, I convened a prehearing conference by
telephone, the substance of which is summarized in my Order and Schedule for Filing
Briefs and Documentary Evidence (Order), dated July 15, 2015. See 42 C.F.R. § 1005.6.

Pursuant to the Order, the IG submitted a brief together with five exhibits (IG Exs. 1-5).
In his brief, the IG moved for summary judgment. Petitioner submitted a response brief
(P. Br.) with seven exhibits (P. Exs. 1-7). Petitioner noted in his brief that IG Ex. 2, the
Change of Plea form, has been expunged from Petitioner’s record and that Count |
referred to in that form was dismissed from Petitioner’s record. The IG submitted a reply
brief.

Neither party objected to any of the proposed exhibits. Therefore, I admit all of the
proposed exhibits into the record.

IL. Issues
The issues in this case are:
1. Whether summary judgment is appropriate;

2. Whether the IG has a basis to exclude Petitioner under 42 U.S.C.
§ 1320a-7(a)(4) for five years. See 42 C.F.R. § 1001.2007(a)(1)-(2).

Il. Jurisdiction

I have jurisdiction to adjudicate this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R.
§§ 1001.2007, 1005.2.

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

The IG is excluding Petitioner based on 42 U.S.C. § 1320a-7(a)(4)), which requires the
IG to exclude “[a]ny individual or entity that has been convicted for an offense which
occurred after August 21, 1996, under Federal or State law, of a criminal offense
consisting of a felony relating to the unlawful manufacture, distribution, prescription,
or dispensing of a controlled substance.”

Therefore, the four essential elements necessary to support the IG’s exclusion are: (1) the
individual to be excluded must have been convicted of a criminal offense; (2) the
criminal offense must have been a felony; (3) the felony conviction must have been for

' My findings of fact and conclusions of law are set forth in italics and bold font.
conduct relating to the unlawful manufacture, distribution, prescription, or dispensing of
a controlled substance; and (4) the felonious conduct must have occurred after August 21,
1996. 42 U.S.C. § 1320a-7(a)(4).

A, Summary Judgment is appropriate.

[he IG moved for summary judgment asserting that there is no issue of material fact that
is in dispute. IG Brief at 9. Petitioner opposes summary judgment contending that he
should be allowed to testify in this proceeding concerning his current fully rehabilitated
status and the fact that the legislative purpose and intent behind the minimum five year
exclusion is not served by excluding him because he does not pose a threat of abuse and
fraud to federal programs. P. Br. at 9-11.

At the request of a party, an ALJ may decide an exclusion case by summary judgment
“where there is no disputed issue of material fact.” 42 C.F.R. § 1005.4(b)(12). “Matters
presented to the ALJ for summary judgment will follow Rule 56 of the Federal Rules of
Civil Procedure and federal case law . . . .”. Civil Remedies Division Procedures § 19(a).
As stated by the United States Supreme Court:

Rule 56(c) of the Federal Rules of Civil Procedure provides
that summary judgment ‘shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.’
By its very terms, this standard provides that the mere
existence of some alleged factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment; the requirement is that there be no
genuine issue of material fact.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original).

There are no genuine issues of material fact in dispute in this case. This case presents a
narrow issue: whether Petitioner was convicted of a felony that requires mandatory
exclusion for not less than five years under 42 U.S.C. § 1320a-7(a)(4). See 42 C.F.R.

§ 1001.2007(a)(1)-(2). As discussed below, the challenges that Petitioner has raised
concerning the exclusion all must be resolved against him as a matter of law.
Accordingly, summary judgment is appropriate.

The testimony that Petitioner would give concerning his rehabilitated status is irrelevant
to my decision as Petitioner’s testimony does not relate to any of the elements for an

exclusion under 42 U.S.C. § 1320a-7(a)(4). For purposes of summary judgment I accept
as true that Petitioner is fully rehabilitated and does not pose a threat of fraud or abuse to

federal programs and conclude that no purpose will be served by allowing Petitioner to
testify on his own behalf. I have also considered all of the evidence that Petitioner
submitted, as well as Petitioner’s letter on his own behalf, P. Ex. 1, in which he states that
e participated in an intensive program of rehabilitation (including both in and out-patient
therapy), successfully completed a court ordered deferred entry of judgment program,
and is participating in the Florida Professional Resource Network where he gets random
drug testing. Although Petitioner appears to have taken great steps to rehabilitate

imself, those facts are simply not material to the outcome of this case.

B. Petitioner pled guilty to the offense of forgery of a prescription for a
narcotic drug and received deferred entry of judgment.

Petitioner is a physician. Petitioner admits that he had a self-medicating addiction. RFH
at 1. On May 3, 2012, the state of California filed a criminal complaint charging
Petitioner with five felony counts of “Forgery of a Prescription for a Narcotic Drug” and
five felony counts of “Burglary.” IG Ex. 2. Count | alleged that Petitioner “did
unlawfully forge and alter a prescription for a narcotic drug.” IG Ex. 2 at2. On
September 20, 2012, the state court accepted Petitioner’s guilty plea to Count 1 for
forgery of a prescription for a narcotic drug in violation of California Health and Safety
Code section 11368. IG Exs. 3, 4. The court dismissed the remaining nine counts in the
complaint. IG Ex. 3 at 1.

On September 21, 2012, Petitioner entered into a deferred entry of judgment program.
IG Ex. 4. On March 14, 2014, Petitioner successfully completed the deferred entry of
judgment drug diversion program and Count 1 was dismissed. IG Ex. 5.

C. Petitioner was convicted of a criminal offense for the purposes of 42 U.S.C.
§ 1320a-7(a)(4).

In his request for hearing, Petitioner appears to argue that although he pled guilty to
Count | of the criminal complaint filed against him, he entered into a deferred entry of
judgment program, which ultimately resulted in Count 1 being dismissed; therefore, he
was not convicted. RFH at 3.

For the purposes of a violation under 42 U.S.C. § 1320a-7(a)(4), the term “convicted”
includes “when a plea of guilty or nolo contendere by the individual . . . has been
accepted by a Federal, State, or local court” and “when the individual . . . has entered into
participation in a first offender, deferred adjudication, or other arrangement or program
where judgment of conviction has been withheld.” 42 U.S.C. § 1320a-7(i); see also

42 C.F.R. § 1001.2. Based on the undisputed facts in this case, I conclude that Petitioner
was convicted of a criminal offense for the purposes of exclusion because Petitioner pled
guilty and a court accepted that plea, and Petitioner participated in a deferred adjudication
program or other similar program.

On September 20, 2012, Petitioner both pled guilty to Count | for forgery of a
prescription for a narcotic drug in violation of California Health and Safety Code section
11368, and the court accepted that guilty plea. IG Ex. 3 at 1-3; IG Ex. 4.

Further, Petitioner was also involved in a deferred entry of judgment program. IG Exs. 4,
5. California statute establishes the following related to deferred entry of judgment:

If the defendant consents and waives his or her right to a
speedy trial or a speedy preliminary hearing, the court may
refer the case to the probation department or the court may
summarily grant deferred entry of judgment if the defendant
pleads guilty to the charge or charges and waives time for the
pronouncement of judgment.

Cal. Penal Code § 1000.1(b).

If the court finds that the defendant is not performing
satisfactorily in the assigned program, or that the defendant is
not benefiting from education, treatment, or rehabilitation, or
the court finds that the defendant has been convicted of a
crime as indicated above, or that the defendant has engaged in
criminal conduct rendering him or her unsuitable for deferred
entry of judgment, the court shall render a finding of guilt to
the charge or charges pled, enter judgment, and schedule a
sentencing hearing as otherwise provided in this code.

Cal. Penal Code § 1000.3.

Any record filed with the Department of Justice shall indicate
the disposition in those cases deferred pursuant to this
chapter. Upon successful completion of a deferred entry of
judgment program, the arrest upon which the judgment was
deferred shall be deemed to have never occurred.

Cal. Penal Code § 1001.4(a).

l agree with previous ALJ decisions that California’s deferred adjudication program is a
conviction as that term is defined in 42 U.S.C. § 1320a-7(i). See Gerald David Austin,
DAB CR1207 at 9 (2004); Carl Jeffrey Boyette, DAB CR1165 (2004). Further, the fact

that Petitioner’s criminal record in California no longer reflects his arrest or guilty plea
following completion of the deferred adjudication program does not affect my
determination as to whether Petitioner was convicted of a criminal offense for exclusion
purposes. Rudman v. Leavitt, 578 F. Supp.2d 812, 815 (D. Md. 2008); Gupton v. Leavitt,
575 F. Supp.2d 874, 880-881 (E.D. Tenn. 2008).

Consequently, the record establishes that Petitioner was convicted of a criminal offense
for the purposes of 42 U.S.C. § 1320a-7(a)(4).

D. Petitioner was convicted of a felony.

Petitioner pled guilty to the felony offense of “Forgery of a Prescription for a Narcotic
Drug.” IG Exs. 3 and 4. The maximum punishment for this offense is one year in state
prison. Cal. Health and Safety Code § 11368. The criminal complaint indicates that
Count 1 is a felony offense. IG Ex. 2 at 1. Petitioner does not dispute that his conviction
was a felony offense. Therefore, I conclude that Petitioner was convicted of a felony
offense.

E. Petitioner’s criminal offense is related to the unlawful distribution,
prescription, or dispensing of a controlled substance.

Petitioner was charged with “Forgery of a Prescription for a Narcotic Drug.” Petitioner
pled guilty to this charge. IG Ex. 3 at 3. The criminal complaint plainly states that
Petitioner “did unlawfully forge and alter a prescription for a narcotic drug.” IG Ex. 2 at
2. Based on the conduct that Petitioner admitted and the statute Petitioner pled guilty to
violating (California Health and Safety Code Section 11368), I conclude that Petitioner
was convicted of a felony that is related to the unlawful distribution, prescription, or
dispensing of a controlled substance under 42 U.S.C. § 1320a-7(a)(4).

F. The underlying conduct of Petitioner’s felony conviction occurred after
August 21, 1996.

To be excluded pursuant to 42 U.S.C. § 1320a-7(a)(4), Petitioner’s felony offense “must
have occurred after August 21, 1996.” The record shows that the conduct on which
Petitioner’s conviction was based occurred on December 8, 2011. IG Ex. 2 at 2.
Petitioner does not dispute this fact. I conclude that Petitioner’s conviction meets the
four elements of a mandatory exclusion under 42 U.S.C. § 1320a-7(a)(4), and, therefore,
the IG was authorized to impose a mandatory exclusion.

G. Petitioner’s arguments that the IG has failed to prove that Petitioner must be
excluded are unavailing.

Petitioner’s argues that he should not be excluded because his offense did not relate to the
delivery of an item or service under Medicare or Medicaid and did not relate to neglect or
abuse of a patient in connection with the delivery of a health care item or service. RFH at
3; P. Br. at 6. However, Petitioner conflates his exclusion under 42 U.S.C. § 1320a-
7(a)(4) with exclusions under 42 U.S.C. § 1320a-7(a)(1) and 42 U.S.C. § 1320a-7(a)(2).
As stated above, exclusions under 42 U.S.C. § 1320a-7(a)(4) require four elements, none
of which involve the delivery or items or services or abuse of patients. In contrast,
exclusions under 42 U.S.C. § 1320a-7(a)(1) involve convictions that relate to the delivery
of an item or service under federal health care programs while exclusions under

42 U.S.C. § 1320a-7(a)(2) involve convictions that relate to patient neglect or abuse in
connection with the delivery of a health care item or services. Here, Petitioner was
convicted of the felony offense of “Forgery of a Prescription for a Narcotic Drug,” which
occurred in December 2011. As discussed above, this conviction fits squarely under

42 U.S.C. § 1320a-7(a)(4).

H. Petitioner must be excluded for the statutory minimum of five years under
42 U.S.C. § 1320a-7(c)(3)(B).

Because I have concluded that a basis exists to exclude Petitioner pursuant to 42 U.S.C.
§ 1320a-7(a)(4), Petitioner must be excluded for a minimum period of five years.

42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2). Petitioner
concedes that the five-year length of the exclusion is required by law. P. Br. at 9.

V. Conclusion

For the foregoing reasons, I affirm the IG’s determination to exclude Petitioner from
participating in Medicare, Medicaid, and all other federal health care programs for the
statutory five-year minimum period pursuant to 42 U.S.C. §§ 1320a-7(a)(4), (c)(3)(B).

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Viora Home Health, Inc.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-2500
Decision No. CR4369
Date: October 27, 2015
DECISION
I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
revoke the participation in the Medicare program of Petitioner, Viora Home Health, Inc.

Revocation is authorized because Petitioner was not operational within the meaning of
42 CFR. § 424.535(a)(5).

I. Background

Petitioner, a home health agency, requested a hearing in order to challenge the
determination of a Medicare contractor — sustained by CMS on initial determination and
reconsideration — to revoke Petitioner’s participation in Medicare. CMS filed a motion
for summary judgment or, in the alternative for a decision based on the written record of
the case. CMS filed seven proposed exhibits, identified as CMS Ex. 1 —- CMS Ex. 7, with
its motion. Petitioner did not file a brief in opposition to CMS’s motion but filed five
proposed exhibits, identified as P. Ex. 1 — P. Ex. 5.! I receive both parties’ exhibits into
the record.

' T gave Petitioner several opportunities to file a brief in opposition to CMS’s motion.
My initial pre-hearing order directed Petitioner to file a brief on the merits. When
Petitioner failed to do so | afforded it another opportunity. Petitioner still did not file a
II. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether CMS is authorized to revoke Petitioner’s Medicare participation on
the ground that Petitioner was not operational within the meaning of 42 C.F.R.
§ 424.535(a)(5).

B. Findings of Fact and Conclusions of Law

The facts of this case are not complex. Petitioner, in its 2012 application for revalidation
as a Medicare participant, listed its business address as 12808 W. Airport Boulevard,
Suite 285, Sugarland, Texas 77478 (Airport Boulevard location). CMS Ex. 6. On July 8,
2014, an inspector employed by a Medicare contractor went to that location in order to
conduct an onsite inspection. When he arrived there, he discovered that Petitioner was
not conducting business at that location. CMS Ex. 4. The contractor and CMS
predicated their revocation determination on the fact that Petitioner was no longer doing
business at the location that it had listed as its business location in its revalidation
application. CMS Ex. 3.

In fact, Petitioner had changed its business location at some point in time after it had filed
its revalidation application. As of July 2014 it was no longer doing business at the
Airport Boulevard location but had moved its business address to 3711 Pennington Court,
Missouri City, Texas 77459 (Pennington Court location). P. Exs. 1, 2.

CMS asserts that its contractor has no record of Petitioner ever notifying it of its change
of location. Petitioner did not submit an official form notifying the contractor of its
change of address (855 Form) nor did it notify the contractor online via CMS’s Provider
Enrollment Chain and Ownership System (PECOS).* In responding to the

brief. On October 23, 2015, I issued an order foreclosing Petitioner from filing a brief.
On October 26, 2015, Petitioner’s representative called my office and insisted that he had
attempted to file a brief but that the Departmental Appeals Board’s electronic filing
system would not accept it. I allowed Petitioner some additional time in order to file its
brief. Finally, Petitioner filed a brief later on October 26. I am accepting that brief and I
address Petitioner’s arguments in this decision.

> Petitioner now contends that it filed an updated 855 Form advising the contractor and
CMS of its change of business location. Petitioner’s brief at 1. Petitioner does not state
when it allegedly filed this form — whether it did so before the unsuccessful July 8, 2014
inspection or subsequently — nor has it offered a copy of this allegedly filed form as proof
of its action. I do not find that Petitioner filed an 855 Form properly notifying the
determination to revoke its participation Petitioner did not deny that it failed to use either
of these official mechanisms for notifying the contractor of its change of business
location but it asserted that on August 6, 2013, it sent a letter to the contractor
announcing its intent to move from the Airport Boulevard location to the Pennington
Court location. P. Ex. 1.

CMS contends that its contractor has no record of ever having received this letter. It
contends additionally that Petitioner cannot prove that it actually sent the letter or that it
was delivered because it was not sent either as certified or as registered mail. I find it
unnecessary to decide whether the letter actually was delivered to the contractor. The
letter was an ineffective form of notice and consequently, Petitioner did not comply with
its duty as a Medicare participant to notify the contractor of its change of business
location.

A provider or a supplier participating in Medicare is required to comply with that
program’s participation criteria. Its duties include complying with the program’s
prerequisites for providing notice and information regarding its business location and
change of address. Medicare publishes a Program Integrity Manual (Manual) that
instructs providers and suppliers as to what information they must provide but just as
importantly, how they are to provide that information. The Manual specifically instructs
providers and suppliers that they must adhere to all relevant instructions. Manual

§ 15.1.3. The Manual allows for two ways in which a provider or supplier may provide
the Medicare program with notice. It may do so either by filing an 855 Form or via
PECOS. Manual § 15.1.2.

The two forms of notice provided for by the Manual are exclusive. The Manual allows
for no alternate form of notice. Petitioner was required, when it changed its business
location, either to provide the Medicare program with an 855 Form announcing the
change, or to notify the program online via PECOS. Sending a letter to the contractor by
regular mail is not an acceptable alternative.

This is not an instance of exalting form over substance. I take notice that there are many
thousands, if not more, providers and suppliers participating in Medicare. The
contractors who administer the program on a day-to-day basis are confronted with
immense amounts of information and are responsible for processing and organizing that
information. It is essential that they receive relevant information in a routinized way.
Receiving it piecemeal or by irregular means poses a real threat to disrupt the orderly
administration of the program. Consequently, it is entirely rational that the Medicare
program and CMS, its administrator, insist that information be provided to the program
only in a standardized format. These requirements apply to all providers and suppliers.

contractor and CMS of its change of business location absent any proof that Petitioner
filed such a form timely.
Petitioner, as a program participant, was required to be knowledgeable and to adhere to
the requirements.

The regulatory requirement that a participating provider or supplier be operational
subsumes the duty to be accessible for on-site compliance inspections. 42 C.F.R.

§ 424.535(a)(5). A provider or supplier can fulfill its duty to be accessible only by
keeping the contractor informed as to its current business location. It is impossible to
inspect a provider or supplier when that participant’s current business location is
unknown. Here, Petitioner failed to provide the contractor with acceptable notice of its
current business location and, consequently, the contractor’s inspector — relying on the
information that Petitioner had supplied on an 855 Form as to its business location — went
to a location that no longer housed Petitioner’s business. Petitioner’s new business
location was inaccessible to the contractor because the contractor had never been
informed of the new address through acceptable channels. Petitioner’s failure to keep the
contractor informed of its business location meant that it was not operational within the
meaning of the regulation. Revocation is justified for that reason.?

/s/
Steven T. Kessel
Administrative Law Judge

> An additional basis for revocation would be that Petitioner failed properly to notify the
Medicare program of its change of business location. 42 C.F.R. §§ 424.516(e)(2);
424.535(a)(1). I do not sustain CMS’s determination on this ground inasmuch as this
basis was not cited by CMS either in its initial determination or in its reconsidered
determination.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Oduah D. Osaro, M.D.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.

Docket No. C-14-805

Decision No. CR4357

Date: October 23, 2015

DECISION

Wisconsin Physicians Service Insurance Corporation (WPS), an administrative contractor
acting on behalf of the Centers for Medicare & Medicaid Services (CMS), revoked the
Medicare enrollment and billing privileges of Petitioner, Oduah D. Osaro, M.D., based on
Petitioner’s termination from the lowa Medicaid program by the Iowa Department of
Human Services pursuant to 42 C.F.R. § 424.535(a)(12). Petitioner appealed a
reconsidered determination, and I affirm CMS’s revocation of Petitioner’s Medicare
enrollment and billing privileges. There is no dispute that Petitioner was terminated from
Iowa’s Medicaid program, and he did not appeal that termination action.

I. Background and Procedural History

Petitioner is a physician licensed to practice medicine in Iowa. P. Ex. 1 §.1. Ina notice
letter dated February 28, 2013, the Iowa Medicaid program terminated Petitioner’s
participation, effective March 30, 2013, because Petitioner allegedly required a Medicaid
recipient to pay him cash in exchange for an office visit in which Petitioner prescribed
controlled substances. In addition, Petitioner allegedly charged that patient an amount in
excess of the amount Medicaid would reimburse for the office visit. CMS Ex. 1. The
letter explained that the termination was grounded upon several sections of the lowa
Administrative Code, each of which the state explained was an independently sufficient
ground for termination. The letter notified Petitioner of his appeal rights and how to file
an appeal. CMS Ex. 1.

On October 2, 2013, WPS notified Petitioner that it was revoking his Medicare
enrollment and billing privileges, effective November 2, 2013 because of his termination
from the Iowa Medicaid program and because he had exhausted all appeal rights. CMS
Ex. 2. WPS imposed a reenrollment bar of one year. CMS Ex. 2.

Petitioner requested a reconsidered determination and filed a corrective action plan.
CMS denied Petitioner’s corrective action plan but did not issue a reconsidered
determination. CMS Ex. 4 at 1. On November 19, 2013, Petitioner re-submitted his
request for reconsideration. CMS Ex. 3, 5. On January 22, 2014, a hearing officer
upheld Petitioner’s revocation in a reconsidered determination and continued to cite his
Medicaid termination as the Medicare revocation basis. CMS Ex. 6.

Petitioner timely requested a hearing on February 20, 2014 to appeal the reconsidered
determination. The case was assigned to me for hearing and decision on March 24,
2014, and I issued an Acknowledgment and Pre-hearing Order (Order) on that date. In
the Order, I set dates for the parties to exchange evidence and arguments. I informed the
parties that I would only schedule a hearing if a party filed written direct testimony for a
witness, and the opposing party requested to cross-examine the witness. Order § 10. I
granted five joint motions for continuances as Petitioner tried to reenroll in Medicaid
with no success.

On July 21, 2015, CMS filed a motion for summary judgment and pre-hearing brief
(CMS Br.), along with 6 exhibits (CMS Exs. 1-6). CMS did not list any witnesses.
Petitioner did not object to CMS’s exhibits. I admit CMS Exs. 1-6. On August 31, 2015,
Petitioner filed a pre-hearing brief and opposed CMS’s motion for summary judgment
(P. Br.), along with two exhibits (P. Exs. 1-2). Petitioner listed himself as a witness and
provided a sworn written statement. P. Ex. 1. CMS neither requested to cross-examine
Petitioner nor objected to Petitioner’s exhibits. I admit P. Exs. 1-2.

I do not find it necessary to convene an in-person hearing here because neither Petitioner
nor CMS sought to cross-examine any witness. Order § 11; See Marcus Singel, D.P.M.,
DAB No. 2609, at 5-6 (2014). Accordingly, I issue this decision based on the full merits
of the written record and find it unnecessary to rule on summary judgment. Order §§ 10,
11.
IIL. Analysis

A. Issue

Whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing
privileges because the lowa Medicaid program terminated his Medicaid enrollment and
Petitioner exhausted his termination appeals.

B. Findings of Fact and Conclusions of Law

I. Effective March 30, 2013, the Iowa Medicaid program terminated
Petitioner from participation in the Iowa Medicaid program.

On February 28, 2013, it is undisputed that the lowa Medicaid program issued a letter
informing Petitioner that he was being terminated from the Iowa Medicaid program
because an investigation showed that Petitioner required a Medicaid patient to pay
Petitioner cash in exchange for an office visit in which Petitioner subscribed the patient a
controlled substance. The amount Petitioner charged for the office visit was in excess of
the amount Medicaid would reimburse for a visit. The termination was grounded upon
several sections of the lowa Administrative Code and became effective on March 30,
2013, 30 days after the date of notification. The termination letter notified Petitioner of
his right to file an appeal. CMS Ex. 1.

2. CMS had a legal basis for revoking Petitioner’s Medicare billing
privileges under 42 C.F.R. § 424.535(a)(12) because the Iowa
Medicaid program terminated Petitioner from the Medicaid program,
and Petitioner has no pending appeal of the termination proceeding.

Petitioner is a physician and, therefore, a supplier for purposes of the Medicare program.
See 42 C.F.R. §§ 400.202, 410.20(b)(1). CMS may revoke the Medicare billing
privileges of a supplier for any of the reasons stated in 42 C.F.R. § 424.535. Based on
the Iowa Medicaid termination, CMS revoked Petitioner’s Medicare billing privileges
under 42 C.F.R. § 424.535(a)(12). That regulation directs that CMS may revoke billing
privileges if:

(i) Medicaid billing privileges are terminated or revoked by a State Medicaid
Agency.

(ii) Medicare may not terminate unless and until a provider or supplier has
exhausted all applicable appeal rights.

Petitioner was terminated by the lowa Department of Human Services, a state Medicaid
agency. The February 28, 2013 termination letter specifically stated that Petitioner had
the right to an appeal. CMS Ex. | at 2. Petitioner then appealed the Iowa Medicaid
termination on March 27, 2013. P. Ex. 1 § 10. As part of his appeal, he participated in a
telephone hearing on May 8, 2013. P. Ex. 1 22. Petitioner states he received the
Administrative Law Judge’s (ALJ’s) decision, dated May 23, 2013, via regular mail. P.
Ex. 1 §§ 37, 38. Petitioner states that his office was closed May 25, 26, 27, 29, and June
1, 2013, and he believes that he ultimately received the ALJ’s decision on June 3 or 4,
2013. P. Ex. 1 938. He also testifies about receiving a letter, postmarked June 4, 2013
via regular mail, stating that the ALJ’s decision was final. P. Ex. 1 § 39. Petitioner
claims that he was not informed that the ALJ’s decision was final in time to file an appeal
of the ALJ’s decision to uphold his Medicaid termination. P. Ex. 1 441. Petitioner does
not state that he attempted to further appeal his Medicaid termination, and Petitioner did
not propose as an exhibit the ALJ decision nor the other letter declaring the proceedings
final.

CMS’s October 2, 2013 letter revoking Petitioner’s Medicare enrollment and billing
privileges states that Petitioner has exhausted all appeal rights related to the Medicaid
termination. CMS Ex. 2. Petitioner does not dispute that he has exhausted his appeal
rights concerning the Medicaid termination although, as evidenced by his frequent
requests for extended continuances of this Medicare revocation proceeding, he has
unsuccessfully attempted to re-enroll in the lowa Medicaid program.

Petitioner implies that he was not given notice in a timely manner to allow him to appeal
his Medicaid termination at the state agency level. However, I am not aware of any
pending legal challenge regarding that issue, and it is not an issue I can now decide in this
forum. Petitioner also argues his lowa Medicaid termination was a result of a flawed
process and seeks to justify his actions, that were a basis for lowa’s termination, as a
“patient’s right to request that the claim for [Petitioner’s] services not be submitted to a
third party payor due to the sensitive nature of the treatment being provided.” P. Br. at 3.
I also do not have authority to consider challenges to the Medicaid termination decision,
which is now final. A Medicare enrollment revocation under section 424.535(a)(12) is
derivative to the termination action of a state Medicaid agency, and I am aware of no

authority that allows me to relitigate the merits or procedures involved in the underlying
termination decision.

Petitioner also argues that I may review the discretionary act of CMS to revoke
Petitioner’s billing privileges. P. Br. at 2. However, although CMS has discretion to
revoke a supplier’s billing privileges, I am unable to review that exercise of discretion.
See, e.g., Latantia Bussell, M.D., DAB No. 2196, at 13 (2008) (“the right to review of
CMS’s determination by an ALJ serves to determine whether CMS had the authority to
revoke . . . not to substitute the ALJ’s discretion about whether to revoke.”).

Finally, Petitioner claims there is a shortage of primary care physicians in his area and the
termination leaves Medicare beneficiaries with a lack of access to necessary services.
Although this is unfortunate, if true, a shortage of physicians is not a legal basis upon
which I may reverse Petitioner’s Medicare revocation.

III. Conclusion

I affirm CMS’s determinations to revoke Petitioner’s Medicare enrollment and billing
privileges and the associated one-year reenrollment bar pursuant to 42 C.F.R.

§ 424.535(a)(12) because Petitioner was terminated from the lowa Medicaid program and
has exhausted his appeals of that termination action.

/s/
Joseph Grow
Administrative Law Judge