Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Virginia Highlands Health Rehab
(CCN: 52-5653),

Petitioner,

Vv.

Centers for Medicare & Medicaid Services.
Docket No. C-09-506
Decision No. CR2083

Date: March 4, 2010

DECISION

I grant summary disposition in favor of the Centers for Medicare & Medicaid Services
(CMS) sustaining its determination to impose civil money penalties against Petitioner,
Virginia Highlands Health and Rehabilitation Center, totaling $247,550.'

I. Background

Petitioner is a skilled nursing facility located in Germantown, Wisconsin. It participates
in the Medicare program. Its participation in Medicare is governed by sections 1818 and
1866 of the Social Security Act and by implementing regulations at 42 C.F.R. Parts 483
and 488. Its hearing rights in this case are governed by regulations at 42 C.F.R. Part 498.

' The civil money penalties consist of penalties of $10,000 per day for each day of a
period that began on March 2, 2009 and which continued through March 23, 2009, and of
$950 per day for each day of a period that began on March 24, 2009 and which continued
through April 21, 2009. I discuss these penalty amounts and duration in detail below.
CMS determined to impose against Petitioner the civil money penalties that I describe in
this decision’s opening paragraph based on noncompliance findings that were made at a
survey conducted at Petitioner’s facility on March 24, 2009.” The noncompliance
findings included findings that Petitioner manifested immediate jeopardy level
deficiencies.

Petitioner requested a hearing and the case was assigned to me for a hearing and a
decision. I issued a pre-hearing order which directed the parties to file pre-hearing briefs
and to exchange all of their proposed evidence including the written direct testimony of
each proposed witness. CMS exchanged a total of 127 proposed exhibits which it
identified as CMS Ex. 1 —- CMS Ex. 127. Petitioner exchanged a total of 22 proposed
exhibits which it identified as P. Ex. 1 — P. Ex. 22. I receive all of the parties proposed
exhibits, including the written direct testimony of their witnesses, into the record of this
case.
CMS then moved for summary disposition. Petitioner opposed the motion.
IL. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether the undisputed material facts establish that:

1. Petitioner failed to comply substantially with Medicare participation
requirements;

2. CMS’s finding of immediate jeopardy is not clearly erroneous;
and

3. CMS’s remedy determinations, as to penalty amount and duration, are
reasonable.

B. Findings of fact and conclusions of law

I make the following findings of fact and conclusions of law (Findings).

> The penalty amounts in this case also take into consideration previous episodes of
noncompliance by Petitioner with Medicare participation requirements.
I. The undisputed material facts establish that Petitioner failed to comply
substantially with the requirements of 42 C.F.R. § 483.25(j).

Lying at the heart of this case are CMS’s allegations that Petitioner failed to comply
substantially with the requirements of 42 C.F.R. § 483.25(j). This regulation requires a
skilled nursing facility to provide each of its residents “with sufficient fluid intake to
maintain proper hydration and health.”

There is no dispute as to what is meant by sufficient fluid intake. Petitioner’s own
policies define “‘sufficient fluid” as “the amount of fluid needed to prevent dehydration.”
CMS Ex. 76, at 1. Dehydration occurs whenever a resident’s fluids output greatly
exceeds that resident’s intake of fluids. Jd. Dehydration is a serious condition that can
cause a resident to experience grave consequences, including death, if not prevented or
properly treated. CMS Ex. 123, at 2; CMS Ex. 124, at 2.

a. Resident # 26

CMS’s allegations of noncompliance with the hydration regulation focus to a large extent
on the care that Petitioner and its staff provided to a resident who is identified as Resident
#26. It is undisputed that, on February 23, 2009, this resident was transported from
Petitioner’s facility to a local hospital. CMS Ex. 43. On admission the resident was
diagnosed to be suffering from, among other things, renal insufficiency, a C-difficile
infection, and volume depletion. /d. at 6. The resident was observed to be suffering from
“skin tenting”, a manifestation of decreased skin turgor, and a sign of dehydration. Id. at
12. In light of these findings the hospital emergency room physician ordered that
Resident #26 be administered intravenous fluids and more than 1.3 gallons of fluids were
given to the resident. /d. at 11-15, 27. Treatment was unavailing and the resident died
within 12 hours of his admission. CMS Ex. 44.

The undisputed facts establish also that Resident # 26 was admitted to Petitioner’s facility
on January 13, 2009, a little more than a month prior to the date of his death. Petitioner’s
staff assessed the resident to be at risk for dehydration. CMS Ex. 30; CMS Ex. 34, at 7;
CMS Ex. 35, at 2. The assessment of a dehydration risk was based in part on the fact that
the resident was taking Lasix, a diuretic medication. CMS Ex. 34, at 2; CMS Ex. 35, at
2. Petitioner’s hydration management guidelines note that diuretic medications are a risk
factor for dehydration. CMS Ex. 76, at 4.

At about the time of the resident’s admission Petitioner’s dietician determined that the
resident needed to consume 2000 cc of fluid daily in order to avoid becoming dehydrated.
CMS Ex. 36. At some point in January 2009, Petitioner’s staff developed a care plan for
the resident which required the staff to: check the resident’s skin turgor each shift, place
fluids at the resident’s bedside within the resident’s reach; provide eight ounces of fluids
at each medication pass; provide eight ounces of extra fluids for the resident at each
meal; notify the resident’s physician of a change in the resident’s status; and monitor the
resident’s laboratory values. CMS Ex. 35, at 2. However, the care plan did not direct the
staff to monitor the resident’s intake and output of fluids.

It is also undisputed that, at the time of his admission, Resident # 26 was receiving 20
mg. of the diuretic Lasix once each day. On January 24, 2009, the resident’s physician
ordered that the resident’s Lasix dosage be quadrupled to 40 mg., twice daily. CMS Ex.
38, at 12,13. This increase in the resident’s diuretic medication did not prompt
Petitioner’s staff to reassess his fluid intake needs nor did they develop a new care plan
for the resident that took into account the increased dosage of Lasix.

Furthermore, there is no dispute that, on February 11, 2009, Resident # 26 developed
diarrhea. P. Ex. 17, at 2. Diarrhea may be a cause of dehydration. That is recognized in
Petitioner’s own internal guidelines. CMS Ex. 76, at 3. Fluid intake by a resident that
might, under normal circumstances, be considered adequate and may be insufficient to
prevent dehydration if that resident is experiencing diarrhea. Id.

Petitioner’s staff made a notation on the resident’s care plan that his diarrhea was an
additional risk factor for dehydration. CMS Ex. 35, at 2. The undisputed facts are that
the resident’s diarrhea persisted from the time of its development until his admission to
the hospital on February 23, 2009. CMS Ex. 37, at 4-5; CMS Ex. 39, at 8-10; CMS Ex.
40, at 18-30; CMS Ex. 43. But, the staff did not modify the resident’s care plan to
account for the resident’s diarrhea despite the persistence of this dangerous condition.
No increased monitoring of the resident was planned nor did Petitioner’s dietician
increase the resident’s daily fluid requirements to compensate for his diarrhea.

The undisputed facts relied on by CMS thus establish the following:

e Resident #26 was known to Petitioner’s staff from the moment of his
admission to be at risk for dehydration.

e The staff implemented a care plan to address the resident’s dehydration risk.
However, this care plan, which included an estimated necessary fluid intake by the
resident of 2000 cc per day, was based only on the resident’s condition at the time
of his admission to the facility.

e The plan put into effect by Petitioner’s staff failed to put into place any
objective mechanism to monitor the intake or output of fluids by the resident.
Thus, the staff could not determine objectively whether the resident’s output of
fluids exceeded his intake.
e During the resident’s stay at the facility the risk that the resident might become
dehydrated was greatly exacerbated by virtue of the increase in his prescribed
diuretic medication and his development of persistent diarrhea.

e Despite these additional or enhanced dehydration risk factors the staff failed to
revise the resident’s care plan or to implement additional interventions to account
for them. The staff knew that the resident’s use of a diuretic at the time of his
admission to the facility posed a risk for dehydration but they made no
reassessment of that risk and planned no new interventions even though the
resident’s dosage of the diuretic was subsequently increased fourfold. The staff
knew, and recorded, that the resident had diarrhea but conducted no reassessment
of the resident based on that development and implemented no new measures to
protect him.

These undisputed facts are more than enough to establish noncompliance with the
requirements of 42 C.F.R. § 483.25(j) and a failure by Petitioner and its staff to protect
Resident # 26 against becoming dehydrated. Petitioner’s staff appears to have been
aware of the heightened dehydration risks encountered by Resident # 26. But, the facts
offered by CMS show that, notwithstanding this knowledge, the staff did nothing to
enhance the protection that they were offering the resident in order to offset the increased
risks to that individual. They did not assess the resident to determine whether he needed
to increase his fluid consumption. They did not attempt to increase the amount of fluid
that he consumed. They did not increase their surveillance of the resident. And, they did
not attempt to determine objectively whether the resident was becoming dehydrated as a
result of putting out more fluid than he was consuming. This last failing is especially
significant because, without measuring the resident’s fluid output, Petitioner’s staff had
no way of knowing whether the amount of fluids that they were giving to him each day
was sufficient to protect against dehydration.

And, clearly, the resident was severely dehydrated upon his admission to the hospital on
February 23, 2009. One might argue about the cause of the resident’s dehydration but
there is no dispute that this resident was suffering from massive fluid depletion. That is
established by the undisputed fact that the hospital physician found it necessary to
administer more than 1.3 gallons of fluids to the resident upon his admission. It is also
made evident by the resident’s appearance on admission, including observation that he
manifested tenting of his skin, an obvious sign of advanced dehydration.

The facts offered by CMS would establish noncompliance with the hydration regulation
in providing care for Resident # 26 even if the resident had not become dehydrated.
Petitioner’s staff’s failure to assess and respond to risk factors for dehydration that the
resident encountered after his admission and after the staff had developed its initial care
plan is sufficient in and of itself to establish noncompliance.

In order to provide proper hydration to a resident a facility must assess the resident’s
condition and must adjust whatever protective measures it adopts to account for changes
that may occur. Here, there were obvious developments in the condition of Resident # 26
that put Petitioner and its staff on notice that the measures that they adopted when the
resident was admitted to the facility to keep the resident hydrated might well be obsolete.
These new developments — clearly enhanced risk factors in the case of this resident —
included the fourfold increase in the dosage of the resident’s diuretic medicine and his
development of persistent diarrhea. Petitioner’s staff failed to take any meaningful
measures to react to these changes in the resident’s condition.

Petitioner makes several arguments and assertions concerning the care it provided to
Resident # 26. All of them, however, are based on a central premise. That is Petitioner’s
contention that a facility cannot be found to have contravened 42 C.F.R. § 483.25(j)
absent a showing that staff failures to hydrate adequately residents caused those residents
to become dehydrated. In essence, Petitioner contends that noncompliance with the
hydration regulation occurs only when residents are, by objective measures, not
adequately hydrated.

Taken to its logical conclusion Petitioner’s argument means that even a facility that
provides no measures to assure that its at risk residents are adequately hydrated would be
in compliance with the hydration regulation if, by chance, all of its residents were
adequately hydrated. Petitioner’s argument also means, essentially, that the measures
that a facility takes or fails to take on behalf of its residents’ hydration needs are
irrelevant to determining whether that facility is in compliance with the hydration
regulation. All that matters, under Petitioner’s theory, is whether residents are adequately
hydrated however they obtain fluids.

The governing regulation provides no support for this argument. The regulation, on its
face, requires that a facility provide adequate hydration to its residents. But, assuring
adequate hydration is not a matter of chance or random luck. In order for a facility to
comply with the regulation it must assess its residents’ needs, it must plan to care for
those needs, and it must implement the care plans that it develops. Furthermore, a facility
is obligated to continually reassess its residents’ needs and to adjust their care plans, if
necessary, as the residents’ conditions change.

The hydration regulation is a subsection of 42 C.F.R. § 483.25. The general preamble to
the regulation’s subsections states:

Each resident must receive and the facility must provide the necessary care
and services to attain or maintain the highest practicable physical, mental,
and psychosocial well-being, in accordance with the comprehensive
assessment and plan of care.
42 C.F.R. § 483.25 (emphasis added). The requirement of assessment and care planning
is therefore incorporated into every one of the regulation’s subsections including 42
C.F.R. § 483.25(j). A facility that fails adequately to assess its residents’ hydration needs
or to plan their care pursuant to the assessment, is noncompliant even as is the facility
that fails to implement a care plan.

Petitioner contends, relying on an affidavit by Dirk Steinart, M.D., Petitioner’s medical
irector, that the resident’s decline, his dehydration, and ultimately, his death, was caused
by a medical condition — sepsis — and not by any noncompliance by Petitioner or its staff.
Petitioner’s response to CMS’s motion for summary judgment (Response) at 7; P. Ex. 17,
at 3-6. For the purposes of this decision I accept this assertion as true. However, it is
irrelevant. Petitioner is not excused from compliance with the hydration regulation by
the fact that the resident may have experienced or even died from sepsis. As I discuss
above, Resident # 26 manifested risk factors resulting from his consumption of diuretic
medication and his chronic diarrhea which Petitioner was required to address but which it
id not address. The fact that the resident may also have developed sepsis provides no
justification for Petitioner’s failure to address these factors.

Dr. Steinart also asserts that whatever dehydration the resident experienced was not
caused by acts or omissions by Petitioner’s staff. P. Ex. 17, at 4-5. According to Dr.
Steinart, when seen at the hospital the resident’s sodium and potassium levels were
within normal limits, his urine output was adequate, his creatinine levels were not such as
to indicate dehydration resulting from an extended period of dehydration, and his overall
laboratory results were not consistent with someone suffering from a severe or extended
fluid intake deficit. I accept all of these assertions of fact as true. However, they are
irrelevant as is Dr. Steinart’s conclusion that the cause of the resident’s death was sepsis
and not a generalized failure by Petitioner’s staff to hydrate Resident # 26 adequately.

A finding of noncompliance in this case does not depend on a finding that Petitioner’s
omissions caused Resident # 26 to experience an adverse outcome. The deficiency rests
on the failure by Petitioner and its staff to address the increased risks manifested by the
resident whether or not the resident experienced an adverse outcome. That Petitioner’s
noncompliance may not have been the proximate cause of the resident’s sepsis-related
dehydration may have been fortuitous but it is no defense. As I discuss above,
Petitioner’s staff should have known that quadrupling the quantity of diuretic medicine
given to Resident # 26 risked dehydrating him. And, they certainly knew that the
resident was at a greatly enhanced risk of dehydration as a consequence of his persistent
diarrhea over a period of about 10 days. But, notwithstanding what the staff knew or
should have known, they failed to assess the dimensions of the risks encountered by the
resident and they failed to make changes in the resident’s care in order to address those
risks. They did not increase the resident’s fluid consumption nor did they monitor the
resident in a way that would have detected the signs of dehydration, including
dehydration from a cause such as sepsis.
Dr. Steinart also asserts that he evaluated Resident # 26 when he saw the resident on
January 15, January 24, January 29, February 5, and February 12, 2009 and that the
resident manifested no signs of dehydration on these occasions. P. Ex. 17, at 3. Again, I
accept these assertions as true. But, assuming them to be true, they beg the question of
Petitioner’s duty to address the risks of dehydration that Resident # 26 faced.
Furthermore, Dr. Steinart does not contend that he evaluated the resident after February
12, 2009 and the resident manifested persistent diarrhea beginning on February 11 and
continuing through his admission to the hospital on February 23, 2009. Thus, the
resident manifested diarrhea — and attendant risk factors for dehydration — during a period
when he was not personally assessed by Dr. Steinart.

Petitioner also offers the affidavits of Christy Bozich and Laurel Sormrude, L.P.N., to
support its assertion that there are material facts in dispute concerning the hydration care
given to Resident #26. Ms. Bozich, who is a social worker and not a nurse, avers that
the staff was aware of the resident’s diarrhea and noted it on his care plan as a significant
change in his condition. P. Ex. 21, at 7. However, according to Ms. Bozich, the facility
Action Team (evidently, the staff group whose responsibilities included assuring that
residents received appropriate hydration):

Never discussed . . . [Resident # 26’s] fluid intake because there were never
any concerns regarding . . . [the resident’s] fluid intake.

P. Ex. 21, at 8. That assertion, assuming its truth, raises no disputed issue of fact in this
case. The question here is not whether staff had “concerns” about the resident’s
hydration but whether they should have had concerns given the resident’s increased
dosage of diuretic medication and his persistent diarrhea. I have made it plain that those
two factors were danger signs that the staff should have identified and addressed with an
updated assessment and, if necessary, new interventions. Moreover, the amount of fluid
that the resident consumed is not, by itself, a measure of whether the facility assured that
he was hydrated adequately. Petitioner’s own guidelines assert that dehydration is a
condition in which output of fluids greatly exceeds input. CMS Ex. 76, at 1. Intake is
only one side of the equation that one must address in protecting a resident against
dehydration. In this case, the resident encountered risk factors that potentially greatly
increased his output of fluids. The staffs deficiency lay in their failure to take those
factors into consideration.

I find Ms. Sormrude’s assertions, as expressed in her affidavit, to be similarly irrelevant
to the issue of whether Petitioner properly managed Resident # 26’s hydration. P. Ex. 22.
Ms. Sormrude avers that she had no concern about the resident’s level of fluid intake.

Id. at 4. She asserts the conclusion that the resident was provided sufficient fluid by
Petitioner’s staff to maintain proper hydration and to maintain his health. /d. And, she
discusses in some detail the efforts by staff to offer the resident fluids at mealtimes and
during medication passes. What is missing from her affidavit is any discussion of how
Petitioner’s staff tracked the resident’s output of fluids. Nor does Ms. Sormrude suggest
that the staff considered whether the fluids that they originally determined to give to
Resident # 26 remained adequate given his increased consumption of diuretic medication
and his persistent diarrhea.

As I discuss above, giving fluids to a resident is only part of the equation that must be
addressed in order to assure that a resident is hydrated adequately. Adequate hydration
cannot be assured unless there is a reasonable balance between what a resident takes in
and what he excretes. Nothing in Ms. Sormrude’s affidavit explains how Petitioner’s
staff — in light of the increased dehydration risk factors faced by Resident # 26 —
addressed how Petitioner would account for these factors. Nor does Ms. Sormrude
explain how Petitioner assured that a balance was maintained between the fluids that
Petitioner gave the resident and his output.

The only reasonable inference that I can draw from the facts offered by CMS and
Petitioner is that Petitioner did not address the increased risk factors faced by Resident #
26. To reiterate, there is no evidence whatsoever showing that Petitioner’s staff assessed
the resident for the risk factors posed by his increased dose of diuretic medication or by
his persistent diarrhea. The failure by Petitioner’s staff to address, systematically or
objectively, those increased risk factors was a deficiency because it meant that Petitioner
was in no position to assure that Resident # 26 was hydrated adequately.

Petitioner argues that a failure to monitor a resident’s intake and output of fluids — and, in
particular, its failure to monitor Resident # 26’s intake and output — is not in and of itself
a deficiency. I agree with Petitioner to the extent that I conclude that there is no language
in 42 C.F.R. § 483.25(j) that explicitly directs a skilled nursing facility to monitor each
resident’s fluid intake and output. However, a facility cannot possibly assure that an at-
risk resident, such as Resident # 26, is protected adequately against dehydration unless it
has some way of determining that the resident’s consumption of fluids equals or exceeds
that which he is excreting.

Petitioner had no system in place that would assure that Resident #26’s consumption of
fluids equaled or exceeded that which he excreted. Petitioner argues repeatedly that it
gave the resident adequate quantities of fluid. But, this conclusion is not supported by
the undisputed material facts. The undisputed facts establish that Petitioner and its staff
had no way of knowing whether they were giving the resident adequate quantities of
fluid. It is an undisputed fact that the staff made an assessment of the quantity of fluid
that the resident needed to consume based on his condition as of the time of his admission
to the facility and never revisited that issue of how much the resident needed to consume
despite the fact that the resident encountered greatly increased risks of dehydration during
his stay at Petitioner’s facility. It is also an undisputed fact that Petitioner’s staff never
developed any specific interventions to address the resident’s increased risk of
10

dehydration. And, finally, it is an undisputed fact that Petitioner had absolutely no
objective mechanisms in place to assure that the resident’s output did not greatly exceed
his intake.

b. Other residents

CMS offers facts — which I find to be undisputed — which establish that Petitioner
neglected to address the hydration needs of residents other than Resident #26. The
shortcomings in care with respect to these other residents are very similar to those
manifested by Petitioner’s care of Resident #26. The undisputed facts show that each of
these residents experienced hydration risk factors during his or her stay at Petitioner’s
facility that were not assessed or addressed systematically by Petitioner’s staff.

Petitioner has not offered evidence to call into dispute any of the facts relied on by CMS.
Instead, Petitioner makes essentially the same argument with respect to these other
residents that it makes concerning its care of Resident # 26. According to Petitioner:

CMS presents no actual instance of insufficient fluid intake or dehydration
for any of these residents. CMS does not offer a single lab report, a single
inical symptom, or identify a single instance of actual dehydration. All
CMS offers is that there is a theoretical risk for these residents to have
experienced dehydration.

fe}

Response at 11 (emphasis in original). Petitioner couples this assertion with facts that are
intended to show that ample fluids were provided to all of the remaining residents whose
care is at issue.

This argument fails here for the same reason that it fails with respect to Resident # 26.
As it argues with respect to the care it gave to Resident # 26, Petitioner essentially asserts
a kind of “no harm, no foul” theory which would absolve it so long as its residents did
not become objectively dehydrated. Petitioner’s argument again ignores the regulatory
requirement that a facility’s staff assess residents’ hydration risks and plan their care
accordingly.

The risks to these residents that are established by the undisputed material facts offered
by CMS are not theoretical but are real. The development of those risks and hazards
imposed on Petitioner’s staff imposes the obligation to assess the risks and to plan for
them. It is not sufficient to assert, as Petitioner argues, that its staff always offered ample
fluids to its residents because the undisputed facts establish that Petitioner failed entirely
to address its residents’ hydration needs in a comprehensive way that would take into
account the possibility — due to enhanced risk factors — that residents would become
dehydrated in spite of the quantity of fluids that the staff offered to them. For purposes of
this decision I accept as true the contentions of Petitioner and its witnesses that all of its
11

residents were offered ample fluids by the staff. But, that assertion begs the question of
Petitioner’s compliance. Petitioner literally had nothing in place that would have
addressed whether these residents’ intake of fluids balanced their output. Thus,
Petitioner’s staff had no way of knowing objectively whether these residents were, in
fact, adequately hydrated.

i. Resident # 12

The undisputed facts offered by CMS establish that this resident had a care plan for fluid
deficit dated February 2009 that listed vomiting, diarrhea, and diuretic medications as
risk factors for dehydration. CMS Ex. 56. On February 24, 2009, Petitioner’s dietician
observed that the resident’s appetite had decreased. She estimated the resident’s daily
fluid intake need as 1800 cc. CMS Ex. 57, at 2. A review of the resident’s condition
conducted by staff on March 6, 2009 concluded that the resident’s risk for fluid deficit
had increased because the resident had a urinary tract infection. CMS Ex. 55, at 1. On
March 13, 2009, the resident’s physician ordered that the resident’s fluid intake be
increased. CMS Ex. 58.

However, and notwithstanding all of these findings that Resident # 12 was at increased
risk of dehydration and needed additional fluids, Petitioner’s staff never modified the
resident’s fluid deficit care plan. Nor did the facility staff direct an increase in the
amount of fluids given to the resident in response either to the March 6 review or the
physician’s order. Thus, the undisputed material facts establish a failure by Petitioner to
plan and implement appropriate interventions to assure that Resident # 12 received
additional fluids in the face of increased dehydration risk factors.

ii. Resident #27

The undisputed facts offered by CMS establish that in December 2008 Petitioner’s staff
estimated that this resident needed to consume 1700 cc of fluid per day. CMS Ex. 47.
Subsequently, this resident experienced loss of appetite, she lost weight, she developed
diarrhea, and she complained of occasional vomiting. CMS Ex. 48, at 1. Her diarrhea
continued in January and February 2009. She continued to manifest diarrhea and to lose
weight in March 2009. Jd. at 2-4. However, Petitioner did not adjust the resident’s
estimated fluid intake or make any changes to the resident’s hydration care plan
subsequent to December 2008 despite these changes in her condition and the
development of a new and obvious risk factor for dehydration (persistent diarrhea).

iti. Resident #7

The undisputed facts establish that Resident # 7 manifested several risk factors for
dehydration. The resident experienced dysphagia, weight loss, hypotension and severe
skin break down. He was on a diet of thickened liquids and he was receiving
12

psychotropic medications. CMS Ex. 6; CMS Ex. 7, at 9-10; CMS Ex. 17, at 17; CMS Ex.
18; CMS Ex. 124, at 3; P. Ex. 9, at 2. In September 2008 Petitioner’s staff estimated that
the resident required 2000 cc of fluid per day. However, subsequently, this resident
developed multiple pressure sores, including one that was assessed as a Stage 4 ulcer.
CMS Ex. 19; CMS Ex. 21. I take notice that pressure ulcers can be a cause of fluid loss.
However, Petitioner did not modify the resident’s care plan to take into account increased
risk factors. And, although it was tracking the resident’s fluid intake, it did not track his
output. CMS Ex. 62; see CMS Ex. 63. Consequently, Petitioner’s staff was in no
position to evaluate objectively whether the resident’s output exceeded his intake.

iv. Resident #28

The undisputed facts show that this resident manifested several risk factors for
dehydration. Resident # 28 suffered from dementia, end-stage congestive heart failure, a
urinary tract infection, a C. difficile infection, and diarrhea. CMS Ex. 65 — CMS Ex. 69.
The resident also experienced weight loss. Petitioner’s staff developed a care plan for
dehydration and fluid deficit. CMS Ex. 68, at 1-2. However, the staff made no estimate
of the amount of fluids the resident needed to consume. Id.; CMS Ex. 69, at 2.
Petitioner’s staff could not have known objectively whether the resident was being
hydrated adequately because it made no evaluation of what the resident needed to
consume in order to be hydrated adequately.

v. Resident # 29

The undisputed facts are that this resident was on a regime that restricted her intake of
fluids. CMS Ex. 1, at 123. The resident risked becoming dehydrated if the restriction
proved to be too great. That made it imperative that Petitioner track the resident’s
consumption of fluids. However, Petitioner’s staff failed to do so comprehensively or
diligently. Between March 16 and March 22, 2009 the staff tracked some, but not all, of
the resident’s fluid intake. CMS Ex. 78, at 2. On other dates (March 6, and March 8-15,
2009) the staff tracked some, but not all, of the resident’s fluid intake. CMS Ex. 79.

2. The undisputed material facts establish that CMS’s determination of
immediate jeopardy level noncompliance with 42 C.F.R. § 483.25(j) is not
clearly erroneous.

Immediate jeopardy is defined to mean noncompliance that:

has caused, or is likely to cause, serious injury, harm, impairment, or death
to a resident.
13

42 C.F.R. § 488.301. A determination of immediate jeopardy by CMS must be sustained
absent evidence proving it to be clearly erroneous. In a case where summary disposition
is sought, as with this one, I must sustain CMS’s determination of immediate jeopardy
where there are no facts from which I might reasonably infer that the determination is
clearly erroneous.

There are no such facts here. The undisputed material facts show that residents of
Petitioner’s facility were placed at grave risk for dehydration. The undisputed facts
establish a likelihood of serious injury, harm, impairment, or death, in the cases of these
residents even if these residents did not become dehydrated as a result of misfeasance by
Petitioner.

The undisputed facts relating to Resident # 26 are illustrative. The resident was at risk
for organ failure and death as a consequence of dehydration.

Especially in the elderly, insufficient hydration can lead to hypotension
(low blood pressure) and death. It could also cause renal failure.
Hydration is essential to bodily functions because our bodies are
approximately 50 to 70 percent water. Dehydration depletes cells’ fluid
and can cause trauma and, ultimately, irreversible cell damage, organ
failure, and death.

CMS Ex. 124, at 2.

Petitioner’s staff knew that there were extreme risks factors present in his case (the
increase in the prescribed dose of diuretic medication and the resident’s persistent
diarrhea) and yet, they failed to put into place measures that were clearly necessary to
protect the resident from becoming dehydrated. They did not reassess him when the new
risk factors became evident, they did not consider the possibility that his fluid intake
might need to be adjusted to compensate for the presence of heightened risk, and they did
nothing to assure that there were objective measurements that would have tracked the
resident’s ratio of intake vs. output of fluids. By any objective measure, this resident
was, consequently, in a position where he was likely to become dehydrated.

The failure of Petitioner’s supervision of Resident # 26 was made manifest when the
resident presented at the hospital on February 23, 2009. The resident was, on that date,
severely dehydrated, so much so that the hospital medical professionals infused him with
more than 1.3 gallons of fluids. Yet, Petitioner had nothing in place that would have
forewarned the staff that the resident was becoming so dehydrated. Even if sepsis — and
not persistent inadequate fluid administration — was the proximate cause of the resident’s
dehydration the staff should have detected the signs of a grave and extremely dangerous
condition, but they failed to do so.

14

Petitioner asserts that there are disputed issues of fact concerning CMS’s determination
of immediate jeopardy. However, it has pointed to nothing that is materially in dispute.
Rather, Petitioner characterizes CMS’s assertion that there was a likelihood of harm to
the residents, including Resident # 26, as being merely speculative and asserts that there
are:

[V]arying degrees of dehydration which would result in varying degrees of
potential harm, many of which would never rise to the level of . . .
immediate jeopardy.

Response at 13-14.

I do not find CMS’s argument that dehydration may lead to organ failure or death to be at
all speculative. It is grounded on expert testimony that Petitioner has not rebutted with
any facts. CMS Ex. 124, at 2.

3. The undisputed material facts establish CMS’s civil money penalty
determinations to be reasonable in duration and amount.

CMS determined that Petitioner failed to comply substantially with several participation
requirements in addition to the noncompliance with 42 C.F.R. § 483.25(j). I find it
unnecessary that I address these additional findings in this decision because Petitioner’s
noncompliance with 42 C.F.R. § 483.25(j), when considered in context with Petitioner’s
past egregious noncompliance with participation requirements, is sufficient to justify both
the duration and the amounts of the civil money penalties that CMS determined to
impose.

a. CMS’s determinations as to duration of noncompliance are
supported by the undisputed material facts.

CMS determined that Petitioner’s immediate jeopardy level noncompliance with the
hydration regulation began on February 11, 2009 and continued unabated at that level

> The alleged additional noncompliance included an alleged immediate jeopardy level
failure to comply with the requirements of section 483.25(c)(2) (treatment of pressure
sores), and eight alleged non-immediate jeopardy level deficiencies at 42 C.F.R. §§
483.10(b)(11)(i) (consultation with treating physician); 483.25 (quality of care);
483.25(h)(1) (maintaining a resident environment free from accident hazards);
483.13(c)(3) (investigation of abuse); 483.20(d), (kk) (review and revision of plans of
care); 483.20(g) (resident assessment); 483.35(i)(2) (sanitation); and 483.75(/)(1)
(clinical records). CMS did not move for summary disposition regarding the alleged
immediate jeopardy level noncompliance with 42 C.F.R. § 483.25(c)(2) but moved for
summary judgment as to the eight alleged non-immediate jeopardy level deficiencies.
15

until March 24, 2009. It found noncompliance at the non-immediate jeopardy level,
including noncompliance with 42 C.F.R. § 483.25(j), continued through April 21, 2009.

CMS’s determinations of duration are presumptively correct. A facility may rebut a
duration determination only by proving affirmatively that it became noncompliant on a
date that is later than that which CMS determined to be the date when noncompliance
began and/or that it corrected the noncompliance on a date that is earlier than that which
CMS determined to be the date when compliance was attained. In deciding a motion for
summary disposition I ask: has Petitioner adduced any facts which, if true, would rebut
the presumption of duration?

I find that Petitioner has not done so. Petitioner asserts in its Response that “(t)here are
material questions of fact whether the . . . duration of the [civil money penalties are]
reasonable.” Response at 14. However, it has not offered any facts that call into question
CMS’s duration determinations. It has offered no affirmative proof to show that it abated
the immediate jeopardy level noncompliance with 42 C.F.R. § 483.25(j) on any date that
is earlier than March 24, 2009. Nor has it offered affirmative proof to show that its
immediate jeopardy level noncompliance began later than February 11. Petitioner
offered no affirmative evidence to show that its non-immediate jeopardy level
noncompliance ended earlier than April 21.

b. CMS’s determinations as to penalty amounts are supported by
the undisputed material facts.

At issue in this case are two civil money penalty amounts: $10,000 per day for each day
of Petitioner’s immediate jeopardy level noncompliance; and $950 per day for each day
of Petitioner’s non-immediate jeopardy level noncompliance. Civil money penalties that
are intended to remedy immediate jeopardy level deficiencies must fall within a range of
from $3,050 to $10,000 per day. 42 C.F.R. § 488.438(a)(1)(i). Civil money penalties
that are intended to remedy non-immediate jeopardy level deficiencies must fall within a
range of from $50 to $3,000 per day. 42 C.F.R. § 488.438(a)(1)(ii).

There are regulatory factors which may be considered in deciding whether a penalty
amount within one of the two ranges is reasonable. These factors include: the seriousness
of a facility’s noncompliance; its compliance history; and its financial condition. 42
C.F.R. §§ 488.438(f)(1) — (4); 488.404 (incorporated by reference into 42 C.F.R. §
488.438(f)(3)). The undisputed material facts in this case strongly support CMS’s
determinations, both as to immediate jeopardy, and as to non-immediate jeopardy penalty
amounts. Petitioner has offered no facts that would call into dispute the facts relied on by
CMS.
16

l address first the immediate jeopardy level civil money penalty amount of $10,000 per
day. This is the highest possible daily penalty amount and, as Petitioner correctly notes,
is generally reserved for the most egregious noncompliance.’ I find such to be
reasonable here because Petitioner’s noncompliance was egregious and because
Petitioner has a history of serious noncompliance with Medicare participation
requirements.>

The failure by Petitioner’s staff to assess and plan for the hydration needs of its residents
was especially egregious because several of the residents including, but not only,
Resident # 26, manifested changes in their clinical conditions that the staff knew about
but which they failed to address. These residents were in grave danger of life threatening
consequences. Petitioner’s staff failed to recognize and address appropriately that
danger.

This is not a simple case of failure to review residents’ conditions periodically or to
revise care plans on a scheduled basis. To the contrary, several of Petitioner’s residents
manifested highly dangerous changes in their conditions which Petitioner’s staff knew
about and, yet, the staff failed even to consider meaningful measures to protect these
residents. Thus, Resident #26’s care plan was never reevaluated or revised even though
he developed two conditions that threatened his state of hydration, his safety, and his life.

Not only did the staff fail to react appropriately to the discovery of hydration risk factors
but they were clueless as to how to react. Petitioner’s own hydration management
guidelines define dehydration as a circumstance where output of fluids far exceeds fluid
intake. CMS Ex. 76, at 1. These guidelines effectively told Petitioner’s staff that they
could not manage the care of residents who were at risk for dehydration unless they could
assure that these residents were not excreting more fluid than they consumed. That is, in
fact, the essential minimum element of proper hydration care. Yet, in the case of the
residents whose care I address in this decision Petitioner’s staff did not develop any
mechanisms for assuring that output did not exceed intake. And, in some instances, they
not only failed to track output but they failed to track intake as well.

+ However, I reject Petitioner’s suggestion that penalties of $10,000 per day should be
reserved for “fraudulent or criminal behavior.” See Response at 15. Petitioner has
offered no legal support for this suggestion.

* CMS also urges that I consider the alleged non-immediate jeopardy level deficiencies as
a reason for imposing a maximum $10,000 per day immediate jeopardy level penalty
amount. I need not address the impact of these alleged non-immediate jeopardy level
deficiencies because I conclude that the egregiousness of Petitioner’s noncompliance
coupled with its history of serious noncompliance is sufficient, in and of itself, to justify
the $10,000 per day penalty amount.
17

Petitioner’s noncompliance is made more egregious by its poor compliance history. The
undisputed facts establish that Petitioner has a history of immediate jeopardy level
noncompliance. In 2007, Petitioner paid civil money penalties totaling more than
$12,500 to remedy an immediate-jeopardy level deficiency. CMS Ex. 127. They
establish also that, in 2008, Petitioner paid civil money penalties of more than $151,000
to remedy another immediate jeopardy level deficiency. Jd. What is evident from this
history is that the imposition of civil money penalties against Petitioner, even very
substantial civil money penalties, has not been sufficient to deter Petitioner from
committing egregious noncompliance. In light of this fact, a maximum penalty amount is
not only reasonable, it is necessary.

Petitioner argues that CMS’s remedy determination was premised on findings of not one,
but two immediate jeopardy level noncompliance findings. It contends that,
axiomatically, a maximum penalty may not be imposed if there is only a single finding of
an immediate jeopardy level deficiency. I disagree. The regulations make it clear that a
penalty of up to $10,000 per day may be imposed to remedy even a single finding of
immediate jeopardy level noncompliance. 42 C.F.R. § 488.438(a)(1)(i). The single
finding of immediate jeopardy for which I grant summary disposition is more than
enough in this case to justify the maximum penalty amount, given the egregiousness of
the noncompliance and Petitioner’s compliance history.

Petitioner also complains that CMS failed to take into account Petitioner’s financial
condition in determining the penalty amounts. CMS is not required to prove a negative.
The regulations afford a facility the opportunity to prove that it lacks the wherewithal to
pay a civil money penalty. But, the regulations impose no burden on CMS to investigate
a facility’s financial condition before determining to impose a penalty. Petitioner could
have come forward with evidence — to the extent that it exists — proving it lacked the
ability to pay the penalties in this case. In fact, it has offered nothing addressing that
possible issue.

I turn next to the $950 per day civil money penalty that CMS imposed to remedy
Petitioner’s continuing non-immediate jeopardy level noncompliance. Petitioner has
offered neither argument nor facts to challenge CMS’s determination. Consequently, I
sustain it. I add, however, that $950 per day is not unreasonable in light of Petitioner’s
compliance history and the inherent seriousness of any failure by a facility — even at the
non-immediate jeopardy level — to protect its residents against dehydration.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Brooke Joseph-Banks,
(NPI: 1275593733),
Petitioner,
Vv.
Centers for Medicare & Medicaid Services.
Docket No. C-10-143
Decision No. CR2082

Date: March 4, 2010

DECISION

Petitioner, Brooke Joseph-Banks,' CRNA (Certified Registered Nurse Anesthetist), is not
entitled to a hearing on the issues raised by her request for hearing and the request for
hearing is dismissed pursuant to 42 C.F.R. § 498.70(b). A party may request that I vacate
a dismissal for good cause but a request to vacate must be submitted within 60 days of
receipt of the notice of dismissal. 42 C.F.R. § 498.72.

I. Background

The Medicare contractor, National Government Services (NGS), notified Petitioner by
letter dated August 21, 2009 that her application for enrollment in Medicare was
approved with a group member effective date of June 13, 2009. Centers for Medicare
and Medicaid Services (CMS) Exhibit (CMS Ex.) 5. Petitioner requested reconsideration

' The request for hearing was actually filed by the practice administrator for Woodland

Anesthesiology Associates, P.C. (Woodland), Petitioner’s employer to which, I infer, she
reassigned her right to bill Medicare for services she provided to Medicare eligible
beneficiaries. However, it is the enrollment in Medicare of Brooke Joseph-Banks that is
in issue and not that of Woodland Anesthesiology Associates, P.C.
by letter dated September 1, 2009, specifically requesting that the effective date for her
participation in Medicare be changed to April 1, 2009, the date she started with
Woodland. Petitioner argued that her start date preceded the date of the CMS policy to
limit retrospective effective dates for billing Medicare claims to 30 days from the date an
approvable application was filed; that Petitioner’s initial application of March 5, 2009
and a later application submitted on May 28, 2009 were rejected; and a complete an
approvable application was submitted on July 10, 2009. CMS Ex. 6. On September 29,
2009, a contractor hearing officer denied Petitioner’s request for reconsideration of the
effective date of her participation in Medicare. CMS Ex. 8. On November 6, 2009,
Petitioner requested a hearing challenging the reconsideration decision.

The case was assigned to me for hearing and decision on November 20, 2009, and an
Acknowledgement and Prehearing Order (Prehearing Order) was issued at my direction.
On December 10, 2009, CMS filed a motion to dismiss Petitioner’s request for hearing,
or, in the alternative, a motion for summary judgment, with CMS exhibits | through 9.
Petitioner failed to respond to the CMS motions and was ordered to show cause why the
motions should not be granted. On January 28, 2010, Petitioner submitted a letter
objecting to CMS’s motion to dismiss.” Petitioner submitted no further response to
CMS’s motion to dismiss and motion for summary judgment. Petitioner submitted no
exhibits, and she did not object to CMS’s exhibits which are admitted as evidence.

IL. Discussion

A. Law
Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as

Medicare Part B. Payment under the program for services rendered to Medicare-eligible
beneficiaries may only be made to eligible providers of services and suppliers.> Act

> Petitioner did not address why she failed to timely file her response. However,
Petitioner’s hearing request is not dismissed for failure to show good cause for why she
did not file a timely response or as a sanction.

> A “supplier” furnishes services under Medicare and includes physicians or other
practitioners and facilities that are not included within the definition of the phrase
“provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider of services,”
commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled
nursing facilities, comprehensive outpatient rehabilitation facilities, home health
agencies, hospice programs, and a fund as described in sections 1814(g) and 1835(e) of
the Act. Act § 1861(u) (42 U.S.C. § 1395x(u)). The distinction between providers and
suppliers is important because they are treated differently under the Act for some
purposes.
§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)).
Administration of the Part B program is through contractors. Act § 1842(a) (42 U.S.C.
§ 1395u(a)).

The Act requires the Secretary to issue regulations that establish a process for the
enrollment of providers and suppliers, including the right to a hearing and judicial review
in the event of denial or non-renewal. Act § 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to
42 C.F.R. § 424.505, a provider or supplier must be enrolled in the Medicare program
and be issued a billing number to have billing privileges and to be eligible to receive
payment for services rendered to a Medicare eligible beneficiary. If enrollment is
approved, a supplier is issued a National Provider Identifier (NPI) to use for billing
Medicare and a Medicare Provider Transaction Access Number (PTAN), an identifier for
the supplier for inquiries. Medicare Program Integrity Manual (MPIM), CMS Pub. 100-
08, Chapter 10, Healthcare Provider/Supplier Enrollment, § 6.1.1.

“A prospective provider or supplier that is denied enrollment in the Medicare program, or
a provider or supplier whose Medicare enrollment has been revoked may appeal” the
decision in accordance with 42 C.F.R. Part 498. 42 C.F.R. § 424.545(a). Pursuant to 42
C.F.R. § 498.5(a), (d), and (1)(1) & (2), a prospective provider or supplier dissatisfied
with an initial decision to deny it enrollment may request reconsideration and, if
dissatisfied with the reconsideration decision, is entitled to a hearing before an
administrative law judge (ALJ). A provider or supplier dissatisfied with an initial
decision to terminate its participation is entitled to a hearing before an ALJ. 42 C.F.R.

§ 498.5(b) and (e). Initial determinations are listed at 42 C.F.R. § 498.3(b) and include:
whether a prospective provider qualifies as a provider; whether a prospective supplier
meets the conditions for coverage specified by the regulations; whether services of a
supplier continue to meet the conditions for coverage; the effective date of a Medicare
provider agreement or supplier approval; and whether to deny or revoke a provider or
supplier’s Medicare enrollment pursuant to 42 C.F.R. §§ 424.530 and 424.535. 42 C.F.R.
§ 498.3(1), (5), (6), (15), and (17).

B. Issue
Whether Petitioner has a right to a hearing on the facts of this case.
C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold followed by the pertinent facts and analysis.
1. Petitioner has no right to a hearing by an ALJ on the issue of
whether she may obtain reimbursement from Medicare for services
provided to Medicare eligible beneficiaries for more than 30 days prior
to her effective date of participation in Medicare.

2. Petitioner, as a supplier not subject to survey and certification or
accreditation, has no right to a hearing by an ALJ on the issue of
whether or not her effective date of enrollment was correctly
determined by CMS.

3. Petitioner has no right to a hearing by an ALJ and dismissal
pursuant to 42 C.F.R. § 498.70(b) is appropriate.

Petitioner’s applications for enrollment in Medicare and the request for hearing in this
case were filed by Petitioner’s employer, Woodland. CMS does not dispute the
assertions in the request for reconsideration and the request for hearing that Petitioner
began working for Woodland on April 1, 2009; that enrollment applications were filed on
March 5, 2009 and May 28, 2009 and that both were rejected by NGS; or that Petitioner
submitted a correct and complete application on July 10, 2009. CMS Exs. 6 and 9.
Petitioner does not allege that the rejection of the applications filed in March and May
was improper. Petitioner does not dispute that the application submitted on July 10,
2009, was received by NGS on July 13, 2009. CMS Ex. 8. On August 21, 2009, NGS
notified Petitioner that her application was approved with an effective date of
participation of June 13, 2009. CMS Ex. 5. The decision on reconsideration approved
the effective date of Petitioner’s participation as June 13, 2009. CMS Ex. 8.

Pursuant to 42 C.F.R. § 424.520(d),*

The effective date for billing privileges for physicians,
nonphysician practitioners and physician and nonphysician
practitioner organizations is the later of the date of filing of a
Medicare enrollment application that is subsequently
approved by a Medicare contractor or the date an enrolled
physician or nonphysician practitioner first began furnishing
services at a new practice location.

The date of filing is the date the Medicare contractor receives a signed application that it
can process to approval. See 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008). In this case,

* This provision was added by final rule at 73 Fed. Reg. 69,725; 69,773 (Nov. 19, 2008)
and 73 Fed. Reg. 80,304 (Dec. 31, 2008) effective January 1, 2009, and will be codified
at 42 C.F.R. § 424.520(d).
there is no dispute that the

the second prong of 42 C.F.

ate of filing was July 13, 2009. Petitioner does not assert that
R. § 424.520(d) is applicable in this case. Because Petitioner

does not dispute that she did not file a complete and approvable application with NGS

prior to the application rece
disagreement is with the op
period for which she may o

ived by NGS on July 13, 2009, it is clear that her
eration of the new regulation which limits to 30 days the
btain retrospective reimbursement. Petitioner cites no

authority for the proposition that her eligibility to claim retrospective reimbursement is an

initial determination that is

subject to my review and I find no such authority. Petitioner

does not specifically challenge the lawfulness of the new regulations at 42 C.F.R. §§

424.520(d) and 424.521(a)(
regulations, I am bound to
424.520(d) and 424.521(a)(

I note that in this case NGS

1). Even if Petitioner challenged the lawfulness of the
ollow the Secretary’s regulations, including 42 C.F.R. §§
1), and I have no authority to find the regulations invalid.

granted Petitioner an effective date of June 13, 2009 (CMS

Ex. 3) rather than July 13, 2009, which is inconsistent with 42 C.F.R. § 520(d), as the

regulation establishes the e

fective date of enrollment as the date of filing of the

application. The effective date determination may have been based upon an incorrect
application of 42 C.F.R. § 521(a)(1),° which permits enrolled physicians, nonphysician

practitioners and physician

and nonphysician practitioner organizations to bill

“retrospectively” for services provided up to 30 days prior to their effective date if

circumstances precluded en

not disturb the June 13, 2009 effective

CMS correctly argues

rollment in advance of providing services.° However, I will
late determined by the contractor.

as grounds for dismissal that Petitioner has no right to a hearing

because the determination of the effective date of her enrollment in Medicare is not an

initial determination that tri:
is that Petitioner’s enrollme
triggered in this case.
hearing and judicial review
1866(j) (42 U.S.C. §
hearing and judicial review

424.545(a); 498.3(1), (5), (6
and (e). CMS acknowledges that t!

> This provision was also a
69,939 (Nov. 19, 2008) and

CMS Motion at

395ce(j)). T.

ggers a right to a hearing. The CMS position, stated simply,
nt as a supplier was not denied and no right to a hearing is

, 6-9, 11-14. The Act only provides for a right to
in the case of denial or non-renewal of enrollment. Act §

e Secretary has provided by regulation for a right to
or both denial and revocation of enrollment. 42 C.F.R. §§

), (17); 498.5(a), (d), and (1)(1) & (2); 42 C.F.R. § 498.5(b)
he plain language of 42 C.F.R. § 498.3(15) indicates

ded by final rule at 73 Fed. Reg. 69,725; 69,768-69; 69,773;
73 Fed. Reg. 80,304 (Dec. 31, 2008) effective January 1,

2009, and is to be codified at 42 C.F.R. § 424.521(a)(1).

6

enrollment. CMS Motion ai
services preformed 30 days
§21(a)(1) is also not an issu

Prior to the change in the
permitted to retroactively bi

regulations effective January 1, 2009, physicians were

1 Medicare for services furnished up to 27 months prior to
5, note 1. Whether or not Petitioner can submit claims for
prior to May 30, 2009 under authority of 42 C.F.R. §

e within my jurisdiction.

t

that the determination of the effective date of a Medicare provider agreement or supplier
approval, is an initial determination that is subject to hearing and judicial review.
However, CMS argues that 42 C.F.R. § 498.3(15) is not a provision applicable in the case
of a supplier such as Petitioner. CMS Motion at 14-17. Although the plain language of a
regulation would normally control, review of legislative or regulatory history is
appropriate when an issue of interpretation is raised as it is in this case. The regulatory
history for 42 C.F.R. § 498.3(15) at 62 Fed. Reg. 43,931, 43,933-34 (Aug. 18, 1997)
supports the CMS position that the provision only permits a right to hearing related to an
effective date determination for providers and suppliers subject to survey and
certification or to accreditation by an accrediting organization. Petitioner was not subject
to survey and certification or accreditation in order to enroll and qualify as a supplier
participating in Medicare. I conclude that 42 C.F.R. § 498.3(15), creates no right for
Petitioner to request a hearing to challenge the effective date determination by CMS or its
contractor.

Accordingly, I conclude that Petitioner has not shown that she has a right to a hearing and
I have found no basis upon which to exercise jurisdiction and grant Petitioner review.

II. Conclusion

I conclude, based on the foregoing, that Petitioner has no right to a hearing and dismissal
of her request for hearing is appropriate pursuant to 42 C.F.R. § 498.70(b).

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Steven V. Ball, CRNA,
(NPI: 1417191685),
Petitioner,
Vv.
Centers for Medicare & Medicaid Services.
Docket No. C-10-109
Decision No. CR2081

Date: March 02, 2010

DECISION

Petitioner, Steven V. Ball, ' CRNA (Certified Registered Nurse Anesthetist), is not
entitled to a hearing on the issues raised by his request for hearing and the request for
hearing is dismissed pursuant to 42 C.F.R. § 498.70(b). A party may request that I vacate
a dismissal for good cause but a request to vacate must be submitted within 60 days of
receipt of the notice of dismissal. 42 C.F.R. § 498.72.

"The request for hearing was actually filed by the practice administrator for Woodland

Anesthesiology Associates, P.C. (Woodland), Petitioner’s employer to which, I infer, he
reassigned his right to bill Medicare for services he provided to Medicare eligible
beneficiaries. However, it is the enrollment in Medicare of Steven V. Ball, CRNA that is
in issue and not that of Woodland.
I. Background

The Medicare contractor, National Government Services (NGS), notified Petitioner by
letter dated July 29, 2009, that his application for enrollment in Medicare was granted
with a group member effective date of May 30, 2009. Centers for Medicare and
Medicaid Services (CMS) Exhibit (CMS Ex.) 3. Petitioner requested reconsideration by
letter dated August 11, 2009, specifically requesting that the effective date for his
participation in Medicare be changed to November 14, 2008, the date he started with
Woodland. Petitioner argued that his start date preceded the April 1, 2009
implementation date of the CMS policy limiting retrospective effective dates for billing
Medicare claims to 30 days from the date an approvable application was filed;
Petitioner’s application could not be submitted at the time of his start date on November
4, 2008 because his APRN (Advanced Practice Registered Nurse) license was not
processed until March 25, 2009; but Petitioner’s CRNA certification was effective
November 4, 2008. CMS Ex. 4. On September 16, 2009, a contractor hearing officer
lenied Petitioner’s request for reconsideration. CMS Ex. 5. On November 6, 2009,
Petitioner requested a hearing challenging the reconsideration decision.

The case was assigned to me for hearing and decision on November 13, 2009, and an
Acknowledgement and Prehearing Order (Prehearing Order) was issued at my direction.
On December 7, 2009, the Centers for Medicare and Medicaid Services (CMS) filed a
motion to dismiss Petitioner’s request for hearing or, in the alternative, a motion for
summary judgment (CMS Motion) and CMS exhibits | through 7. Petitioner failed to
file a response and was ordered to show cause why the case should not be dismissed. On
January 28, 2010, Petitioner submitted a letter objecting to the CMS motion to dismiss.”
Petitioner submitted no further response to the CMS motions. Petitioner submitted no
exhibits and he did not object to the CMS exhibits, which are admitted as evidence.

IL. Discussion
A. Law
Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395) establishes the

supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. Payment under the program for services rendered to Medicare-eligible

> Petitioner did not address why he failed to timely file his response. However, this case
is not dismissed because Petitioner failed to timely file a response or as a sanction.
beneficiaries may only be made to eligible providers of services and suppliers.* Act
§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)).
Administration of the Part B program is through contractors. Act § 1842(a) (42 U.S.C.
§ 1395u(a)).

The Act requires the Secretary to issue regulations that establish a process for the
enrollment of providers and suppliers, including the right to a hearing and judicial review
in the event of denial or non-renewal. Act § 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to
42 C.F.R. § 424.505, a provider or supplier must be enrolled in the Medicare program
and be issued a billing number to have billing privileges and to be eligible to receive
payment for services rendered to a Medicare eligible beneficiary. If enrollment is
approved, a supplier is issued a National Provider Identifier (NPI) to use for billing
Medicare and a PTAN, an identifier for the supplier for inquiries. Medicare Program
Integrity Manual (MPIM), CMS Pub. 100-08, Chapter 10, Healthcare Provider/Supplier
Enrollment, § 6.1.1.

“A prospective provider or supplier that is denied enrollment in the Medicare program, or
a provider or supplier whose Medicare enrollment has been revoked may appeal” the
decision in accordance with 42 C.F.R. Part 498. 42 C.F.R. § 424.545(a). Pursuant to 42
C.F.R. § 498.5(a), (d), and (1)(1) & (2), a prospective provider or supplier dissatisfied
with an initial decision to deny it enrollment may request reconsideration and, if
dissatisfied with the reconsideration decision, is entitled to a hearing before an
administrative law judge (ALJ). A provider or supplier dissatisfied with an initial
decision to terminate its participation is entitled to a hearing before an ALJ. 42 C.F.R.

§ 498.5(b) and (e). Initial determinations are listed at 42 C.F.R. § 498.3(b) and include:
whether a prospective provider qualifies as a provider; whether a prospective supplier
meets the conditions for coverage specified by the regulations; whether services of a
supplier continue to meet the conditions for coverage; the effective date of a Medicare
provider agreement or supplier approval; and whether to deny or revoke a provider or

> A “supplier” furnishes services under Medicare and includes physicians or other
practitioners and facilities that are not included within the definition of the phrase
“provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider of services,”
commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled
nursing facilities, comprehensive outpatient rehabilitation facilities, home health
agencies, hospice programs, and a fund as described in sections 1814(g) and 1835(e) of
the Act. Act § 1861(u) (42 U.S.C. § 1395x(u)). The distinction between providers and
suppliers is important because they are treated differently under the Act for some
purposes.
supplier’s Medicare enrollment pursuant to 42 C.F.R. §§ 424.530 and 424.535. 42 C.F.R.
§ 498.3(1), (5), (6), (15), and (17).

B. Issue
Whether Petitioner has a right to a hearing on the facts of this case.
C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold followed by the pertinent facts and analysis.

1. Petitioner has no right to hearing by an ALJ on the issue of whether
he may obtain reimbursement from Medicare for services provided to
Medicare eligible beneficiaries for more than 30 days prior to his
effective date of participation in Medicare.

2. Petitioner, as a supplier not subject to survey and certification or
accreditation, has no right to hearing by an ALJ on the issue of
whether or not his effective date of enrollment was correctly
determined by CMS.

3. Petitioner has no right to hearing by an ALJ and dismissal pursuant
to 42 C.F.R. § 498.70(b) is appropriate.

Petitioner’s applications for enrollment in Medicare and the request for hearing in this
case were filed by Petitioner’s employer, Woodland. CMS does not dispute the
assertions in the request for reconsideration and the request for hearing that Petitioner
began working for Woodland on November 14, 2008; that an application was not filed
when Petitioner started at Woodland as his APRN license was not issued until March 25,
2009; or that his CRNA certification was effective prior to his employment with
Woodland. CMS Ex. 5. The evidence shows that NGS received an application for
Petitioner on June 1, 2009, but it was not accepted as it was on an outdated form. CMS
Ex. | and 5. NGS informed Petitioner that it was closing his request to enroll and that
Petitioner must complete and file a new CMS 855] and 855R application form with an
original signature and date. CMS Ex. 1, at 1. CMS does not deny that Petitioner
submitted a proper and complete application on June 26, 2009, which NGS received on
June 29, 2009. CMS Exs. 2 and 5. On July 29, 2009, NGS notified Petitioner that his
application was approved with an effective date of participation of May 30, 2009.
Petitioner requested reconsideration on August 11, 2009. The contractor hearing officer
approved the effective date of Petitioner’s participation as May 30, 2009. CMS Ex. 5.
Pursuant to 42 C.F.R. § 424.520(d),*

The effective date for billing privileges for physicians,
nonphysician practitioners and physician and nonphysician
practitioner organizations is the later of the date of filing of a
Medicare enrollment application that is subsequently
approved by a Medicare contractor or the date an enrolled
physician or nonphysician practitioner first began furnishing
services at a new practice location.

The date of filing is the date the Medicare contractor receives a signed application that it
can process to approval. See 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008). In this case,
there is no dispute that the date of filing was June 29, 2009. Petitioner does not assert
that the second prong of 42 C.F.R. § 424.520(d) is applicable in this case. Because
Petitioner does not dispute that he did not file a complete and approvable application with
NGS prior to the application received by NGS on June 29, 2009, it is clear that his
disagreement is with the operation of the new regulation which limits to 30 days the
period for which he may obtain retrospective reimbursement. Petitioner cites no
authority for the proposition that his eligibility to claim retrospective reimbursement is an
initial determination that is subject to my review and I find no such authority. Petitioner
does not specifically challenge the lawfulness of the new regulations at 42 C.F.R.

§§ 424.520(d) and 424.521(a)(1). Even if Petitioner challenged the lawfulness of the
regulations, I am bound to follow the Secretary’s regulations, including 42 C.F.R.

§§ 424.520(d) and 424.521(a)(1), and I have no authority to find the regulations invalid.

I note that in this case NGS granted Petitioner an effective date of May 30, 2009 (CMS
Ex. 3) rather than June 29, 2009, which is inconsistent with 42 C.F.R. § 520(d), as the
regulation establishes the effective date of enrollment as the date of filing of the
application. The effective date determination may have been based upon an incorrect
application of 42 C.F.R. § 521(a)(1),° which permits enrolled physicians, nonphysician
practitioners and physician and nonphysician practitioner organizations to bill
“retrospectively” for services provided up to 30 days prior to their effective date if

* This provision was added by final rule at 73 Fed. Reg. 69,725; 69,773 (Nov. 19, 2008)
and 73 Fed. Reg. 80,304 (Dec. 31, 2008) effective January 1, 2009, and will be codified
at 42 C.F.R. § 424.520(d).

> This provision was also added by final rule at 73 Fed. Reg. 69,725; 69,768-69; 69,773;
69,939 (Nov. 19, 2008) and 73 Fed. Reg. 80,304 (Dec. 31, 2008) effective January 1,
2009, and is to be codified at 42 C.F.R. § 424.521(a)(1).
circumstances precluded enrollment in advance of providing services.° However, I will
not disturb the May 30, 2009 effective date determined by the contractor.

CMS correctly argues as grounds for dismissal that Petitioner has no right to a hearing
because the determination of the effective date of his enrollment in Medicare is not an
initial determination that triggers a right to a hearing. The CMS position, stated simply,
is that Petitioner’s enrollment as a supplier was not denied and no right to a hearing is
triggered in this case. CMS Motion at 1, 7-9, 11-13. The Act only provides for a right to
earing and judicial review in the case of denial or non-renewal of enrollment. Act

§ 1866(j) (42 U.S.C. § 1395cc(j)). The Secretary has provided by regulation for a right to
earing and judicial review for both denial and revocation of enrollment. 42 C.F.R.

§§ 424.545(a); 498.3(1), (5), (6), (17); 498.5(a), (d), and (I)(1) & (2); 42 C.F.R.

§ 498.5(b) and (e). CMS acknowledges that the plain language of 42 C.F.R. § 498.3(15)
indicates that the determination of the effective date of a Medicare provider agreement or
supplier approval, is an initial determination that is subject to hearing and judicial review.
However, CMS argues that 42 C.F.R. § 498.3(15) is not a provision applicable in the case
of a supplier such as Petitioner. CMS Motion at 13-16. Although the plain language of a
regulation would normally control, review of legislative or regulatory history is
appropriate when an issue of interpretation is raised as it is in this case. The regulatory
istory for 42 C.F.R. § 498.3(15) at 62 Fed. Reg. 43,931, 43,933-34 (Aug. 18, 1997)
supports the CMS position that the provision only permits a right to hearing related to an
effective date determination for providers and suppliers subject to survey and
certification or to accreditation by an accrediting organization. Petitioner was not subject
to survey and certification or accreditation in order to enroll and qualify as a suppler
participating in Medicare. I conclude that 42 C.F.R. § 498.3(15), creates no right for
Petitioner to request a hearing to challenge the effective date determination by CMS or its
contractor.

Accordingly, I conclude that Petitioner has not shown that he has a right to a hearing and
I have found no basis upon which to exercise jurisdiction and grant Petitioner review.

° Prior to the change in the regulations effective January 1, 2009, physicians were

permitted to retroactively bill Medicare for services furnished up to 27 months prior to
enrollment. CMS Motion at 5, note 2. Whether or not Petitioner can submit claims for
services preformed 30 days prior to May 30, 2009 under authority of 42 C.F.R. §
§21(a)(1) is also not an issue within my jurisdiction.
Il. Conclusion

I conclude, based on the foregoing, that Petitioner has no right to a hearing and dismissal
of his request for hearing is appropriate pursuant to 42 C.F.R. § 498.70(b).

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Almont Ambulatory Surgical Center, Inc.
(CCN: 05C0001822),

Petitioner,

Vv.

Centers for Medicare & Medicaid Services.
Docket No. C-09-647
Decision No. CR2080

Date: February 26, 2010

DECISION

I dismiss the hearing request of Petitioner, Almost Ambulatory Surgical Center because I
find that it has abandoned its request for a hearing.

I. Background

Petitioner is an ambulatory surgical center doing business in California. It participated in
the Medicare program and its participation in Medicare was subject to applicable
provisions of the Social Security Act and implementing regulations.

The Centers for Medicare & Medicaid Services (CMS) determined to terminate
Petitioner’s participation in Medicare based on findings made during a survey of
Petitioner’s facility that was conducted on May 7, 2009. The agency conducting that
survey identified a total of 15 deficiencies at the facility including six instances of
noncompliance with Medicare coverage conditions. Termination was effectuated on July
20, 2009.
Petitioner requested a hearing and the case was assigned to me for a hearing and a
decision. | issued a pre-hearing order on August 13, 2009 in which I directed the parties
to file pre-hearing exchanges by specified dates. My order required each party to file a
brief which addressed every issue in the case and all proposed exhibits including the
written direct testimony of each proposed witness. Petitioner then moved for summary
disposition and, on November 7, 2009, I issued a ruling denying Petitioner’s motion. In
that ruling I again ordered the parties to complete pre-hearing exchanges on the due dates
that I had originally established. CMS complied with my initial pre-hearing order on
December 15, 2009 by filing a pre-hearing exchange that included a brief and 12
proposed exhibits. The exhibits, which CMS identified as CMS Ex. 1 — CMS Ex. 12,
included the written declarations of three proposed witnesses. CMS mailed a copy of its
exchange to Petitioner in care of Roberto Macatangay, MD, MPH, Petitioner’s director
and the individual who had made previous filings on Petitioner’s behalf.

Petitioner’s pre-hearing exchange was due on January 14, 2010. However, it failed to file
anything by this deadline. On January 28, 2010, I sent an order to show cause to
Petitioner directing Petitioner to file its pre-hearing exchange within 10 days along with a
statement explaining its failure to file its exchange timely. I expressly warned Petitioner
that, if it failed to file a response to the order to show cause, I could consider it to have
abandoned its hearing request.

Petitioner failed nothing in response to the order to show cause.
IL. Issue, findings of fact and conclusions of law
A. Issue

The issue in this case is whether there is reason for me to dismiss Petitioner’s hearing
request.

B. Findings of fact and conclusions of law

I find that Petitioner abandoned its request for a hearing. The initial pre-hearing order
that I issued in this case on August 13, 2009 unequivocally established a deadline of
January 14, 2010 for Petitioner to file its pre-hearing exchange. My November 2, 2009
ruling in which I denied Petitioner’s motion for summary disposition reinforced the initial
pre-hearing order by directing the parties to file their pre-hearing exchanges by the
deadlines established in the August 13 order. CMS duly complied with my order.
Petitioner filed nothing. Nor did Petitioner file any response to my order to show cause
which explicitly warned Petitioner that I might decide that it had abandoned its hearing
request if it failed to file a reply to the order to show cause.
I am authorized to dismiss a hearing request in the circumstance where a party has
abandoned it. 42 C.F.R. § 498.69(a). I do so here.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Margaret J. Prewitt, CRNA,

(NPI: 1134353600),

Petitioner,

Vv.

Centers for Medicare & Medicaid Services.
Docket No. C-10-142
Decision No. CR2079

Date: February 26, 2010

DECISION

Petitioner, Margaret J. Prewitt,’ CRNA (Certified Registered Nurse Anesthetist), is not
entitled to a hearing on the issues raised by her request for hearing and the request for
hearing is dismissed pursuant to 42 C.F.R. § 498.70(b). A party may request that I vacate
a dismissal for good cause but a request to vacate must be submitted within 60 days of
receipt of the notice of dismissal. 42 C.F.R. § 498.72.

I. Background
The Medicare contractor, National Government Services (NGS), notified Petitioner by

letter dated July 29, 2009, that her application for enrollment in Medicare was approved
with a group member effective date of May 30, 2009. Centers for Medicare and

' The request for hearing was filed by the practice administrator for Woodland
Anesthesiology Associates, P.C. (Woodland), Petitioner’s employer to which, I infer, she
reassigned her right to bill Medicare for services she provided to Medicare eligible
beneficiaries. However, it is the enrollment in Medicare of Margaret J. Prewitt that is in
issue and not that of Woodland.
Medicaid Services (CMS) Exhibit (CMS Ex.) 3. Petitioner requested reconsideration by
letter dated August 11, 2009, specifically requesting that the effective date for her
participation in Medicare be changed to January 20, 2009, the date she started with
Woodland. Petitioner argued that her start date preceded the April 1, 2009
implementation date of the CMS policy limiting retrospective effective dates for billing
for Medicare claims; that her enrollment application could not be submitted at the time of
her start date with Woodland on January 20, 2009 because her state license as an APRN
(Advanced Practice Registered Nurse) was not processed until April 2, 2009; but that her
CRNA certification was effective January 13, 2009, prior to the date she started with
Woodland. CMS Ex. 4. On September 16, 2009, a contractor hearing officer issued a
decision denying the reconsideration request for an earlier effective date of Medicare
participation. CMS Ex. 5. On November 6, 2009, Petitioner requested a hearing to
challenge the reconsideration decision.

The case was assigned to me for hearing and decision on November 20, 2009, and an
Acknowledgement and Prehearing Order (Prehearing Order) was issued at my direction.
On December 9, 2009, CMS filed a motion to dismiss Petitioner’s request for hearing or,
in the alternative, a motion for summary judgment (CMS Motion). CMS also filed CMS
exhibits | through 7. Petitioner did not file a timely response to the CMS motions and on
January 25, 2010 was ordered to show cause why this case should not be dismissed for
abandonment or as a sanction. On January 28, 2010, Petitioner submitted a letter
objecting to the CMS motions.” Petitioner submitted no further response to the CMS
motions. Petitioner submitted no exhibits or objections to the CMS exhibits, which are
admitted.

IL. Discussion

A. Law
Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as

Medicare Part B. Payment under the program for services rendered to Medicare-eligible
beneficiaries may only be made to eligible providers of services and suppliers.> Act

> Petitioner did not address why she failed to timely file her response to the CMS
motions. However, I conclude that Petitioner did not abandon her hearing request and it
is not dismissed for abandonment or as a sanction.

> A “supplier” furnishes services under Medicare and includes physicians or other
practitioners and facilities that are not included within the definition of the phrase
“provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider of services,”
commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled
nursing facilities, comprehensive outpatient rehabilitation facilities, home health
§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)).
Administration of the Part B program is through contractors. Act § 1842(a) (42 U.S.C.
§ 1395u(a)).

The Act requires the Secretary to issue regulations that establish a process for the
enrollment of providers and suppliers, including the right to a hearing and judicial review
in the event of denial or non-renewal. Act § 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to
42 C.F.R. § 424.505, a provider or supplier must be enrolled in the Medicare program
and be issued a billing number to have billing privileges and to be eligible to receive
payment for services rendered to a Medicare eligible beneficiary. If enrollment is
approved, a supplier is issued a National Provider Identifier (NPI) to use for billing
Medicare and a PTAN, an identifier for the supplier for inquiries. Medicare Program
Integrity Manual (MPIM), CMS Pub. 100-08, Chapter 10, Healthcare Provider/Supplier
Enrollment, § 6.1.1.

“A prospective provider or supplier that is denied enrollment in the Medicare program, or
a provider or supplier whose Medicare enrollment has been revoked may appeal” the
decision in accordance with 42 C.F.R. Part 498. 42 C.F.R. § 424.545(a). Pursuant to 42
C.F.R. § 498.5(a), (d), and (1)(1) & (2), a prospective provider or supplier dissatisfied
with an initial decision to deny it enrollment may request reconsideration and, if
dissatisfied with the reconsideration decision, is entitled to a hearing before an
administrative law judge (ALJ). A provider or supplier dissatisfied with an initial
decision to terminate its participation is entitled to a hearing before an ALJ. 42 C.F.R.

§ 498.5(b) and (e). Initial determinations are listed at 42 C.F.R. § 498.3(b) and include:
whether a prospective provider qualifies as a provider; whether a prospective supplier
meets the conditions for coverage specified by the regulations; whether services of a
supplier continue to meet the conditions for coverage; the effective date of a Medicare
provider agreement or supplier approval; and whether to deny or revoke a provider or
supplier’s Medicare enrollment pursuant to 42 C.F.R. §§ 424.530 and 424.535. 42 C.F.R.
§ 498.3(1), (5), (6), (15), and (17).

B. Issue

Whether Petitioner has a right to a hearing on the facts of this case.

agencies, hospice programs, and a fund as described in sections 1814(g) and 1835(e) of
the Act. Act § 1861(u) (42 U.S.C. § 1395x(u)). The distinction between providers and
suppliers is important because they are treated differently under the Act for some
purposes.
C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold followed by the pertinent facts and analysis.

1. Petitioner has no right to hearing by an ALJ on the issue of whether
she may obtain reimbursement from Medicare for services provided to
Medicare eligible beneficiaries for more than 30 days prior to her
effective date of participation in Medicare.

2. Petitioner, as a supplier not subject to survey and certification or
accreditation, has no right to hearing by an ALJ on the issue of
whether or not her effective date of enrollment was correctly
determined by CMS.

3. Petitioner has no right to hearing by an ALJ and dismissal pursuant
to 42 C.F.R. § 498.70(b) is appropriate.

Petitioner’s applications for enrollment in Medicare and the request for hearing in this
case were filed by Petitioner’s employer, Woodland. CMS does not dispute the
assertions in the request for reconsideration (CMS Ex. 4) and the request for hearing that
Petitioner began working for Woodland on January 20, 2009; that her CRNA certification
was effective January 13, 2009; and that her APRN license was not granted until April 2,
2009 (CMS Ex. 2, at 4; CMS Ex. 4). The evidence shows that NGS received an
enrollment application from Woodland on behalf or Petitioner on June 1, 2009.

However, the form used by Woodland had been superseded by a new form. Therefore,
NGS informed Woodland that it was closing the enrollment request and that Petitioner
must complete and file a new CMS 855] and 855R application form with an original
signature and date. CMS Ex. 1. Petitioner submitted a new application on June 26, 2009.
CMS Ex. 2. According to the decision on reconsideration, NGS received Petitioner’s
new application on June 29, 2009. CMS Ex. 5, at 1. On July 29, 2009, NGS notified
Petitioner that her application was approved with an effective date of May 30, 2009.
CMS Ex. 3. The decision on reconsideration approved the effective date of Petitioner’s
participation as May 30, 2009. CMS Ex. 5.

Pursuant to 42 C.F.R. § 424.520(d),*

* This provision was added by final rule at 73 Fed. Reg. 69,725; 69,773 (Nov. 19, 2008)
and 73 Fed. Reg. 80,304 (Dec. 31, 2008) effective January 1, 2009, and will be codified
at 42 C.F.R. § 424.520(d).
The effective date for billing privileges for physicians,
nonphysician practitioners and physician and nonphysician
practitioner organizations is the later of the date of filing of a
Medicare enrollment application that is subsequently
approved by a Medicare contractor or the date an enrolled
physician or nonphysician practitioner first began furnishing
services at a new practice location.

The date of filing is the date the Medicare contractor receives a signed application that it
can process to approval. See 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008). In this case,
there is no dispute that the date of filing was June 29, 2009. Petitioner does not assert
that the second prong of 42 C.F.R. § 424.520(d) is applicable in this case. Because
Petitioner does not dispute that she did not file a complete an approvable application with
NGS prior to the application received by NGS on June 29, 2009, it is clear that her
disagreement is with the operation of the new regulation which limits to 30 days the
period for which she may obtain retrospective reimbursement. Petitioner cites no
authority for the proposition that her eligibility to claim retrospective reimbursement is an
initial determination that is subject to my review and I find no such authority. Petitioner
does not specifically challenge the lawfulness of the new regulations at 42 C.F.R. §§
424.520(d) and 424.521(a)(1). Even if Petitioner challenged the lawfulness of the
regulations, I am bound to follow the Secretary’s regulations, including 42 C.F.R. §§
424.520(d) and 521(a)(1), and I have no authority to find the regulations invalid.

I note that in this case NGS granted Petitioner an effective date of May 30, 2009 (CMS
Ex. 3) rather than June 29, 2009, which is inconsistent with 42 C.F.R. § 520(d), as the
regulation establishes the effective date of enrollment as the date of filing of the
application. The effective date determination may have been based upon an incorrect
application of 42 C.F.R. § 521(a)(1),° which permits enrolled physicians, nonphysician
practitioners and physician and nonphysician practitioner organizations to bill
“retrospectively” for services provided up to 30 days prior to their effective date if
circumstances precluded enrollment in advance of providing services.° However, I will
not disturb the May 30, 2009 effective date determined by the contractor.

> This provision was also added by final rule at 73 Fed. Reg. 69,725; 69,768-69; 69,773;
69,939 (Nov. 19, 2008) and 73 Fed. Reg. 80,304 (Dec. 31, 2008) effective January 1,
2009, and is to be codified at 42 C.F.R. § 424.521(a)(1).

° Prior to the change in the regulations effective January 1, 2009, physicians were
permitted to retroactively bill Medicare for services furnished up to 27 months prior to
enrollment. CMS Motion at 5, note 2. Whether or not Petitioner can submit claims for
services preformed 30 days prior to May 30, 2009 under authority of 42 C.F.R.

§ 521(a)(1) is also not an issue within my jurisdiction.
CMS correctly argues as grounds for dismissal that Petitioner has no right to a hearing
because the determination of the effective date of her enrollment in Medicare is not an
initial determination that triggers a right to a hearing. CMS Motion at 1, 11. The CMS
position, stated simply, is that Petitioner’s enrollment as a supplier was not denied and no
right to a hearing is triggered in this case. CMS Motion at 6-9, 11-13. The Act only
provides for a right to hearing and judicial review in the case of denial or non-renewal of
enrollment. Act § 1866(j) (42 U.S.C. § 1395cc(j)). The Secretary has provided by
regulation for a right to hearing and judicial review for both denial and revocation of
enrollment. 42 C.F.R. §§ 424.545(a); 498.3(1), (5), (6), (17); 498.5(a), (d), and (1)(1) &
(2); 42 C.F.R. § 498.5(b) and (e). CMS acknowledges that the plain language of 42
C.F.R. § 498.3(15) indicates that the determination of the effective date of a Medicare
provider agreement or supplier approval, is an initial determination that is subject to
earing and judicial review. However, CMS argues that 42 C.F.R. § 498.3(15) is not a
provision applicable in the case of a supplier such as Petitioner. CMS Motion at 14-16.
Although the plain language of a regulation would normally control, review of legislative
or regulatory history is appropriate when an issue of interpretation is raised as it is in this
case. The regulatory history for 42 C.F.R. § 498.3(15) at 62 Fed. Reg. 43,931, 43,933-34
(Aug. 18, 1997) supports the CMS position that the provision only permits a right to
earing related to an effective date determination for providers and suppliers subject to
survey and certification or to accreditation by an accrediting organization. Petitioner was
not subject to survey and certification or accreditation in order to enroll and qualify as a
suppler participating in Medicare. I conclude that 42 C.F.R. § 498.3(15), creates no right
or Petitioner to request a hearing to challenge the effective date determination by CMS
or its contractor.

Accordingly, I conclude that Petitioner has not shown that she has a right to a hearing and
I have found no basis upon which to exercise jurisdiction and grant Petitioner review.

II. Conclusion

I conclude, based on the foregoing, that Petitioner has no right to a hearing and dismissal
of her request for hearing is appropriate pursuant to 42 C.F.R. § 498.70(b).

/s/
Keith W. Sickendick
Administrative Law Judge