Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Brett Taylor, D.C.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-526
Decision No. CR4742

Date: November 23, 2016

DECISION

The Centers for Medicare & Medicaid Services (CMS), through an administrative
contractor, revoked the Medicare enrollment and billing privileges of Brett Taylor, D.C.
(Dr. Taylor or Petitioner) because Dr. Taylor was convicted, as an aggravated offender,
of driving while intoxicated (DWI) and CMS determined that his conviction of that
felony offense is detrimental to the best interests of the Medicare program and its
beneficiaries. CMS also revoked Dr. Taylor for failing to timely report the conviction to
CMS. Dr. Taylor requested a hearing before an administrative law judge (ALJ) to
dispute the revocation, arguing that his felony conviction is not detrimental to the best
interests of the Medicare program or its beneficiaries and that, consequently, he did not
need to report the felony conviction to CMS. Based on the record in this case, I affirm
CMS’s revocation because CMS’s case-by-case determination that Dr. Taylor’s felony
offense is detrimental to the best interests of the Medicare program and its beneficiaries is
reasonable.

I. Background and Procedural History

In 2012, the state of Michigan licensed Dr. Taylor as a chiropractor and CMS enrolled
him in the Medicare program as a supplier. CMS Exhibit (Ex.) 2 at 9; CMS Ex. 4 at 1.
In a December 9, 2015 initial determination, a CMS administrative contractor revoked
Dr. Taylor’s Medicare enrollment and billing privileges, effective July 25, 2013, for the
following reasons:

42 CFR § 424.535(a)(3) — Felony Conviction

The Centers for Medicare & Medicaid Services has been
made aware of your July 25, 2013 felony conviction of one
count of Driving While Intoxicated - Aggravated Offender, in
violation of the Missouri Code, in the 21st Judicial Circuit, St.
Louis County. Based on our review, we have determined to
revoke your Medicare enrollment, under the regulation a[t]
42 CFR §424.535(a)(3).

42 CFR §424.535(a)(9) — Failure to Report

Brett Taylor was adjudged guilty of a felony by the 21*
Judicial Circuit, St. Louis County on July 25, 2013. Brett
Taylor did not notify CMS of this adverse legal action within
30 days as required under 42 CFR §424.516.

CMS Ex. 5 at 1 (emphasis in original). The CMS administrative contractor barred
Petitioner from reenrolling for three years. CMS Ex. 5 at 2.

Petitioner requested reconsideration of the revocation, filing extensive arguments and
documents to support his request. CMS Ex. 1. However, on March 4, 2016, the CMS
administrative contractor’s hearing officer issued an unfavorable reconsidered
determination. CMS Ex. 6. The hearing officer upheld the revocation on both grounds
identified in the initial determination.

According to our records on July 25, 2013, Brett Taylor was
found guilty of a felony conviction of one count of Driving
While Intoxicated - Aggravated Offender. The reconsideration
request indicates that Dr. Taylor should not have been revoked
from the Medicare program due to the specific felony
conviction at issue and due to the lack of adequate notice that
reporting was required.

Section 3 of the CMS-855I application addresses Final
Adverse Legal Action/Convictions and States “This section
captures information on final adverse legal actions, such as
convictions, exclusions, revocations, and suspensions. All
applicable final adverse actions must be reports [sic],
regardless of whether any records were expunged or appeals
are pending.” Furthermore 42 CFR §424.516(d)(1)(ii) states
[a]ny adverse legal action must be reported within 30 days.
Dr. Taylor failed to report this adverse legal action within the
30-days as required.

A discretionary review of all the files, submitted with the
reconsideration request, has been conducted and it has been
determined that Dr. Taylor’s felony conviction is detrimental
to the best interest of the Medicare program and _ its
beneficiaries.

CMS Ex. 6 at 2 (emphasis in original).

Petitioner timely requested a hearing. I issued an Acknowledgment and Pre-Hearing
Order (Order) establishing deadlines for the submission of prehearing exchanges. In
accordance with the Order, CMS filed its prehearing exchange, which included a motion
for summary judgment and brief (CMS Br.), and six exhibits. Petitioner filed a brief

(P. Br.) and opposed summary judgment.

II. Decision on the Record

Petitioner did not object to any of CMS’s proposed exhibits; therefore, I admit CMS Exs.
1-6 into the record. See Order { 7; Civil Remedies Division Procedures § 14(e).

Neither party submitted written direct testimony for any witnesses. Therefore, there are
no witnesses to be cross-examined, and I issue this decision based on the written record.
Order §f 8-11; Civil Remedies Division Procedures §§ 16(b), 19(b), (d).

III. Issue

Whether CMS had a legitimate basis to revoke Dr. Taylor’s Medicare enrollment and
billing privileges.

IV. Jurisdiction

I have jurisdiction to hear and decide this case. See 42 C.F.R. §§ 498.3(b)(17),
498.5(1)(2); see also 42 U.S.C. § 1395ec(j)(8).

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

My findings of fact and conclusions of law are set forth in italics and bold font.
The Social Security Act authorizes the Secretary of Health Human Services to create
regulations governing the enrollment of suppliers in the Medicare program, and to
discontinue the enrollment of a physician or other supplier who “has been convicted of a
felony under Federal or State law for an offense which the Secretary determines is
detrimental to the best interests of the [Medicare] program or program beneficiaries.”

42 U.S.C. § 1395u(h)(8), 1395cc(j). For Medicare program purposes, chiropractors are
considered physicians and, therefore, suppliers. 42 U.S.C. § 1395x(d), (r).

Under the Secretary’s regulations, CMS may revoke a supplier’s Medicare enrollment
and billing privileges when a supplier is: (a) convicted of a federal or state felony
offense; (b) within ten years preceding enrollment or revalidation of enrollment; and (c)
the felony offense is one that CMS has determined to be detrimental to the best interests
of the program and its beneficiaries. This section includes a non-exhaustive list of the
types of felony offenses that CMS considers detrimental to the best interests of the
program and its beneficiaries. 42 C.F.R. § 424.535(a)(3)(i)(A)-(D) (2012).'

There are three different types of review an ALJ may have to perform when reviewing
CMS’s determination to revoke based on section 424.535(a)(3) depending on whether the

' The Secretary revised section 424.535(a)(3) effective February 3, 2015. 79 Fed. Reg.
72,500 (Dec. 5, 2014). The modifications to the text include: 1) expanding the list of
individuals whose felony conviction can result in revocation of the supplier to include a
supplier’s manager; 2) simplifying the time frame as to when a felony conviction can be a
basis for revocation from ten years preceding enrollment or revalidation of enrollment to
“within the preceding 10 years”; 3) defining “convicted” based on the definition found at
42 C.F.R. § 1001.2; 4) changing the phrase ““CMS has determined is detrimental to the
best interests of the Medicare program and its beneficiaries” from the present perfect to
the present tense; 5) and adding the second clause to the phrase “Offenses include, but are
not limited in scope and severity to,” which refers to a list of examples of the types of
felonies that CMS considers to be detrimental to the best interests of the Medicare
program and its beneficiaries. 79 Fed. Reg. at 72,532. Petitioner believes that I should
apply the version of section 424.535(a)(3) in effect when Petitioner was convicted in
2013, arguing that CMS may only then revoke Petitioner if Petitioner was convicted of a
felony specified in section 424.535(a)(3). P. Br. at 2-5. CMS asserts in opposition that it
does not matter whether I apply the new or old version of section 424.535(a)(3) because
CMS only clarified that section and did not substantively change it. CMS Br. at 15-18.

l agree with Petitioner that I ought to apply the regulation in effect when Petitioner was
convicted, but also agree with CMS that doing so makes no difference. CMS has never
been limited to only revoking suppliers convicted of felonies listed in section
424.535(a)(3), and CMS has always been able to make a “‘case-specific” determination
that an individual felony conviction is detrimental to the best interests of the Medicare
program and its beneficiaries. Fady Fayad, M.D., DAB No. 2266 at 8 (2009), aff'd,
Fayad v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011).
felony for which a supplier was convicted (1) is specifically listed in the regulations, (2)
is similar to a crime listed in the regulations, or (3) has been determined to be detrimental
to the best interests of the Medicare program and its beneficiaries through a case-by-case
determination.

When a supplier is convicted of a felony specifically listed in the regulations, an ALJ
applies the most deferential review standard. Such felonies are considered detrimental
per se. Letantia Bussell, M.D., DAB No. 2196 at 9 (2008).

When a supplier is convicted of a felony similar to the ones listed in the regulations, an
ALJ must look to the circumstances surrounding the conviction to determine if the felony
conviction is similar to one of the offenses listed in the regulations. Abdul Razzaque
Ahmed, M.D., DAB No. 2261 at 11 (2009), aff'd, Ahmed v. Sebelius, 710 F. Supp. 2d 167
(D. Mass. 2010). Even if a criminal offense is not similar to one of the listed crimes in
the regulations, it still may be found to be detrimental to the best interests of the
Medicare program and program beneficiaries if it is one that falls into one of the four
general categories of crimes listed in the regulations (i.e., felony crimes against persons,
financial crimes, any felony that placed the Medicare program or its beneficiaries at
immediate risk, and any felonies that would result in mandatory exclusion under section
1128(a) of the Social Security Act). Ahmed, DAB No. 2261 at 10, 12.

When a supplier is convicted of a felony that is neither listed in the regulations nor
similar to a felony listed in the regulations, an ALJ must determine whether CMS’s case-
by-case determination that a felony offense is detrimental to the best interests of the
program and its beneficiaries is reasonable. See Fady Fayad, M.D., DAB No. 2266 at 8,
16-17 (2009), aff'd, Fayad v. Sebelius, 803 F. Supp. 2d 699, 704 (E.D. Mich. 2011).

1. Petitioner pled guilty on July 25, 2013, to felony driving while intoxicated
(DWD, as an aggravated offender, under Missouri Revised Statutes § 577.010
and a Missouri court sentenced Petitioner to seven years of incarceration, but
suspended that sentence and ordered Petitioner to serve five years of probation.

On November 6, 2010, Petitioner was charged with a class C DWI felony as an
aggravated offender under Missouri Revised Statutes § 577.010. Petitioner pled guilty to
that crime on July 25, 2013. A Missouri court sentenced Petitioner to seven years of
incarceration, suspended that sentence, and placed Petitioner on probation for five years.
The court also ordered Petitioner to undergo an alcohol evaluation, and follow any
recommendations and treatment plan; not to drink alcohol, not to drive without a valid
license, and to have an ignition interlock. CMS Ex. 3.

Petitioner had been convicted previously of DWI in August 1989, October 1993, June
2003, and December 2008; one of these was a felony conviction. CMS Ex. | at 37.
2. CMS had a legitimate basis under 42 C.F.R. § 424.535(a)(3) to revoke
Petitioner’s Medicare enrollment and billing privileges because Petitioner was
convicted of a felony offense that CMS reasonably determined to be detrimental
to the best interests of the Medicare program and its beneficiaries.

As stated above, CMS may revoke a supplier’s Medicare billing privileges if the supplier
is: (1) convicted of a federal or state felony offense; (2) within ten years preceding
enrollment or revalidation of enrollment; and (3) the felony offense is one that CMS has
determined to be detrimental to the best interests of the program and its beneficiaries.

42 CFR. § 424.535(a)(3) (2012).

In the present case, the record is clear that Petitioner was convicted of a felony on July
25, 2013. CMS Ex. | at 6; CMS Ex. 3. Further, that conviction necessarily took place
within ten years preceding the revalidation of his enrollment since suppliers are required
to revalidate enrollment at least every five years and Petitioner had been enrolled in 2012.
CMS Ex. 4; 42 C.F.R. § 424.515. Therefore, the only issue in contention is whether
Petitioner was convicted of a felony detrimental to the best interests of the Medicare
program and its beneficiaries.

The initial and reconsidered determinations indicated that CMS was revoking Petitioner
based, in part, on 42 C.F.R. § 424.535(a)(3). Both determinations identified Petitioner’s
conviction on July 25, 2013, as an aggravated DWI offender as the factual basis for the
revocation. CMS Ex. 5 at 1; CMS Ex 6 at 2.

A revocation notice must state “[t]he reason for the revocation in sufficient detail for the
provider or supplier to understand the nature of its deficiencies.” 42 C.F.R. §
405.800(b)(1); see also 42 C.F.R. § 498.25(a) (an unfavorable reconsidered
determination must “give[] the reasons for the determination” and “the conditions or
requirements of the law or regulations that the affected party fails to meet.”). Other than
identifying the regulatory basis for its determination, the Departmental Appeals Board
(DAB) has stated that “no regulation provides that CMS must explain its reasons for
exercising its discretion to deny an application based on such a felony conviction rather
than to accept it notwithstanding the conviction.” Brian Ellefsen, DO, DAB No. 2626 at
9 (2015). This reasoning applies to revocations as well. Therefore, in the present case,
CMS provided Petitioner with sufficient notice of the revocation.

In evaluating the merits of CMS’s revocation, I note that the DAB permits CMS to clarify
its reasons for revoking under section 424.535(a)(3) during the ALJ level of appeal:

The Board has held that a federal agency may clarify its
reasons for a challenged determination, or assert new
reasons for that determination, during the ALJ proceeding as
long as the non-federal party has adequate notice of the
reasons and a reasonable opportunity to respond during that
proceeding.

Fayad, DAB No. 2266 at 10. In the present case, this means I look to CMS’s brief for
clarifying reasons for CMS’s revocation of Petitioner. This is appropriate since
Petitioner had the opportunity to file its prehearing exchange after CMS filed its brief
and, to the extent necessary based on CMS’s clarifying arguments, had the opportunity to
respond with new evidence. 42 C.F.R. § 424.56(e)(1); Order 4 4, 6.

In its brief, CMS asserted that it determined Petitioner’s felony conviction was
detrimental to the best interests of the Medicare program and provided three legal bases
to support this determination: 42 C.F.R. § 424.535(a)(3)(i) (2015) (a case-by case
determination); 42 C.F.R. § 424.535(a)(3)(ii)(A) (2015) (conviction of a felony similar to
a crime against persons such as murder, rape, assault); 42 C.F.R. § 424.535(a)(3)(ii)(C)
(2015) (conviction of a felony that placed the Medicare program or its beneficiaries at
immediate risk). CMS Br. at 10-14. Although CMS cited these bases under the new
version of section 424.535(a)(3), as explained earlier, all of them are cognizable under
the version of section 424.535(a)(3) in effect when Petitioner was convicted.

CMS asserts that DWI is a crime against the public because it puts everyone on the road
at risk of injury or death. To support this, CMS cited National Highway Traffic Safety
Administration (NHTSA) statistics for 2013, in which there were 10,076 fatalities
involving DWI, which accounted for 31 percent of all traffic fatalities that year.
According to Mothers Against Drunk Driving, in 2014, 290,000 people were injured in
DWI crashes. Consistent with this, CMS notes that Petitioner was seriously injured in an
accident while he was intoxicated (CMS Ex. | at 37). CMS further supports its
determination by noting that Petitioner’s crime, as a class C felony under Missouri
Revised Statutes § 577.010 for multiple DWI offenses, is categorized along with DWI
crimes involving the injury or death of an individual. Finally, CMS asserts that
Petitioner’s DWI conviction represents a lack of good judgment. CMS Br. at 11-13.

Petitioner argues in opposition to CMS’s position that Petitioner was still in chiropractic
school when the actual offense resulting in the 2013 conviction occurred and that no one
was harmed as a result of the offense. Petitioner asserts that his felony conviction was
not for a crime specifically listed in section 424.535(a)(3). Further, Petitioner states that
his crime is not similar to any examples listed as crimes against persons because Missouri
law provides for a category of “Offenses Against the Person,” which includes the crimes
listed in section 424.535(a)(3)(i)(A) (2012), and DWI is not one of them. Rather,
Missouri law categorizes Petitioner’s DWI offense as a public safety offense. Petitioner
states that all he had to do to commit his DWI offense was to be intoxicated and drive a
car, and that such a crime is not one against a person. Petitioner also argues that his
felony offense is not a crime that placed the Medicare program or a Medicare beneficiary
at immediate risk of harm because the regulations only provide one example of that type
of crime, involving medical malpractice, and Petitioner’s DWI offense clearly is not
related to providing medical services. Finally, Petitioner asserts that CMS failed to
provide an explanation of its case-by-case analysis in its reconsidered determination and,
therefore, there is an insufficient basis for an ALJ to uphold revocation based on such an
analysis. Related to this argument, Petitioner states that, on reconsideration, the hearing
officer failed to consider the facts related to Petitioner’s criminal offense (including that
it happened in 2010 while Petitioner was in chiropractic school), that no one was harmed
as a result of the criminal conduct, and that Petitioner submitted evidence of his recovery
from alcohol over the last five years, including an evaluation by a psychologist and
numerous negative screenings for alcohol. P. Br. at 2, 6, 7-11, 13-17; CMS Ex.

I conclude that CMS had a legitimate basis, through a case-by-case evaluation, to
determine that Petitioner’s felony offense is detrimental to the best interests of the
Medicare program.” Although Petitioner is correct that the preamble to the final rule
changes to section 424.535(a)(3), effective in February 2015, indicated CMS would
conduct individualized reviews of the circumstances related to each criminal conviction
before deciding whether to revoke suppliers, 79 Fed. Reg. at 72,510, 72,512, as stated in
Ellefsen, it is sufficient for the reconsidered determination to provide basic information
about the basis for revocation so long as CMS ultimately exercised its discretion to
revoke the supplier. DAB No. 2626 at 9. The reconsidered determination in the present
case is sufficient because it noted receipt of the reconsideration request, acknowledged
Petitioner’s arguments and evidence, and concluded, after a “discretionary review of all
the files, submitted with the reconsideration request,” that Petitioner’s felony conviction
is detrimental to the best interests of the program and its beneficiaries. CMS Ex. 6 at 2.

In its brief, CMS provides sufficient clarification of the factual grounds supporting the
earing officer’s revocation as a discretionary act through a case-by-case consideration.
Petitioner’s class C felony DWI conviction is not only based on Petitioner’s most recent
DWI offense in 2010, but also due to the cumulative effect of four previous DWI
convictions.* Petitioner has been convicted five times of DWI from 1989 to 2013. As

> Because I uphold CMS’s determination that section 424.535(a)(3) is a basis for
revocation through a case-by-case determination, I do not need to consider whether
Petitioner’s felony conviction is similar to the offenses listed under section
424.535(a)(3)(i)(A) or 424.535(a)(3)(i)(C).

> As CMS points out, a class C DWI felony offense means an individual being is a
chronic offender, which is a person with four previous DWI offenses; however, the court
records indicate Petitioner was an aggravated offender, which is a person with three
previous DWI offenses. CMS Ex. 3; Missouri Revised Statutes §§ 577.010(2)(5)(a),
577.023(1). Regardless of this discrepancy, there is no doubt that Petitioner’s conviction
of a felony was based, in part, on his four previous DWI convictions.
CMS points out, Missouri Revised Statutes § 577.010(2)(5) groups Petitioner’s offense
along with DWI related deaths as class C felonies; therefore, it is clear that Petitioner’s
offense is very serious. Although Petitioner submitted with his reconsideration request
numerous statements from individuals as to his sobriety in recent years and test results
proving his diligent efforts not to drink alcohol anymore (CMS Ex. 1), such evidence
only shows recovery for a short time when compared with Petitioner’s multiple DWI
offenses over the course of two decades.

My decision is guided in part by the Secretary’s response to a comment from the public
that felonies related to alcohol and traffic violations cannot result in revocation under
section 424.535(a)(3). In rejecting that comment, the Secretary stated:

We do not believe that felonies relating to drugs, alcohol, or
traffic violations cannot be detrimental to the best interests of
Medicare beneficiaries, and thus should be automatically
excluded from the purview of §§ 424.530(a)(3) and
424.535(a)(3). While certain felonies carry different,
potentially more severe penalties than others, each case is
distinct and state law classifications of certain criminal
actions can vary widely. Therefore, we must maintain the
flexibility to address all potential situations.

79 Fed. Reg. at 72,510.

CMS acted legitimately to conclude that Petitioner’s criminal conviction is detrimental to
the Medicare program and its beneficiaries. In coming to this conclusion, I am mindful
that “the right to review of CMS’s determination by an ALJ serves to determine whether
CMS had the authority to revoke [a supplier’s] billing privileges, not to substitute the
ALJ’s discretion about whether to revoke.” Bussell, M.D., DAB No. 2196 at 13
(emphasis in original). Therefore, I must affirm this basis for revocation.

3. Ido not need to decide whether CMS had a legitimate basis under 42 C.F.R.
§ 424.535(a)(9) to revoke Dr. Taylor’s enrollment and billing privileges.

Having concluded that CMS had a legitimate basis to revoke Petitioner based on his
serious criminal DWI offense, I do not need to resolve the issue as to whether CMS
could legitimately revoke Petitioner under section 424.535(a)(9) for failing to timely
report his criminal conviction to CMS or a CMS administrative contractor. Although I
do not have authority review the three-year reenrollment bar that CMS imposed on
Petitioner, Petitioner’s revocation under section 424.535(a)(3) is sufficient to justify such
a bar on its own. Further, revocation based on a criminal conviction is retroactively
effective as of the date of the conviction (42 C.F.R. § 424.535(g)); therefore, it is
unnecessary to address 42 C.F.R. § 424.535(a)(9).
10

VI. Conclusion

I affirm CMS’s determination to revoke Petitioner’s Medicare enrollment and billing
privileges.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Harry K. Wong, DC,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-648
Decision No. CR4741

Date: November 22, 2016

DECISION

The Centers for Medicare & Medicaid Services (CMS), through an administrative
contractor, determined that the effective date for the reactivation of the Medicare billing
privileges for Harry K. Wong, DC (Dr. Wong or Petitioner) was November 25, 2015. Dr.
Wong requested a hearing before an administrative law judge to dispute this effective
date. Because CMS’s administrative contractor approved Dr. Wong’s revalidation
enrollment application that it received on November 25, 2015, the CMS administrative
contractor correctly determined that the effective date for the reactivation of billing
privileges is November 25, 2015. Therefore, I affirm CMS’s determination.

I. Background and Procedural History

Dr. Wong is a chiropractor (National Provider Identification (NPI) number 1841352416),
who has been enrolled in the Medicare program for many years as a supplier. CMS
Exhibit (Ex.) 5 at 1; Petitioner (P.) Ex. 2 at 1. Dr. Wong is affiliated with a group
practice called Wong Chiropractic Center, Inc. (NPI number 1194027466), which is also
enrolled in the Medicare program. CMS Ex. 7 at 1; P. Ex. 1 at 7; P. Ex. 2 at 1.
The address for Dr. Wong and the Wong Chiropractic Center was 1391 Woodside Road,
Redwood City, California. However, in May 2012, Wong Chiropractic Center’s office
manager filed a CMS-885B enrollment application to inform the CMS administrative
contractor that its new address was 1021 Alameda De Las Pulgas, Belmont, California.

P. Ex. 1 at 1, 2, 4, 6; P. Ex. 2 at2. The CMS administrative contractor acknowledged this
change of address for Wong Chiropractic Center. P. Ex. 1 at 7.

In 2014, the CMS administrative contractor sent a notice to Dr. Wong at the 1391
Woodside Road address to revalidate his Medicare enrollment information. Dr. Wong
did not receive the notice because 1391 Woodside Road was no longer his address.
When Dr. Wong did not respond to the revalidation request, on October 14, 2014, the
CMS administrative contractor deactivated Dr. Wong’s Medicare billing privileges. Dr.
Wong was not aware of the deactivation until September 2015. On November 10, 2015,
Wong Chiropractic Center’s office manager spoke with a representative from the CMS
administrative contractor and learned that the CMS administrative contractor deactivated
Dr. Wong for failing to revalidate his enrollment information. CMS Ex. | at 2; CMS Ex.
3; P. Ex. 1 at 1-2.

On November 25, 2015, the CMS administrative contractor received a CMS-855I
enrollment application from Dr. Wong. CMS Ex. | at 2; CMS Ex. 2; CMS Ex. 6. After
receiving some additional information from Dr. Wong (CMS Exs. 4, 5), on December 28,
2015, the CMS administrative contractor reactivated Dr. Wong’s Medicare billing
privileges effective November 25, 2015. CMS Ex. 7 at 1.

In his timely filed reconsideration request, Dr. Wong requested that the CMS
administrative contractor grant him a reactivation date of January 1, 2015. Dr. Wong
asserted that he should have an earlier reactivation date because the CMS administrative
contractor erroneously mailed the revalidation notice to an incorrect address, which
resulted in the deactivation. CMS Ex. 3.

The CMS administrative contractor issued an unfavorable reconsidered determination
that upheld November 25, 2015, as the effective date for the reactivation of Medicare
billing privileges. Further, the reconsidered determination stated:

[Dr. Wong] states in the appeal that the revalidation letter was
sent to the wrong address. The 8551 application that was
received November 25, 2015 updates the correspondence
address. Prior to that the correspondence address on file was
what was used to address the revalidation letter. It is the
provider's responsibility to ensure that Medicare has the
current information.

CMS Ex. | at 2.
Petitioner requested a hearing to dispute the reconsidered determination. On July 14,
2016, I issued an Acknowledgment and Pre-Hearing Order (Order), which established a
submission schedule for pre-hearing exchanges. In response, CMS filed a motion for
summary judgment with a brief in support of the motion (CMS Br.) and seven exhibits.
Petitioner submitted two exhibits.

IL. Decision on the Written Record

I admit all of the proposed exhibits into the record because neither party objected to any
of them. Order 7; Civil Remedies Division Procedures (CRDP) § 14(e).

My Order advised the parties to submit written direct testimony for each witness and that
I would only hold an in-person hearing if a party requested to cross-examine a witness.
Order {J 8-10; CRDP §§ 16(b), 19(b). CMS did not offer any written direct testimony.
Petitioner submitted written direct testimony from his office manager (P. Ex. 1);
however, CMS did not request to cross-examine that witness. Therefore, I issue this
decision based on the written record. Pre-Hearing Order 10; CRDP § 19(d).

III. Issue

Whether CMS had a legitimate basis to assign November 25, 2015, as the effective date
for reactivation of Dr. Wong’s Medicare billing privileges.

IV. Jurisdiction

I have jurisdiction to hear and decide this case. 42 U.S.C. § 1395cc(j)(8); 42 C.F.R.
§§ 424.545(a), 498.3(b)(15), (17), 498.5()(2).

V. Findings of Fact, Conclusions of Law, and Analysis
My findings of fact and conclusions of law are set forth in italics and bold font.

The Social Security Act (Act) authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations governing the enrollment process for providers and
suppliers. 42 U.S.C. §§ 1302, 1395cc(j). A “supplier” is “a physician or other
practitioner, a facility, or other entity (other than a provider of services) that furnishes
items or services” under the Medicare provisions of the Act. 42 U.S.C. § 1395x(d); see
also 42 U.S.C. § 1395x(u). For Medicare program purposes, chiropractors are considered
physicians. 42 U.S.C. § 1395x(r).

A supplier must enroll in the Medicare program to receive payment for covered Medicare
items or services. 42 C.F.R. § 424.505. The terms “Enroll/Enrollment means the process
that Medicare uses to establish eligibility to submit claims for Medicare covered services
and supplies.” 42 C.F.R. § 424.502. A provider or supplier seeking billing privileges
under the Medicare program must “submit enrollment information on the applicable
enrollment application. Once the provider or supplier successfully completes the
enrollment process ... CMS enrolls the provider or supplier into the Medicare program.”
42 C.F.R. § 424.510(a). CMS then establishes an effective date for billing privileges
under the requirements stated in 42 C.F.R. § 424.520(d) and may permit limited
retrospective billing under 42 C.F.R. § 424.521.

To maintain Medicare billing privileges, providers and suppliers must revalidate their
enrollment information at least every five years. CMS reserves the right to perform
revalidations at any time. 42 C.F.R. § 424.515. When CMS notifies providers and
suppliers that it is time to revalidate, the providers or suppliers must submit the
appropriate enrollment application, accurate information, and supporting documentation
within 60 calendar days of CMS’s notification. 42 C.F.R. § 424.515(a)(2).

CMS can deactivate an enrolled provider or supplier’s Medicare billing privileges if the
enrollee fails to comply with revalidation requirements. 42 C.F.R. § 424.540(a)(3).
When CMS deactivates providers or suppliers’ Medicare billing privileges “[n]o payment
may be made for otherwise Medicare covered items or services furnished to a Medicare
beneficiary.” 42 C.F.R. § 424.555(b). If CMS deactivates a provider or supplier’s billing
privileges due to an untimely response to a revalidation request, the enrolled provider or
supplier may apply for CMS to reactivate its Medicare billing privileges by completing a
new enrollment application or, if deemed appropriate, recertifying its enrollment
information that is on file. 42 C.F.R. § 424.540 (b)(1).

I. On November 25, 2015, the CMS administrative contractor received Petitioner’s
enrollment application (CMS -8551), which the CMS administrative contractor
ultimately approved.

Dr. Wong submitted a CMS-855I enrollment application on November 25, 2015, to
revalidate his enrollment as a supplier in the Medicare program. CMS Exs. 2, 6. After
requesting and receiving further information from Dr. Wong, the CMS administrator
approved Dr. Wong’s application and reactivated his Medicare billing privileges effective
November 25, 2015. CMS Exs. 4, 5, 7.

2. The effective date for Petitioner’s Medicare billing privileges is November 25,
2015.

The effective date for Medicare billing privileges for physicians, non-physician
practitioners, and physician or non-physician practitioner organizations is the later of the
“date of filing” or the date the supplier first began furnishing services at a new practice
location. 42 C.F.R. § 424.520(d). The “date of filing” is the date that the Medicare
contractor “receives” a signed enrollment application that the Medicare contractor is able
to process to approval. 73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); Donald Dolce,
M.D., DAB No. 2685 at 8 (2016). CMS’s published guidance for its contractors states
that the effective date for the reactivation of Medicare billing privileges is the date on
which the contractor received the enrollment application. Medicare Program Integrity
Manual (MPIM) § 15.27.1.2. That guidance is consistent with the effective date for
Medicare billing privileges in section 424.520(d) and with section 424.555(b)’s
prohibition on reimbursing services performed by deactivated providers and suppliers.

In the present case, the CMS administrative contractor properly determined that Dr.
Wong’s effective date for reactivation of his Medicare billing privileges is November 25,
2015, because that is the date that Dr. Wong filed his enrollment application that the
CMS administrative contractor ultimately approved.

Dr. Wong disagrees with this conclusion because he did not receive the revalidation
notice in 2014 and that his failure to respond to that notice, which he did not receive,
resulted in the deactivation of his Medicare billing privileges. In particular, Dr. Wong
asserts that his office notified CMS of his change in address in 2012, and that the CMS
administrative contractor should not have mailed the revalidation notice to his old
address. P. Ex. 2 at 1-2, 7.

Unfortunately, the record shows that Dr. Wong submitted a CMS-855B enrollment
application in 2012 to update the address of Wong Chiropractic Center, the practice
group with which he is affiliated. P. Ex. 1 at 1-2, 7; P. Ex. 2 at 2. However, there is no
evidence in the record that he submitted a CMS-855I enrollment application to update his
enrollment record as a chiropractor at the same time. Because Dr. Wang failed to update
his address as an individual supplier in 2012, the CMS administrative contractor mailed
the revalidation notice to the address it had on file for Dr. Wong, which was 1391
Woodside Road, Redwood City, California. CMS Ex. | at 2; P. Ex. 1 at 1. Therefore, it
was Dr. Wong’s failure to properly notify the CMS administrative contractor of the
change in his address that resulted in Dr. Wong’s inability to receive the revalidation
notice, ultimately resulting in the deactivation of his Medicare billing privileges.

V. Conclusion

1 affirm CMS’s determination that Petitioner’s effective date for Medicare billing
privileges is November 25, 2015.

/s/
Scott Anderson
Administrative Law Judge


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

AAA Healthcare Services, Inc.
(CCN: 747039;
NPI: 1144427485)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-656
Decision No. CR4739
Date: November 18, 2016

DECISION

Palmetto GBA, an administrative contractor acting on behalf of the Centers for Medicare
& Medicaid Services (CMS), revoked the Medicare enrollment and billing privileges of
Petitioner, AAA Healthcare Services, Inc., because Petitioner failed to timely provide a
Zone Program Integrity Contractor (ZPIC), Health Integrity, access to requested
documentation involving 30 of its patients. CMS upheld the revocation in a reconsidered
determination, and Petitioner requested a hearing to dispute the revocation. For the
reasons stated herein, I affirm CMS’s determination revoking Petitioner’s Medicare
enrollment and billing privileges.

I. Background

Petitioner is a home health agency that was enrolled as a provider of services in the
Medicare program. On December 1, 2015, the ZPIC informed Petitioner that it would be
“conducting a review of selected claims [Petitioner had] submitted to Medicare and/or
Medicaid,” and that “[t]he records we are requesting include any and all documentation
to support the medical necessity of services billed for the specific dates of service on the
attached list plus the preceding 60 days.” CMS Exhibit (CMS Ex.) | at 1-2. Petitioner
requested an additional 30 days to submit the requested records (CMS Ex. 3), and when
the records were not received by February 3, 2016, the ZPIC notified Petitioner that it
must submit the requested records within five days. CMS Ex. 4 at 1. After Petitioner
failed to respond to the ZPIC’s follow-up letter directing that it submit the documentation
within five days, Palmetto GBA notified Petitioner, on March 14, 2016, that it had
revoked Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R.
§ 424.535(a)(10)! based on Petitioner’s failure to provide access to requested
documentation upon the request of CMS or a Medicare contractor. CMS Ex. 5 at 1.
Additionally, Palmetto GBA informed Petitioner it had established a one-year re-
enrollment bar. CMS Ex. 5 at 1-2.

On April 4, 2016, Petitioner submitted a timely request for reconsideration, arguing that
the revocation of its Medicare enrollment and billing privileges was improper because it
had sent the requested documentation on March 10, 2016. Petitioner’s (P.) Ex. 4 at 2.
CMS’s Provider Enrollment Oversight Group issued a reconsidered determination on
April 26, 2016, in which it determined that Palmetto GBA properly revoked Petitioner’s
Medicare enrollment and billing privileges pursuant to 42 C.F.R. §§ 424.535(a)(10) and
424.516(f) because Petitioner “repeatedly failed to provide the documentation upon
request.” CMS Ex. 6 at 3. CMS explained that pursuant to 42 C.F.R. §§ 424.516(f) and
424.535(a)(10), providers are responsible for “maintaining and providing access to the
documentation upon the request of CMS or a Medicare contractor.” CMS Ex. 6 at 3.

Petitioner submitted a timely request for hearing that was dated June 6, 2016, and
received June 21, 2016. Petitioner supplemented its hearing request on June 30, 2016.

In an Order dated July 19, 2016, I directed the parties to submit pre-hearing briefs
addressing all issues of law and fact, along with any proposed exhibits. Order, § 3.
Pursuant to my Order, CMS submitted its pre-hearing brief (CMS Br.), along with six
proposed exhibits (CMS Exs. | to 6). Petitioner submitted its pre-hearing brief (P. Br.)
with five proposed exhibits.” In the absence of any objections, I will admit the parties’
exhibits into the record, with the exception of P. Ex. 5, which is a copy of an Order that I
issued on June 6, 2016; this Order is not offered as evidence in support of Petitioner’s
arguments, and I will not admit it into the record. I therefore admit CMS Exs. 1-6 and P.
Exs. 1-4.

Neither party offered the testimony of any witnesses, and therefore, a hearing to cross-
examine witnesses is not necessary. See Acknowledgment and Prehearing Order §§ 8, 9,

' CMS, in its brief, cites to 42 C.F.R. § 424.535(a)(1) as a basis for revocation, but it
otherwise appears that CMS intended to rely upon the same regulatory basis, 42 C.F.R.
§ 424.535(a)(10) that it and its contractor previously relied upon. CMS Br. at 3.

> Petitioner’s submission of proposed exhibits is not compliant with my Order, to include
that Petitioner did not upload its exhibits as separate documents and did not mark its
exhibits with whole numbers. I have re-designated Petitioner’s Exhibits A through D as
Petitioner’s Exhibits 1 through 4, respectively.
and 10. I consider the record in this case to be closed, and the matter is ready for a
decision on the merits.

Il. Issue

The issue is whether CMS had a legitimate basis for revoking Petitioner’s Medicare
enrollment and billing privileges pursuant to 42 C.F.R. §§ 424.535(a)(10) and 424.516(f)
because Petitioner did not timely provide the ZPIC access to requested documentation.

Il. Jurisdiction
I have jurisdiction to decide this issue. 42 C.F.R. §§ 498.3(b)(17), 498.5(/)(2).

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

The Social Security Act authorizes the Secretary of Health and Human Services
(Secretary) to establish regulations governing the enrolling of providers and suppliers in
the Medicare program. 42 U.S.C. § 1395cc(j)(1)(A). The Secretary promulgated
enrollment regulations in 42 C.F.R. part 424, subpart P. See 42 C.F.R. §§ 424.500-.570.
The regulations provide CMS with the authority to revoke the billing privileges of an
enrolled provider or supplier if CMS determines that a provider or supplier violated a
provision in 42 C.F.R. § 424.535(a).

A provider or supplier may request reconsideration of an initial determination to revoke
its privileges. 42 C.F.R. §§ 498.5(/)(1), 498.22(a). If dissatisfied with the reconsidered
determination, the provider or supplier may request a hearing before an administrative
law judge. Id. § 498.5()(2).

As a home health agency, Petitioner was a provider for purposes of the Medicare
program. 42 U.S.C. § 1395(x)(u).

1. The ZPIC sent Petitioner a request for documentation to
support the medical necessity of services billed for specified
dates of service, and Petitioner did not submit a response
within the time period designated by the ZPIC.

The ZPIC informed Petitioner that it would be “conducting a review of selected claims”
Petitioner had submitted, and requested that Petitioner submit requested documentation
supporting the medical necessity of services no later than 30 days from the date of the
December 1, 2015 letter. CMS Ex. | at 1. The documentation request included records
such as patients’ medical records for specific dates of service, nurses’ notes, therapy
progress notes and orders, and plans of care for specified periods. CMS Ex. | at 1.

> My findings of fact and conclusions of law are set forth in italics and bold font.
Petitioner sent a letter to the ZPIC on December 22, 2015, in which it requested an
extension until January 31, 2016, to provide the required documentation due to the

intervening holidays and an inability to make copies of the record
malfunctioning office copier. CMS Ex. 3 at 1.

Petitioner failed to meet the January 31, 2016 deadline. CMS Ex.

is as a result of a

4at1;P. Br. at2. On

February 3, 2016, the ZPIC issued a “SECOND REQUEST” via FedEx for Petitioner “to

submit to Health Integrity any medical records to support the me:

ical necessity and

reasonableness of the services billed to Medicare,” and directed that Petitioner submit the

requested documentation within five days. CMS Ex. 4 at 1.

Petitioner did not submit the requested documentation within five
admitted that it “submitted the requested records on 3/10/16 and t

days. Petitioner
ey were received on

3/11/16 at 9:43a[m] signed by L[.] Hawkins.” P. Ex. 4 at 1. Petitioner submitted

additional documentation on April 4, 2016. P. Ex. 4 at 1.

Allowing five days for mail service, even though service was presumably effectuated by
FedEx in fewer than five days, Petitioner was required to submit the requested
documentation to the ZPIC no later than February 16, 2016.* Petitioner did not submit a

timely response to the ZPIC’s February 3, 2016 letter that directe
requested records within five days, and Petitioner did not comply

it to submit the
with the ZPIC’s second

request until more than a month later. Therefore, Petitioner did not timely respond to the

ZPIC’s request for documentation.

2. CMS had a basis to revoke Petitioner’s Medicare enrollment

and billing privileges pursuant to 42 C.F.R.

§§ 424.535(a)(10) and 424.516(f) because Petitioner failed
to provide the documentation requested within the given

timeframe.

Pursuant to 42 C.F.R. § 424.535(a)(10), CMS may revoke a provi
billing privileges and any corresponding provider or supplier agre

der’s or supplier’s
ement if:

(i) The provider or supplier did not comply with the documentation
or CMS access requirements specified in § 424.516(f) of this

subpart.

(ii) A provider or supplier that meets the revocation criteria specified
in paragraph (a)(10)(i) of this section, is subject to revocation for a
period of not more than | year for each act of noncompliance.

* February 16, 2016 is first business day following February 13, 2016.
Section 424.516(f) provides additional provider and supplier requirements for enrolling
and maintaining active enrollment status in the Medicare program. Specifically, the
regulation provides:

(f) Maintaining and providing access to documentation. (1)(i) A provider
or a supplier that furnishes covered ordered items of DMEPOS, clinical
laboratory, imaging services, or covered ordered/certified home health
services is required to—

(A) Maintain documentation (as described in paragraph (f)(1)(ii) of
this section) for 7 years from the date of service; and

(B) Upon the request of CMS or a Medicare contractor, to provide
access to that documentation (as described in paragraph (f)(1)(ii) of
this section).

Petitioner concedes that it did not furnish the requested documentation in a timely
manner; specifically, Petitioner has submitted uncontroverted evidence that it did not
submit the requested documentation until March 2016, which was well after the deadline.
P. Ex. 4 at 1 (Petitioner’s April 4, 2016 letter stating that it mailed records to the ZPIC on
March 10, 2016); see CMS Ex. 6 at 2 (reconsidered determination stating that Petitioner
submitted a “medical records submission letter” on March 7, 2016); P. Br. at 2
(Petitioner’s statement that it submitted a letter on March 7, 2016, and “included the
records requested with a summary on each of the requested records”).

I conclude that CMS had a basis to revoke Petitioner’s Medicare enrollment and billing
privileges pursuant to 42 C.F.R. §§ 424.535(a)(10) and 424.516(f) because Petitioner
failed to provide the requested documentation in a timely manner. Pursuant to 42 C.F.R.
§ 424.516(f), a party is required to provide documents “upon request.” Here, Petitioner
failed to provide the documents upon the ZPIC’s request, even though it was given ample
opportunity to submit the documents. The ZPIC first requested that Petitioner submit the
documents within 30 days of its December 1, 2015 letter, and then extended the deadline
an additional 30 days following Petitioner’s request for additional time based on the
holidays and problems with its photocopier. After Petitioner did not comply with the
extended deadline, the ZPIC gave Petitioner yet another opportunity to submit the
documentation. Petitioner failed to submit any documentation and did not request
another extension of the deadline; rather, Petitioner simply ignored the ZPIC’s time-
sensitive second request for documentation. While Petitioner eventually provided the
requested documents more than a month after the ZPIC sent its second request letter,
Petitioner did so well beyond the time allowed by the ZPIC. Palmetto was authorized to
revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R.

§§ 424.516(f) and 424.535(a)(10) due to Petitioner’s failure to provide access to
documentation requested by the ZPIC. Here, there is no dispute that Petitioner did not
provide the requested documents within the given timeframe. P. Br. at 2; see P. Ex. 4;
CMS Ex. 6 at 2. Therefore, CMS had a legitimate basis to revoke Petitioner’s Medicare
enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(10); see Letantia
Bussell, M.D., DAB No. 2196 at 13 (2008) (review of CMS determination by ALJ
addresses “whether CMS had the authority to revoke . . .”).

Petitioner explained in its request for hearing that it was unable to comply with the
ZPIC’s request in a timely manner “due to financial issues that prevented us access to the
records at the office (payment for rent was late, thus the landlord denied us access to the
requested records).” Request for Hearing, at 1. However, Petitioner acknowledged in its
brief that it paid its rent in full on February 11, 2016, and regained access to its office on
that same date. P. Br. at 1-2. Therefore, as Petitioner regained access to the records on
February 11, 2016, it is unclear why it took Petitioner approximately one more month to
comply with the records request and Petitioner did not submit the requested
documentation until either March 7 or 10, 2016. Further, as Petitioner had previously
requested an extension of the deadline to comply with the request, it is unclear why
Petitioner did not inform the ZPIC that it did not have access to the records and request
an additional short extension of the deadline. Instead, Petitioner essentially ignored the
second request and the accompanying deadline, and did not submit the requested records
for nearly a month following the date it regained access to the documentation in question.
Petitioner has not presented any meritorious basis to challenge CMS’s revocation of its
enrollment and billing privileges, and it has not presented evidence of a circumstance
beyond its control that prevented it from complying with the ZPIC’s request. Petitioner’s
failure to pay its rent, and the resulting temporary loss of access to its office, does not
amount to a circumstance beyond its control.

Vv. Conclusion

For the reasons explained above, I affirm the revocation of Petitioner’s Medicare
enrollment and billing privileges.

/s/
Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Arlene Bailey,
(O.I. File No.: H-16-40274-9),

Petitioner,
v.
The Inspector General.
Docket No. C-16-783
Decision No. CR4738

Date: November 17, 2016

DECISION

Petitioner, Arlene Bailey, was a licensed practical nurse (LPN) in the State of Louisiana.
Following a hearing at which Petitioner appeared and testified, the Louisiana State Board
of Practical Nurse Examiners (State Board) found that Petitioner had violated the nursing
practice statute by engaging in unprofessional conduct. Based on these findings, the
State Board suspended Petitioner’s LPN license. Now, pursuant to section 1128(b)(4) of
the Social Security Act (Act), the Inspector General (I.G.) has excluded Petitioner from
participation in Medicare, Medicaid, and all federal health care programs until she
regains her LPN license.

For the reasons set forth below, I find that Petitioner’s LPN license was suspended for
reasons bearing on her professional competence or professional performance. The I.G.
therefore had a legal basis to exclude her from program participation. The duration of the
exclusion is the minimum required by section 1128(c)(3)(e) of the Act; accordingly, it is
reasonable as a matter of law.
I. Background

In a letter dated May 30, 2016, the LG. advised Petitioner that she was excluded from
participation in Medicare, Medicaid, and all federal health care programs because her
license to provide health care as a licensed practical nurse in the State of Louisiana was
revoked, suspended, or otherwise lost for reasons bearing on her professional
competence, professional performance, or financial integrity. I.G. Exhibit (Ex.) 2. The
letter explained that section 1128(b)(4) of the Act authorizes the exclusion. /d. Petitioner
timely requested review. I convened a telephone prehearing conference and issued an
Order and Schedule for Filing Briefs and Documentary Evidence.

Pursuant to that order, the I.G. submitted a brief and four proposed exhibits (I.G. Br.; I.G.
Exs. 1-4). Petitioner presented her position in a letter (P. Br.). Petitioner also submitted
answers to the questions posed in the informal short form brief which this office provided
to her (P. Informal Br.). In the absence of any objections, I admit into evidence I.G. Exs.
1-4.

The parties agreed that this case could be resolved without an in-person hearing. I.G. Br.
at 6; P. Informal Br. at 3; see also Order and Schedule for Filing Briefs and Documentary
Evidence § 6. I therefore decide this case based on the written record.

Il. Discussion

1. The I.G. is authorized to exclude Petitioner because the Louisiana State
Board suspended Petitioner’s LPN license for reasons bearing on her
professional competence or professional performance.'

The Act authorizes the Secretary of Health and Human Services to exclude from program
participation an individual whose license to provide health care is revoked, suspended, or
otherwise lost for reasons bearing on her professional competence, professional
performance, or financial integrity. Act § 1128(b)(4); accord 42 C.F.R. § 1001.501(a).

Petitioner does not dispute that her LPN license is suspended. Nor does she dispute that
the suspension was imposed for reasons bearing on her professional competence or
professional performance, within the meaning of section 1128(b)(4) of the Act. P. Br.; P.
Informal Br. There can be no doubt that these elements are satisfied in the present case.

The State hearing officer who presided at Petitioner’s license suspension hearing found
that Petitioner tested positive for cocaine while at work. I.G. Ex. 4 at 1. The hearing
officer found credible Petitioner’s assertion that she did not knowingly ingest the cocaine;

' My findings of fact and conclusions of law are set out in bold italic type.
nevertheless, the hearing officer found that the toxicology report confirmed that cocaine
was found in Petitioner’s system. I.G. Ex. 4 at 2. Based on the hearing officer’s
findings, the State Board concluded that Petitioner had violated Louisiana nursing
practice statutes and regulations in that she was unfit or incompetent, and was guilty of
unprofessional conduct. /d. Among other things, the State Board cited the following
instance of unprofessional conduct:

...[U]sing or being under the influence of drugs which impair
judgment while on duty, or using or being under the influence of
illegal drugs whether on or off duty....

Id. (bold type in original). It is well settled that findings of unprofessional conduct under
state law bear on an individual’s professional competence or performance within the
meaning of section 1128(b)(4). See, e.g., Marvin L. Gibbs, Jr., M.D., DAB No. 2279 at 7
(2009) (and cases cited therein).

Petitioner’s letter explains the circumstances that led to her positive drug test. She states
that she did not ingest cocaine and that the testing facility must have misidentified her
urine sample. P. Br. Even if I found Petitioner’s explanation credible (as apparently the
State hearing officer did), I have no authority to look behind the State Board’s
conclusions that Petitioner had cocaine in her system and that the positive drug test
represents unprofessional conduct. To do so would represent an impermissible collateral
attack on the State Board’s decision to suspend Petitioner’s license. See 42 C.F.R.

§ 1001.2007(d) (providing that, where an exclusion is based on an agency’s prior
determination where the facts were adjudicated and a final decision was made, the
underlying basis for that determination is not reviewable and may not be collaterally
attacked).

2. As a matter of law, Petitioner must be excluded until she regains her LPN
license in Louisiana.

The Act requires that Petitioner’s period of exclusion “shall not be less than the period
during which the individual’s . . . license. . . is . . . revoked, suspended, or surrendered... .”
Act § 1128(c)(3)(E). Petitioner does not dispute that she must be excluded until she regains
her LPN license. Instead, Petitioner asks that I reinstate her LPN license. P. Br.
Petitioner’s request reflects a misunderstanding of my authority. I cannot direct the State to
take any action on Petitioner’s license. Petitioner must address her request to reinstate her
LPN license to Louisiana State authorities (either the State Board or a State court). If, in the
future, Louisiana authorities reinstate her LPN license, Petitioner may then request that the
1.G. reinstate her participation in Medicare, Medicaid, and other federal health programs.
Til. Conclusion

For the above reasons, I conclude that the LG. had a legal basis to exclude Petitioner
from participation in Medicare, Medicaid, and all other federal health care programs for
so long as her LPN license is suspended.

/s/
Leslie A. Weyn
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Center for Tobacco Products,

(FDA No. FDA-2015-H-1193)
Complainant
v.

Phero and Anna, Inc.
d/b/a Lone Star Market 2,

Respondent.
Docket No. C-15-2023
Decision No. CR4737

Date: November 21, 2016

INITIAL DECISION

The Center for Tobacco Products (CTP) seeks to impose a civil money penalty
against Respondent, Phero and Anna, Inc. d/b/a Lone Star Market 2, located at
5758 Greenwood Drive, Corpus Christi, Texas 78417, for five violations of the
Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140, within a thirty-six month period.
Specifically, CTP alleges that Lone Star Market 2 violated the Act by
impermissibly selling tobacco products to minors, on three separate occasions, and
failing to verify, by means of photo identification containing a date of birth, that
the purchasers were 18 years of age or older, on three separate occasions.
Procedural History

CTP began this matter by serving an administrative complaint seeking a $5,000
civil money penalty on Respondent Lone Star Market 2, at 5758 Greenwood
Drive, Corpus Christi, Texas 78417, and by filing a copy of the complaint with the
Food and Drug Administration’s (FDA) Division of Dockets Management.
Respondent timely answered CTP’s complaint. In its answer, Respondent denied
the allegations. On June 3, 2015, I issued an Acknowledgement and Prehearing
Order (APHO) that set deadlines for the parties to file their pre-hearing exchanges.

CTP filed its pre-hearing exchange on May 10, 2016. CTP’s pre-hearing
exchange included the declarations of two witnesses. Respondent filed its pre-
hearing exchange on May 31, 2016. Respondent provided the declarations of four
witnesses.

On August 2, 2016, I held a pre-hearing conference in this case. Following the
pre-hearing conference, I issued an Order that scheduled the hearing for
September 22, 2016. That Order noted that during the pre-hearing conference,
Respondent’s counsel indicated that he wanted to cross examine one of CTP’s
witnesses, Inspector Juan Garcia. The Order further noted that CTP indicated that
it did not want to cross examine any of Respondent’s witnesses.

On August 9, 2016, Respondent filed a Motion for Summary Decision and to
Strike Inspector Garcia’s testimony. CTP filed a response on August 24, 2016. I
issued an Order on August 25, 2016, denying Respondent’s Motion.

On September 22, 2016, a hearing was held in this case. The purpose of the
hearing was to allow Respondent to cross examine Inspector Juan F. Garcia.

On an October 12, 2016, I informed the parties that the Court had received the
transcript of the hearing, and set the deadline for the parties’ post-hearing brief
submissions as November 14, 2016. Both parties filed post-hearing briefs.

Analysis
I. Violations

CTP determined to impose a civil money penalty against Respondent pursuant to
the authority conferred by the Federal Food, Drug, and Cosmetic Act (Act) and
implementing regulations at Part 21 of the Code of Federal Regulations. The Act
prohibits the misbranding of tobacco products while they are held for sale after
shipment in interstate commerce. 21 U.S.C. § 331(k). FDA and its agency, CTP,
may seek civil money penalties from any person who violates the Act’s

requirements as they relate to the sale of tobacco products. 21 U.S.C. § 331(f)(9).
The sale of tobacco products to an individual who is under the age of 18 and the
failure to verify the photographic identification of an individual who is not over
the age of 26 are violations of implementing regulations. 21 C.F.R. §§ 1140.14(a),
(b)C).

In its Complaint, CTP alleges that Respondent Lone Star Market 2 committed five
violations of the Act and its implementing regulations within a thirty-six month
period. Lone Star Market 2 filed an answer, and informal brief, that denied selling
a tobacco product to a minor. Answer; Informal Brief of Respondent.

The matter currently before me involves one prior complaint. The prior complaint
was settled by the parties and closed on October 20, 2014. In settling the
complaint, the Respondent admitted the violations occurred, waived the ability to
contest the violations in the future, and stated that it understood that the admitted
to violations may be counted in determining the total number of violations for
future enforcement actions. Complaint; Informal Brief of Complainant. The
current Complaint involves two new violations: impermissibly selling cigarettes
to a minor, and failing to verify, by means of photo identification containing a date
of birth, that the purchaser was 18 years of age or older.

CTP’s case against Respondent rests on the testimony of Mr. Garcia plus
corroborating evidence. CTP Ex. 4. Mr. Garcia is an FDA-commissioned officer
whose duties include determining whether retail outlets are unlawfully selling
tobacco products to minors. Id. at 1-2. Mr. Garcia’s inspections entail
accompanying minors who attempt to purchase tobacco products from retail
establishments such as the one operated by Respondent. Id.

Mr. Garcia testified that he went to Respondent’s place of business on November
9,2014. CTP Ex. 4 at 2-3. Mr. Garcia further testified that on November 9, 2014,
he confirmed that the minor was carrying her photographic identification, and that
she did not have tobacco products in her possession. Mr. Garcia testified that the
minor entered the establishment and went directly to the sales counter. Mr. Garcia
explained that he stood in an area of the store with a clear view of the sales
counter. Mr. Garcia stated that he saw the minor purchase a package of cigarettes
from an employee of Respondent, and that the minor did not provide photographic
identification to the employee, and that the employee did not provide the minor
with a receipt after purchase. Id.

Mr. Garcia stated that after the purchase, the minor and he both exited the store
and returned to his vehicle, where the minor immediately gave him the pack of
cigarettes. The cigarettes were observed to be a package of Marlboro cigarettes.
CTP Ex. 4 at 3. Mr. Garcia testified that he then labeled the cigarettes as
evidence, and took photographs of the package. Id. at 3, 12-13. Mr. Garcia
testified that shortly after the inspection he recorded the inspection in the FDA’s
Tobacco Inspection Management System. Id. at 3.

Mr. Garcia’s testimony plus the corroborating evidence consisting of photographs
of the pack of cigarettes that he obtained from the minor on November 9, 2014,
are proof that Respondent unlawfully sold a tobacco product to a minor, and failed
to check the minor’s identification before making the sale.

Throughout the case Respondent’s counsel has asserted that there were other
customers in the store at the time of the purchase and that the store owner, Mr.
Loubani, personally knew Mr. Garcia. The inference being that because Mr.
Loubani knew Mr. Garcia he would not have sold cigarettes to a minor in his
presence. Respondent’s counsel further argued at hearing that any testimony from
Mr. Garcia should be stricken as hearsay. In addition to Mr. Loubani’s testimony,
Respondent offered the testimony of Ms. Grande, Mr. Gutierrez, and Ms. Young.

In its post-hearing brief, Respondent again asserts Mr. Garcia’s testimony should
be stricken as hearsay and that Mr. Loubani would not have sold cigarettes to Mr.
Garcia as he knew him to be a tobacco inspector. Respondent further argues that
Mr. Garcia’s reliance on the minor’s driver’s license and birth certificate is
misplaced and that additional effort should have been made to verify the veracity
of these documents.

CTP’s post-hearing brief asserts that Mr. Garcia’s testimony should not be
considered hearsay and that the witness statements submitted by Respondent were
irrelevant to the issues at hand.

I find that although Inspector Garcia did not verify the birth certificate or driver’s
license with the state authorities, the method he used to verify their authenticity
was sufficient. Mr. Garcia examined the documents and compared the photo on
the license with the minor. Mr. Garcia testified that he was familiar with these
types of documents. I find that his assumption of validity was reasonable —
especially in the absence of any evidence to the contrary. I similarly find that
Respondent’s assertion that he knew Mr. Garcia and would not have sold
cigarettes to a minor in his presence is unpersuasive. Mr. Garcia’s testimony is
that the minor entered the store without cigarettes. As a result, the only reasonable
explanation that I can find for her emerging from the store with cigarettes is that
she purchased them in the store. The evidence that she made such a purchase is
supported by Mr. Garcia’s testimony plus corroborating evidence. The witness
statements submitted by Respondent indicating that Respondent has a policy in
place against selling cigarettes to minors and that Respondent has not sold

cigarettes in the past is not sufficient to establish that the sale to a minor did not
occur on November 9, 2014.

Respondent’s request that Mr. Garcia’s testimony be stricken as hearsay is denied.
Under 21 C.F.R. Part 17, the Administrative Law Judge determines the
admissibility of evidence and has discretion to apply the Federal Rules of
Evidence when deemed appropriate. However, the Federal Rules of Evidence are
not controlling in an administrative hearing. Mr. Garcia personally witnessed the
sale and observed the minor enter Respondent’s establishment without cigarettes
and subsequently leave the store with cigarettes in hand. That testimony, plus the
corroborating evidence, leads to the inference that the minor could only have
obtained cigarettes by purchasing them at Respondent’s business establishment.

I find that these facts establish Respondent Phero and Anna, Inc. d/b/a Lone Star
Market 2’s liability under the Act.

II. Civil Money Penalty

Pursuant to 21 U.S.C. § 333(f)(9), Respondent Lone Star Market 2 is liable for a
civil money penalty not to exceed the amounts listed in FDA’s civil money
penalty regulations at 21 C.F.R. § 17.2. In its Complaint, CTP sought to impose
the maximum penalty amount, $5,000, against Respondent for five violations of
the Act and its implementing regulations within a thirty-six month period.
Complaint J 13. In its Informal Brief, CTP continues to assert that a $5,000 civil
money penalty is appropriate. Informal Brief of Complainant at 9-11.

In both its Answer and its Informal Brief, Respondent denied any obligation to pay
a civil money penalty because it did not violate the regulations. However, the
parties previously agreed in a December 14, 2015, stipulation that Respondent had
the ability to pay the $5,000 civil money penalty.

Ihave found that Respondent committed five violations of the Act and its
implementing regulations within a thirty-six month period. When determining the
amount of a civil money penalty, I am required to take into account “the nature,
circumstances, extent and gravity of the violations and, with respect to the
violator, ability to pay, effect on ability to continue to do business, any history of
prior such violations, the degree of culpability, and such other matters as justice
may require.” 21 U.S.C. § 303(f)(5)(B). Respondent has not provided any
arguments with regards to the nature, circumstances, extent and gravity of the
violations, any history of prior such violations, the degree of culpability, etc.
Instead, Respondent’s sole argument has been that it should not have to pay a civil
money penalty because it did not commit the violations.

i. Nature, Circumstances, Extent and Gravity of the Violations

Time and again, Respondent Lone Star Market 2 has failed to comply with the Act
and its implementing regulations. Over the course of the five violations discussed
in this Complaint, Respondent has admitted to three violations, and I have found
that Respondent committed the two most recent violations; specifically
Respondent has committed: three violations of selling tobacco products to minors,
and two violations for failing to verify, by means of photo identification
containing a date of birth, that the purchasers were 18 years of age or older. The
repeated inability of Respondent to comply with federal tobacco regulations is
serious in nature and the civil money penalty amount should be set accordingly.

ii. Respondent’s Ability to Pay And Effect on Ability to do Business

As noted above, Respondent previously stipulated that it has the ability to pay the
$5,000 civil money penalty.

iii. History of Prior Violations

The current action is the second civil money penalty action brought against
Respondent since September 2, 2014 for violations of the Act and its
implementing regulations. In the first civil money penalty action, CRD Docket
Number C-14-1705, FDA Docket Number FDA-2014-H-1189, Respondent twice
violated the prohibition against selling tobacco products to persons younger than
18 years of age, 21 C.F.R. § 1140.14(a), and violated the requirement that retailers
verify, by means of photo identification containing a purchaser’s date of birth, that
no tobacco purchasers are younger than 18 years of age, 21 C.F.R.
§ 1140.14(b)(1). Respondent settled the prior complaint with CTP for an
undisclosed penalty amount.

I agree with CTP that “[t]hese repeat violations show an unwillingness or inability
to sell tobacco products in accordance with federal tobacco regulations.” Informal
Brief at 11. While Respondent has already paid a civil money penalty for its
previous violations, its continued inability to comply with the federal tobacco
regulations calls for a more severe penalty.

iv. Degree of Culpability

Respondent Lone Star Market 2 admitted to three violations. Based on my finding
that Respondent committed the two most recent violations in the current
complaint, I hold it fully culpable for all five violations of the Act and its
implementing regulations.
v. Additional Mitigating Factors
Respondent has not asserted any mitigating factors.
vi. Penalty

Based on the foregoing reasoning, I find a penalty amount of $5,000 to be
appropriate under 21 U.S.C. §§ 303(f)(5)(B) and 333(f)(9).

Conclusion

Pursuant to 21 C.F.R. § 17.45, I enter judgment in the amount of $5,000 against
Respondent, Phero and Anna, Inc. d/b/a Lone Star Market 2, for five violations of
the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140, within a thirty-six month period.

/s/
Catherine Ravinski
Administrative Law Judge


Petitioner, Hussein Awada, M.D., is a physician who, until recently, was licensed to
practice in Michigan. He conspired to distribute more than 80,000 prescriptions for
controlled substances to individuals recruited by his co-conspirator. At the same time, he
Medicare, Medicaid, and Blue Cross/Blue Shield massive amounts (more than $2.3
million) for unnecessary services or for services that he did not provide. He was
convicted of aiding and abetting healthcare fraud and of conspiracy to possess with intent
to distribute controlled substances. Based on these convictions, the Inspector General

as excluded him for twenty-three years from participating in Medicare, Medicaid,
and all federal health care programs, as authorized by sections 1128(a)(1) and 1128(a)(4)
of the Social Security Act (Act). Petitioner concedes that he must be excluded for a
minimum period of five years but challenges the length of his exclusion.

bille

(IG)

For t

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Hussein Awada, M.D.,

(OI File No. 5-11-40776-9),
Petitioner,

v.

The Inspector General.

Docket No. C-16-700
Decision No. CR4736

Date: November 15, 2016

DECISION

e reasons discussed below, I find that the twenty-three-year exclusion falls within a
reasonable range.
Background

In a letter dated May 31, 2016, the IG advised Petitioner Awada that, because he had
been convicted of a criminal offense related to the delivery of an item or service under
Medicare or a state healthcare program and of a criminal offense related to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance, the IG
was excluding him from participating in Medicare, Medicaid, and all federal health care
programs for a period of twenty-three years. The letter explained that sections 1128(a)(1)
and 1128(a)(4) of the Act authorize the exclusion. IG Exhibit (Ex.) 1.

Petitioner timely requested review.

The parties have submitted written arguments. (IG Br.; P. Br.). With his brief, the IG
submitted five exhibits (IG Exs. 1-5). Petitioner submitted five exhibits (P. Exs. 1-5). In
the absence of any objections, I admit into evidence IG Exs. 1-5 and P. Exs. 1-5.

Neither party asserts that an in-person hearing is necessary. I.G. Br. at 11; P. Br. at 16.
The parties agree that that Petitioner Awada was convicted of crimes related to the
delivery of an item or service under Medicare or a state healthcare program and related to
the unlawful manufacture, distribution, prescription, or dispensing of a controlled
substance, and must therefore be excluded from program participation for at least five
years. IG Br. at 1-2; P. Br. at 1-2.

Discussion

Based on the aggravating factors and one mitigating
factor, a twenty-three-year exclusion is reasonable.

Section 1128(a)(1) mandates that the Secretary of Health and Human Services exclude an
individual who has been convicted of a felony relating to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial misconduct in connection with the
delivery of a health care item or service. See 42 C.F.R. § 1001.101(c).

Section 1128(a)(4) mandates that the Secretary of Health and Human Services exclude
from program participation any individual or entity convicted of a felony criminal offense
“relating to the unlawful manufacture, distribution, prescription, or dispensing of a
controlled substance.” See 42 C.F.R. § 1001.101(d).

In this case, Petitioner Awada was licensed to practice medicine and to administer
controlled substances in the State of Michigan. IG Ex. 5 at 7. Although the record does

' T make this one finding of fact/conclusion of law.
not detail the particulars of his crimes, it seems that he engaged in two separate felonious
schemes. For more than a year, he and others distributed prescriptions for controlled
substances (Oxycodone and Roxicodone) to individuals who were actively recruited by
one of his accomplices. Needless to say, no medical need justified the prescriptions.
Petitioner himself actively ran this “pill mill,” contributing to the opiate epidemic “in a
very large way.” IG Ex. 3 at 2; P. Ex. 3 at 13.

At the same time, Petitioner fraudulently billed Medicare, Medicaid, and Blue Cross/Blue
Shield for health services that he did not provide, or, worse, he provided unnecessary
services just so he could justify his billings. In doing so, he abused more than 100 of his
patients, subjecting them to invasive and unnecessary tests on a monthly basis. P. Ex. 3
at 2, 13-15.

Petitioner Awada pled guilty in federal district court to one felony count of conspiracy to
possess with intent to distribute controlled substances, in violation of 18 U.S.C. §§ 846,
841(a)(1) and (b)(1)(C). He also pled guilty to one felony count of health care fraud,
aiding and abetting, in violation of 18 U.S.C. §§ 1347 and 2. IG Ex. 2 at 1; see IG Ex. 3
at 1-3. The court entered judgment against him on November 16, 2015. IG Ex. 2 at 1.
The Court sentenced him to 84-months imprisonment for each count, to be served
concurrently, and ordered him to pay $2,348,000 in restitution ($848,000 to Blue
Cross/Blue Shield and $1,500,000 to the Medicare trust fund). IG Ex. 2 at 6.

Petitioner agrees that he must be excluded for at least five years. Act § 1128(c)(3)(B); 42
C.F.R. §§ 1001.102(a), 1001.2007(a)(2); P. Br. at 2. I now consider whether the length
of the exclusion, beyond five years, falls within a reasonable range.

Among the factors that may serve as a basis for lengthening the period of exclusion are
the four that the IG relies on in this case: 1) the acts resulting in the conviction, or similar
acts, caused a government program or another entity financial losses of $5,000 or more;
2) the acts that resulted in the conviction, or similar acts, were committed over a period of
one year or more; 3) the sentence imposed by the court included incarceration; and 4) the
convicted individual has been the subject of any other adverse action by any federal,

state, or local government agency or board, if the adverse action is based on the same set
of circumstances that serves as a basis for the exclusion. 42 C.F.R. § 1001.102(b). The
presence of an aggravating factor or factors, not offset by any mitigating factor or factors,
justifies lengthening the mandatory period of exclusion.

Program financial loss (42 C.F.R. § 1001.102(b)(1)). Restitution has long been
considered a reasonable measure of program losses. Jason Hollady, M.D., DAB No.
1855 (2002). Here, the sentencing judge ordered Petitioner to pay a whopping
$2,348,000 in restitution to the victims of his crime — the Blue Cross/ Blue Shield
insurance company and the Medicare program. LG. Ex. 2 at 6. Thus, Petitioner’s actions
resulted in program financial losses many, many times greater than the $5,000 threshold

for aggravation. The enormity of these losses constitutes an exceptionally aggravating
factor that compels a period of exclusion significantly longer than the five-year
minimum. See Jeremy Robinson, DAB No. 1905 (2004); Donald A. Burstein, Ph.D.,
DAB No. 1865 (2003).

Petitioner does not challenge the amount of program losses and concedes that the entire
financial loss must be considered “regardless of whether full or partial restitution has
been made.” 42 C.F.R. § 1001.102(b)(1); P. Br. at 4. Nevertheless, he argues that I
should not ignore the fact that he paid full restitution. I disagree. Petitioner did not
return that money voluntarily. He repaid his victims — at least some of them; the losses
suffered by his patient victims are more difficult to monetize — only after he was caught,
convicted, and ordered to do so. See IG Ex. 2 at 8; P. Ex. 3 at 24-25 (indicating that
forfeiture of his assets, to pay restitution, was part of the defendant’s sentence and
included in the final judgment). That he complied with the criminal court’s order does
not eliminate the loss as an aggravating factor. The amount of loss — whether repaid or
not — reflects the magnitude of his crimes and must be considered. Indeed, many, if not
most, excluded individuals in Petitioner’s situation can show that they paid the court-
ordered restitution. They either pay or suffer the consequences, which can be significant.

Moreover, an exclusion is supposed to protect program integrity and program
beneficiaries. As the regulations recognize, the amount of program losses reflects, in
part, the seriousness of the individual’s crime and thus the level of threat he poses to
program integrity. While the process is inexact, so long as the IG reasonably translates
the aggravating factor into an increase in the period of exclusion, I must affirm his
determination. That a corrupt physician and his schemes can cause health care programs
millions of dollars in losses underscores the importance of excluding the unscrupulous.
Health care programs simply cannot withstand this level of fraud.

Duration of crime (42 C.F.R. § 1001.102(b)(2)). Petitioner’s criminal acts were
committed over a period of approximately 14 months — beginning in December 2010 and
continuing until February 2012. I.G. Ex. 3 at 2. The Departmental Appeals Board has
sustained significant increases in the period of exclusion based on wrongful acts that
were committed for even just “‘slightly more’ than the one-year minimum standard.”
Jeremy Robinson, DAB No. 1905 at 12 (2004), citing Donald A. Burstein, Ph.D., DAB
No. 1865 at 12 (2003).

Petitioner concedes that his criminal activity lasted for 14 months, but points to letters
from grateful patients, and argues that I should also consider the “outstanding treatment
and exemplary care” he gave to program beneficiaries during the period of his criminal
activities. P. Br. at 8-9. First, I do not agree that Petitioner did not harm patients. As
noted above, he subjected approximately 100 of them to unnecessary and sometimes
invasive procedures. I consider that harmful. Moreover, as discussed below, I may
consider mitigating only those factors listed in the regulation. That, while he engaged in
illegal activities, a physician also cared well for some of his patients is not a factor I may
consider to offset this (or any other) aggravating factor. 42 C.F.R. § 1001.102(c).

Incarceration (42 C.F.R. § 1001.102(b)(5)). The criminal court sentenced Petitioner to a
very substantial period of incarceration — seven years. I.G. Ex. 3 at 2.

While any period of incarceration justifies increasing the period of exclusion, the Board
has repeatedly held that long periods of incarceration are relevant in determining whether
a period of exclusion is reasonable. Eugene Goldman, M.D., a/k/a Yevgeniy Goldman,
M.D., DAB No. 2635 at 6 (2015). Generally, the longer the jail time, the longer the
exclusion, because a lengthy sentence evidences a more serious offense. See Jeremy
Robinson, DAB No. 1905 (2004) (citing Jason Hollady, M.D., DAB No. 1855 at 12
(2002), where the Board characterized the nine-month incarceration as “relatively
substantial”); Stacy Ann Battle, D.D.S., DAB No. 1843 (2002) (finding that four months
in a halfway house, followed by four months home confinement justifies lengthening the
period of exclusion); Brenda Mills, M.D., DAB CR1461, aff'd DAB No. 2061 (2007)
(finding that six months home confinement justifies increase in length of exclusion).

Other adverse actions (42 C.F.R. § 1001.102(b)(9). Based on the circumstances
underlying this exclusion, the Michigan Department of Licensing and Regulatory Affairs
revoked Petitioner’s license to practice medicine. IG Exs. 4, 5.

Mitigating factor. The regulations consider as mitigating just three factors: 1) a
petitioner was convicted of three or fewer misdemeanor offenses and the resulting
financial loss to the program was less than $1,500; 2) the record in the criminal
proceedings demonstrates that a petitioner had a mental, physical, or emotional condition
that reduced his culpability; and 3) a petitioner’s cooperation with federal or state
officials resulted in others being convicted or excluded, or additional cases being
investigated, or a civil money penalty being imposed. 42 C.F.R. § 1001.102(c).

The parties agree that Petitioner Awada cooperated with law enforcement and his
cooperation qualifies as a mitigating factor. Petitioner initially refused to take
responsibility for his actions, forcing prosecutors to give one of his co-conspirators “a
tremendous break” in return for the testimony that was essential in building a case against
Petitioner. P. Ex. 3 at 14. After his arrest, however, Petitioner cooperated with law
enforcement. In sentencing, the judge gave him “significant credit” for that cooperation;
nevertheless he sentenced him to seven years in prison, which speaks volumes for the
seriousness of his offenses. By the same token, I consider Petitioner’s cooperation with
law enforcement a mitigating factor, which justifies decreasing the period of exclusion.
However, that decrease is already reflected in the 23-year exclusion, which would have
been substantially longer had Petitioner not cooperated.
Petitioner also claims that his mental health issues constitute a mitigating factor. He
suffers from a narcissistic personality disorder and bipolar disorder. However, the Court
explicitly found that Petitioner’s mental health issues do not excuse what he did, “which
is very serious.” P. Ex. 3 at 18. Because the court found that his mental condition did
not reduce his culpability, this is not a mitigating factor.

For more than a year, Petitioner engaged in two separated felonies, which the sentencing
court correctly characterized as “very, very serious.” P. Ex. 3 at 19. His felonious
conduct cost Medicare and Blue Cross/Blue Shield vast amounts of money. Because his
crimes were so serious, the Court sentenced him to seven years in prison, and the state
licensing board revoked his license to practice medicine. I recognize that he cooperated
with law enforcement. Nevertheless, based on the totality of the aggravating and
mitigating factors, I find that the 23-year exclusion falls within a reasonable range.

Conclusion

The L.G. properly excluded Petitioner from participating in Medicare, Medicaid, and
other federal health care programs. So long as the period of exclusion is within a
reasonable range, based on demonstrated criteria, I have no authority to change it. Joann
Fletcher Cash, DAB No. 1725 at 7, citing 57 Fed. Reg. 3298, 3321 (1992). I find that the
23-year exclusion falls within a reasonable range.

/s/
Carolyn Cozad Hughes
Administrative Law Judge