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

Superior Medical Products
(PTAN: 6514330001),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-432
Decision No. CR3224
Date: May 7, 2014
DECISION

The Medicare enrollment and billing privileges of Petitioner, Superior Medical Products,
are revoked pursuant to 42 C.F.R. §§ 424.57(d) and 424. 535(a)(1),' effective August 24,
2013, based on violation of 42 C.F.R. § 424.57(c)(7)(i)(C) (supplier standard 7).

I. Procedural History and Jurisdiction
The Medicare contractor, Palmetto GBA (Palmetto),” notified Petitioner by letter dated

August 9, 2013, that its Medicare billing privileges and provider agreement were revoked
effective July 19, 2013. Centers for Medicare & Medicaid Services (CMS) exhibit

' The 2012 revision of the Code of Federal Regulations (C.F.R.) is cited, unless
otherwise indicated.

> The notice was issued by the National Supplier Clearinghouse Supplier Audit and
Compliance Unit (SACU), which is operated by Palmetto.
(Ex.) 1 at 6. Palmetto cited 42 C.F.R. §§ 405.800, 424.57(e),? 424.535(a)(1),
424.535(a)(5)(ii), and 424.535(g), as the authority for revocation based on Petitioner’s
noncompliance with 42 C.F.R. § 424.57(c )(7).4 CMS Ex. | at 6-7. Palmetto also
notified Petitioner that it was subject to a two-year bar to re-enrollment pursuant to 42
C.F.R. § 424.535(c). CMS Ex. | at 6.

Petitioner submitted a request for reconsideration that was received by Palmetto on
August 16, 2013. CMS Ex. 1 at 1. Palmetto notified Petitioner by letter dated October
25, 2013, that the revocation of its enrollment and billing privileges was upheld based on
violation of supplier standard 7, 42 C.F.R. § 424.57(c)(7). CMS Ex. | at 1-5.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
December 13, 2013 (RFH). The case was assigned to me for hearing and decision on
January 2, 2014, and an Acknowledgement and Prehearing Order (Prehearing Order) was
issued at my direction. No issue has been raised as to the timeliness of Petitioner’s
request for hearing, the parties do not challenge my authority to decide this case, and I
conclude that I have jurisdiction.

On February 3, 2014, CMS filed a combined prehearing brief and motion for summary
judgment (CMS Br.), with CMS Exs. | through 3. On February 20, 2014, Petitioner filed
its opposition to CMS’ motion for summary judgment (P. Br.), with Petitioner’s exhibit
(P. Ex.) 1.° On April 4, 2014, CMS waived its right to file a reply brief. The parties have

> The citation to 42 C.F.R. § 424.57(e) was a clerical error as that provision relates to
revalidation of billing privileges every three years, which is not an issue in this case. I
conclude that Palmetto intended to cite 42 C.F.R. § 424.57(c), which includes supplier
standard 7.

* This regulatory requirement is known as durable medical equipment, prosthetics,
orthotics, and supplies (DMEPOS) supplier standard 7.

> Petitioner’s exhibit was not correctly marked as required by the Prehearing Order.
However, the exhibit was not returned to Petitioner for correction because there was no
potential for confusion based on the incorrect marking. Petitioner marked and filed a 17-
page document as SMP (for Superior Medical Products) Exhibit 1. Petitioner also
marked and filed separately documents marked as SMP Exhibit 1, page 17a, 17b, 17c,
17d, 17e, and 17 f.
not objected to my consideration of the exhibits and CMS Exs. | through 3 and P. Ex. 1
are admitted as evidence. Petitioner also filed documents with its request for hearing,
some of which duplicate documents included in P. Ex. 1. I treat the documents filed with
the request for hearing as P. Ex. 2 pages | through 6, and they are also admitted as
evidence.

IL. Discussion
A. Applicable 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. Administration of the Part B program is through contractors, such as
Palmetto. Act § 1842(a) (42 U.S.C. § 1395u(a)). Payment under the program for
services rendered to Medicare-eligible 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)). Petitioner is a durable medical equipment, prosthetics,
orthotics, and supplies (DMEPOS) supplier.

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 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. To receive direct-billing privileges, a
DMEPOS supplier must meet and maintain the Medicare application certification
standards set forth in 42 C.F.R. § 424.57(c). Among other requirements, a DMEPOS
supplier must maintain a physical facility on an appropriate site. 42 C.F.R.

§ 424.57(c)(7). An appropriate site for the physical facility must meet certain criteria,
including that the practice location is in a location accessible to the public, Medicare
beneficiaries, and CMS and its agents, and that the practice location must be accessible

° A “supplier” furnishes services under Medicare. The term supplier applies to
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.

and staffed during posted hours of operation. 42 C.F.R. § 424.57(c)(7)(i)(B), (C). A
DMEPOS supplier must provide complete and accurate information in response to
questions on its application for Medicare billing privileges and must report to CMS any
changes in information supplied on the application within 30 days of the change. 42
C.F.R. § 424.57(c)(2). A DMEPOS supplier must permit CMS or its agent to conduct
on-site inspections to ascertain supplier compliance with the Medicare enrollment
standards. 42 C.F.R. § 424.57(c)(8). Finally, a DMEPOS supplier must at all times be
“operational,” which means it “has a qualified physical practice location, is open to the
public for the purpose of providing health care related services, is prepared to submit
valid Medicare claims, and is properly staffed, equipped, and stocked . . . to furnish these
items or services.” 42 C.F.R. § 424.502.

The Secretary has delegated the authority to revoke enrollment and billing privileges to
CMS. 42 C.F.R. § 424.535. CMS or its Medicare contractor may revoke an enrolled
supplier’s Medicare enrollment and billing privileges and supplier agreement for any of
the reasons listed in 42 C.F.R. § 424.535. Specifically, CMS may revoke a supplier’s
enrollment and billing privileges if the supplier is determined not to be in compliance
with the enrollment requirements. 42 C.F.R. § 424.535(a)(1). CMS may also revoke a
currently enrolled supplier’s Medicare enrollment and billing privileges if CMS
determines, upon on-site review, that the supplier is no longer operational to furnish
Medicare covered items or services, or the supplier fails to satisfy any or all of the
Medicare enrollment requirements, or has failed to furnish Medicare covered items or
services as required by the statute or regulations. 42 C.F.R. § 424.535(a)(5)(ii). After a
supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred
from reenrolling in the Medicare program for one to three years. 42 C.F.R. § 424.535(c).

A supplier whose enrollment and billing privileges have been revoked may request
reconsideration and review as provided by 42 C.F.R. pt. 498. A supplier submits a
written request for reconsideration to CMS or its contractor. 42 C.F.R. § 498.22(a).
CMS or its contractor must give notice of its reconsidered determination to the supplier,
giving the reasons for its determination and specifying the conditions or requirements the
supplier failed to meet, and the right to an ALJ hearing. 42 C.F.R. § 498.25. Ifthe
decision on reconsideration is unfavorable to the supplier, the supplier has the right to
request a hearing by an ALJ and further review by the Departmental Appeals Board (the
Board). Act § 1866(j)(8) (42 U.S.C. § 1395ce(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17),
498.5. A hearing on the record, also known as an oral hearing, is required under the Act.
Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-751 (6th Cir. 2004). The
supplier bears the burden to demonstrate that it meets enrollment requirements with
documents and records. 42 C.F.R. § 424.545(c).

B. Issues

Whether summary judgment is appropriate; and
Whether there was a basis for the revocation of Petitioner’s billing
privileges and Medicare enrollment.

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

My conclusions of law are set forth in bold text followed by my findings of fact and
analysis.

1. Summary judgment is appropriate.

A provider or supplier denied enrollment in Medicare or whose enrollment had been
revoked has a right to a hearing and judicial review pursuant to section 1866(h)(1) and (j)
of the Act and 42 C.F.R. §§ 424.454(a), 498.3(b)(1), (5), (6), (8), (15), (17), 498.5. The
Act requires a hearing on the record, also known as an oral hearing. Act §§ 205(b), 1866
(h)(1) and (j); Crestview, 373 F.3d at 748-51. A party may waive appearance at an oral
hearing, but must do so affirmatively in writing. 42 C.F.R. § 498.66. In this case,
Petitioner has not waived the right to oral hearing or otherwise consented to decision
based only upon the documentary evidence or pleadings. Accordingly, disposition on the
written record alone is not permissible, unless CMS’ motion for summary judgment has
merit.

Summary judgment is not automatic upon request. Rather, it is limited to certain specific
conditions. The procedures established by 42 C.F.R. pt. 498 related to ALJ hearings
applicable in this case do not include a summary judgment procedure. However,
appellate panels of the Board have long recognized the availability of summary judgment
in cases subject to 42 C.F.R. pt. 498, and the federal courts have recognized the Board’s
interpretative rule. See, e.g., Crestview, 373 F.3d at 749-750. Furthermore, I adopted a
summary judgment procedure as a matter of judicial economy within my authority to
regulate the course of proceedings and made it available to the parties in the litigation of
this case by my Prehearing Order. Prehearing Order §§ II.D and ILG.

Summary judgment is appropriate when there is no genuine dispute as to any issue of
material fact for adjudication or the moving party is entitled to judgment as a matter of
law. In determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-moving party,
drawing all reasonable inferences in that party’s favor. The party requesting summary
judgment bears the burden of showing that there are no genuine issues of material fact for
trial or that it is entitled to judgment as a matter of law. Generally, the non-movant may
not defeat an adequately supported summary judgment motion by relying on the denials
in its pleadings or briefs, but must furnish evidence of a dispute concerning a material

fact, i.e., a fact that would affect the outcome of the case if proven. Mission Hosp. Reg’!
Med. Ctr., DAB No. 2459, at 4 (2012) (and cases cited therein); Experts Are Us, Inc.,
DAB No. 2452, at 4 (2012) (and cases cited therein); Senior Rehab. & Skilled Nursing
Ctr., DAB No. 2300, at 3 (2010) (and cases cited therein); see also, Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).

The standard for deciding a case on summary judgment and an ALJ’s decision-making in
deciding a summary judgment motion differ from resolving a case after a hearing. On
summary judgment, the ALJ does not make credibility determinations, weigh the
evidence, or decide which inferences to draw from the evidence, as would be done when
finding facts after a hearing on the record. Rather, on summary judgment the ALJ
construes the evidence in a light most favorable to the non-movant and avoids deciding
which version of the facts is more likely true. Holy Cross Vill. at Notre Dame, Inc., DAB
No. 2291, at 5 (2009). The Board has also recognized that on summary judgment it is
appropriate for the ALJ to consider whether a rational trier of fact could find that the
parties’ evidence would be sufficient to meet that party’s evidentiary burden. Dumas
Nursing & Rehab., L.P., DAB No. 2347, at 5 (2010). The Secretary has not provided for
the allocation of the burden of persuasion or the quantum of evidence in 42 C.F.R. pt.
498. The Board, however, has provided some persuasive analysis regarding the
allocation of the burden of persuasion in cases subject to 42 C.F.R. pt. 498. Batavia
Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing &
Convalescent Ctr. v. Thompson, 129 Fed. App’x 181 (6th Cir. 2005).

In deciding that summary judgment is appropriate, I note that Petitioner does not dispute
the material facts. Petitioner was a DMEPOS supplier at the time of the inspections.
Petitioner admits that his posted hours of operation were Monday through Friday, 8:00
a.m. to 9:00 a.m. CMS Ex. 2 at 1. Petitioner does not dispute that Palmetto’s inspector
attempted to inspect his location on Thursday, July 18, 2013, at 8:28 a.m. and Friday,
July 19, 2013 at 8:16 a.m.” Petitioner does not deny that the inspector’s attempted visits
were on dates and at times when his posted hours indicated that the facility should have
been open. Petitioner admits that his facility was not open when the inspector visited.
RFH, P. Br., CMS Ex. | at 15-28.

I conclude, after viewing the evidence before me in the light most favorable to Petitioner
and drawing all inferences in Petitioner’s favor, that there is no dispute as to any material
fact in this case that requires a trial. The issues in this case that require resolution are

7 There was an initial visit on July 17, 2013 at 3:59 p.m., but that visit was outside
Petitioner’s posted hours and the fact he was not open at the time of that visit is not a
basis for finding a violation of supplier standard 7.

issues of law related to the interpretation and application of the regulations that govern
enrollment and billing privileges in the Medicare program and application of the law to
the undisputed facts of this case. The issues in this case must be resolved against
Petitioner as a matter of law. The undisputed evidence shows that there is a basis for
revocation of Petitioner’s Medicare enrollment and billing privileges effective August 24,
2013. Accordingly, I conclude summary judgment is appropriate.

2. There was a basis to revoke Petitioner’s Medicare enrollment and
billing privileges pursuant to 42 C.F.R. §§ 424.57(d) and 424.535(a)(1)
for violation of 42 C.F.R. § 424.57(c)(7)(i)(C) (supplier standard 7).

3. The effective date of revocation is August 24, 2013, pursuant to 42
C.F.R. § 424.57(d).

a. Facts

The facts are not disputed. On Thursday, July 18, 2013 at about 8:28 a.m., a SACU
investigator attempted to inspect Petitioner’s facility at Petitioner’s address on file with
CMS, 2400 Augusta Drive, Suite 365, Houston, Texas 77057. The investigator found the
door locked and the office appeared not to be accessible. The investigator returned to
Petitioner’s facility on Friday, July 19, 2013 at about 8:16 a.m., and again found the door
locked and the office appeared not open and accessible. CMS Ex. | at 15-28. The
inspector knocked several times and received no response; the inspector also could see
through a transom window that no lights were on inside the office suite. CMS Ex. | at
20. Petitioner does not dispute that the inspections were attempted as reported by the
SACU investigator, or that the doors to his office were locked and he was not open for
business when the investigator tried to gain access. Petitioner does not dispute that the
facility should have been open on the dates and at the times that the investigator
attempted to inspect. RFH; P. Br.

b. Analysis

Palmetto informed Petitioner in the notice of the initial determination dated August 9,
2013, that revocation was based on noncompliance with supplier standard 7 because his
business was not open when an inspector attempted to conduct two site visits during
Petitioner’s reported hours of operation. Palmetto also advised Petitioner that revocation
was pursuant to 42 C.F.R. § 424.535(a)(5)(ii) based on a conclusion that Petitioner was

® Tf the issue of whether or not Petitioner was operational was properly before me, P.
Exs. | and 2 would cause the conclusion, giving the benefit of all favorable inferences to
Petitioner, that there are material issues of fact in dispute that would require a trial.
not operational. Palmetto advised Petitioner that the effective date of revocation was July
19, 2013, the date on which CMS determined that Petitioner was not operational. CMS
Ex. | at 6-7. Palmetto notified Petitioner of the reconsideration determination by letter
dated October 25, 2013. Palmetto advised Petitioner that the revocation of his enrollment
and billing privileges was upheld on reconsideration based on the fact that Petitioner’s
facility was not open when the SACU investigator attempted inspections. Therefore, the
reconsideration hearing officer concluded that the evidence did not show that Petitioner
was in compliance with supplier standard 7. CMS Ex. 1 at 1-4. Although the
reconsideration hearing officer sets forth the definition of operational and states that a
supplier must be operational, she did not specifically find or conclude that the Petitioner
was not operational and therefore subject to revocation of enrollment and billing
privileges pursuant to 42 C.F.R. § 424.535(a)(5). Rather, she concluded that revocation
was appropriate because Petitioner failed to show compliance with supplier standard 7.
Accordingly, I conclude that the specific issue before me is whether or not Petitioner was
in compliance with 42 C.F.R. § 424.57(c)(7) (supplier standard 7). Whether or not there
was a basis for revocation pursuant to 42 C.F.R. § 424.535(a)(5) because Petitioner was
not operational is not at issue before me because it was not a basis for revocation upheld
on reconsideration. It is well established that even a single violation of a single supplier
standard is an adequate basis for revocation of billing privileges and enrollment.
18661CPayday.com, DAB No. 2289, at 13 (2009).

CMS argues before me that Petitioner was not “operational” and the facility was not
accessible to the public, Medicare beneficiaries, CMS, or its agents, as required by
supplier standard 7, 42 C.F.R. § 424.57(c)(7), on the dates the SACU investigator could
not gain access to Petitioner’s facility. CMS Br. at 1,5. CMS argues that a violation of
this standard constitutes a sufficient basis to revoke Petitioner’s billing privileges and
participation in Medicare pursuant to 42 C.F.R. § 424.535(a)(5)(ii). CMS Br. at 1. CMS
conflates revocation based on violation of supplier standard 7 (42 C.F.R.

§ 424.57(c)(7)(i)(C)), which requires that Petitioner’s facility be accessible and staffed
during posted hours of operation; and violation of 42 C.F.R. § 424.535(a)(5), which
authorizes CMS to revoke because it has determined that a supplier is no longer
operational. The Board recognized a distinction between these regulatory requirements
in Complete Home Care, DAB No. 2525, at 6 (2013), concluding that it did not need to
decide whether or not a supplier was operational where it found a single violation of 42
C.F.R. § 424.57(c)(7)(i)(C). The evidence that Petitioner was closed to the public on the
dates of two inspections, during hours when the facility should otherwise be open, is
some evidence that Petitioner was no longer operational. However, whether a facility is
open to the public during posted hours of operation is only one of the criteria established
by 42 C.F.R. § 424.502 for deciding whether a supplier is operational. An analysis of
whether a facility is “operational” within the meaning of 42 C.F.R.

§ 424.502 also requires consideration of evidence related to the other factors listed in the
regulation such as whether or not Petitioner was prepared to submit valid Medicare
claims, whether the facility was properly staffed, equipped, and stocked to furnish items

or services the supplier was authorized to furnish by its Medicare enrollment. The
evidence before me that would be considered on the issue of whether or not Petitioner
was operational at the time of the visits is not conceded by Petitioner and a trial would be
required to resolve disputed issues of material fact. Furthermore, and more significantly,
whether or not Petitioner was operational within the meaning of 42 C.F.R. § 424.502 is
not at issue in this case because violation of 42 C.F.R. § 424.535(a)(5) was not the basis
on which the reconsideration hearing officer upheld revocation.

Supplier standard 7 requires that Petitioner maintain an appropriate site that meets
specified criteria, including that it be accessible and staffed during posted hours of
operation. CMS or its agents must also be able to inspect the site during normal hours of
operation to ensure compliance with participation requirements. Petitioner does not deny
his facility was not accessible and staffed during his normal hours of operation when the
SACU investigator attempted to conduct inspections. Accordingly, Petitioner violated
supplier standard 7 (42 C.F.R. § 424.57(c)(7)(i)(C)) and there is a basis for the revocation
of Petitioner’s enrollment and billing privileges pursuant to 42 C.F.R. §§ 424.57(d) and
424.535(a)(1).

In this case, Petitioner was not in compliance with the special enrollment requirement for
DMEPOS suppliers established by 42 C.F.R. § 424.57(c)(7)(i)(C) because Petitioner’s
facility was admittedly unstaffed and inaccessible to the public during his hours of
operation. Although 42 C.F.R. § 424.535(a)(1) contemplates that Petitioner would be
allowed to file a corrective action plan, in this case that would be a needless act because
Petitioner cannot correct his admitted violation of supplier standard 7.

Pursuant to 42 C.F.R. § 424.57(d) the effective date of the revocation of Petitioner’s
billing privileges and Medicare enrollment is August 24, 2013, which is 15 days after the
August 9, 2013 notice of the initial determination was issued. The July 19, 2013
effective date listed in the notice of initial determination is incorrect as a retroactive
effective date would be authorized in this case only if revocation was based on a
determination that Petitioner was no longer operational. 42 C.F.R. § 424.535(g).

Petitioner states that it has been a provider since 1996 and has always been very attentive
to the supplier standards. Petitioner’s owner asserts that he has passed all of his previous
site inspections and his accreditation is up to date. He further informed me that he is the
only employee and he usually travels to nursing facilities to work with the beneficiaries
there to provide for their needs because they cannot travel. He states that generally no
one comes to his office during posted hours but his sign states that he is available by
appointment after 9 a.m. Monday through Friday. He also states that he is usually in his
office during the stated hours of operation from 8 a.m. to 9 a.m. and he does not know
how he missed the site inspector on those two days. Petitioner states that he has been a
diligent, committed professional and is dedicated to his field. He asks that I give him
favorable consideration and re-instate him. Even if I accept all Petitioner’s assertions as

10

true for purposes of summary judgment, those facts have no impact on the outcome in
this case as those facts are not material to the determination that Petitioner violated
supplier standard 7. Furthermore, to the extent that Petitioner’s arguments may be
construed as a request for equitable relief, I have no authority to grant equitable relief.

US Ultrasound, DAB No. 2302, at 8 (2010) (“[nJeither the ALJ nor the Board is
authorized to provide equitable relief by reimbursing or enrolling a supplier who does not
meet statutory or regulatory requirements.”). I am also required to follow the Act and
regulations and have no authority to declare statutes or regulations invalid.
1866I1CPayday.com, L.L.C., DAB No. 22839, at 14 (“[a]n ALJ is bound by applicable laws
and regulations and may not invalidate either a law or regulation on any ground.”).

HI. Conclusion
For the foregoing reasons, I conclude that Petitioner’s Medicare enrollment and billing

privileges are revoked effective August 24, 2013.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In re LCD Complaints
Category III CPT Codes (L29288)
Contractor: First Coast Service Options, Inc.
Docket No. C-13-521
Decision No. CR3223

Date: May 8, 2014

DECISION DISMISSING LCD COMPLAINTS

I dismiss the complaints of two aggrieved parties who challenge the local coverage
determination (LCD) involving the minimally invasive lumbar decompression (MILD)
procedure. The contractor, First Coast Services Options, Inc. (FCSO), has represented
that the relevant LCD provisions are no longer in effect.

I. Procedural Background

On February 27, 2013, the Departmental Appeals Board (Board) remanded to me an LCD
complaint, previously docketed as C-12-777 and re-docketed on remand as C-13-521, for
further proceedings. On March 7, 2013, the Board remanded another LCD complaint,
previously docketed as C-12-1011 and re-docketed on remand as C-13-511, for further
proceedings. The Board directed that the aggrieved parties’ complaints were acceptable
on remand and that I should continue to consider the merits of their appeals. On April
18, 2013, I consolidated these two LCD complaints under docket number C-13-521
because both cases involved common questions of law and fact, a challenge to the same
provisions of the same LCD denying coverage for the MILD procedure, the same
representative for both aggrieved parties, the same contractor, and the same LCD record.
Order Acknowledging Acceptable Complaint; Consolidating Cases; and Granting Leave
for Aggrieved Party Response (April 18, 2013 Order).
Prior to the remands and consolidation of these cases, FCSO filed the LCD record, the
aggrieved parties filed their statements regarding the validity of the LCD record, and
FCSO responded to their statements. On April 18, 2013, I granted one of the aggrieved
parties leave to file a reply to FCSO’s latest filing. The reply was filed on May 21, 2013,
along with six additional exhibits. On June 17, 2013, I directed FCSO to review the May
2013 submission and indicate whether the six additional exhibits were significant to the
evaluation of the LCD before me. FCSO responded on July 12, 2013.

Pending my review, on January 9, 2014, the Centers for Medicare & Medicaid Services
(CMS) issued a national coverage determination (NCD) “Decision Memo for
Percutaneous Image-guided Lumbar Decompression for Lumbar Spinal Stenosis (CAG-
00433N)” (Decision Memo).' In the Decision Memo, CMS determined that
percutaneous image-guided lumbar decompression (PILD) for lumbar spinal stenosis is
not reasonable and necessary under section 1862(a)(1)(A) of the Social Security Act.
CMS determined, however, that it would provide coverage for PILD for Medicare
beneficiaries with lumbar spinal stenosis who are enrolled in an approved clinical study
that meets certain criteria. The Decision Memo included an explanation that PILD is
commercially known as the MILD procedure.

On January 28, 2014, I issued an “Order for Supplemental Briefing” (January 28 Order).
I noted that an Administrative Law Judge (ALJ) is not authorized to disregard, set aside,
or otherwise review an NCD. 42 C.F.R. § 405.1060(b). I also noted that according to the
Decision Memo, the NCD’s preliminary language is effective immediately and subject to
formal revision and formatting changes prior to the release of the final NCD publication
in the National Coverage Determination Manual. I therefore instructed FCSO to brief
how issuance of the Decision Memo might affect my review in this case and allowed the
aggrieved parties an opportunity to respond. I specifically directed FCSO to address
whether it planned to retire the challenged LCD in response to the recent NCD.

FCSO responded to my January 28 Order on February 6, 2014. FCSO acknowledged that
I specifically requested that it address whether it planned to retire the LCD. Although it
was inferred, FCSO’s non-attorney representative did not, however, unequivocally state
that FCSO was planning to retire the LCD. FCSO instead represented that the Decision
Memo specifically confirmed FCSO’s LCD to not cover MILD because it is not
reasonable and necessary under the Social Security Act. FCSO also stated that “[w]hen
an NCD is communicated the Medicare Administrative Contractor [MAC] awaits specific
implementation instructions from CMS via the Program Change Management process”
and that “[t]his implementation will . . . entail the amendment of LCD ‘Noncovered
Services’ with removal of the code for the mild procedure for the applicable codes in

' The Decision Memo is available at http://www.cms.gov/medicare-coverage-
database/details/nca-decision-memo.aspx? NCAId=269.

MCS (system for physician services) and FISS (system for hospital services) . . .. Once
CMS issues implementation instructions via a Change Request, the MAC will publish an
article outlining the NCD decision including guidance on the limited coverage.”
(Emphasis in original). FCSO’s representative concluded:

In summary, the First Coast LCD “Noncovered Services” as it applies to the non
coverage of the mild procedure from 2011 to early 2014 was validated by the
NCD. All claims for this service from 2011 to early 2014 should be non covered
since the ... LCD “Noncovered Services” is given due deference. ... Effective
with CMS’ NCD implementation, [the contractor] may cover certain claims for the
mild procedure . . . as outlined by CMS. ... Future claims not meeting the
requirements of the NCD should be denied as not reasonable and necessary per the
NCD.

FCSO February 6, 2014 Response at 1-2.

The aggrieved parties do not dispute that MILD is a PILD procedure. Instead, the
aggrieved parties urge that I continue to consider their LCD complaint for other reasons.
They assert that:

The Decision Memorandum has no legal impact and should be given no
evidentiary weight because (1) the Decision Memorandum and its evidence and
analysis were not the basis of the LCD and are not in the LCD record, (2) the
Decision Memorandum was based on different evidence, a different analysis and
resulted in conditional coverage, and (3) the Decision Memorandum is pre-
decisional and no NCD exists as a result of the Decision Memorandum.

Aggrieved Parties’ March 7, 2014 Supplemental Briefing at 4.

On March 20, 2014, I instructed the staff attorney assisting me to contact FCSO to
ascertain when it expected to receive the CMS implementation instructions its
representative referenced in its supplemental brief. In a responsive electronic mail
communication dated March 20, 2014, FCSO’s representative informed the staff attorney
unequivocally that FCSO was no longer relying on the LCD since CMS issued the
Decision Memo on January 9, 2014. I instructed the staff attorney to provide the
aggrieved parties an opportunity to respond to FCSO’s clarification. The aggrieved
parties chose not to respond.

II. Dismissal
Only LCDs that are currently effective may be challenged. 42 C.F.R. § 426.325(a). An

ALJ must dismiss a case when a contractor notifies the ALJ that an LCD provision is no
longer in effect. 42 C.F.R. § 426.444(b)(6). An ALJ does not have the authority to deny
a contractor the right to reconsider, revise, or retire an LCD. 42 C.F.R. § 426.405(d)(12).
A contractor may retire an LCD or LCD provision under review before the date the ALJ
issues a decision regarding that LCD. Retiring an LCD or LCD provision under review
has the same effect as a decision under 42 C.F.R. § 426.460(b). 42 C.F.R. § 426.420(a).

FCSO now fully represents that, since January 9, 2014 when the PILD NCD became
effective, the LCD provisions at issue here are no longer effective and will not be used
further to adjudicate any MILD claims. Although the aggrieved parties may dispute the
merits of the Decision Memo and the PILD NCD, I am unable to continue my review of
the LCD record if FCSO is clearly no longer relying upon the LCD when processing
claims for the MILD procedure. The Board conducts a review for any challenge to an
NCD that may be used as a basis for future denial of coverage. See 42 C.F.R. §
426.300(b).

The aggrieved parties may now receive individual claim review without the contractor
applying the retired LCD to adjudicate their claim. See 42 C.F.R. § 426.460(b)(1).
Individual claim review without application of the disputed LCD provides the aggrieved
parties with the same relief as if I had found the LCD in question invalid under the
reasonableness standard. Jd.; see 68 Fed. Reg. 63,692, 63,698 (Nov. 7, 2003).

For the reasons discussed above, I dismiss the aggrieved parties’ complaints because
FCSO has informed me that the LCD provisions it used to consider whether to cover the
MILD procedure have not been in effect since January 9, 2014. If for some reason FCSO
were to use the challenged LCD provisions to continue to deny coverage for MILD, the
aggrieved parties may use that determination as a basis for me to vacate this dismissal.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Ridgecrest Healthcare,
(CCN: 03-5125),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-513
Decision No. CR3222
Date: May 06, 2014
DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose civil money penalties against Petitioner, Ridgecrest Healthcare, consisting of the
following:

e A per-diem civil money penalty of $5,000 for Petitioner’s noncompliance
with Medicare participation requirements on December 7, 2012;

e A per-diem civil money penalty of $7,200 for Petitioner’s noncompliance
with Medicare participation requirements on February 1, 2013; and

e A civil money penalty of $500 per day for Petitioner’s noncompliance with
Medicare participation requirements during a period that began on
December 8, 2012 and that ran through April 4, 2013.

Additionally, I sustain CMS’s determination to deny Petitioner Medicare payment for
new admissions from February 2 through April 4, 2013.

CMS notified Petitioner of its intent to impose the remedies that I recite above and
Petitioner requested a hearing before an administrative law judge. The case was assigned
originally to another administrative law judge and then reassigned to me. I held a hearing
on February 24, 2014 by video teleconference. At the hearing I heard the cross-
examination testimony of several witnesses whose direct testimony had been filed in
writing. I received into evidence exhibits from the parties, including the witnesses’
written direct testimony, which was identified as CMS Ex. | — CMS Ex. 37 and P. Ex. 1
—P. Ex. 45.

I. CMS’s Allegations of Noncompliance

This case is based entirely on the care that Petitioner gave to one of its residents,
identified in the parties’ exhibits as Resident # 1. The facts are undisputed that Resident
# 1 is a relatively young and physically healthy individual whose primary medical
problems consist of a chronic schizoaffective disorder and a bipolar disorder. CMS Ex. 1
at 1-2; CMS Ex. 19 at 4. He resides in a locked unit in Petitioner’s facility that is
reserved for individuals with psychiatric and behavioral problems.

On November 22, 2012, there was an incident at Petitioner’s facility involving Resident
# 1 and three of Petitioner’s certified nursing assistant employees. It is undisputed that a
nursing assistant was escorting the resident from one of Petitioner’s shower rooms when
the resident became uncooperative. The incident included the resident grabbing the
handles of two doors, effectively immobilizing himself. One of Petitioner’s nursing
assistants, Morris Sohn, used physical force to pry the resident’s hand from a door and
the resident sustained a broken finger.

Based on this incident and the events that ensued subsequently CMS alleges that
Petitioner:

e Allowed Resident # 1 to be abused physically, in violation of the
requirements of 42 C.F.R. §§ 483.13(b) and (c)(1)(i);

e Continued to employ an individual (Mr. Sohn) who had abused a
resident, failed to report to appropriate authorities the incident that
caused Resident # 1 to sustain a broken finger, and failed to protect the
resident against possible additional abuse while an investigation into the
November 22 incident was in progress, in violation of the requirements
of 42 C.F.R. §§ 483.13(c)(1)(ii) and (c)(2) — (4);

e Failed to implement its written anti-abuse policies because it failed to
complete a thorough and timely investigation of the November 22
incident, in violation of the requirements of 42 C.F.R. § 483.13(c); and
e Failed to provide Resident # 1 with necessary care and services to
address the pain and swelling that the resident experienced from his
broken finger, in violation of the requirements of 42 C.F.R. § 483.25.

CMS bases its noncompliance allegation on findings that were made at two surveys of
Petitioner’s facility, completed on December 8, 2012 (December survey) and on February
2, 2013 (February survey). CMS Ex. 1; CMS Ex. 27. Both of these surveys resulted in
findings that Petitioner’s alleged noncompliance with the requirements of 42 C.F.R.

§§ 483.13(c)(1)(ii) and (c)(2) — (4) was so egregious as to constitute immediate jeopardy.
That is the basis for the $5,000 and $7,200 civil money penalties that I cite in the opening
paragraph of this decision. Other findings of alleged noncompliance were at a less
egregious level of scope and severity than immediate jeopardy and all of the findings of
noncompliance are the basis for the $500 daily civil money penalties and denial of
payment for new admissions.

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

The issues are whether: Petitioner failed to comply substantially with the participation
requirements cited by CMS; CMS’s determination that Petitioner’s failure to comply with
the requirements of 42 C.F.R. §§ 483.13(c)(1)(ii) and (c)(2) — (4) was clearly erroneous;
and CMS’s remedy determinations are reasonable.

B. Findings of Fact and Conclusions of Law

The evidence establishes overwhelmingly that Mr. Sohn not only used unreasonable force
in attempting to gain control over Resident # 1 but that he should not have used force at
all. The evidence also establishes that Petitioner breached its responsibility to investigate
the November 22 incident thoroughly and completely and to report that incident to
appropriate State authorities. These failures put Resident # 1 at immediate jeopardy
because not only was he harmed but also there was a likelihood of additional harm to the
resident due to Petitioner’s failure to recognize its duties and its failure to protect the
resident adequately. The fact that Petitioner allowed Mr. Sohn to continue to serve as a
nursing assistant, without retraining him or without supervising his actions, in and of
itself, put Resident # 1 and, potentially, other residents, at risk for serious harm.

The heart of this case — and not disputed — is that Mr. Sohn forcefully intervened to
remove Resident # 1’s hand from a door when the resident was resisting being moved
from Petitioner’s shower area. The parties agree that while the resident was being
escorted from the shower he grabbed two door handles in an entryway and refused to
move. It was at that point that Mr. Sohn applied pressure to the fingers of the resident’s
left hand in order to pry that hand away from the door, and in the process of doing so he
broke the resident’s finger. CMS Ex. 34 at 3; Tr. at 172-73.

I see no justification for this use of force. At the moment that Mr. Sohn acted the resident
was posing no threat to himself or to others. He could not have done so: he had
immobilized himself by grabbing the two door handles. Tr. at 172-73. The nursing
assistants who intervened were not confronting a resident who was violently acting out or
who was in the process of engaging in something harmful.

Petitioner argues that the resident had a history of engaging in self-injurious conduct.
Furthermore, according to Petitioner, at the time of the incident, Resident # 1 was
actively attempting to grab potentially harmful items, such as shaving equipment, that
were stored in “cubbies” that were immediately adjacent to the resident. The cubbies that
Petitioner refers to are a kind of shelving in which residents store personal items such as
shampoo and shaving equipment. It contends that Mr. Sohn was motivated to use force
against the resident by his concern that the resident might seize an item from the cubbies
and use it to harm himself. Petitioner’s post-hearing brief at 5. Thus, according to
Petitioner, and in the heat of the moment, its staff reacted to what they perceived to be a
danger — that the resident might grab an object from the cubbies and harm himself — and
reacted appropriately. Jd. at 9.

The obvious flaw in this argument is that Resident # 1 could not possibly have harmed
himself at the moment that Mr. Sohn decided to use force. He could not have done so
because he had immobilized himself by grabbing door handles with both hands. Resident
# 1 was not actively attempting to grab anything other than the door handles.

Petitioner’s own witness, Gary Martin, PhD, recognized that the use of force against
Resident # 1 was unnecessary:

I did express concern . . . about the staff’s technique of trying to remove the
Resident’s hands from the door handles (even before I learned that the
Resident’s finger had been injured). But my concern was for the technique
used to intervene, and not from any concern about possible abuse. For
instance, I recall inquiring why staff had to use that technique rather than
simply standing between the Resident and the cubbyholes and waiting for
him to release the door handles, which I thought was likely to happen fairly
soon given the Resident’s short attention span.

P. Ex. 40 at 7-8 (emphasis added).
Mr. Sohn could have prevented the resident from seizing items from the cubbies without

using force against the resident. As Mr. Sohn admitted in his testimony, he was standing
between the resident and the cubbies at the moment that he decided to intervene
forcefully to remove the resident’s hand from the door handle. In that position, he was
blocking the resident’s access to the cubbies. Tr. at 171-72.

Petitioner argues also that its staff was merely following a standard and widely accepted
protocol when Mr. Sohn applied force to Resident # 1. It contends that its staff was
trained in crisis prevention techniques including the proper use of physical interventions
in appropriate circumstances to deescalate inappropriate resident behavior and to assure
resident and staff safety. P. Ex. 45; CMS Ex. 15. But, nothing in the training that
Petitioner refers to or in the crisis prevention techniques to which it refers suggests or
allows the use of force against residents in circumstances where force is unnecessary.
There was no need to use force here, consequently, Petitioner’s assertion that it used
appropriate techniques is unavailing.

Petitioner’s staff abused Resident # 1 when Mr. Sohn forcefully removed the resident’s
and from the door handle. Here, and by his own admission, Mr. Sohn deliberately used
force against Resident # 1. That use of force was clearly inappropriate and it caused the
resident to sustain an injury, a broken finger.' The inappropriate use of force in this case
was thus abuse. A resident has a right to be free from physical abuse. 42 C.F.R.

§§ 483.13(b), (c)(1)G@). “Abuse” constitutes the willful infliction of injury, among other
things. 42 C.F.R. § 488.301. “Willful” means “deliberate.” Abuse may occur where a
staff member takes a deliberate action against a resident that causes the resident harm
even if the staff did not intend to harm the resident. Vandalia Park, DAB No. 1939
(2004).

Furthermore, Petitioner’s staff violated Petitioner’s anti-abuse policy when Mr. Sohn
applied inappropriate force to Resident # 1. CMS Ex. 14 at 19-20. Petitioner’s policy
explicitly prohibits its staff from “Twisting, squeezing or pinching any part of a resident’s
body with fingers or nails.” /d. at 20. Mr. Sohn deliberately squeezed Resident # 1’s
fingers in his attempt to remove the resident’s hand from the door.

Petitioner’s management was informed about the incident and it also knew that the
resident had sustained a fractured finger. Yet, management did virtually nothing to

investigate the events of November 22. The sum total of Petitioner’s “investigation” of
the incident consists of a few sentence fragments jotted down on a single piece of paper

' Petitioner argues that it is within the realm of reasonable possibility that Mr. Sohn’s use
of force was not the cause of Resident #1’s broken finger. Petitioner’s post-hearing brief
at 6 n.5. Anything is possible, of course, but the overwhelming probability is that the use
of force against the resident was the cause of the fracture. The resident had no
complaints prior to the incident and complained of pain almost immediately afterward.
However, whether or not the resident was injured is not necessary to my decision. The
use of force against Resident # 1 would have been inappropriate and harmful even if the
resident had sustained no injury as a consequence.
and dated November 27. CMS Ex. 24 at 1. These sentence fragments are notations of
what the nursing assistants had to say about the November 22 incident. There is no
summary of the events, no analysis of what happened, no reference to facility policies, no
discussion of the Resident and his condition, and no conclusions as to whether the actions
taken by staff were appropriate or not.

A skilled nursing facility has an obligation to investigate thoroughly any incident that
might involve abuse. Even the remote possibility that a resident has suffered abuse
triggers the duty to conduct a full and thorough investigation. The facility must report all
possible incidents of abuse to appropriate State authorities and it must prevent further
possible incidents of abuse while an incident is being investigated. 42 C.F.R.

§ 483.13(c)(2) - (4).

The cursory “investigation” that Petitioner’s management conducted of the November 22
incident fell far short of what it was obligated to do and constituted a substantial violation
of regulatory requirements. As I have discussed, management did nothing to investigate
the incident aside from its supervisor making a few cursory notations of the staffs
statements about what had occurred.

Petitioner argues that the notes in question are merely the tip of the iceberg, that in fact,
its employee, Ms. Nicole Crothers, interviewed all of the staff members who were
involved in the November 22 incident and determined, based on her interviews, that no
abuse had occurred. Petitioner’s post-hearing brief at 4. But, in the absence of any
evidence that a thorough investigation took place speculating about what Ms. Crothers
did or did not do is pointless. There is no evidence showing that Ms. Crothers or anyone
else on Petitioner’s staff thoroughly investigated the November 22 incident.

Petitioner argues also that no one on its staff actually thought that anything abusive had
occurred on November 22. Rather, Petitioner’s management concluded that the incident
was merely a “behavioral incident” that didn’t rise to the level of abuse. Petitioner’s
post-hearing brief at 14-15. From this assertion Petitioner apparently believes that its
staff had no duty to conduct more of an investigation than the cursory interviews that the
staff conducted. Petitioner would have me find that its staff’s conclusion that there was
no abuse justified not investigating the possibility of abuse.

This is plainly circular reasoning. There was overwhelming evidence that suggested
more than the remote possibility that abuse had occurred on November 22. That included
the staff’s admission that there had been a physical confrontation with Resident # 1 and
also the fact that the resident had sustained a serious injury caused by that confrontation.
There also was a surveillance video that showed the confrontation and it is apparent that

the video revealed a physical altercation between the staff and the resident.” That
Petitioner’s management could have misjudged this evidence and formed the implausible
belief that there was no possibility of abuse doesn’t excuse it from investigating the
possibility of abuse.

Petitioner did not notify appropriate State officials of the November 22 incident.’ This
failure, coupled with the failure to investigate promptly and thoroughly the November 22
incident comprised immediate jeopardy level noncompliance. “Immediate jeopardy” is
defined at 42 C.F.R. § 488.301 to mean a situation where noncompliance has caused or is
likely to cause serious injury, impairment, harm, or death to a resident. Here, there was a
igh probability of harm, not only to Resident # 1, but to all of Petitioner’s residents,
because in not investigating the November 22 incident, Petitioner’s management blinded
itself to the probability that further abusive conduct would occur. How could
management trust its staff to do the right thing in the next confrontation with a resident if
management did not fully investigate and assess the November 22 incident? How could
management be assured that further confrontations and inappropriate uses of force would
not occur? The answers to these questions are that management could not have known
whether staff would act inappropriately without conducting an investigation. Moreover,
and as I discuss below, it turns out that Mr. Sohn — and probably other staff members as
well — were laboring under a highly inappropriate misunderstanding of when force could
be used against residents. By not investigating the November 22 incident management
tolerated this misunderstanding and greatly increased the likelihood that residents would
be harmed.

Petitioner did nothing to protect Resident # 1 or other residents from the possibility that
Mr. Sohn might engage in additional abusive conduct. In fact, it continued to permit Mr.
Sohn to provide care to residents without substantial re-training, not only during the days
following November 22, but also during the period between the December and February
surveys. CMS’s determination to impose a second immediate jeopardy level civil money
penalty against Petitioner on February 1, 2013 is based on Petitioner’s continued
employment of Mr. Sohn without addressing his abusive act.

* Petitioner destroyed the surveillance video. I find that the best evidence of what that
video showed is the testimony of Katrina Huff, a State Agency surveyor, who saw the
video. CMS Ex. 34. Ms. Huff testified that she saw three of Petitioner’s staff attempting
to remove the resident’s right hand from a door handle and the resident physically
resisting. Jd. at 2-3; Tr. at 25-26.

* Petitioner subsequently investigated the November 22 incident, but only after the
December survey and only after it had been cited for not investigating or reporting the
November 22 incident.
I am not suggesting that Mr. Sohn acted out of malice when he broke the resident’s
finger. To the contrary, I conclude from the testimony that Mr. Sohn gave at the hearing
that he believed — and still believes — that he acted appropriately during the November 22
incident. Tr. at 168-86. What was evident from Mr. Sohn’s testimony is that he lacks
any comprehension of why his use of force against Resident # 1 was inappropriate and
abusive. He asserted that he was merely implementing the techniques that he had been
trained to use against residents who are engaging in obstructive or dangerous conduct.
Tr. at 177. What Mr. Sohn so obviously failed to comprehend is that the techniques that
e had been trained to use and that he used — which definitely involve the application of
force — are reserved only for those circumstances where the use of force is appropriate,
such as a situation where a staff member is assaulted physically by a resident and the staff
member is unable to retreat. See CMS Ex. 15.

Petitioner allowed Mr. Sohn to continue working while under the misapprehension that

e could use physical force to confront a resident, as with the case of Resident # 1, ina
circumstance where physical force would never be appropriate. That is a clear regulatory
violation.

Petitioner argues that CMS’s basis for finding that immediate jeopardy continued until
February 1, 2013 is that in continuing to utilize Mr. Sohn as a care-giver Petitioner
contravened the requirements of 42 C.F.R. § 483.13(c)(1)(ii)(A) and (B). This subsection
essentially prohibits a facility from employing an individual who has been convicted of
conduct amounting to abuse by a court of law or who has had a finding of abuse entered
against him or her in a State nursing registry. Petitioner asserts that nothing of the kind
ad been issued against Mr. Sohn and consequently there is no basis in the regulations for
finding that Petitioner contravened regulatory requirements in continuing to employ Mr.
Sohn after the December survey. Petitioner’s post-hearing brief at 18-19.

I agree with Petitioner that noncompliance in this case cannot be based on a violation of
42 C.F.R. § 483.13(c)(1)(ii)(A) and (B). As Petitioner correctly notes, Mr. Sohn was not
convicted of abuse nor was an abuse finding entered against him in the State nursing
registry. However, the continued employment of Mr. Sohn was nevertheless a regulatory
violation. Petitioner is not culpable because it employed an individual who was
convicted of abuse. It is culpable because it continued to employ Mr. Sohn as a caregiver
without assuring that he understood why his conduct on November 22 was inappropriate
and abusive. In doing so Petitioner ran the risk that Mr. Sohn, laboring under the
mistaken belief that he’d acted appropriately on November 22, might engage in similar
abusive conduct towards Resident # 1 or some other resident. That violated the
provisions of 42 C.F.R. § 483.13(c)(1) barring facility abuse of residents, because there
remained a high likelihood of continuing abuse so long as Mr. Sohn remained employed
as a caregiver without correcting his faulty understanding of when it might be appropriate
to use force.
The continued employment of Mr. Sohn without retraining him put both Resident # 1 and
other residents at immediate jeopardy. That Mr. Sohn, and other staff members as well,
did not understand the circumstances when force could be used against a resident put
Resident # 1 and all other residents at Petitioner’s facility at a likelihood for harm, at the
very least. CMS’s determination of immediate jeopardy was not clearly erroneous.
Rather, it was entirely supported by the evidence.

Petitioner’s failure to investigate timely and thoroughly the November 22 incident not
only contravened regulatory requirements that it conduct such an investigation but it
contravened Petitioner’s own policy governing abuse. CMS Ex. 14; 42 C.F.R.

§ 483.13(c). Petitioner has not offered a specific defense here except to argue that it was
not obligated to conduct the type of abuse investigation mandated by the regulations and
its own policy because the November 22 incident was merely a “behavioral incident.” I
have explained why the incident of November 22 clearly constituted abuse and why
Petitioner’s management should have recognized that.

I find it unnecessary to address CMS’s remaining allegation that Petitioner’s staff failed
adequately to deal with Resident # 1’s complaints resulting from his broken finger. The
other deficiency findings that I have sustained are more than adequate to support the

remedies that CMS imposed against Petitioner.

The two immediate jeopardy level civil money penalties of $5,000 and $7,200 are based
on the findings of immediate jeopardy level noncompliance that I have sustained. In any
case where CMS imposes a per-diem immediate jeopardy level civil money penalty of
more than $3,050 there potentially arises an issue of whether the penalty amount is
reasonable. However, Petitioner has offered no argument here challenging the penalty
amounts. I therefore find it unnecessary to address CMS’s rationale for the penalty
amounts in question.

Similarly, Petitioner has not disputed the $500 per day penalty amounts for non-
immediate jeopardy level noncompliance between December 8, 2012 and April 4, 2013.
Petitioner has not argued that, if it was noncompliant it cured its noncompliance at an
earlier date than the date of substantial compliance determined by CMS. Nor does it
argue that $500 per day for non-immediate jeopardy level noncompliance is
unreasonable. Therefore, I find it unnecessary to address the duration and amount of the
$500 per day penalties.

Finally, I find it unnecessary to address whether denial of payment for Medicare
admissions is a permissible remedy in this case. As a matter of law such remedy is
permissible whenever CMS finds noncompliance that is substantial. Petitioner has not
10

challenged the imposition of the remedy except to argue that no remedy should be
imposed against it on the ground that it was at all times compliant with participation
requirements. I have addressed those arguments.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Orthopaedic Surgery Associates
(PTAN: 0689190003)
(NPI: 1306923149),
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-440
Decision No. CR3221

Date: May 6, 2014

DECISION

The Centers for Medicare & Medicaid Services (CMS) revoked the Medicare billing
privileges of Petitioner, Orthopaedic Surgery Associates. Petitioner appealed. As
discussed below, the evidence of record supports CMS’s determination. Therefore, I
affirm the revocation of Petitioner’s Medicare billing privileges.

I. Background

Petitioner was enrolled in the Medicare program as a supplier of durable medical
equipment, prosthetics, orthotics, and supplies (DMEPOS). CMS Exhibit (Ex.) 2. On
July 12 and 26, 2013, a CMS contractor from Palmetto GBA, the National Supplier
Clearinghouse (NSC), attempted to conduct a site inspection at Petitioner’s location on
file with CMS. CMS Ex. 1. A site inspection could not be completed on either date and,
on September 20, 2013, NSC issued an initial determination revoking Petitioner’s
Medicare supplier number effective July 26, 2013, the date CMS determined that
Petitioner’s practice location was not operational. CMS Ex. 2. NSC barred Petitioner
from re-enrolling in the Medicare program for two years from the effective date. CMS
Ex. 2.

Petitioner filed a timely request for reconsideration with NSC and later submitted
evidence to the NSC hearing officer assigned to the case. CMS Exs. 3, 4. On October
24, 2013, the NSC hearing officer issued an unfavorable reconsidered determination
upholding the revocation of Petitioner’s Medicare billing privileges. CMS Ex. 5.

On December 12, 2013,' Petitioner timely filed a request for hearing (RFH) before an
administrative law judge. On January 3, 2014, I issued an Acknowledgement and Pre-
hearing Order (Order). Pursuant to the Order, CMS filed its brief (CMS Br.) and five
exhibits (CMS Exs. 1-5). Petitioner submitted a brief (P. Br.) and one exhibit (P. Ex. 1).

II. Decision on the Record

In the absence of objection, I admit CMS Exs. 1-5 and P. Ex. | into the record. With its
RFH, Petitioner submitted documents that have been admitted as CMS Exs. 2-5.
Petitioner also submitted copies of emails that Petitioner’s Associate Administrator wrote
to NSC’s hearing officer who conducted the reconsideration of the initial determination
to revoke Petitioner’s Medicare billing privileges. Petitioner did not resubmit these
emails as exhibits, therefore, I will not admit these documents into the record as

exhibits. However, I have reviewed the emails and they are part of the record because the
emails were attached to Petitioner’s RFH.

My Pre-hearing Order advised the parties that they must submit written direct testimony
for each proposed witness and that an in-person hearing would only be necessary if the
opposing party requested an opportunity to cross-examine a witness. Order §{j 8-11; see
Vandalia Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB No. 1823, at 7-8
(2002) (holding that the use of written direct testimony for witnesses is permissible so
long as the opposing party has the opportunity to cross-examine those witnesses).? CMS
did not submit any direct testimony for witnesses and CMS did not request to cross-

' Petitioner’s request for a hearing is dated November 11, 2013, but was postmarked on
December 12, 2013. However, it is undisputed Petitioner’s request for a hearing is
timely.

> Administrative decisions cited in this decision are accessible on the internet at:
http://www.hhs.gov/dab/decisions/index.html.
examine any of the individuals for whom Petitioner submitted affidavits (P. Ex. 1).°
Therefore, there is no need for an in-person hearing and I issue this decision based on the
written record. Order {ff 9-11.

III. Issue

Whether CMS had a legitimate basis for revoking Petitioner’s Medicare billing privileges
for failing to comply with Supplier Standard 7 (42 C.F.R. § 424.57(c)(7)) and failing to
be operational (42 C.F.R. § 424.535(a)(5)). Ihave jurisdiction to decide this issue.

42 C.F.R. §§ 498.3(b)(17), 498.5(1)(2); see also 42 U.S.C. § 1395ce(j)(8).

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

In order fora DMEPOS supplier to receive Medicare payments for items furnished to a
Medicare-eligible beneficiary, the Secretary of Health and Human Services must first
issue a supplier number to that DMEPOS supplier. 42 U.S.C. § 1395m(j)(1)(A). To
receive direct-billing privileges, a DMEPOS supplier must meet and maintain each of the
supplier enrollment standards, including the requirement to maintain a physical location
that is accessible and staffed during posted hours. 42 C.F.R. § 424.57(c)(7)(i)(C). CMS
may revoke a currently enrolled DMEPOS supplier’s Medicare billing privileges if CMS
determines, upon on-site review, that the DMEPOS supplier is no longer operational to
furnish Medicare covered items or services, or the supplier fails to satisfy any of the
Medicare enrollment requirements, or has failed to furnish Medicare covered items or
services as required by the statute or regulations. 42 C.F.R. § 424.535(a)(5)(ii). After a
DMEPOS supplier’s Medicare billing privileges are revoked, it is barred from reenrolling
in the Medicare program for one to three years. 42 C.F.R. § 424.535(c).

I. The NSC site inspector could not gain entry to Petitioner’s facility at
1401 NW 9" Avenue in Boca Raton, Florida, when site inspections
were attempted on July 12 and 26, 2013.

* Petitioner submitted affidavits for three individuals as P. Ex. 1. The affidavits do not
substantively provide any direct testimony. Each affidavit states only that the individual
is: “over 18 years of age and competent to testify of my own knowledge of the facts
stated herein”; that “[a]ll the facts stated by me herein are true, correct and complete to
the best of my knowledge and understanding”; and that the individual “[w]ill testify...
in the case of Orthopaedic Surgery Associates v. Centers for Medicare and Medicaid
Services.” P. Ex. 1, at 1-3.

* My findings of fact and conclusions of law are set forth in italics and bold in the
discussion captions of this decision.
On Friday, July 12, 2013, at approximately 11:05 a.m., an NSC inspector attempted to
conduct an unannounced site inspection at Petitioner’s facility located at 1401 NW 9"
Avenue, Boca Raton, Florida. CMS Ex. 1, at 2. Petitioner’s posted hours of operation
were listed as Monday, Thursday and Friday from 8:00 a.m. to 6:00 p.m. CMS Ex. 1, at
5. The inspector’s report “found supplier closed; non-operational despite posted
days/hours of operation.” CMS Ex. 1, at 2. On Friday, July 26, 2013, at approximately
10:11 a.m., the NSC inspector attempted another site inspection and again found the
facility to be closed during Petitioner’s posted hours of operation. CMS Ex. 1, at 2. The
NSC inspector’s observation that Petitioner’s office was closed and no personnel were
present during the attempted site inspections is corroborated by Petitioner. In Petitioner’s
request for reconsideration and Petitioner’s RFH, Petitioner states: “We apologize for
not being available to complete an inspection of our facility. We had physicians out of
the office at that time which resulted in a change in office hours.” CMS Ex. 3, at 1.
Again in Petitioner’s brief, it states: “Admittedly we were not available to complete an
inspection of our facility. We had physicians out of the office at that time which resulted
in a change in office hours.” P. Br. at 1. Thus, Petitioner admits that both of the
attempted site inspections could not be completed because Petitioner’s personnel were
not in the office during its posted hours of operation.

Therefore, based on the evidence of record, I find that the NSC inspector attempted to
conduct site inspections of Petitioner’s facility at 1401 NW 9" Avenue in Boca Raton,
Florida, on July 12 and 26, 2013, during Petitioner’s posted hours of operation.
However, the NSC inspector was unable to gain entry to the facility and complete the
inspections because none of Petitioner’s personnel were present at the location.

2. CMS had a legitimate basis to revoke Petitioner’s Medicare billing
privileges because Petitioner’s location was not accessible and staffed
during posted hours of operation, and was not operational, as
required by 42 C.F.R. §§ 424.57(c)(7)(i)(©) and 424.535(a)(5)(ii).

For a supplier to be “operational,” it must be “open to the public for the purpose of
providing health care related services . . . and [be] properly staffed . . . to furnish these
services.” 42 C.F.R. § 424.502 (emphasis added). Further, DMEPOS suppliers must
permit CMS or its agents to conduct on-site inspections to ascertain supplier compliance
with enrollment standards, and the supplier must be accessible and staffed during posted
hours of operation to beneficiaries and to CMS. 42 C.F.R. § 424.57(c)(7)(i)(C), (c)(8).
CMS may perform periodic site visits to determine whether the supplier is operational
and complying with Medicare enrollment requirements. 42 C.F.R. §§ 424.510(d)(8),
424.515(c), 424.517(a).
The facts in this case establish that Petitioner’s location was not open and available for
the NSC’s site inspector to conduct site inspections on July 12 and 26, 2013. Therefore,
CMS had a legitimate basis to conclude that Petitioner was not operational under

42 C.F.R. § 424.535(a)(5)(ii) and was not in compliance with the supplier standards
found at 42 C.F.R. § 424.57(c)(7)(i)(C).

In its brief, Petitioner admits that its staff was not available at the time of the attempted
site inspections because physicians were out of the office at the time which resulted in a
change in office hours. P. Br. at 1. Petitioner argues it should have been contacted by
phone to verify compliance or given an opportunity to file a Corrective Action Plan
(CAP) before CMS made a final determination to revoke Petitioner’s supplier number.
P. Br. at 1. Petitioner contends it has “updated our office hours and are in full
compliance with the DMEPOS supplier standards.” P. Br. at 1.

However, a DMEPOS supplier is neither “open to the public” nor “accessible” if the
supplier location is closed because the staff is out for lunch, on a break, making patient
visits, or out of the office for any reason. See Ita Udeobong, d/b/a Midland Care Med.
Supply & Equip., DAB No. 2324, at 6-7 (2010). Even assuming Petitioner’s staff
members were out of the office for a short period of time due to a change in office hours,
this is not a sufficient excuse, as it does not show that Petitioner was accessible and
properly staffed when NSC attempted site inspections during Petitioner’s posted hours of
normal operation. CMS Ex. 1. A supplier may not close, even temporarily, during its
posted hours of operation. Complete Home Care, Inc., DAB No. 2525, at 5 (2013). It is
incumbent on Petitioner to make whatever reasonable arrangements are necessary to keep
its business open while allowing for patient consultations and visits as well as breaks for
staff members. As stated in a previous case:

A Medicare supplier differs from a strictly private business in that it is an
integral part of a publicly run program. The requirement that a supplier be
open at all times during normal business hours reflects CMS’s
determination that a supplier be available to beneficiaries to meet their
needs and to alleviate their medical conditions.

A to Z DME, LLC, DAB CR1995, at 6 (2009), aff’d DAB No. 2303 (2010). Also, the
regulatory drafters contemplated allowing facilities to temporarily close during posted
hours to account for circumstances including short-term closures, and instead chose to
emphasize that a supplier’s place of business must always remain publicly accessible
during posted hours. Complete Home Care, Inc., DAB No. 2525, at 6. The drafters
explained in the preamble to the final rule that they believed a supplier “should be
available during posted business hours” and “should do its best to plan and staff for
temporary absences.” 75 Fed. Reg. 52,629, 52,636 (2010).
Therefore, I conclude that CMS has a basis for its determination that Petitioner’s location
was not operational because it was not accessible and staffed during posted business
hours and CMS properly revoked Petitioner’s Medicare billing privileges. 42 C.F.R.

§§ 424.57(c)(7)(i)(C), 424.535(a)(5)(ii).

3. Petitioner had no right to file a Corrective Action Plan (CAP) and I
have no jurisdiction to review CMS’s denial of a CAP.

Petitioner argues that CMS should have afforded Petitioner the opportunity to file a CAP
before revoking Petitioner’s Medicare billing privileges. P. Br. at 1. Along with its
reconsideration request, Petitioner submitted a form CMS 855S to update its office hours
asa CAP. CMS Ex. 3, at 1. The updated schedule indicates that Petitioner is open on
Monday, Tuesday and Thursday from 8:00 a.m. to 6:00 p.m. CMS Ex. 3, at 8. However,
NSC did not provide Petitioner with notice of a right to submit a CAP in the initial
revocation determination. CMS Ex. 2. The lack of opportunity to submit a CAP is
consistent with 42 C.F.R. § 424.535(a)(1), which states that a supplier is “granted an
opportunity to correct the deficient compliance requirement before a final determination
to revoke billing privileges, except for those imposed under paragraphs (a)(2), (a)(3),
or (a)(5) of this section.” (Emphasis added). Petitioner’s Medicare billing privileges
were revoked, in part, pursuant to 42 C.F.R. § 424.535(a)(5), after CMS determined that
Petitioner was nonoperational after an on-site review. Thus, Petitioner is exempt from
the requirement that a supplier be given the opportunity to file a CAP before a final
determination to revoke billing privileges and Petitioner had no right to file a CAP.

In any event, I do not have jurisdiction to review CMS’s decision to reject a CAP.

42 C.F.R. § 405.809 (CAP decisions are not initial determinations subject to appeal under
42 C.F.R. Part 498); Pepper Hill Nursing & Rehab. Ctr., DAB No. 2395, at 9-10 (2011);
DMS Imaging, Inc., DAB No. 2313, at 7-10 (2010).

V. Conclusion

Based on the reasons stated above, I affirm the determination to revoke Petitioner’s
DMEPOS supplier number and Medicare billing privileges effective July 26, 2013,
pursuant to 42 C.F.R. §§ 424.57(c)(7)(i(C), 424.535(a)(5)(ii).

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Ashley William Forsyth, D.O.
(OI File Number H-13-41298-9),

Petitioner,
v.
The Inspector General.
Docket No. C-14-247
Decision No. CR3219

Date: May 6, 2014

DECISION

The Inspector General (1.G.) of the United States Department of Health and Human
Services excluded Petitioner, Ashley William Forsyth, D.O., from participation in
Medicare, Medicaid, and all other federal health care programs pursuant to 42 U.S.C.

§ 1320a-7(b)(4), effective November 20, 2013. The I.G. based the exclusion on
Petitioner’s surrender of his medical license while a formal disciplinary proceeding was
pending before the Oregon Medical Board for reasons bearing on Petitioner’s
professional performance, professional competence, or financial integrity. The LG.
indicated that the exclusion would last until Petitioner regained his medical license in
Oregon. For the reasons stated below, I affirm the I.G.’s determination to exclude
Petitioner.

I. Background

In an October 31, 2013 letter, the I.G. notified Petitioner that he was being excluded from
Medicare, Medicaid, and all federal health care programs pursuant to 42 U.S.C. § 1320a-
7(b)(4). LG. Exhibit (Ex.) 1, at 1. The I.G. excluded Petitioner because his “license to
practice medicine or provide health care as an osteopath in the State of Oregon was
revoked, suspended, or otherwise lost or was surrendered while a formal disciplinary
proceeding was pending before the Oregon Medical Board for reasons bearing on your
professional competence, professional performance, or financial integrity.” I.G. Ex. 1,

at 1. The I.G. stated that Petitioner’s exclusion would remain in effect until the I.G.
reinstated him and that Petitioner would be eligible for reinstatement only if Petitioner
regains his license to practice as an osteopathic physician in Oregon. IG. Ex. 1, at 1.
Petitioner timely filed a request for hearing (RFH) with the Departmental Appeals Board,
Civil Remedies Division, and the Director of the Civil Remedies Division
administratively assigned this case to me for hearing and decision.

On December 18, 2013, I convened a telephonic prehearing conference, the substance of
which is summarized in my December 20, 2013 Order and Schedule for Filing Briefs and
Documentary Evidence (Order). See 42 C.F.R. § 1005.6. Pursuant to the Order, the I.G.
filed a brief (1.G. Br.) on January 23, 2014, with five exhibits (I.G. Exs. 1-5). Petitioner
electronically filed a response (P. Br.) on March 24, 2014, 11 days after the deadline
established in my Order. See Order § 5.b. However, Petitioner has asserted that he
attempted to file his brief electronically earlier and believed he successfully did so. Once
Petitioner was made aware that my office had not received his brief, he promptly filed it.
The L.G. has not requested that I strike Petitioner’s brief for untimeliness. Therefore, I
accept Petitioner’s brief and will consider it as though it was timely filed. Petitioner did
not submit any exhibits with his response. The I.G. elected not to file a reply brief.

II. Decision on the Record

Petitioner did not object to any of the I.G.’s proposed exhibits. Therefore, I admit I.G.
Exs. 1-5 into the record.

Both the I.G. and Petitioner indicated that they did not have any witnesses to offer and
that it was not necessary to hold an in-person hearing. LG. Br. at 4; P. Br. at 3.
Therefore, an in-person hearing is unnecessary and I issue this decision on the basis of
the written record.

II. Issue

The sole issue before me is whether Petitioner surrendered his license to practice
medicine while a formal disciplinary proceeding was pending before a state licensing
authority for reasons bearing on his professional competence, professional performance,
or financial integrity. 42 U.S.C. § 1320a-8(b)(4)(B).

I have jurisdiction to decide this issue. 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see
also 42 U.S.C. § 1320a-7(f)(1).
IV. Findings of Fact, Conclusions of Law, and Analysis

The LG. relies on 42 U.S.C. § 1320a-7(b)(4) as the basis for Petitioner’s exclusion. I.G.
Ex. 1. The statute provides:

(b) PERMISSIVE EXCLUSION. — The Secretary may exclude the
following individuals and entities from participation in any Federal health
care program (as defined in section 1128B(f)):

* * *

(4) LICENSE REVOCATION OR SUSPENSION. - Any individual or
entity —

(A) whose license to provide health care has been revoked or
suspended by any State licensing authority, or who otherwise lost
such a license or the right to apply for or renew such a license, for
reasons bearing on the individual’s or entity’s professional
competence, professional performance, or financial integrity, or

(B) who surrendered such a license while a formal disciplinary
proceeding was pending before such an authority and the proceeding
concerned the individual’s or entity’s professional competence,
professional performance, or financial integrity.

42 U.S.C. § 1320a-7(b)(4). Therefore, the I.G. must prove the following elements:

(1) Petitioner’s license to provide health care has been surrendered, (2) while a formal
disciplinary proceeding was pending before a state licensing authority, and (3) the
proceeding concerned Petitioner’s professional competence, professional performance, or
financial integrity. For the reasons stated below, I find that the IG. has proven each of
these elements.

1. Petitioner surrendered his license to practice as an osteopathic physician in
Oregon on January 10, 2013.'

The Board Chair of the Oregon Medical Board entered a Stipulated Order on January 10,
2013, in which Petitioner agreed to “‘surrender[ ] his license to practice medicine while
under investigation.” I.G. Ex. 4, at 5. Prior to that time, Petitioner was licensed to
practice in Oregon as an osteopathic physician. See I.G. Exs. 2, at 1; 4, at 1. The
Stipulated Order stated that Petitioner cannot reapply for a license to practice medicine in

' My findings of fact and conclusions of law are set forth in italics and bold font.
Oregon for two years. I.G. Ex. 4, at 5. The Stipulated Order also stated that “all open
investigations” pertaining to Petitioner would be terminated. I.G. Ex. 4, at 5. Thus, the
Stipulated Order demonstrates that Petitioner surrendered his license to practice in
Oregon as an osteopathic physician on January 10, 2013, and that he remains unlicensed
to practice medicine in Oregon.

2. A formal disciplinary proceeding was pending before the Oregon Medical
Board at the time Petitioner surrendered his medical license.

The Oregon Medical Board is the licensing authority for physicians in Oregon. I.G. Ex.
4, at 1. Petitioner does not dispute that he surrendered his license while a formal
disciplinary proceeding was pending before the Oregon Medical Board. P. Br. at 2. The
Oregon Medical Board issued a “Complaint and Notice of Proposed Disciplinary Action”
against Petitioner on September 2, 2011. I.G. Ex. 2, at 2. On May 3, 2012, Petitioner
appeared before the Board’s Investigative Committee, and on August 1, 2012, the Board
issued an “Amended Complaint and Notice of Proposed Disciplinary Action, in which
the Board proposed taking disciplinary action by imposing up to the maximum range of
potential sanctions identified in [Oregon Revised Statutes] 677.205(2).” LG. Ex. 4, at 1,
4. While the Oregon Medical Board referred to “this investigation” in the Stipulated
Order and stated that Petitioner surrendered his license while “under investigation,” see
1G. Ex. 4, at 4, this “investigation” was formally initiated under state statute by a
complaint and later an amended complaint. See Or. Rev. Stat. § 677.200. Accordingly,
the Oregon Medical Board’s complaint and amended complaint against Petitioner, which
included proposed disciplinary sanctions, and Petitioner’s appearance before a committee
of the Oregon Medical Board, demonstrate that there was a “formal disciplinary
proceeding” pending at the time Petitioner surrendered his medical license.

3. The disciplinary proceeding before the Oregon Medical Board concerned
Petitioner’s professional competence and professional performance.

The disciplinary proceeding before the Oregon Medical Board against Petitioner was
triggered by an allegation of malpractice against Petitioner and, in the course of that
itigation, his admission to using marijuana on a regular basis for his alleged chronic back
pain. I.G. Ex. 4, at 2. The conduct involving the malpractice action resulted from
Petitioner’s “failure to timely and accurately diagnose” a patient in April 2007 who was
exhibiting signs of a stroke and his failure to order the transfer of that patient to a medical
facility equipped to handle such a problem. The patient, a 24-year-old female, was later
determined to have a vertebral arterial dissection and pontine infarction (stroke in the
brain stem). I.G. Ex. 4, at 2.

The family of the patient sued Petitioner for malpractice. During the malpractice case,
Petitioner acknowledged that he used marijuana since 2003 and continued through 2007
for chronic pain, usually being “gifted” marijuana from friends. I.G. Ex. 4, at 3. He

advised the Oregon Medical Board that he had a “medical marijuana card in either 2006
or sometime in 2007.” I.G. Ex. 4, at 3. Petitioner also held a medical marijuana card
from 2009 to 2010. I.G. Ex. 4, at 3. On July 25, 2011, while employed as an emergency
room physician, Petitioner provided a urine sample to the Oregon Medical Board, which
tested positive for marijuana even though Petitioner did not have a valid medical
marijuana card at the time. In August 2011, Petitioner told the Oregon Medical Board
that he “forgot to renew” his medical marijuana card and continued his marijuana use
throughout 2011. He admitted to using marijuana on days he was scheduled to work, but
always two hours or more prior to his reporting time so that the effects had “worn off.”
LG. Ex. 4, at 3.

On May 3, 2012, Petitioner told the Investigative Committee of the Oregon Medical
Board that he was receiving treatment for a degenerative disc disorder and was prescribed
Vicodin and Neurontin. Petitioner admitted that he also used marijuana on a daily basis,
and would not cease using marijuana even on days he was scheduled to see patients. He
told the Committee that he did not intend to stop using marijuana as a way to treat his
pain. I.G. Ex. 4, at 5.

The Oregon Medical Board concluded that Petitioner’s conduct with regard to the patient
who suffered a stroke constituted “gross or repeated acts of negligence” pursuant to
section 677.190(13) of the Oregon Revised Statutes.” I.G. Ex. 4, at 1. It also found that
Petitioner violated section 677.190(1)(a) of the Oregon Revised Statutes when he
engaged in “unprofessional or dishonorable conduct.” I.G. Ex. 4, at 5. That phrase is
defined as:

Conduct unbecoming a person licensed to practice medicine or podiatry, or
detrimental to the best interests of the public, and includes:

(a) Any conduct or practice contrary to recognized standards of ethics
of the medical or podiatric profession or any conduct or practice which
does or might constitute a danger to the health or safety of a patient or
the public or any conduct, practice or condition which does or might
adversely affect a physician’s ability safely and skillfully to practice
medicine or podiatry ....

Or. Rev. Stat. § 677.188(4)(a). Further, the Oregon Medical Board concluded that
Petitioner violated the Federal Controlled Substances Act, a separate ground for
suspension or revocation of Petitioner’s medical license. See Or. Rev. Stat.

§ 677.190(a)(23); I.G. Ex. 4, at 5.

> Section 677.190 of the Oregon Revised Statutes states 26 grounds upon which the
Oregon Medical Board may “refuse to grant, or may suspend or revoke a license to
practice ....” See generally Or. Rev. Stat. § 677.190(1)-(26).
The Oregon Medical Board’s conclusion that Petitioner engaged in “gross or repeated
negligence” with regard to his misdiagnosis of a patient reflects that the disciplinary
proceeding involved Petitioner’s professional competence. Further, the finding that
Petitioner used marijuana on days when he would provide care to patients, and his
insistence that he would continue to use marijuana in such circumstances, means that the
Oregon Medical Board concluded that he posed a danger to the health or safety of a
patient or the public because Petitioner’s action was “unprofessional or dishonorable
conduct.” See Or. Rev. Stat. § 677.188(4)(a); I.G. Ex. 4, at 5.

4. The 1.G. has a basis to exclude Petitioner under 42 U.S.C. § 1320a-7(b)(4).

As seen above, Petitioner surrendered his medical license while a formal disciplinary
proceeding was pending before the Oregon Medical Board and the proceeding concerned
is professional competence and performance. Thus, the elements of 42 U.S.C. § 1320a-
7(b)(4) are satisfied, and the I.G. has a basis to exclude Petitioner.

Petitioner appears to urge me to review the I.G.’s discretionary decision to exclude
Petitioner claiming that the Oregon Medical Board’s zero-tolerance approach to medical
marijuana does not reflect current science and research about the issue. See P. Br. at 3.
Petitioner also filed articles with his RFH about medical marijuana to support his
argument. But Petitioner’s arguments and evidence are not relevant because I have no
authority to review the I.G.’s decision to impose a permissive exclusion under 42 U.S.C.
§ 1320a-7(b)(4).> See 42 C.F.R. § 1005.4(c)(5). Although I have the authority to reverse
an exclusion, see 42 C.F.R. §§ 1001.3005(a)(3), 1005.20(b), I can only do so if the LG.
as failed to prove that there is a basis for the exclusion. See 42 C.F.R. § 1001.2007(a);
Keith Michael Everman, D.C., DAB No. 1880 (2003).*

Furthermore, even though Petitioner expects to obtain a medical license in a state other
than Oregon, I cannot reverse the exclusion on this basis because “the period of the
exclusion shall not be less than the period during which the individual’s or entity’s
license to provide health care is revoked, suspended, or surrendered, or the individual or

> Tf Thad such authority, I would agree with the I.G.’s decision to impose exclusion. The
Oregon Medical Board took necessary and appropriate action to protect the public from a
physician who is regularly using marijuana, an addictive drug that is illegal under federal
law. See generally U.S. Dep’t of Justice, Drug Enforcement Admin., The Dangers and
Consequences of Marijuana Abuse (Jan. 2014), available at
http://www.justice.gov/dea/docs/dangers-consequences-marijuana-abuse.pdf.

* Administrative decisions and rulings cited in this decision are accessible on the internet
at: http://www.hhs.gov/dab/decisions/index.html.
the entity is excluded or suspended from a Federal or State health care program.”
42 U.S.C. § 1320a-8(c)(3)(E).

Finally, Petitioner indicates that he is an excellent and knowledgeable physician who
should be allowed to provide services to Medicare beneficiaries. However, I cannot
reverse the I.G.’s decision to impose an exclusion based upon equitable considerations.
See Donna Rogers, DAB No. 2381, at 6 (2011).

V. Conclusion
For the reasons explained above, I affirm the I.G.’s determination to exclude Petitioner

pursuant to 42 U.S.C. § 1320a-7(b)(4).

/s/
Scott Anderson

Administrative Law Judge