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

Heather A. Panek,
(OI File No. H-15-42614-9),

Petitioner,
v.
The Inspector General.
Docket No. C-16-333
Decision No. CR4668

Date: July 29, 2016

DECISION

Petitioner, Heather A. Panek, is excluded from participating in Medicare, Medicaid, and
all federal health care programs pursuant to section 1128(b)(1)(A)(i) of the Social
Security Act (Act) (42 U.S.C. § 1320a-7(b)(1)(A)(i)), effective February 18, 2016.
Exclusion is based on Petitioner’s conviction of a misdemeanor criminal offense related
to fraud, committed after August 21, 1996, in connection with the delivery of a health
care item or service. Petitioner’s exclusion for a minimum period of three years is not
unreasonable considering the presence of one aggravating factor and one mitigating
factor. Act § 1128(c)(3)(D) (42 U.S.C. § 1320a-7(c)(3)(D)); 42 C.F.R.

§ 1001.201(b)(1).'

' Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after
the period of exclusion expires. Reinstatement is not automatic upon completion of the
period of exclusion. Citations are to the 2015 revision of the Code of Federal
Regulations (C.F.R.), unless otherwise stated.
I. Background

The Inspector General (1.G.) for the Department of Health and Human Services notified
Petitioner by letter dated January 29, 2016, that she was being excluded from
participation in Medicare, Medicaid, and all federal health care programs for a period of
three years. The I.G. cited section 1128(b)(1) of the Act as the basis for Petitioner’s
exclusion and stated that the exclusion was based upon her misdemeanor conviction in
the Court of Common Pleas of Blair County, Pennsylvania.

Petitioner timely requested a hearing through counsel on February 12, 2016 (RFH). On
February 25, 2016, the case was assigned to me to hear and decide. I convened a
telephone prehearing conference on March 28, 2016, the substance of which is
memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and
Documentary Evidence (Prehearing Order) issued on March 29, 2016. Petitioner waived
an oral hearing and the parties agreed that this matter may be resolved based upon the
parties’ briefs and documentary evidence. Prehearing Order at 3. On April 26, 2016, the
IG. filed his brief and I.G. Exhibits (Exs.) 1 through 6. Petitioner filed her brief (P. Br.)
on May 23, 2016, with no exhibits. The I.G. filed a reply brief on June 9, 2016 (1.G.
Reply). Petitioner did not object to my consideration of I.G. Exs. 1 through 6 and they
are admitted as evidence.

II. Discussion
A. Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s right to a
hearing by an administrative law judge (ALJ) and judicial review of the final action of
the Secretary of Health and Human Services (the Secretary).

Pursuant to section 1128(b)(1)(A) of the Act (42 U.S.C. § 1320a-7(b)(1)(A)), the
Secretary may exclude from participation in any federal health care program an
individual convicted under federal or state law of a misdemeanor criminal offense
committed after August 21, 1996, related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct in connection with the delivery of
any health care item or service or with respect to any act or omission in a health care
program not subject to section 1128(a)(1), operated by or financed in whole or part by
any federal, state, or local government. Pursuant to section 1128(b)(1)(B) (42 U.S.C.

§ 1320a-7(b)(1)(B)), the Secretary may exclude from participation in any federal health
care program an individual convicted under federal or state law of a misdemeanor
criminal offense committed after August 21, 1996, related to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial misconduct with respect to any act or
omission in a program other than a health care program operated or financed by a federal,
state or local government. The Secretary has promulgated regulations implementing
these provisions of the Act. 42 C.F.R. § 1001.201(a).

Section 1128(c)(3)(D) of the Act provides that an exclusion imposed under section
1128(b)(1) of the Act will be for a period of three years, unless the Secretary determines
in accordance with published regulations that a shorter period is appropriate because of
mitigating circumstances or that a longer period is appropriate because of aggravating
circumstances. 42 C.F.R. § 1001.201(b). Authorized aggravating and mitigating factors
are listed in 42 C.F.R. § 1001.201(b)(2) and (3).

The standard of proof is a preponderance of the evidence, and there may be no collateral
attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(c), (d).
Petitioner bears the burden of proof and the burden of persuasion on any affirmative
defenses or mitigating factors, and the I.G. bears the burden on all other issues. 42
CFR. § 1005.15(b).

B. Issues

The Secretary has by regulation limited my scope of review to two issues:

Whether the I.G. has a basis for excluding an individual or entity from
participating in Medicare, Medicaid, and all other federal health care programs;

and

Whether the length of the proposed exclusion is unreasonable.
42 CFR. § 1001.2007(a)(1).

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

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

1. Petitioner timely filed her request for hearing, and I have
jurisdiction.

2. An oral hearing was waived by the parties and decision on the
pleadings and documentary evidence is appropriate.
There is no dispute that Petitioner timely requested a hearing and that I have jurisdiction
pursuant to section 1128(f) of the Act and 42 CFR. pt. 1005.

Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to
reasonable notice and an opportunity for a hearing. The Secretary has provided by
regulation that a sanctioned party has the right to a hearing before an ALJ, and both the
sanctioned party and the I.G. have a right to participate in the hearing. 42 C.F.R.

§§ 1005.2-.3. Either or both parties may choose to waive appearance at an oral hearing
and to submit only documentary evidence and written argument for my consideration.
42 C.F.R. § 1005.6(b)(5). Petitioner waived an oral hearing and the parties agreed that
this matter may be resolved based upon the parties’ briefs and documentary evidence.
Prehearing Order at 3.

3. Petitioner was convicted of an offense related to fraud within the
meaning of section 1128(b)(1)(A)(i) of the Act.

4. Petitioner was convicted of an offense related to the delivery of a
health care item or service within the meaning of section
1128(b)(1)(A)(i) of the Act.

5. There is a basis for Petitioner’s exclusion from Medicare, Medicaid,
and all other federal health care programs under section
1128(b)(1)(A)(i) of the Act.

a. Facts

Petitioner does not dispute that on June 9, 2015, she was convicted, pursuant to her guilty
pleas, in the Court of Common Pleas of Blair County, Pennsylvania (state court) of one
misdemeanor count of refusal to keep records required by the Pennsylvania Controlled
Substance, Drug, Device and Cosmetic Act (Pennsylvania Controlled Substance Act) and
one misdemeanor count of furnishing false or fraudulent material information, violations
of “35 Pennsylvania Statutes (P.S.) § 780-113(a)(21) [and](a)(28)” P. Br. at 3; I.G. Exs.
3,4,5. The charges to which Petitioner pleaded guilty alleged the misdemeanor offenses
as follows:

[Count 1:] The refusal or failure to make, keep or furnish any
record, notification, order form, statement, invoice or
information required under this act.
[Count 2:] The furnishing of false or fraudulent material
information in, or omission of any material information from
any application, report, or other document required to be kept
or filed under this act, or any record required to be kept by
this act.

1.G. Ex. 3. The police complaint, a copy of which Petitioner filed with her request for
hearing and a copy of which was admitted without objection as I.G. Ex. 4, alleged that
Petitioner was licensed to dispense controlled substances, but she failed to make, keep, or
furnish the record of her dispensing of oxycodone and Adderall™ to patients. The
complaint alleged that Petitioner furnished false or fraudulent material information, or
omitted material information related to dispensing oxycodone and Adderall™, on
documents or records that were required to be kept by the Pennsylvania Controlled
Substance Act. The complaint alleges that the violations occurred between May 20, 2014
and June 25, 2014, when Petitioner removed on numerous occasions, using another
nurse’s login identification, Adderall™ or oxycondone, both Schedule II controlled
substances, from the “MedDispense” unit (an automatic drug dispensing device) and
falsely documented the administration of the drugs, the return of the drugs, or the wasting
(disposal) of the drugs. I.G. Ex. 4; RFH. Petitioner was sentenced on May 29, 2015, to
pay fines totaling $200 and two years of probation. I.G. Ex. 5; P. Br. at 3.

b. Analysis

The I.G. notice of exclusion dated January 29, 2016, cited section 1128(b)(1) of the Act
as the basis for Petitioner’s exclusion. I.G. Ex. 2. In briefing before me, the I.G. argues
more precisely that the permissive exclusion is authorized by section 1128(b)(1)(A)(i) of
the Act. I.G. Br. at 3, 6; I.G. Reply at 2. Section 1128(b)(1)(A)(i) of the Act 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)):

(1) CONVICTION RELATING TO FRAUD. - Any
individual or entity that has been convicted for an offense
which occurred after [August 21, 1996] the date of the
enactment of the Health Insurance Portability and
Accountability Act of 1996, under Federal or State law —

(A) of a criminal offense consisting of a misdemeanor
relating to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct —
(i) in connection with the delivery of a health care item
or service, ...

The parties agree that the elements for exclusion pursuant to section 1128(b)(1)(A)(i) are:
(1) conviction in a state or federal court; (2) of a misdemeanor offense relating to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct; (3)
the offense occurred after August 21, 1996; and (4) the offense is in connection with the
delivery of a health care item or service. P. Br. at 5; 1.G. Br. at 3.

Petitioner admits that she pleaded guilty to one count of furnishing false or fraudulent
material information in violation of the Pennsylvania Controlled Substance Act. P. Br. at
5. She also does not dispute that she was convicted of two misdemeanor offenses by a
state court. An individual or entity is considered to have been “convicted” of an offense
if, among other things, a judgment of conviction is entered, or a guilty plea or no contest
plea is accepted by a federal, state, or local court. Act § 1128(i)(1), (3) (42 U.S.C.

§ 1320a-7(i)(1), (3)). Petitioner’s guilty pleas were accepted by the state court and a
judgment of conviction was entered by the state court. Therefore, Petitioner was
convicted within the meaning of section 1128(i) of the Act.

Petitioner does not dispute that the offenses for which she was convicted occurred
tween May and June 2014, which is after August 21, 1996. I.G. Exs. 3, 4.

Petitioner admitted to and was convicted of one count of furnishing false or fraudulent
material information. Generally, fraud is defined as “a knowing misrepresentation of the
truth or concealment of a material fact to induce another to act to his or her detriment.”
Black’s Law Dictionary 685 (8" ed. 2004). It is not necessary to look beyond the
language of the Pennsylvania statute that Petitioner admitted she violated to determine
that the required element of fraud existed. I conclude that the element of fraud, which
Petitioner admitted to by her guilty plea, was sufficient to satisfy the requirement of
section 1128(b)(1)(A)(i) for an offense related to fraud. See Richard E. Bohner, DAB
No. 2638 (2015).

Finally, I conclude that Petitioner’s offenses were related to the delivery of a health care
item or service because Petitioner abused her authority as a nurse in order to gain access
to the controlled substances. Further, she failed to report the disposition of those
substances pursuant to her duty under the Pennsylvania Controlled Substance Act.
Accordingly, I conclude that the I.G. has made a prima facie showing of the elements
necessary for permissive exclusion pursuant to section 1128(b)(1)(A)(i) of the Act.

Petitioner argued in her request for hearing that permissive exclusion is not appropriate
because her criminal conviction was not for an offense involving pecuniary gain or
financial misconduct. This argument is without merit. The Departmental Appeals Board
considered and rejected a similar argument in Bohner, DAB No. 2638. In Bohner, the
Board considered a permissive exclusion under section 1128(b)(1)(A)(i) of the Act. The
Board concluded that the misdemeanor conviction need not be for the offense of fraud; it
is only required that the offense be related to fraud. Whether or not an offense is related
to fraud is determined by looking at the underlying facts. The Board also concluded that
the phrase in section 1128(b)(1)(A)(i), “related to fraud,” is not limited to financial
misconduct. Bohner, at 8-14. The Board’s analysis in Bohner is persuasive. Petitioner
concedes that she was convicted of a misdemeanor offense of furnishing false or
fraudulent material information in violation of the Pennsylvania Controlled Substance
Act. Therefore, the charge to which Petitioner pleaded guilty and for which she was
convicted reflects on its face that it was related to fraud. I conclude that the fact that
Petitioner was not convicted of an offense that was clearly related to financial misconduct
is not a defense to permissive exclusion pursuant to section 1128(b)(1)(A)(i) of the Act so
long as the offense was related to fraud, as it was in this case.

Petitioner also argues in her request for hearing that there is no evidence that her offenses
compromised patient care or impaired the performance of her professional duties. She
argues that the evidence does not show that she lacked financial integrity; perpetrated any
systemic fraud; or fraudulently billed Medicare, Medicaid, or any other federal program
or insurance carrier. None of these arguments address the elements for permissive
exclusion pursuant to section 1128(b)(1)(A)(i). None of these arguments negate the
1.G.’s prima facie showing of a basis for permissive exclusion in this case. These
assertions are also not assertions of fact that are mitigating factors that may be considered
under 42 C.F.R. § 1001.201(b)(3). Accordingly, these arguments do not affect my
decision in this case.

Petitioner argues in her brief that the I.G. has no legal basis to exclude her under section
1128(b)(1)(A)(i) of the Act because the offenses for which she was convicted were not in
connection with the delivery of a health care item or service. Petitioner raises several
arguments in support of her position that her offense was not related to the delivery of a
health care item or service. Petitioner states in her brief, “[t]he factual crux . . . involves
er improper use of another nurse’s login and failure to properly document the
administration of medications to patients.” P. Br. at 6. Petitioner argues that there were
no allegations that her misconduct involved the unlawful diversion of narcotics from
patients to herself or that she falsified patient records to give the impression that patients
had received their medications. P. Br. at 6-7. Petitioner argues that there is no evidence
that her misconduct compromised patient care. RFH; P. Br. at 6-7. Petitioner argues
urther that she did not illegally distribute controlled substances, fraudulently bill
Medicare, Medicaid, or any federal program or insurance carrier, or engage in “any sort
of systemic fraud.” RFH; P. Br. at 6-7. Petitioner’s arguments are meritless. The Board
has repeatedly concluded that for an offense to be “in connection with the delivery of a
ealth care item or service,” all that needs to be shown is a “common sense connection or
nexus” between the conviction and the delivery of a health care item or service. See

George John Schulte, DAB No. 2649 at 7 (2015). In this case, there is an obvious nexus
between Petitioner’s offense and the delivery of a health care item or service. Petitioner
was a nurse. The evidence shows she was on duty at the time she committed her
offenses. Petitioner had access to the controlled substances because she was a nurse.
Petitioner does not dispute that the controlled substances were health care items.
Petitioner failed in her duty as a nurse to report the disposition of the controlled
substances as required by state law. These facts are all that are necessary to find the
required nexus. Although unnecessary, it may also be inferred that by unlawfully
removing drugs from the MedDispense machine, Petitioner directly impacted the delivery
of these drugs by diverting them away from their intended recipients — the patients.
Petitioner’s failure to properly document the disposition of the drugs, which were
controlled substances, also bears a direct connection to the delivery of a health care item
or service, particularly to the extent that Petitioner’s actions resulted in loss of control of
the drugs. Petitioner argues that there is no evidence supporting unlawful diversion of
narcotics by Petitioner. P. Br. at 6. To the contrary, Petitioner admitted by her pleas and
in pleadings before me that she obtained controlled substances fraudulently or by false
pretenses (even though she was not specifically convicted of those acts which are,
therefore, not a basis for exclusion) by using another nurse’s identity, thereby preventing
proper disposition of those drugs either by administration of the specific pills or capsules
to the proper patient or by destruction. The evidence does not show what Petitioner did
with the controlled substances, but evidence of their ultimate disposition is not required
in this case.

Contrary to Petitioner’s arguments, the fact that her misconduct may not have any
connection to Medicare, Medicaid, any other federal health care program, or insurance
carrier is irrelevant, for all that is required is that her offense was “in connection with the
delivery of a health care item or service.” Act § 1128(b)(1)(A)(i); 42 CFR.

§ 1001.201(a)(1)(i). There is also no requirement in either the statute or the regulation
that “systemic fraud” or patient harm must have resulted from Petitioner’s misconduct in
order for the required nexus to be found. The facts Petitioner admitted by her guilty pleas
are more than sufficient to establish that her offenses were related to the delivery of a
health care item or service.

6. Petitioner’s exclusion for three years is not unreasonable
considering the presence of one aggravating and one mitigating factor.

The period of exclusion under section 1128(b)(1) is three years, unless aggravating or
mitigating factors justify lengthening or shortening that period. Act § 1128(c)(3)(D);

42 CFR. § 1001.201(b)(1). Only the aggravating factors authorized by 42 C.F.R.

§ 1001.201(b)(2) may be considered to increase the period of exclusion, and only the
mitigating factors authorized by 42 C.F.R. § 1001.201(b)(3) may be considered to reduce
the period of exclusion. Pursuant to 42 C.F.R. § 1001.2002(c)(2), the I.G. is required to
state in the notice of exclusion the factors considered in setting the length of the
exclusion. The notice letter in this case did not state that the I.G. considered any
aggravating or mitigating factors in determining the length of Petitioner’s exclusion. LG.
Ex. 2. Because the notice letter is silent as to aggravating or mitigating factors, I
conclude that no such factors were considered by the I.G. rather than concluding that the
notice violated the requirement of 42 C.F.R. § 1001.2002(c)(2). My conclusion is
consistent with the I.G.’s assertions in his opening brief that “the I.G. did not apply any
aggravating or mitigating factors to lengthen or shorten the minimum three-year period of
exclusion.” LG. Br. at 7 (citing I.G. Ex. 2).

Petitioner, however, in her response brief, argues that the mitigating factor listed at 42
C.F.R. § 1001.201(b)(3)(i) exists because she was convicted of three or fewer offenses,
and there was no evidence of any financial loss to a government program or to other
individuals or entities as a result of her criminal acts. Petitioner argues that the presence
of this mitigating circumstance should provide a basis for determining that the three-year
exclusion is “impermissibly long.” P. Br. at 8. Petitioner also cites the fact that she
received a two-year suspension from the State Board of Nursing of the Commonwealth of
Pennsylvania (State Board of Nursing) and argues that, to the extent she is excluded and
mitigating evidence is considered, she should be excluded “for two years at most,”
consistent with the Nursing Board’s determination. P. Br. at 8.

In his reply brief, the I.G. agrees that Petitioner was convicted of only two misdemeanor
offenses and that no restitution was ordered that would indicate loss to the government.
The I.G. agrees that these facts may be considered mitigating under 42 C.F.R.

§ 1001.201(b)(3)(i) and a basis for shortening the exclusion period. The I.G. argues that
the two-year suspension of Petitioner’s nursing license is not a mitigating factor but an
aggravating factor under 42 C.F.R. § 1001.201(b)(2)(vi), which provides a basis for
lengthening her exclusion. The I.G. argues that “[a]fter weighing the single aggravating
factor and single mitigating factor present in Petitioner’s case, the I.G. determined to set
the period of exclusion at the three-year statutory minimum.” L.G. Reply at 6. The I.G.
asserted that the baseline three-year exclusion was reasonable “[g]iven the nature of
Petitioner’s conduct and that the [Nursing] Board also deemed Petitioner sufficiently
untrustworthy and suspended her nursing license.” I.G. Reply at 6. The I.G.’s challenge
is that there is no evidence that at the time of the exclusion, the I.G. considered any
aggravating or mitigating factors. To the contrary, the absence of any mention of factors
in the notice letter gives rise to the presumption that no aggravating or mitigating factors
were considered. It is not clear from the I.G. reply whether counsel or some other
representative of the I.G. has reassessed the period of exclusion while this matter was
pending before me or what authority might permit that action. Rather than elicit
testimony or further briefing from the I.G. to clarify, I elect to exercise my authority
under the regulations to ensure proper consideration of the aggravating and mitigating
factors in this case. 42 C.F.R. § 1005.20(b).
10

The I.G. has conceded that the mitigating factor listed at 42 C.F.R. § 1001.201(b)(3)(i)
exists in this case. Accordingly, I conclude that the evidence before me establishes the
mitigating factor established by 42 C.F.R. § 1001.201(b)(3)(i), that is, Petitioner was
convicted of three or fewer offenses and financial loss to the government was less than
$1,500. This mitigating fact is a basis for reducing the period of exclusion.

I further conclude that the evidence indisputably shows that on August 19, 2015, the State
Board of Nursing suspended Petitioner’s license as a result of her conviction. I.G. Ex. 6;
P. Br. at 8. The suspension of Petitioner’s nursing license based on her conviction is
clearly an aggravating factor under 42 C.F.R. § 1001.201(b)(2)(vi).

The Act requires that the period of a permissive exclusion under section 1128(b)(1) be
three years, unless the Secretary determines it should be longer based on the presence of
aggravating factors or mitigating factors that the Secretary established by regulation. Act
§ 1128(c)(3)(D). A mitigating factor may justify a reduction in the three-year period of
exclusion, but the regulations do not state that it must result in a downward adjustment or
how significant such an adjustment should be. 42 C.F.R. § 1001.201(b)(3). Similarly,
where an aggravating factor is present in a case, the regulations do not require that it must
result in lengthening the period of exclusion or how significant the adjustment should be.
42 C.F.R. § 1001.201(b)(2). The I.G. argues that a three-year exclusion was reasonable
“given the nature of Petitioner’s conduct” and the fact that the State Board of Nursing
found her “sufficiently untrustworthy and suspended her nursing license.” I.G. Reply at
6. Petitioner wants her exclusion reduced to two years to match the suspension imposed
by the State Board of Nursing.

The applicable regulation broadly states that the ALJ must determine whether the length
of exclusion imposed is “unreasonable.” 42 C.F.R. § 1001.2007(a)(1). Pursuant to 42
C.F.R. § 1005.30(b), I have authority to “affirm, increase or reduce” the period of
exclusion proposed by the I.G. or to reverse the exclusion. The Board, however, has
made clear that the role of the ALJ in exclusion cases is more limited than suggested by
the regulations. According to the Board, the ALJ’s role is to conduct a de novo review of
the facts related to the basis for the exclusion and the existence of aggravating and
mitigating factors and to determine whether the period of exclusion imposed by the I.G.
falls within a reasonable range. Juan De Leon, Jr., DAB No. 2533 at 3 (2013); Craig
Richard Wilder, M.D., DAB No. 2416 at 8 (2011); Joann Fletcher Cash, DAB No. 1725
at 17,n.9 (2000). The Board has explained that, in determining whether a period of
exclusion is “unreasonable,” the ALJ is to consider whether such period falls “within a
reasonable range.” Cash, DAB No. 1725 at 17,n.9. The Board cautions that whether the
ALJ thinks the period of exclusion too long or too short is not the issue. The ALJ may
not substitute his or her judgment for that of the I.G. and may only change the period of
exclusion in limited circumstances.

11

In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the I.G.
considers an aggravating factor to extend the period of exclusion and that factor is not
later shown to exist on appeal, or if the I.G. fails to consider a mitigating factor that is
shown to exist, then the ALJ may make a decision as to the appropriate extension of the
period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842
(2002), the Board suggests that, when it is found that an aggravating factor considered by
the I.G. is not proved before the ALJ, then some downward adjustment of the period of
exclusion should be expected absent some circumstances that indicate no such adjustment
is appropriate. Thus, the Board has by these various prior decisions significantly limited
my authority under the applicable regulation to judge the reasonableness of the period of
exclusion.

In this case, after de novo review, I have concluded that a basis for exclusion exists. I
further conclude that there was an aggravating factor and a mitigating factor that the I.G.
failed to consider. Therefore, I am required to determine whether some upward or
downward adjustment of the three-year exclusion is required and the reasonable range for
a period of exclusion. The three-year period is the period specified by the Act for an
exclusion pursuant to section 1128(b)(1). Act § 1128(c)(3)(D). Therefore, a three-year
exclusion is presumptively reasonable. In this case, I conclude that the aggravating factor
that Petitioner’s nursing license was suspended should be treated as having equal weight
as the mitigating factor that Petitioner was convicted of only two offenses with no
specified loss to the government. Accordingly, I conclude that a three-year period of
exclusion is appropriate and within the reasonable range in this case.

III. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all other federal health care programs for a period of three years, effective
February 18, 2016.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

MedAlert Medical Equipment and Supplies, Inc.
(PTAN: 6339530001),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-274
Decision No. CR4667
Date: July 29, 2016
DECISION

The Centers for Medicare & Medicaid Services (CMS), through its administrative
contractor, Palmetto GBA National Supplier Clearinghouse (NSC), revoked the
enrollment of MedAlert Medical Equipment and Supplies, Inc. (MedAlert or Petitioner)
as a Medicare supplier of durable medical equipment, prosthetics, orthotics, and supplies
(DMEPOS) because MedAlert: failed to timely inform CMS of its change of address;
was not operational or accessible during its posted hours of operation at its practice
location on file with CMS; and failed to maintain a comprehensive liability insurance
policy. MedAlert requested a hearing to dispute the revocation. For the reasons
explained below, I affirm CMS’s determination to revoke MedAlert’s enrollment in the
Medicare program; however, I modify the effective date of revocation from July 14,
2015, to October 1, 2015.

I. Background and Procedural History
MedaAlert was enrolled in the Medicare program as a DMEPOS supplier. In a September

1, 2015 initial determination, NSC revoked MedAlert’s Medicare enrollment and billing
privileges. CMS Exhibit (Ex.) 4. NSC based the revocation on the following:
1) 42 CFR. § 424.57(c)(2) (“[MedAlert] failed to notify the NSC regarding the
closure of [MedAlert’s] business.”);

2) 42 C.F.R. §§ 424.57(c)(7) and 424.535(a)(5) (“Recently, a representative of the
NSC attempted to conduct a visit of [MedAlert’s] facility on July 14, 2015;
however, the visit was unsuccessful because [MedAlert is] no longer at the address
listed in [MedAlert’s] supplier file with the NSC and the facility is vacant.
Because we could not complete an inspection of [MedAlert’s] facility, we could
not verify [MedAlert’s] compliance with the supplier standards. Based upon a
review of the facts, we have determined that [MedAlert’s] facility is not
operational to furnish Medicare covered items or services.”); and

3) 42 CFR. § 424.57(c)(10) (“The general liability policy on file with NSC has
expired.”).

CMS Ex. 4 at 1-2. NSC made the effective date for revocation retroactive to July 14,
2015, the date CMS determined MedAlert’s supplier location was not operational. CMS
Ex.4 at 1.

In a September 30, 2015 letter, MedAlert requested reconsideration of the initial
determination. MedAlert asserted in that request that the roof of its practice location at
4116 Live Oak Street, Dallas, Texas, was damaged by hail, which resulted in leakage of
water whenever it rained. MedAlert stated that the leakage of rain damaged its inventory;
however, the landlord would not fix the roof. Following a June 27, 2015 rain storm,
MedaAlert expeditiously moved to 4908 Ross Avenue, Dallas, Texas. MedAlert then tried
to “put things together at new place” while waiting for documentation to be issued (i.e.,
state license, proof of liability insurance) with MedAlert’s new address on it. CMS Ex. 3.

In her November 27, 2015 reconsidered determination, the NSC hearing officer
concluded:

I have reviewed all of the documentation in the file for this
case and my decision has been made in accordance with
Medicare guidelines, . . . as outlined in 42CFR424.57 [sic].
[MedAlert] is in violation of 42 CFR § 424.57(c)(7) and
424 .535(a)(5)(ii) and was out of compliance with applicable
Medicare requirements, as stated in supplier standards 2, 7
and 10.

CMS Ex. 2 at 6.

On January 25, 2016, MedAlert requested a hearing to dispute the revocation. I issued an
Acknowledgement and Pre-hearing Order (Order) on February 4, 2016. In response to
my Order, CMS filed a motion for summary judgment and prehearing brief (CMS Br.),
and six exhibits (CMS Exs. 1-6). One exhibit was the written direct testimony of an NSC
site inspector, Larry Seals. CMS Ex. 6. MedAlert filed a prehearing brief (P. Br.) in
opposition to summary judgment along with seven exhibits (P. Exs. 1-7). One exhibit
was the written direct testimony of MedAlert’s owner, Christian Ogwuegbu. P. Ex. 1.

II. Decision on the Record

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

I directed the parties to submit written direct testimony for each proposed witness and
advised the parties that an in-person hearing would only be necessary if the opposing
party requested an opportunity to cross-examine a witness. Order JJ 8,9; CRDP § 16(b).
Neither party requested to cross-examine the opposing party’s witness. Therefore, I
decide this case based on the written record. Order JJ 10-11; CRDP § 19(b), (d).

III. Issue

Whether CMS had a legitimate basis for revoking Petitioner’s Medicare enrollment and
billing privileges.

IV. Jurisdiction

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

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

The Secretary of Health and Human Services (Secretary) has the authority to create
provider and supplier enrollment standards, and DMEPOS supplier requirements.

42 USC. §§ 1395m(j)(1)(B)Gi), 1395cc(j). The Secretary promulgated a regulation that
requires providers and suppliers to be operational. 42 C.F.R. § 424.535(a)(5)(i). To be
“operational,” a provider or supplier 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. The Secretary also promulgated regulations establishing
DMEPOS supplier standards. 42 C.F.R. § 424.57(c). The supplier standards require a
DMEPOS supplier to report to CMS any changes in its enrollment information within 30
days. 42 C.F.R. § 424.57(c)(2). They also require a DMEPOS supplier to maintain, “at

' My numbered findings of fact and conclusions of law are set forth in italics and bold in
the discussion captions of this decision.
all times” a comprehensive liability insurance policy. 42 C.F.R. § 424.57(c)(10).
Further, each DMEPOS supplier must also be “open to the public a minimum of 30 hours
per week,” “post[] hours of operation,” and be “accessible and staffed during posted
hours of operation.” 42 C.F.R. § 424.57(c)(7), (c)(30).

CMS or its contractors may conduct inspections of a supplier’s premises at any time to
determine if a supplier is in compliance with Medicare enrollment requirements or the
supplier standards. See 42 C.F.R. §§ 424.57(c)(8), 424.5 10(d)(8), 424.515(c),
424.517(a). A supplier is subject to revocation of its Medicare billing privileges if it
violates the DMEPOS supplier standards or the regulatory requirements applicable to all
providers and suppliers. 42 C.F.R. §§ 424.57(e)(1), 424.535(a).

1. On July 14, 2015, at 4:09 p.m., an NSC site inspector visited MedAlert’s address
that was on file with CMS (4116 Live Oak Street, Dallas, Texas) and determined
that MedAlert’s office was vacant.

2. After obtaining supporting documents, MedAlert mailed a CMS-855S form to
NSC on October 1, 2015, informing CMS that it moved its office from its 4116
Live Oak Street, Dallas, Texas address to 4908 Ross Avenue, Dallas, Texas.

In 2012, MedAlert notified CMS, using a CMS-855S form, that MedAlert’s new address
would be 4116 Live Oak Street, Dallas, Texas. CMS Ex. 1. In 2015, the roof of the
building at the 4116 Live Oak Street address was damaged by hail, resulting in a roof that
leaked when it rained. CMS Ex. 3; P. Ex. | at 1. When the roof leaked, some of
MedAlert’s inventory would be damaged. CMS Ex. 3; P. Ex. | at 1. The landlord of the
building did not make timely repairs and, either on June 27, 2015 or July 2, 2015, it
rained sufficiently hard to cause enough damage that MedAlert “quickly relocated our
products to 4908 Ross Avenue, Dallas, TX 75206 because more rain was forecast.” P.
Ex. | at 1; see also CMS Ex. 3 at 1. On July 1, 2015, MedAlert’s lease for the 4908 Ross
Avenue location commenced. P. Ex. 2. MedAlert left the 4116 Live Oak Street address
on July 4, 2015, at which time it “put a note on the door for people to know we moved to
a new [lJocation with the address and our phone number.” CMS Ex. 3.

On July 14, 2015, at 4:09 p.m., NSC site inspector Larry Seals arrived at MedAlert’s
office at 4116 Live Oak Street in order to conduct a site inspection. CMS Ex. 5 at 1-2.
Mr. Seals noted that the hours of operation, Monday to Friday, 9 a.m. to 5 p.m., were
posted. CMS Ex. 5 at 2. However, Mr. Seals observed that MedAlert was not open, did
not have staff present, did not have customer activity, did not have a sign with
MedAlert’s name on it, did not appear to have inventory, and did not appear to be
operational. CMS Ex. 5 at 2. Mr. Seals also saw on the office door a “City of Dallas
Construction Permit stating the building was ‘Vacant Floor Space.’” CMS Ex. 5 at 2, 4.
Mr. Seals spoke to a construction worker at the location who confirmed that the building
was not occupied. CMS Ex. 5 at 2. Mr. Seals testified that he “discovered that Petitioner
was no longer conducting business at its address of record, 4116 Live Oak Street, Dallas,
Texas 75204.” CMS Ex. 695. Therefore, I find that MedAlert’s office at the address on
file with CMS was vacant on July 14, 2015, the date on which an NSC inspector

attempted a site visit.

3. CMS had a legitimate basis to revoke MedAlert’s Medicare enrollment and
billing privileges because MedAlert did not report to CMS its change in practice
location within 30 days in accordance with 42 C.F.R. § 424.57(c)(2).

When a DMEPOS supplier files an enrollment application, it must provide “Business
Location Information,” which “must be a specific street address as recorded by the
United States Postal Service.” P. Ex. 6 at 2. CMS may require documentation of a
supplier’s “practice location” with its application. 42 C.F.R. § 424.510(d)(2)(ii). A
DMEPOS supplier must “report any changes in information supplied on the [enrollment]
application within 30 days of the change.” 42 C.F.R. §§ 424.57(c)(2); 424.516(c). The
CMS-855S form states that in order for a DMEPOS supplier to change its address with
CMS, a DMEPOS supplier must submit “professional and business licenses for the new
address, and proof of insurance covering the new address.” P. Ex. 6 at 2.

MedaAlert concedes that it had moved from the 4116 Live Oak Street address in early July
2015. P. Br. at 1; CMS Ex. 3. MedAlert also concedes that it did not submit a CMS-
855S form to notify CMS of its change of address until October 1, 2015. P. Br. at 2; P.
Ex. 7; CMS Ex. | at 2. However, MedAlert argues that it had to move its location due to
an emergency and that it took time to obtain new license and insurance documents with
MedAlert’s 4908 Ross Avenue address on them. P. Br. at 2; P. Ex. 1 at 1. MedAlert
asserts that its owner had contacted “Medicare” before the move and learned that to
change its address, MedAlert needed to provide those documents, reflecting the new
address, with a completed CMS-855S. P. Br. at 2; CMS Ex. | at 1. Although MedAlert
received an updated liability insurance document on July 29, 2015, it did not receive an
updated state license and surety bond documents until September 30, 2015, and October
1, 2015, respectively. P. Br. at 2; P. Ex. | at 1-2. Based on these facts, MedAlert argues
that revocation is inappropriate because its deficiencies did not pose any health or safety
risks to the public and that MedAlert was “at all times making best efforts to submit the
required documents in order to remain in compliance.” P. Br. at 2.

As indicated above, the regulations require a DMEPOS supplier to report changes in its
enrollment application information within 30 days of the change. Although the CMS-
8558S indicates that documents must be submitted reflecting the new address, an inability
to provide the documents does not absolve MedAlert from promptly reporting the change
of address. MedAlert’s move to a new location took place on July 4, 2015 (CMS Ex. 3);
therefore, MedAlert had until August 3, 2015, to report the change in address to CMS.
By that time, MedAlert already had the new liability insurance document reflecting the
updated address (P. Ex. 1 at 1; P. Ex. 3), and MedAlert could have submitted this with the

CMS-855S, along with documentation that it was in the process of obtaining a new
license and surety bond. Further, while MedAlert states that it took significant time to
obtain updated license and surety bond documents, MedAlert did not provide any specific
information as to when it sought those documents or why it took so much time to receive
them. Therefore, I do not know if MedAlert acted immediately to secure those
documents. My concern related to this issue is heightened by the fact that the CMS-855S
form that MedAlert submitted on October 1, 2015, indicates that the effective date of the
change in MedAlert’s address was August 15, 2015, and not July 4, 2015, as MedAlert
stated in its reconsideration request. CMS Ex. 6 at 2. MedAlert’s owner certified this
information as “true, correct, and complete” on August 15, 2015. CMS Ex. 6 at 3. This
clearly incorrect information calls into question the credibility of MedAlert’s owner. In
any event, MedAlert failed to report its change of address within 30 days of moving to a
new location. Therefore, I conclude that MedAlert violated 42 C.F.R. § 424.57(c)(2).

4. CMS failed to make a prima facie showing that Petitioner was not operational.
A supplier is “operational” when it:

has a qualified physical practice location, is open to the public
for the purpose of providing health care related services, is
prepared to submit valid Medicare claims, and is properly
staffed, equipped, and stocked (as applicable based on the
type of facility or organization, provider or supplier specialty,
or the services or items being rendered) to furnish these items
or services.

42 C.F.R. § 424.502. CMS may revoke a currently enrolled supplier’s Medicare billing
privileges in the following circumstance.

Upon on-site review or other reliable evidence, CMS
determines that the provider or supplier is... .

(i) No longer operational to furnish Medicare-covered
items or services.

42 CFR. § 424.535(a)(5)(i).

Although MedAlert asserts that it had an office at 4908 Ross Avenue on July 14, 2015,
i.e., the date of NSC’s attempted site inspection, the regulatory definition of the term
“operational” refers to the “qualified physical practice location” of a supplier. 42 C.F.R.
§ 424.502. The “qualified physical practice location” is the address a supplier provided
to CMS and is currently on file with CMS. Care Pro Health, Inc., DAB No. 2723 at 6
(2016). Therefore, it follows that:
when CMS or [its] contractor determines that a provider or
supplier, including a DMEPOS supplier, is no longer
operating at the practice location provided to Medicare on a
paper or electronic Medicare enrollment application that the
revocation should be effective with the date that CMS or [its]
contractor determines that the provider or supplier is no
longer operating at the practice location.

73 Fed. Reg. 69,725, 69,865 (Nov. 18, 2008).

The 4116 Live Oak Street address was MedAlert’s address on file with CMS on July 14,
2015. CMS Ex. 1; CMS Ex. 5 at 1,2. Further, an NSC site inspector verified that
MedAlert no longer was operational at that practice location on July 14, 2015. CMS Exs.
3,5,6. CMS revoked based on these facts. CMS Ex. 2 at 4-5; CMS Ex. 4 at 2.

However, due to the holding in Adora Healthcare Services, Inc., DAB No. 2714 at 3-7
(2016), I reverse CMS’s conclusion that MedAlert violated 42 C.F.R. § 424.535(a)(5)()
because CMS failed to conduct a second site visit to the 4116 Live Oak address after
August 3, 2015 (i.e., the date on which Petitioner was required to provide CMS notice
that it changed its practice location).

5. The effective date of Petitioner’s revocation is October 1, 2015.

Providers and suppliers are retroactively revoked to the date that CMS determines that
the provider or supplier was not operational. 42 C.F.R. § 424.535(g). In its initial
determination in this case, NSC made July 14, 2015, Petitioner’s revocation effective
date, which is the date NSC determined that Petitioner was no longer operational. CMS
Ex. 4 at 1,2. However, I must change the effective date of revocation because I reverse
NSC’s conclusion that Petitioner was not operational in violation of 42 C.F.R.

§ 424.535(a)(5).

Petitioner violated 42 C.F.R. § 424.57(c)(2), which is a DMEPOS supplier standard.
When CMS revokes a DMEPOS supplier for violating a supplier standard, the revocation
is effective 30 days after CMS sends the notice of revocation. In the present case, the
initial determination to revoke Petitioner was sent on September 1, 2015. CMS Ex. 4 at
1. Therefore, the correct effective date for Petitioner’s revocation is October 1, 2015.

6. It is unnecessary for me to decide whether MedAlert violated 42 C.F .R.
§ 424.57(c)(7) and (c)(10).

As indicated above, I have concluded that MedAlert violated 42 C.F.R. § 424.57(c)(2).
One violation of the DMEPOS supplier standards is sufficient to require CMS to revoke
Medicare billing privileges. See 42 C.F.R. § 424.57(e)(1); 18661CPayday.com, L.L.C.,
DAB No. 2289, at 13 (2009) (‘“[F]ailure to comply with even one supplier standard is a
sufficient basis for revoking a supplier’s billing privileges.”). Therefore, I need not
determine whether further violations of the DMEPOS supplier standards occurred.

VI. Conclusion

I affirm CMS’s revocation of MedAlert’s Medicare enrollment and billing privileges
based on a violation of 42 C.F.R. § 424.57(c)(2). Because I reversed CMS’s
determination that Petitioner was not operational, I modify the effective date of
Petitioner’s revocation to October 1, 2015.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Medical and Foot Care Group, sc.
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-2797
Decision No. CR4665

Date: July 28, 2016

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its administrative
contractor, National Government Services (NGS), revoked the Medicare enrollment and
billing privileges of Medical and Foot Care Group, S.C. (Petitioner) because Petitioner
filed multiple Medicare claims for services allegedly provided to deceased beneficiaries.
Petitioner requested a hearing to dispute the revocation, arguing that Petitioner provided
services to living beneficiaries each time it filed claims with Medicare; however,
Petitioner admits that it unintentionally and erroneously filed a number of claims using
Medicare numbers for deceased individuals. Because there is no dispute that Petitioner
filed 17 claims related to 16 beneficiaries who were deceased on the date that Petitioner
purportedly provided services to them, I grant CMS’s motion for summary judgment and
affirm CMS’s revocation of Petitioner’s Medicare billing privileges.

' The Civil Remedies Division docketed this case with Petitioner’s name as Medical and
Foot Care Group, Inc. based on the reconsidered determination identifying Petitioner as
such. Centers for Medicare & Medicare Services (CMS) Exhibit (Ex.) 10. However, the
initial determination, and Petitioner’s reconsideration and hearing requests indicate that
Petitioner is a professional service corporation (i.e., an “S.C.”). CMS Exs. 2, 14; Hearing
Request at 1. Therefore, I modify the case caption to reflect that Petitioner is an “S.C.”
I. Case Background and Procedural History

Petitioner was enrolled in the Medicare program as a Medicare Part B Group Practice.
CMS Exhibit (Ex.) 3 at 1; CMS Ex. 7 at 2. In a December 10, 2014 initial determination,
NGS revoked Petitioner’s Medicare enrollment and billing privileges effective January 8,
2015, for the following reasons:

42 CFR § 424.535(a)(1) — Noncompliance

Medical and Foot Care Group’s enrollment reflects Marwa
Sayed as a 5% or more owner. Based on a notarized
statement by Marwa Sayed, since 2013 she has had no
affiliation with Medical and Foot Care Group. As of
December 5, 2014, Medical and Foot Care Group has not
reported any changes in ownership. Medical and Foot Care
Group failed to report a change in ownership within 30 days
as required by 42 CFR § 424.516(d) and is in noncompliance
with Medicare enrollment requirements.

42 CFR §424.535(a)(8) — Abuse of Billing Privileges

Data analysis revealed that Medical and Foot Care Group SC
submitted claims for services rendered to beneficiaries who
were deceased on the purported date of service.

CMS Ex. 2 at 1 (emphasis in original). NGS attached a list of 34 claims filed between
2010 and 2014 involving 30 deceased beneficiaries. CMS Ex. 2 at 3. NGS also imposed
a three-year re-enrollment bar in the Medicare program. CMS Ex. 2 at 2. NGS informed
Petitioner that it could request reconsideration of the revocation. CMS Ex. 2 at 1.

Petitioner timely submitted two reconsideration requests. One request disputed that
Petitioner violated 42 C.F.R. § 424.535(a)(1). In that request, Petitioner provided a
detailed account of its dealings with Marwa Sayed, DPM, and its efforts to ensure that
Dr. Sayed reported her divestiture of an ownership interest in Petitioner. CMS Ex. 12.
The second reconsideration request disputed that Petitioner violated 42 C.F.R.

§ 424.535(a)(8). In that request, Petitioner provided extensive information about the
claims referenced in the initial determination. Specifically, Petitioner indicated that it
had provided services to living beneficiaries for all claims that it filed; however,
Petitioner had mistakenly sought reimbursement from CMS using the names and
Medicare numbers for deceased beneficiaries. CMS Exs. 14, 15.
On April 8, 2015, NGS issued a reconsidered determination upholding the initial
determination to revoke Petitioner. CMS Ex. 10. Petitioner timely requested a hearing to
dispute the revocation.

The case was originally assigned to Administrative Law Judge Joseph Grow. Judge
Grow issued an Acknowledgment and Pre-hearing Order (Order) on June 15, 2015.

In response to the Order, CMS filed a motion for summary judgment and prehearing brief
(CMS Br.), and seventeen proposed exhibits (CMS Exs. 1-17), one of which was a
notarized statement from Dr. Sayed (CMS Ex. 5). Petitioner filed a prehearing brief
opposing summary judgment (P. Br.) and 24 proposed exhibits (P. Exs. 1-24).? On
March 31, 2016, the parties were notified that Judge Grow transferred to another
component in the Department of Health and Human Services and that this case was
transferred to me.

II. Issues
1. Whether CMS is entitled to summary judgment; and

2. Whether CMS had a legitimate basis to revoke Petitioner’s Medicare
enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8).

III. Jurisdiction

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

IV. Findings of Fact, Conclusions of Law, and Analysis
The Social Security Act (Act) authorizes the Secretary of Health and Human Services

(Secretary) to issue regulations concerning the enrollment of providers and suppliers in
the Medicare program. 42 U.S.C. § 1395cc(j)(1)(A). The Secretary has promulgated

* In its prehearing exchange, Petitioner objected to page 3 of CMS Ex. 2, and requested to
cross-examine Dr. Sayed. P. Br. at 3,23. I overrule this objection because CMS Ex. 2 is
CMS’s initial determination in this case and not a substantive exhibit. Exclusion of one
page of the initial determination would make CMS Ex. 2 incomplete.

> As explained below, I grant summary judgment for CMS and affirm CMS’s revocation
of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R.

§ 424.535(a)(8). Therefore, it is unnecessary for me to determine whether Petitioner
violated 42 C.F.R. § 424.535(a)(9).
enrollment regulations in 42 C.F.R. part 424, subpart P. See 42 C.F.R. §§ 424.500 -
424.570. The regulations provide CMS with the authority to revoke the billing privileges
of an enrolled provider or supplier if CMS determines that certain circumstances exist.
Id. § 424.535(a). Relevant to this case, CMS may revoke a provider’s or supplier’s
billing privileges if:

The provider or supplier submits a claim or claims for
services that could not have been furnished to a specific
individual on the date of service. These instances include but
are not limited to situations where the beneficiary is deceased,
the directing physician or beneficiary is not in the State or
country when services were furnished, or when the equipment
necessary for testing is not present where the testing is said to
have occurred.

Id. § 424.535(a)(8) (2014).4 When CMS revokes a provider’s or supplier’s billing
privileges, any provider agreement in effect at the time of revocation is terminated. Id.

§ 424.535(b). In addition, after revocation, CMS must impose a bar on re-enrollment for
a minimum of one year, but no more than three years. Id. § 424.535(c).

A provider or supplier may request reconsideration of the initial determination to revoke
his or her billing privileges. 42 C.F.R. §§ 498.5(1)(1), 498.22(a). If dissatisfied with the
reconsidered determination, the supplier may request a hearing before an Administrative
Law Judge (ALJ). Id. § 498.5(1)(2).

A. Summary judgment is appropriate in this case.

An ALJ may decide a case arising under 42 C.F.R. part 498 by summary judgment.
Livingston Care Ctr. v. U.S. Dep’t of Health & Human Servs. , 388 F.3d 168, 172 (6th
Cir. 2004) (citing Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743 (6th Cir. 2004)).
“Matters presented to the ALJ for summary judgment will follow Rule 56 of the Federal
Rules of Civil Procedure and federal case law . . . .” Civil Remedies Division Procedures

§ 19(a)(iii).
As stated by the United States Supreme Court:

Rule 56(c) of the Federal Rules of Civil Procedure provides
that summary judgment ‘shall be rendered forthwith if the

* CMS amended 42 CFR. § 424.535(a)(8) effective February 3, 2015.

See 79 Fed. Reg. 72,500 (Dec. 5, 2014). However, in this case I will apply 42 C.F.R.

§ 424.535(a)(8) (2014) because the text reflected in that regulation was in effect on all the
dates relevant to this case.
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.’
By its very terms, this standard provides that the mere
existence of some alleged factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment; the requirement is that there be no
genuine issue of material fact.

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

To determine whether there are genuine issues of material fact for an in-person hearing,
the ALJ must view the evidence in the light most favorable to the non-moving party,
drawing all reasonable inferences in that party’s favor. Senior Rehab. & Skilled Nursing
Ctr., DAB No. 2300 at 3 (2010) (citations omitted). However, in order to defeat a well-
pleaded motion for summary judgment, the non-moving party must come forward with
some evidence of a dispute concerning a material fact; mere denials in its pleadings are
not sufficient. Id.

In the present case, there are no material facts in dispute. Petitioner does not dispute that
it filed 17 claims for services rendered to 16 of the beneficiaries identified in the list
attached to the initial determination. Petitioner also does not dispute that the list attached
to the initial determination provides accurate dates on which Petitioner claimed it
provided services for the 16 named beneficiaries. Rather, Petitioner asserts that it
provided services on the dates identified, except that Petitioner had sought Medicare
reimbursement for services provided to beneficiaries who have similar names or
Medicare numbers as the incorrectly identified beneficiaries (i.e., Petitioner mistakenly
billed Medicare for services provided to beneficiaries other than the ones that Petitioner
identified in the claims it filed).’ CMS Exs. 14, 15. Although Petitioner “denies the
Social Security death index” documentation CMS submitted in this case regarding the 16
beneficiaries at issue (P. Br. at 21), Petitioner only made this blanket denial and did not
come forward with evidence to dispute the Social Security Administration’s death
records. Further, while Petitioner argues that “[a]ll of the practitioners including
[Petitioner] had been told by Medicare to verify the coverage [of beneficiaries] by using
C-Snap and not the Social Security death index” (P. Br. at 9), such an argument does not

> Of the 17 claims discussed below in this decision, two diverge from the general
description just provided. In both of those claims, Petitioner provided a date of service
that was after the beneficiaries died. Petitioner asserts that it actually provided the
services to the beneficiaries named in those claims on different dates, which were both
before the beneficiaries died, but that Petitioner had erroneously entered incorrect dates
on the claims. For purposes of summary judgment, I accept these assertions as true.
dispute the fact that the 16 beneficiaries in question in this case were deceased on the
dates Petitioner claimed it had provided services to them. Therefore, I do not consider
Petitioner to have successfully disputed the dates of death for those beneficiaries.°

For purposes of summary judgment, I draw all inferences in favor of Petitioner. I accept
as true that each instance where Petitioner billed for services purportedly provided to one
of the 16 deceased beneficiaries, Petitioner had rendered those services to a different,
living beneficiary and that Petitioner’s staff had merely misidentified the deceased
beneficiary on the Medicare claims it submitted to CMS. However, even accepting
Petitioner’s position as true, Petitioner has conceded that it claimed reimbursement for
services that could not have been rendered to the beneficiaries it identified in the claims it
submitted because the beneficiaries identified on the claims were deceased at the time
Petitioner rendered the claimed services. These claims may form the basis for summary
judgment.

B. Petitioner does not dispute that it filed 17 claims, related to 16
beneficiaries, for Medicare reimbursement for services purportedly
provided on dates when the 16 beneficiaries were deceased.

As indicated above, for purposes of summary judgment, I accept as true Petitioner’s
position that it filed claims for reimbursement with the Medicare program for services
that it provided to beneficiaries; however, Petitioner’s staff erroneously identified the
beneficiaries in question as ones who were deceased at the time that the services were
rendered, or in two instances, incorrectly identified the dates of services for properly
identified beneficiaries. Below are the specific factual positions that Petitioner takes with
regard to each claim/beneficiary.

1) Brown

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on December 17, 2012, to a beneficiary with the surname of Brown and a
Medicare number ending in 1423D, who had died on July 11,2012. CMS Ex. 2 at 3;
CMS Ex. 17 at 64. Petitioner responded that it had not provided the services to Brown,
who Petitioner identified as Rose Brown, but to a living beneficiary with the similar
name of Rosie Brown-Parker. CMS Ex. 14 at 10. Petitioner stated that the “incorrect
patient . . . was unintentionally selected” for billing and that “[t]here was an unintentional
human error from the billing clerk to select a similar but incorrect patient name.”

® In light of Petitioner’s concern about the dates of death for the beneficiaries identified
in the attachment to the initial determination, for purposes of summary judgment, I limit
my conclusions related to Petitioner’s violation of 42 C.F.R. § 424.535(a)(8) to the 16
beneficiaries for whom CMS provided Social Security Administration death record
documentation. See CMS Ex. 17.
CMS Ex. 14 at 10; see also P. Ex. 6 at 1; P. Ex. 9 at 3-4. Petitioner provided statements
from Robyn Jackson, M.D., and Ms. Brown-Parker in which both individuals confirm
that Dr. Jackson provided treatment to Ms. Brown-Parker on December 17, 2012. P. Ex.
7 at 11; P. Ex. 8 at 4. Petitioner also provided documentation from Ms. Brown-Parker’s
visit with Dr. Jackson. CMS Ex. 15 at 3, 6-10; P. Ex. 5 at 2; P. Ex. 7 at 13-16. Further,
Petitioner submitted a document showing that Ms. Brown-Parker is a Medicare
beneficiary (CMS Ex. 15 at 4-5; P. Ex. 7 at 12), and that Petitioner had claimed
reimbursement for services provided to this beneficiary on multiple occasions from 2010
through 2014. P. Ex. 3 at 1-2; see also CMS Ex. 15 at 11-15. Petitioner provided
documents to show that Rose Brown had previously been Petitioner’s patient. CMS Ex.
15 at 16-21.

2) Ortega

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on March 27, 2014, to a beneficiary with the surname of Ortega and a Medicare
number ending in 2125A, who had died on October 29, 2012. CMS Ex. 2 at 3; CMS Ex.
7 at 54. Petitioner responded that it had incorrectly billed for services provided to
Ortega, who Petitioner identified as Maria Ortega, but actually provided those services to
a living beneficiary with the similar name in its records of Maria Ortaga. CMS Ex. 14 at
2. Petitioner learned during its investigation of this matter that the beneficiary was
incorrectly entered in its records as Maria Ortaga and that the beneficiary’s real name is
Maria Elena Uraga Olmedo, and it is for this beneficiary that Petitioner ought to have
filed a claim related to services provided to her on March 27, 2014. CMS Ex. 14 at 12;
see also P. Ex. 6 at 3-4; P. Ex. 9 at 3; P. Ex. 2 at 4. In its reconsideration request,
Petitioner: asserted that both Maria Ortega and Maria Elena Uraga Olmedo were
Petitioner’s patients; confirmed that Maria Ortega died on October 29, 2012; and denied
any accusation that Petitioner intentionally billed for a deceased patient. CMS Ex. 14 at
2-13. Petitioner provided statements from Neil Fried, DPM, and Ms. Uraga Olmedo in
which both individuals confirm that Dr. Fried provided treatment to Ms. Uraga Olmedo
on March 27, 2014. P. Ex. 7 at 57; P. Ex. 8 at 5. Petitioner also provided documentation
from Ms. Uraga Olmedo’s visit with Dr. Fried. CMS Ex. 15 at 40, 42-45; P. Ex. 5 at 4;
P. Ex. 7 at 58-61. Further, Petitioner submitted a document showing that Ms. Uraga
Olmedo is a Medicare beneficiary. CMS Ex. 15 at 46; P. Ex. 7 at 62. Petitioner also
submitted documents showing that Maria Ortega had been Petitioner’s patient. CMS Ex.
5 at 59-68.

3) Senda

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on February 4, 2013, to a beneficiary with the surname of Senda and a Medicare
number ending in 2515A, who had died on January 10, 2013. CMS Ex. 2 at 3; CMS Ex.
17 at 29. Petitioner responded that it had provided services to Senda, who Petitioner
identified as Roberto Senda, but that the services had been provided on January 4, 2013,
six days before Mr. Senda died. CMS Ex. 14 at 15. Petitioner asserts that a billing error
resulted in the Medicare claim incorrectly identifying the date of services as February 4,
2013, rather than January 4, 2013. CMS Ex. 14 at 15; P. Ex. 6 at 6. Petitioner provided a
statement from Mr. Senda’s son and caregiver in which he confirmed that Dr. Robyn
Jackson provided treatment to Mr. Senda on January 4, 2013. CMS Ex. 15 at 90; P. Ex.8
at 6. Petitioner also provided documentation from Mr. Senda’s January 4, 2013 visit.
CMS Ex. 15 at 73, 77-79; P. Ex. 5 at 7. Petitioner further submitted documentation
showing that Mr. Senda was a Medicare beneficiary. CMS Ex. 15 at 74-75, 81-83.

4) Williams

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on April 17, 2014, to a beneficiary with the surname of Williams and a
Medicare number ending in 2994D, who had died on January 16, 2013. CMS Ex. 2 at 3;
CMS Ex. 17 at 78. Petitioner responded that it had not provided the services to Williams,
who Petitioner identified as Dorothy Williams, on April 17, 2014, but had provided
services to a different Dorothy Williams (Medicare number ending in 3611D) on that
date. CMS Ex. 14 at 20. Petitioner indicated that the deceased Dorothy Williams had
been Petitioner’s patient from 2009 to 2010, and that “unintentional human error at the
time of billing” resulted in billing for the deceased Dorothy Williams rather than the
living Dorothy Williams. CMS Ex. 14 at 20; see also P. Ex. 6 at 11; P. Ex. 9 at 4-5.
Petitioner provided a statement from Dorothy Williams (Medicare number ending in
3611D) that Neil Fried, DPM, treated her on April 17, 2014. P. Ex. 8 at 1. Petitioner
also submitted a statement from Dr. Fried indicating that he treated Dorothy Williams
(Medicare number ending in 3611D) on April 27, 2014; however, Petitioner submitted
treatment records from the April 17, 2017 visit with Dr. Fried. CMS Ex. 15 at 201-209.
P. Ex. 7 at 75-78. Petitioner also submitted a document showing that Dorothy Williams
(Medicare number ending in 3611D) is a Medicare beneficiary. CMS Ex. 15 at 214.

5) Hirsch

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on September 22, 2010, to a beneficiary with the surname of Hirsch and a
Medicare number ending in 3635A, who had died on April 8, 2009. CMS Ex. 2 at 3;
CMS Ex. 17 at 26. Petitioner responded that it had not provided the services to Harry
Hirsch (Medicare number ending in 3635A), but rather provided them to his wife, Renee
Hirsch (Medicare number ending in 6488A). CMS Ex. 14 at 21. Petitioner stated that
both Harry Hirsch and Renee Hirsch had been Petitioner’s patients and “[t]here was an
unintentional human error on this date of service and her husband, Harry Hirsch, was
incorrectly selected at the time of billing instead of Renee Hirsch, who is the actual
patient who was seen on 9/22/2010.” CMS Ex. 14 at 21; see also P. Ex. 6 at 12; P. Ex.9
at 3. Petitioner provided documentation from the September 22, 2010 visit with Richard
Committo, DPM. CMS Ex. 15 at 233-238; P. Ex. 5 at 18; P. Ex. 7 at 86-88.
Petitioner also submitted documents showing that Renee Hirsch was a Medicare
beneficiary. CMS Ex. 15 at 227, 229-31; P. Ex. 7 at 84.

6) Smith

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on June 23, 2012, to a beneficiary with the surname of Smith and a Medicare
number ending in 3635A, who had died on April 6, 2012. CMS Ex. 2 at 3; CMS Ex. 17
at 20. Petitioner responded that it had not provided the services to Smith, who Petitioner
identified as Mary Smith, but to a living beneficiary with the similar name of Marie
Smith. CMS Ex. 14 at 22. Petitioner stated that “[t]here was an unintentional human
error of selecting the wrong patient name due to the similarity of the first name and the
exact last name. CMS Ex. 14 at 22; see also P. Ex. 6 at 13; P. Ex. 9 at 5. Petitioner
provided a statement from Keith Hopkins, M.D. confirming that Dr. Hopkins provided
treatment to Marie Smith on June 23, 2012. P. Ex. 7 at 97. Petitioner also provided
documentation from Marie Smith’s visit with Dr. Hopkins. CMS Ex. 15 at 247, 251-55;
P. Ex. 5 at 19; P. Ex. 7 at 99-103. Further, Petitioner submitted documents showing that
Marie Smith is a Medicare beneficiary. CMS Ex. 15 at 249-250; P. Ex. 7 at 104.

7) Williams

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on July 24, 2013, to a beneficiary with the surname of Williams and a Medicare
number ending in 3992A, who had died on July 23, 2013. CMS Ex. 2 at 3; CMS Ex. 17
at 44. Petitioner responded that it had not provided the services to Williams, who
Petitioner identified as Frank Williams, but to a living beneficiary with the similar name
of Frederick Williams. CMS Ex. 14 at 23. Petitioner stated that “the patient that was
unintentionally billed had the same last name, Williams, with the first name ‘Frank’.

At the time of billing, Frank Williams was chosen instead of Frederick Williams due to
the close similarity in names.” CMS Ex. 14 at 23; see also P. Ex. 6 at 14; P. Ex. 9 at 5.
Petitioner provided documentation from Frederick Williams’ visit with Dr. Robert Bester.
CMS Ex. 15 at 262, 266-69; P. Ex. 5 at 20. Petitioner also submitted a document
showing that Frederick Williams is a Medicare beneficiary. CMS Ex. 15 at 264-65.
Further, Petitioner submitted documents to show that Frank Williams had been
Petitioner’s patient. CMS Ex. 15 at 273-79

8) Hilliard

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on August 14, 2010, to a beneficiary with the surname of Hilliard and a
Medicare number ending in 4326C, who had died on May 24, 2010. CMS Ex. 2 at 3;
CMS Ex. 17 at 77. Petitioner responded that it had not provided the services to Hilliard,
who Petitioner identified as Henrietta Hilliard, but to a living beneficiary with the same
first name, Henrietta Patterson. CMS Ex. 14 at 24. Petitioner stated that “[t]here was

10

unintentional human error at the time of entering patients, when the name ‘Henrietta’ was
entered as the last name for both patients.” CMS Ex. 14 at 24; see also P. Ex. 6 at 15;

P. Ex.9 at 5. Petitioner provided documentation from Ms. Patterson’s visit with Marwa
Sayed, DPM. CMS Ex. 15 at 282, 288-92; P. Ex. 5 at 6. Petitioner also submitted a
document showing that Ms. Patterson is eligible for Medicare. CMS Ex. 15 at 286.
Finally, Petitioner provided documents showing that Henrietta Hilliard had been
Petitioner’s patient. CMS Ex. 15 at 293-300.

9) Moreno

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on April 24, 2014, to a beneficiary with the surname of Moreno and a Medicare
number ending in 4538D, who had died on December 19, 2010. CMS Ex. 2 at 3; CMS
Ex. 17 at 107. Petitioner responded that it had not provided the services to Moreno, who
Petitioner identified as Guadalupe Moreno, but to a living beneficiary with the similar
name of Ignacio Moreno. CMS Ex. 14 at 26. Petitioner stated that: “At the time of
billing, Guadalupe Moreno . . . was incorrectly chosen due to the same last name as
Ignacio Moreno.” CMS Ex. 14 at 26; see also P. Ex. 6 at 17; P. Ex. 9 at 6. Petitioner
provided a statement from Annell Tucker, DPM, confirming that Dr. Tucker provided
treatment to Ignacio Moreno on April 24, 2014. P. Ex. 7 at 46. Petitioner also provided
documents from Ignacio Moreno’s visit with Dr. Tucker. CMS Ex. 15 at 320-23; P. Ex.
5 at 22; P. Ex. 7 at 47-49. Petitioner also submitted a document showing that Ignacio
Moreno is a Medicare beneficiary. CMS Ex. 15 at 324. Further, Petitioner submitted
documents showing Guadalupe Moreno was Petitioner’s patient. CMS Ex. 15 at 331-35.

10) Charleston

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on January 26, 2013, to a beneficiary with the surname of Charleston and a
Medicare number ending in 4928A, who had died on January 12, 2011. CMS Ex. 2 at 3;
CMS Ex. 17 at 17. Petitioner responded that it had not provided the services to
Charleston, who Petitioner identified as Charleston Levater,’ but to a living beneficiary
with the name of T. Charles Livingston. CMS Ex. 14 at 28. Petitioner stated that “due to
an unintentional human error by the biller, the patient Charleston Levater . . . was
selected at the time of billing, which is exactly listed in our computer database next to the

7 Though Petitioner identifies the deceased patient as Charleston Levater, both the Social
Security Death Index (CMS Ex. 17 at 17) and Petitioner’s own records, including the
patient’s signature (e.g., CMS Ex. 15 at 367-69), identify the individual as Levater
Charleston. Petitioner’s explanation — that both patients were listed next to one another
in its database — strains credulity, though for purposes of summary judgment I accept it as
true, even if irrelevant. Petitioner subsequently correctly identified Ms. Charleston, but
nevertheless offered the same explanation. P. Ex. 9 at 6.
11

intended patient who was seen and treated, T. Charles Livingston.” CMS Ex. 14 at 28;
see also P. Ex. 6 at 19; P. Ex. 9 at 6. Petitioner provided documentation from Ms.
Livingston’s visit with Marwa Sayed, DPM. CMS Ex. 15 at 349, 354-57; P. Ex. 5 at 24.
Petitioner also submitted documents showing that Ms. Livingston is a Medicare
beneficiary. CMS Ex. 15 at 350, 360. Further, Petitioner submitted documents showing
that Levater Charleston was Petitioner’s patient. CMS Ex. 15 at 367-69.

11) Emanuel

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on July 18, 2014, to a beneficiary with the surname of Emanuel and a Medicare
number ending in 5690A, who had died on October 29, 2011. CMS Ex. 2 at 3; CMS Ex.
17 at 1. Petitioner responded that it had not provided the services to Emanuel, who
Petitioner identified as Helen Emanuel, but to a living beneficiary with the name of
Emanuel Klawir. CMS Ex. 14 at 29. Petitioner stated that “[a]t one point in time, we did
have both patients in our database, Helen Emanuel and Emanuel Klawir, and apparently
due to unintentional human error in entering patient name, the first and last name were
inputted incorrectly and the first name was mismatched and switched with the last name.
At the time of billing for the service date of 7/18/2014, the intended name was for
Emanuel Klawir . . . but instead, due to this unintentional mistake, they clicked on the last
name Emanuel with the different first name Helen.” CMS Ex. 14 at 29; see also P. Ex. 6
at 20; P. Ex. 9 at 6. Petitioner provided statements from Annell Tucker, DPM, and
Emanuel Klawir’s daughter, Dolores Khuld (see CMS Ex. 15 at 379), in which both
individuals confirm that Dr. Tucker provided treatment to Mr. Klawir on July 18, 2014.
P. Ex. 7 at 51; P. Ex. 8 at 3. Petitioner also provided documentation regarding Mr.
Klawir’s visit with Dr. Tucker. CMS Ex. 15 at 372-78; P. Ex. 5 at 25; P. Ex. 7 at 52-55.
Further, Petitioner provided documents showing that Helen Emanuel had been
Petitioner’s patient. CMS Ex. 15 at 382-85.

12) Williams

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on January 21, 2014, to a beneficiary with the surname of Williams and a
Medicare number ending in 5866A, who had died on August 8, 2012. CMS Ex. 2 at 3;
CMS Ex. 17 at 10. Petitioner responded that it had not provided the services to Williams,
who Petitioner identified as Lionel Williams, but to a living beneficiary with the similar
name of Lionel Wilson. CMS Ex. 14 at 30. Petitioner stated that “Lionel Wilson . . . was
the intended patient and there was unintentional human error at the time of billing
choosing a patient with the same first name and similar first letter of the last name. Both
names are listed next to each other, therefore it was unintentional error to select Lionel
Williams.” CMS Ex. 14 at 30; see also P. Ex. 6 at 21; P. Ex. 9 at 6. Petitioner provided
documentation related to Mr. Wilson’s visit with Dr. Gatlin. CMS Ex. 15 at 388, 392-95;
P. Ex. 5 at 26. Petitioner also submitted documentation showing that Mr. Wilson is a
Medicare beneficiary. CMS Ex. 15 at 390-91. Further, Petitioner submitted
12

documentation showing that Mr. Williams was also Petitioner’s patient. CMS Ex. 15 at
401-02.

13) Schramm

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on August 15, 2013, to a beneficiary with the surname of Schramm and a
Medicare number ending in 7592C, who had died on March 28, 2013. CMS Ex. 2 at 3;
CMS Ex. 17 at 23. Petitioner responded that it had not provided the services to
Schramm, who Petitioner identified as Mary Schramm, but to a living beneficiary with
the name of Mary Hilbert. CMS Ex. 14 at 34. Petitioner stated that:

Both patients, Mary Schramm and Mary Hilbert, used to live
in the same house, and when Mary Schramm died on
3/28/2013, Mary Hilbert was still living in the same house
and same address.

At the time of billing for this date of service, an unintentional
human error was made. When the billing information was
entered, the biller thought that because of the first name and
the same address, patient Mary Schramm was selected and
billed. Apparently the wrong patient name was selected
instead of the intended and correct name Mary Hilbert .. . .

CMS Ex. 14 at 34; see also P. Ex. 6 at 25.

Petitioner provided documentation related to Ms. Hilbert’s August 15, 2013 visit with
Dr. Robert Bester, including a statement signed by Mary Hilbert that Dr. Bester treated
her on August 15, 2013. CMS Ex. 15 at 455, 457-60, 463; P. Ex. 5 at 30. Petitioner also
submitted documentation showing that Ms. Hilbert was a Medicare beneficiary. CMS
Ex. 15 at 456. Further, Petitioner submitted documents showing that Mary Schramm had
been Petitioner’s patient. CMS Ex. 15 at 467-70.

14) Williams

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on May 1, 2013, to a beneficiary with the surname of Williams and a Medicare
number ending in 8427M, who had died on March 11, 2011. CMS Ex. 2 at 3; CMS Ex.
17 at 96. Petitioner responded that it had not provided the services to Williams, who
Petitioner identified as Clarice Williams, but to a living beneficiary with the similar name
of Clarice Wells. CMS Ex. 14 at 36. Petitioner stated that it:
13

intended to bill Clarice Wells . . . who was on schedule 5/1/2013 for Dr.
Robyn Jackson and was seen and treated. The biller unintentionally made a
human error in selecting the patient due to an exact first name and last
names that begin with the letter “W” at the time of billing, which linked the
wrong patient to the date of service.

CMS Ex. 14 at 36; see also P. Ex. 6 at 27; P. Ex.9 at 7. Petitioner provided a statement
from Robyn Jackson, M.D. confirming that Dr. Jackson provided treatment to Ms. Wells
on May 1, 2013. P. Ex. 7 at 1. Petitioner also provided documentation from Ms. Wells’
visit with Dr. Jackson. CMS Ex. 15 at 484, 486-90; P. Ex. 5 at 32; P. Ex. 7 at 2-5.
Petitioner also submitted documentation showing that Ms. Wells was a Medicare
beneficiary. CMS Ex. 15 at 485. Further, Petitioner provided documents showing that
Ms. Williams was also one of Petitioner’s patients. CMS Ex. 15 at 491-97.

15) Patel

CMS asserted that Petitioner filed claims for Medicare reimbursement for services
provided on July 19, 2013, and January 4, 2014, to a beneficiary with the surname of
Patel and a Medicare number ending in 8702M, who had died on October 20, 2012.
CMS Ex. 2 at 3; CMS Ex. 17 at 6. Petitioner responded that it had not provided the
services to the Laxmiben Patel with a Medicare number ending in 8702M, but had
provided services to a Laxmiben Patel with a Medicare number ending in 3690M. CMS
Ex. 14 at 38. Petitioner stated that “[a]pparently since there were exactly two similar
patients with same first name and last name with an exact spelling, there was an
unintentional human error in selecting the deceased patient as the patient who was seen.”
CMS Ex. 14 at 38. Petitioner provided documents to show that Laxmiben Patel (with the
Medicare number ending in 3690M) was treated on both July 19, 2013, and January 4,
2014. CMS Ex. 15 at 526-29, 532; P. Ex. 7 at 30-31, 33-38. Petitioner provided
statements from James Miller III, M.D. and Laxmiben Patel (with the Medicare number
ending in 3690M) in which both individuals confirm that Dr. Miller provided treatment to
Laxmiben Patel on January 4, 2014. P. Ex. 7 at 29; P. Ex. 8 at 2. Petitioner also
submitted documentation that Laxmiben Patel (with the Medicare number ending in
3690M) was a Medicare beneficiary. CMS Ex. 15 at 524; P. Ex. 7 at 32.

16) Schuler

CMS asserted that Petitioner filed a claim for Medicare reimbursement for services
provided on April 26, 2013, to a beneficiary with the surname of Schuler and a Medicare
number ending in 9957D, who had died on June 15, 2011. CMS Ex. 2 at 3; CMS Ex. 17
at 32. Petitioner responded that it had not provided the services to Schuler, who
Petitioner identified as Berdina Schuler, on April 26, 2013, but had provided the services
to Ms. Schuler on April 26, 2011. CMS Ex. 14 at 42. Petitioner explained:
14

Medicare rejected the claim for the date of service of 4/26/2011 ....
Apparently, when reviewing the Medicare rejection folder, there was an
unintentional human error where the rejected claim for 4/26/2011 was
rebilled in the year 2013 with an incorrect year of service. This date of
service of 4/26/2011 was for the exact procedures that were billed by
mistake in the year 2013.

CMS Ex. 14 at 42. Petitioner provided a statement from Richard Committo, DPM, that
confirms that Dr. Committo treated Ms. Schuler on April 26, 2011. P. Ex. 7 at 90.
Petitioner also provided documentation from Ms. Schuler’s visit with Dr. Committo.
CMS Ex. 15 at 571-75; P. Ex. 5 at 37; P. Ex. 7 at 92-95. Petitioner also submitted a
document showing that Ms. Schuler is a Medicare beneficiary. CMS Ex. 15 at 570.

C. CMS was authorized to revoke Petitioner’s Medicare enrollment and
billing privileges pursuant to 42 C.F.R. § 424.535(a)(8).

Once CMS determined that Petitioner submitted a claim or claims that could not have
been furnished to a specific individual on the dates of service, it was then authorized to
revoke Petitioner’s Medicare enrollment and billing privileges. 42 C.F.R.
§ 424.535(a)(8). Here, there are 17 undisputed instances where Petitioner submitted
claims for services that could not have been and, in fact, were not furnished to specific
individuals on the claimed dates of service.

Petitioner’s argument in this case is that it unintentionally filed claims with incorrect
information and had, in fact, provided the services claimed to Medicare beneficiaries, just
that those services were provided to different beneficiaries than those listed in the claims
or, in two instances, on dates that are different than those listed on the claims. Petitioner
asserts that it has provided significant documentation to prove that services were
provided to living beneficiaries. Petitioner concludes from this that its actions were not
abusive under 42 C.F.R. § 424.535(a)(8), but simple errors in the claims it filed.
Petitioner points out that it has merely had errors involving 16 beneficiaries among the
7,500 patients that Petitioner has served. Petitioner also avers that CMS failed to give it
proper notice of the basis for the revocation in the initial determination. P. Br. at 18-24.

Although Petitioner’s argument is understandable, the operative language of section

424 .535(a)(8) does not require that CMS demonstrate Petitioner intended to defraud
Medicare before it may revoke Petitioner’s billing privileges. See 42 C.F.R.

§ 424.535(a)(8). Even an unintentional error with regard to claims may serve as a basis
for revocation if the regulatory text does not require fraudulent or dishonest intent. Louis
J. Gaefke, D.P.M., DAB No. 2554 at 7 (2013).

The holdings in Gaefke are directly applicable to the case at hand. Gaefke involved a
podiatrist who had sought Medicare reimbursement for services provided to certain
15

beneficiaries on dates that were after the beneficiaries had died. The podiatrist argued
that his billing personnel had simply made errors in the claims they filed because he had
provided the services claimed, just to different beneficiaries with similar names. Gaefke,
DAB No. 2554 at 3. However, as stated above, the decision in Gaefke made it clear that
unintentional errors in claims that were filed may serve as the basis for upholding a
violation of 42 C.F.R. § 424.535(a)(8). As stated in the decision:

Petitioner relies on CMS’s preamble statements that the revocation
authority is directed at providers and suppliers engaged in “a pattern of
improper billing” and is not intended for “isolated occurrences” or
“accidental billing errors,” and that CMS would “not revoke billing
privileges . . . unless there are multiple instances, at least three, where
abusive billing practices have taken place.” 73 Fed. Reg. [36,448,] 36,455
[June 27, 2008]. Petitioner argues that “[i]t is clear from the Federal
Register excerpt . . . that ‘abusive billing practices’ must have taken place
for the regulation to apply” and that “it absolutely cannot be applied in the
area of accidental billing errors.” [citation omitted]. Petitioner argues that
the revocation is thus “clearly at odds with [section] 424.535(a)(8), which
is intended to allow revocations only in instances where there is evidence
that the provider has engaged in fraud or abuse.” [citation omitted].

The regulation, and the preamble when read in the context of the regulation,
do not support Petitioner’s argument that the revocation was unauthorized
because his improper claims resulted from inadvertent errors. The plain
language of the regulation contains no requirement that CMS establish that
the supplier acted with fraudulent or dishonest intent. The regulatory
language also does not provide any exception for inadvertent or accidental
billing errors. As the Board stated in [Howard B.] Reife [, D.P.M., DAB
No. 2527 (2013)], the “operative language” of the regulation “does not
require that CMS demonstrate that Petitioner intended to defraud Medicare
before it may revoke Petitioner’s billing privileges,” but “simply authorizes
revocation where the supplier submits ‘a claim or claims for services that
could not have been furnished to a specific individual on the date of
service,” including, as is particularly applicable here, “‘where the
beneficiary is deceased.’” Reife at 5. Petitioner’s submission via his billing
agent of multiple claims for services that could not have been provided as
claimed falls squarely within the conduct the regulation prohibits.

Gaefke, DAB No. 2554 at 7-8 (footnote omitted).

Further, to the extent that Petitioner relies on the term “abuse” in the title to section
424 .535(a)(8) to read a requirement into the regulation that Petitioner must have intended
to file improper billing, this argument has previously been rejected. Id. at 8.
16

In addition, Petitioner’s argument that its claim submission error rate is very low because
it has only had problems with claims related to 16 beneficiaries out of the thousands of
patients Petitioner has served, has also been previously been rejected. Id. at 10 (citing
Reife, DAB No. 2527 at 7).

Petitioner also gains no benefit from blaming its employees who completed the erroneous
claims that serve as the basis for revocation in this case. As stated in Gaefke:

As discussed, Medicare suppliers and providers certify that they are
responsible for the accuracy of their claims for reimbursement, and the
regulation contains no exception for improper claims prepared and
submitted by billing agents, which is consistent with the preamble stating
that providers and suppliers are responsible for claims submitted on their
behalf. As in Reife, Petitioner “cites no legal authority relieving suppliers
of responsibility for the claims for Medicare reimbursement submitted on
their behalf and at their direction.” ... Petitioner’s position, if adopted,
would effectively shield a supplier from any consequences for the
submission of an unlimited number of improper claims on his behalf, so
long as he could point to an agreement with a billing agent, who is not a
party to the supplier’s Medicare agreement, to submit the claims.
Petitioner’s efforts to assign blame for the improper billing to his billing
agent or his assistant do not relieve him of his responsibility for the
improper claims or bar CMS from revoking his billing privileges.

DAB No. 2554 at 6 (internal citation and footnote omitted).

Petitioner also asserts that the initial determination in this case violates the regulatory
notice requirements. Petitioner argues that the list of claims and beneficiaries that served
as the basis for Petitioner’s revocation (CMS Ex. 2 at 3) only provided the surnames of
the beneficiaries and the last four digits of the beneficiaries’ Medicare numbers.
Petitioner states that: “This was time consuming and [Petitioner] was not given adequate
information to submit a ‘corrective action plan’ because the Petitioner could not correct a
problem in which [it] was unaware of.” P. Br at 22.

The regulations require that CMS’s initial determination to revoke a provider or supplier
must include:

(i) The reason for the revocation in sufficient detail for the provider or
supplier to understand the nature of its deficiencies.

(ii) The right to appeal in accordance with part 498 of this chapter.
17

(iii) The address to which the written appeal must be mailed.

42 CFR. § 405.800(b); see also 42 C.F.R § 498.20(a)(1) (initial determination must set
“forth the basis or reasons for the determination . . . .”).

In the present case, the initial determination stated that one of the bases for revocation
was that Petitioner “submitted claims for services rendered to beneficiaries who were
deceased on the purported date of service.” CMS Ex. 2 at 1. The initial determination
then referenced “Attachment A,” which provided a list with four columns for each claim
in question: 1) “Beneficiary Claim HIC Num”; “Beneficiary [Surname]”; Beneficiary
Death Date; and Claim Date of Service. CMS Ex. 2 at 3. The notice also included
Petitioner’s right to request reconsideration and the address where Petitioner should send
such a request. CMS Ex. 2 at 1-2.

I conclude that the information provided to Petitioner in the initial determination was
adequate to meet the regulatory requirement that CMS provide sufficient detail for
Petitioner to understand the nature of its noncompliance. Although not having the full
name or Medicare number for each patient made Petitioner’s efforts to respond to the
initial determination more challenging (P. Br. at 8), based on Petitioner’s detailed
reconsideration request, Petitioner was able to meaningfully respond to the allegations in
the initial determination.

The 17 improper claims that are undisputed in this case are sufficient to show a section
424.535(a)(8) violation. Section 424.535(a)(8) only requires “‘a claim or claims” for
services that could not have been rendered. Therefore, one claim for services that could
not have been rendered is enough for revocation. Even CMS guidance on this subject
requires no more than three claims. 73 Fed. Reg. at 36,455. Therefore, I conclude that
CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing
privileges pursuant to 42 C.F.R. § 424.535(a)(8).

V. Conclusion

I grant summary judgment in favor of CMS and affirm CMS’s determination to revoke
Petitioner’s Medicare enrollment and billing privileges.

/s/
Scott Anderson
Administrative Law Judge