Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Alan J. Chernick, D.D.S., DATE: August 30, 1996
Petitioner,

Docket No. C-96-099
Decision No. CR434

-vwe

The Inspector General.

DECISION

By letter dated November 28, 1995, Alan J. Chernick,
D.D.S., the Petitioner herein, was notified by the
Inspector General (1I.G.), U.S. Department of Health and
Human Services (HHS), that it had been decided to exclude
Petitioner for a period of five years from participation
in the Medicare, Medicaid, Maternal and Child Health
Services Block Grant and Block Grants to States for
Social Services programs.' The I.G.'s rationale was that
exclusion, for at least 5 years, is mandated by sections
1128(a)(1) and 1128(c)(3)(B) of the Act because
Petitioner had been convicted of a criminal offense
related to the delivery of an item or service under the
Medicaid program.

Petitioner filed a timely request for review of the
I.G.'s action by an administrative law judge (ALJ) of the
Departmental Appeals Board (DAB). The I.G. moved for
summary disposition.

Because I have determined that there are no facts of
decisional significance genuinely in dispute, and that
the only matters to be decided are the legal implications
of the undisputed facts, I have granted the I.G.'s motion

1 unless otherwise indicated, hereafter I refer
to all programs from which Petitioner has been excluded,
other than Medicare, as "Medicaid."
2

and decided the case on the basis of the parties' written
submissions.?

I affirm the I.G.'s determination to exclude Petitioner
from participation in the Medicare and Medicaid programs
for a period of five years.

APPLICABLE LAW

Sections 1128(a) (1) and 1128(c) (3) (B) of the Act make it
mandatory for any individual who has been convicted of a
criminal offense related to the delivery of an item or
service under Medicare or Medicaid to be excluded from
participation in such programs for a period of at least
five years.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant to this case, Petitioner
was a dentist licensed to practice in the State of New
York. P. Ex. 3 at 2; I.G. Ex. 1 at 8-9.

2. A State Superior Court Information charged Petitioner
with the crime of offering a false instrument for filing
in the first degree. According to the Superior Court
Information, which is the basis of the Petitioner's
criminal conviction, on or about December 11, 1992,
Petitioner, knowing that a magnetic diskette contained
false billing information, caused that diskette to be
submitted to a fiscal agent of the New York Medicaid
program. I.G. Ex. 2.

3. The Superior Court Information alleged that the claim
submitted by Petitioner was false in that it represented
that Petitioner had furnished certain dental services to
a Medicaid recipient when Petitioner knew these services
had not been furnished. I.G. Ex. 2.

4. On June 7, 1994, Petitioner pled guilty in County
Court, Rockland County, State of New York, to the reduced
charge of offering a false instrument for filing in the
second degree in violation of N.Y. Penal Law section
175.30, a misdemeanor. Petitioner admitted that, on or

2 The I.G. submitted a brief (I.G. Brief),
accompanied by five exhibits (I.G. Exs. 1-5). I admit
I.G. Exs. 1-5 into evidence. Petitioner submitted a
brief (P. Brief), accompanied by four exhibits (P. Exs.
1-4). I admit P. Exs. 1-4 into evidence.
3

about December 11, 1992, he filed or caused to be filed a
claim form with regard to a Medicaid recipient that
contained false billing information. I.G. Ex. 1.

5. On July 19, 1994, as a result of his guilty plea,
Petitioner was sentenced to three-years' probation, 300
hours of community service, and a penalty assessment of
$90. I.G. Exs. 3, 4.

6. Petitioner paid restitution to the State of New York
in the amount of $18,000. I.G. Exs. 1, 3.

7. As a result of Petitioner's conviction, the New York
State Department of Social Services, by letter dated June
14, 1994, excluded Petitioner from the Medicaid program
for two years. I.G. Ex. 5.

8. By letter dated November 28, 1995 (Notice), the I.G.
informed Petitioner that, effective 20 days from the date
of the Notice, he would be excluded from participation in
Medicare and Medicaid for the minimum mandatory period of
five years.

9. The Secretary of HHS (Secretary) has delegated to the
I.G. the authority to determine and impose exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 21662.

10. Petitioner's guilty plea, and the court's acceptance
of that plea, constitute a "conviction" within the
meaning of sections 1128(a)(1) and 1128(i) of the Act.
Findings 4-5.

11. Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicaid, within the meaning of section 1128(a) (1) of the
Act. Findings 2-4, 10.

12. The minimum mandatory period of exclusion pursuant
to section 1128(a)(1) is five years. Act, section
1128(c) (3) (B).

13. Assertions by a petitioner that he or she actually
is innocent, that his or her trial was unfair, or that
the statutory five-year minimum mandatory exclusion
specified in section 1128(a) should be modified because
of mitigating circumstances cannot be addressed in this
forum.

14. The I.G. properly excluded Petitioner from
participation in Medicare and Medicaid for a period of
five years pursuant to sections 1128(a)(1) and
1128(c)(3)(B) of the Act. Findings 1-13.
4
15. Neither the I.G. nor an ALJ has the authority to

reduce a five-year minimum exclusion mandated by sections
1128(a)(1) and 1128(c) (3) (B) of the Act.

PETITIONER'S ARGUMENT

Petitioner acknowledges that he was convicted of a
misdemeanor offense. Petitioner acknowledges further
that the basis of the criminal charge upon which he was
convicted was the result of his performing dental
services for a Medicaid patient. He asserts in his
defense that the offense at issue involved only a small
amount of money and he maintains that he properly
submitted the work to Medicaid. Petitioner admits that
he pled guilty to the offense, but claims he did so only
because he did not wish to undergo a trial with the
expense and stress such a proceeding would involve.
Petitioner contends also that he was not informed that,
as a result of his guilty plea, he would be excluded from
participation in Medicare and Medicaid. Pet.'s request
for hearing; P. Brief. Petitioner alleges that "the
exclusion is disproportionate to the actual circumstances
of the case." P. Brief, at 1. He requests that I
"consider a concomitant two year exclusion [with the
State exclusion] and that any mandated exclusion start on
the day of conviction," rather than 20 days from the date
of the I.G.'s Notice. Id. at 2.

DISCUSSION

The first statutory requirement for mandatory exclusion
pursuant to section 1128(a)(1) of the Act is that the
individual or entity in question has been convicted of a
criminal offense under federal or State law. Section
1128(i) of the Act defines the term "convicted of a
criminal offense" to include those circumstances in which
a plea of guilty by an individual has been accepted by a
federal, State, or local court. Act, section 1128(i)(3).
In the present case, it is undisputed that, on June 7,
1994, Petitioner pled guilty to the crime of offering a
false instrument for filing in the second degree and that
the State court accepted the plea. I.G. Ex. 1 at 27-28,
30. On July 19, 1994, as a result of his guilty plea,
Petitioner was sentenced to three-years' probation, 300
hours of community service, and a penalty assessment of
$90. I.G. Exs. 3, 4. Petitioner paid also restitution
in the amount of $18,000. I.G. Exs. 1, 3. Based on the
foregoing, I conclude that Petitioner was convicted of a
5

criminal offense within the meaning of sections
1128(a)(1) and 1128(i) of the Act.

I find also that the second requirement of section
1128(a)(1) -- that the criminal offense leading to the
conviction be related to the delivery of an item or
service under Medicare or Medicaid -- has been satisfied.
Here, Petitioner, in pleading guilty, admitted that, on
or about December 11, 1992, he filed or caused to be
filed a claim with regard to a Medicaid recipient that
contained false billing information. I.G. Exs. 1, 2. It
is well-established that financial misconduct directed at
Medicare or Medicaid, in connection with the delivery of
items or services under the program, constitutes a
program-related offense invoking mandatory exclusion. In
particular, filing fraudulent Medicare or Medicaid claims
has been held to constitute clear program-related
misconduct. Jack W. Greene, DAB CR19 (1989), aff'd DAB
1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F.
Supp. 835, 838 (E.D. Tenn. 1990); Scott Gladstone, M.D.,
DAB CR331 (1994); Ian C. Klein, D.P.M., DAB CR177 (1992).

Once it is determined that a program-related criminal
conviction has occurred, exclusion is mandatory under
section 1128(a) of the Act as a purely derivative action.
The Secretary is not permitted to look beyond the fact of
conviction. Peter J. Edmonson, DAB CR163 (1991), aff'd,
DAB 1330 (1992). The intent of the individual committing
the offense is not relevant under section 1128(a).
DeWayne Franzen, DAB CR58 (1989), aff'd, DAB 1165 (1990).
Further, assertions by a petitioner that he or she
actually is innocent, that his or her trial was unfair,
or that the statutory five-year minimum mandatory
exclusion specified in section 1128(a) should be modified
because of mitigating circumstances cannot be addressed
in this forum. Edmonson, DAB 1330, at 4-5; Janet
Wallace, L.P.N., DAB CR155 (1991), aff'd, DAB 1326
(1992); Richard G. Philips, D.P.M., DAB CR133 (1991),
aff'd, DAB 1279 (1991). Thus, in the case at hand,
Petitioner's assertions that he was not informed of the
consequences of his guilty plea or that he pled guilty
only to avoid the expense and stress of a trial are
irrelevant. Additionally, although Petitioner requests
"that some mitigation be applied to the length of
exclusion" (P. Brief, at 2), I have no authority to
consider his request.

The fact that New York State excluded Petitioner for two
years from the date of his conviction has no bearing on
the length of the exclusion imposed and directed by the
I.G. Section 1128(c)(3)(B) of the Act requires that an
exclusion imposed under section 1128(a)(1) be fora
6

minimum mandatory period of at least five years. This
five-year minimum mandatory requirement is codified also
in the regulations at 42 C.F.R. § 1001.102(a). The Act
does not permit the Secretary to offset a minimum
mandatory exclusion against a previously imposed State
exclusion. Neither the I.G. nor an ALJ has the authority
to reduce a five-year minimum mandatory exclusion.
Maximo Levin, M.D., DAB CR343 (1994). Since the I.G.
excluded Petitioner pursuant to section 1128(a) (1),
Petitioner's five-year exclusion is reasonable as a
matter of law.

Furthermore, the appellate panel in Shanti Jain, M.D.,
DAB CR237 (1992), aff'd, DAB 1398 (1993), held that "[a)n
administrative law judge has no authority to alter the
effective date of exclusion designated by the I.G. where
the I.G. acted within the discretion afforded by statute
and regulation in setting the effective date." Jain, DAB
1398, at 7. Thus, I am without authority to alter the
commencement date of Petitioner's exclusion.

Finally, I note that Petitioner has submitted numerous
“character reference" letters. P. Ex. 2. Whether or not
Petitioner has a good character is immaterial and
irrelevant to my consideration of the issues in this
case. While statements attesting to Petitioner's good
character may reflect positively upon him, I have no
authority to consider them as bases for reducing the
five-year exclusion imposed and directed against him by
the I.G.

CONCLUSION

For the foregoing reasons, I find that the I.G. properly
excluded Petitioner from participating in Medicare and
Medicaid, pursuant to section 1128(a)(1) of the Act.
Furthermore, the five-year minimum period of exclusion
imposed and directed against Petitioner is mandated by
section 1128(c) (3) (B) of the Act.

Petitioner's five-year exclusion is, therefore,
sustained.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

In the Case of:
William B. Barham, M.D., DATE: August 23, 1996
Petitioner,

Docket No. C-96-025
Decision No. CR432

-v-

The Inspector General.

DECISION

By letter dated October 27, 1995 (Notice), the Inspector
General (I.G.) notified Petitioner that he was being
excluded for five years from participation in the
Medicare, Medicaid, Maternal and Child Health Services
Block Grant, and Block Grants to States for Social
Services programs. The I.G. alleged that Petitioner was
convicted, in the United States Navy, by General Court
Martial, of a criminal offense related to neglect or
abuse of patients in connection with the delivery of a
health care item or service, within the meaning of
section 1128(a)(2) of the Social Security Act (Act). The
Notice informed Petitioner that section 1128(c) (3)(B) of
the Act requires that individuals convicted of such
offenses be excluded for at least five years.

On November 13, 1995, Petitioner requested a hearing
before an administrative law judge of the Departmental
Appeals Board (DAB) to contest his exclusion. In his
hearing request, Petitioner argued that he should not be
excluded for three reasons: 1) a court martial is not a
"conviction" within the meaning of section 1128(i) of the
Act; 2) even if a court martial were a conviction,
Petitioner's conviction was not related to neglect or
abuse of patients, within the meaning of section
1128(a) (2) of the Act; and 3) Petitioner does not pose a
threat to patient health or safety.

During the January 24, 1996 telephone prehearing
conference, the parties agreed that there were no
material facts in dispute. Accordingly, Petitioner
2

waived his right to an in-person hearing and I set a
schedule for the parties to file briefs supported by
documentary evidence. The I.G. filed a Brief (I.G. Br.)
and four exhibits (I.G. Exs. 1-4). Petitioner filed a
Brief (P. Br.) and three exhibits (P. Exs. 1-3). Neither
party objected to the admission of the offered exhibits.
I admit into evidence I.G. Exs. 1-4 and P. Exs. 1-3.

I find no reason to disturb the I.G.'s determination to
exclude Petitioner from participation in the Medicare and
Medicaid programs for a period of five years.

APPLICABLE LAW

Section 1128(a)(2) of the Act provides that any
individual or entity that has been convicted, under
federal or State law, of a criminal offense relating to
neglect or abuse of patients in connection with the
delivery of a health care item or service, must be
excluded from participation in any program under title
XVIII, including any State health care program as defined
in section 1128(h). Section 1128(c) (3) (B) of the Act
makes mandatory an exclusion of at least five years for
individuals convicted of such crimes.

Section 1128(i) of the Act provides that an individual
will be deemed convicted under any of the following
circumstances:

(1) when a judgment of conviction has been
entered against the individual or entity by a
Federal, State, or local court, regardless of
whether there is an appeal pending or whether the
judgment of conviction or other record relating
to the criminal conduct has been expunged;

(2) when there has been a finding of guilt
against the individual or entity by a Federal,
State, or local court;

(3) when a plea of guilty or nolo contendere by
the individual or entity has been accepted by a
Federal, State, or local court; or

(4) when the individual or entity has entered
into participation in a first offender, deferred
adjudication, or other arrangement or program
where judgment of conviction has been withheld.
3

PETITIONER'S ARGUMENT

Petitioner contends that his conviction in the U.S. Navy,
by General Court Martial, does not meet the requirements
of section 1128(i) of the Act because courts martial are
not part of the federal judiciary, but are legislative
courts with jurisdiction independent of the judicial
power created and defined by Article III of the
Constitution. He maintains that mandatory exclusion is
limited to those persons who have been convicted by an
Article III federal court, so that each person so
excluded is afforded those rights and protections offered
by the federal judiciary system. He asserts also that he
could not even have been charged with "indecent assault"
in the federal system, since no similar charge exists
under federal or applicable State law.

The Petitioner contends also that the offense of which he
was convicted did not relate to the abuse or neglect of
patients. He asserts that the incidents underlying the
offense of which he was convicted were not abuse but were
consensual acts between adults, and that the alleged
victims made no claim of injury or abuse. Petitioner
contends further that he was not convicted of an offense
related to the neglect or abuse of patients, since he was
charged and convicted under Article 134 of the Uniform
Code of Miliary Justice which applies to sexual acts
generally.

Finally, Petitioner contends that he does not present a
threat to the health or safety of patients. He points
out that he has undergone intensive psychotherapy and
claims that he has resolved those issues which triggered
the violations. In this regard he asserts that it is the
opinion of his psychotherapist that he has been fully
rehabilitated and no longer presents a threat to his
patients. Petitioner maintains that this conclusion is
supported by the decision of the Virginia Board of
Medicine not to suspend or revoke his medical license,
and by the testimony of his current mentor, who has
observed Petitioner for over one year.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant herein, Petitioner was a
physician and lieutenant commander in the United States
Navy Medical Corps.

2. Petitioner was charged with five counts of having
committed indecent assaults upon patients in his care.
I.G. Ex. 1 at 229-230.
4

3. Following a court martial, the Petitioner was found
guilty on June 30, 1993, of five counts of indecent
assault under Article 134 of the Uniform Code of Military
Justice, 10 U.S.C. section 934. I.G. Ex. 1 at 13-14,
483.

4. As a result of his conviction, Petitioner was removed
from the Navy, fined, and imprisoned. I.G. Ex. 1 at 2,
501.

5. Conviction by court martial is a conviction by a
federal court within the meaning of section 1128(i) of
the Act.

6. Petitioner was convicted of criminal offenses
relating to abuse of patients. Findings 1-3.

7. The offenses for which Petitioner was convicted
occurred in connection with the delivery of a health care
item or service. Findings 2, 3.

8. Petitioner's exclusion is mandatory pursuant to
section 1128(a)(2) of the Act. Findings 5-7.

9. It is irrelevant that the offenses of which
Petitioner was convicted do not have a civilian analogue,
because the offenses clearly involve the abuse of
patients.

10. The I.G. was required to exclude Petitioner from
participating in the Medicare and Medicaid programs for a
minimum of five years. Act, section 1128(c) (3) (B).

11. Petitioner's alleged rehabilitation and
psychotherapy are irrelevant to the statutory requirement
that he be excluded for five years.

DISCUSSION

Under the statutory scheme of sections 1128(a)(2) and
1128(c) (3) (B) of the Act, I must uphold Petitioner's
five-year exclusion if the I.G. proves the following
elements:

1) Petitioner was convicted of a criminal
offense, within the meaning of section 1128(i) of
the Act; and
5

2) Petitioner's conviction was for a criminal
offense related to neglect or abuse of patients
in connection with the delivery of a health care
item or service.

Petitioner denies that he was convicted within the
meaning of the Act. He further denies that his
conviction related to neglect or abuse of patients.
Finally, Petitioner argues that he should not be excluded
for five years because he has been rehabilitated. I
conclude that the I.G. has proved each required element.
I have no authority to reduce to less than five years the
length of a mandatory exclusion. Therefore, I uphold
Petitioner's exclusion.

A. Petitioner was convicted of a criminal offense,

I find that Petitioner was convicted of a criminal
offense, within the meaning of sections 1128(i)(1) and
(2) of the Act. Petitioner acknowledges that he was
convicted of indecent assault, after trial by general
court martial. P. Br. at 1, 10. Petitioner argues,
however, that a court martial is not a federal court
within the meaning of section 1128(i). I disagree.

Petitioner argues that Congress did not intend to include
courts martial when it used the term "federal court" in
section 1128(i). According to Petitioner, Congress
intended to limit the term "federal court" to courts
established pursuant to Article III of the Constitution.
Therefore, Petitioner contends, section 1128(i) does not
apply to courts martial because they are established
under Article I of the Constitution, rather than under
Article III. I reject this argument. Neither the plain
language of section 1128 nor its legislative history
makes any distinction between Article I and Article III
federal courts. I do not share Petitioner's view that,
because the statute does not specifically include Article
I courts, it should be construed as excluding them from
consideration as federal courts. On the contrary, the
legislative history of section 1128(i) makes clear that
Congress intended to define the term "conviction"
broadly. See S. Rep. No. 109, 100th Cong., 1st Sess. 2,
reprinted in 1987 U.S.C.C.A.N. 682, 694-95. Indeed, a
broad interpretation of the term "conviction" is
consistent with the remedial purpose of section 1128,
which is to protect federal programs and their
beneficiaries and recipients from persons who have been
shown to be untrustworthy. Thus, the legislative history
and purpose of section 1128 favor a broad and inclusive
interpretation of the term "federal court."
6

My conclusion that courts martial are federal courts
within the meaning of section 1128(i) is further
reinforced by decisions of the Supreme Court and United
States Courts of Appeals. The Supreme Court has held
that the judgment of a court martial having jurisdiction
to try an officer or soldier for a crime is entitled to
the same finality and conclusiveness as are the judgments
of a civil court. Grafton v. U.S., 206 U.S. 333, 345
(1907); see also U. v. Price, 258 F.2d 918 (3d Cir.
1958); U.S. v. Lee, 428 F.2d 917, 920 (6th Cir. 1970).
Indeed, U.S. v. Lee involved facts analogous to those in
this case.

The defendant in Lee argued that a conviction by court
martial should not subject him to prosecution for
transporting a firearm il interstate commerce. At issue
in Lee was a statute that made transporting a firearm in
interstate commerce a crime if a person had previously
been convicted of a crime punishable by imprisonment for
a term exceeding one year. As Petitioner argues here,
the defendant in Lee argued that, because a court martial
was not part of the judicial branch of the federal
government, its judgment was not a "conviction." The
court of appeals rejected that argument:

The language of the statute is not limited to
judgments rendered by Article III courts. Courts
martial are authorized under Article I of the
Constitution. [Citations omitted] In cases in
which courts martial have jurisdiction, their
judgments are to 'be accorded the finality and
conclusiveness of a civil court in a case of
which it may legally take cognizance.' [Citing
Grafton] Jurisdiction of the military court is
not challenged in this case.... The finding of
the court martial that Lee had committed a crime,
and the judgment of sentence in excess of one
year are entitled to the conclusiveness of the
judgment of an Article III court.

428 F.2d at 920. The court's statements in Lee are
equally applicable here. The language of section 1128(i)
is not limited to Article III courts.' Petitioner has

| Petitioner argues that section 1128(i) is
distinguishable from the statute at issue in Lee.
According to Petitioner, the phrase "by a Federal, State,
or local court" is meant to limit the types of
convictions covered by section 1128. As I have discussed
above, I do not agree that the phrase is meant to limit
the definition of conviction.
7

made no suggestion that the court martial which convicted
him lacked jurisdiction. Here, I find that it is
appropriate to accord the judgment of the court martial
in Petitioner's case the same finality and conclusiveness
that I would accord the judgment of a civil court.

Additional support for this view is found in Article 76
of the Uniform Code of Military Justice (UCMJ), 10 U.S.C.
§ 876, which provides:

(T]he proceedings, findings, and sentences of
courts-martial as approved, reviewed, or affirmed
...are final and conclusive. Orders publishing
the proceedings of courts-martial and all action
taken pursuant t those proceedings are binding
upon all departments, courts, agencies, and
officers of the United States....

This statute underscores that the Petitioner's conviction
by court martial is sufficient to bind the Department of
Health and Human Services to a determination that
Petitioner stands convicted of a criminal offense under
section 1128(i) of the Act.

I reject as unfounded also Petitioner's argument that it
is unfair to exclude him on the ground that he was not
afforded in the court martial procedure all of the
constitutional protections granted defendants in federal
or State criminal proceedings. It is well-established
that petitioners cannot use these administrative
proceedings to collaterally attack the substantive
determinations or procedural safeguards of their criminal
proceedings. Peter J. Edmonson, DAB 1330, at 4-5 (1992).

Even if I could consider such an equitable argument, I
would find no merit in it. Clearly Petitioner was
afforded substantial protection of his constitutional
rights in the trial phase of the court martial. For
example, he was represented by counsel (both civilian and
military) (I.G. Ex. 1 at 86, 225-26), he had the
opportunity to cross-examine the witnesses against him
(e-g I.G. Ex. 1 at 327, 376), and the members of the
court martial were instructed that they could not convict
unless each element of Petitioner's offenses were proved
beyond a reasonable doubt (I.G. Ex. 1 at 472-73).

Moreover, an elaborate post-trial procedure and review
process has been established by Congress to review courts
martial and assure their fairness, as detailed in the
UCMJ at 10 U.S.C. §§ 859-876a. A court martial
conviction receives an intermediate level of review by
the Court of Criminal Appeals under Article 66 of the
UCMJ, 10 U.S.C. section 866. Sections 867 and 941 of the
UCMJ provide that courts martial convirtions receive an
additional level of review by the United States Court of
Appeals for the Armed Forces. Section 867a provides for
review of decisions of the United States Court of Appeals
for the Armed Forces by the United States Supreme Court
on writ of certiorari. Part of the responsibility of the
court in conducting the post-trial review process of
courts martial includes the protection and preservation
of the constitutional rights of persons in the armed
forces. U.S. v. Frischholz, 16 U.S.C.M.A. 150, 152, 36
C.M.R. 306, 308 (1966). After conviction, Petitioner was
advised of and exercised his rights to appellate review
of his court martial conviction. I.G. Ex. 1 at 6-12.

The Court of Criminal Appeals issued a decision on
December 19, 1994 affirming his conviction. I.G. Ex 1 at
4-5.

For the reasons just discussed, I conclude that a court
martial is a federal court within the meaning of section
1128(i). Petitioner admits that the court martial
convicted him. P. Br. at 1, 10. Therefore, I find that
he was convicted within the meaning of section
1128(i)(1). Additionally, the court martial found him
guilty of the offenses with which he was charged. I.G.
Ex. 1 at 483. Accordingly, Petitioner was convicted also
of a criminal offense within the meaning of section
1128(i) (2).

B. Petitioner's conviction was for a criminal offense
related to neglect or abuse of patients in connection
with the delivery of a health care item or service.

Petitioner contends that the incidents for which he was
convicted did not relate to neglect or abuse, but
involved consensual acts between adult males. Petitioner
implies that he was prosecuted for engaging in homosexual
conduct to the discredit of the Navy, rather than for
assault. P. Br. at 11. Petitioner points out that one
element of the offenses of which he was convicted was
that his conduct must be prejudicial to the order and
discipline of the service. Because this element would
not be present if he had been charged in a non-military
court, Petitioner suggests that his conviction cannot be
viewed as relating to neglect or abuse of patients, but
rather as an offense against military discipline only.
Id. This argument ignores the fact that the element
involving military discipline was only one of eight
elements which the court martial was required to find in
order to convict Petitioner. I.G. Ex. 1 at 470. The
remaining seven elements of each charge relate solely to
9

Petitioner's unlawful sexual assaults on his victims.’
There is nothing unique to the military about the crime
of sexual abuse of patients.

Moreover, to the extent that Petitioner is asserting that
his victims consented to his conduct, this amounts to a
claim that Petitioner did not, in fact, commit the acts
of which he was convicted.’ As I have already stated,
Petitioner may not collaterally attack his conviction in
this forum. Furthermore, even were I to examine the
facts underlying Petitioner's conviction, I would
conclude that there is ample evidence that the encounters
between Petitioner and his victims were not consensual.
The statements of Petitioner's victims clearly show that
they did not anticipate Petitioner's improper behavior
and that they felt it was humiliating and degrading.

I.G. Ex. 1 at 94-109, 321, 323-24, 372-74. The record
further reflects that in at least one instance the victim
complained immediately thereafter regarding the
Petitioner's improper conduct. I1.G. Ex. 1 at 375-76.

An appellate panel of the DAB has recognized that a
conviction for unwanted sexual advances of the sort
committed by Petitioner is "related to abuse" within the

? I note that an element of each offense of which
Petitioner was convicted was that the acts were done
without the victim's consent and against his will. I.G.
Ex. 1 at 470-71.

3 In fact, Petitioner's claim that the acts he was
convicted of engaging in were consensual is inconsistent
with his own statement, made to the Maryland Board of
Physician Quality Assurance in his application for a
medical license. In his license application he stated:

On June 30, 1993, I was convicted at a
general court-martial of 5 counts of
indecent assault involving two different
patients. This became an issue when I
fondled and ultimately orally sodomized a
patient who was under my care....

Subsequent investigation revealed one other
patient who I had fondled and
masturbated.... I realize that the behavior
that I engaged in with these two patients is
repulsive, illegal, unprofessional, and
unethical. : can be condoned under no
circumstances, and I have taken steps to
ensure that it never happens again.

I.G. Ex. 2 at 3.
10

meaning of section 1128(a)(2) of the Act and, thus, forms
a basis for exclusion from the Medicare and Medicaid
programs. Bruce Lindberg, D.C., DAB 1280, at 6 (1991).

I find further that the record establishes that the
offenses for which Petitioner was convicted involved
patients in his care. The record reflects that the
victims were enlisted men in the Marines who came to
Petitioner for medical treatment of venereal disease,
thus establishing a doctor-patient relationship. I.G.
Ex. 1 at 94-109, 321, 323-24, 372-74. The record also
shows that the assaults were committed in the course of
medical examinations by the Petitioner and therefore were
in connection with the delivery of a health care item or
service under section 1128(a)(2). Id.

The I.G. has proved that Petitioner was convicted of a
criminal offense related to neglect or abuse of patients
in connection with the delivery of a health care item or
service. Section 1128(c)(3)(B) of the Act mandates that
individuals convicted of such crimes be excluded from
participation in Medicare and Medicaid for at least five
years. Here, the I.G. has excluded Petitioner for the
minimum mandatory period.

Petitioner nevertheless argues that he should not be
excluded because he has been rehabilitated through
psychotherapy and other means and, thus, no longer
presents a danger to his patients. Because Petitioner's
exclusion is for the minimum mandatory period, I cannot
consider mitigating factors. Peter J. Edmonson, DAB 1330
(1992).

CONCLUSION
The I.G.'s determination that Petitioner's exclusion for
at least five years is mandated by section 1128(a) (2) of

the Act and is supported by the applicable law and
regulations.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Thelma C. Villanueva, M.D., DATE: August 21, 1996
Petitioner,

Docket No. C-96-185
Decision No. CR431

-v-

The Inspector General.

weeveveeevervrre

DECISION

I find that the two-year exclusion that the Inspector
General (I.G.) imposed against Petitioner is
unreasonable. I modify the exclusion so that Petitioner
will be eligible to apply to the I.G. for reinstatement
into the Medicare program on the date that Petitioner is
reinstated by the State of New York to participate in the
New York Medicaid program.

I. Backaround

On January 24, 1996, the I.G. excluded Petitioner from
participating in Medicare and State health care programs
(including Medicaid), for a period of two years. The
I.G. advised Petitioner that the exclusion was being
imposed pursuant to section 1128(b) (5) of the Social

' This does not mean that Petitioner will be
reinstated automatically on the date that she is
reinstated to participate in the New York Medicaid
program. As I discuss below, my modification of
Petitioner’s exclusion by the I.G. means that she will be
eligible to apply to the I.G. for reinstatement on the
date that she is reinstated by the State of New York to
participate in the New York Medicaid program.

2? The notice which the I.G. sent to Petitioner on
January 24, 1996 erroneously advised Petitioner that she
was being excluded for five years. The I.G. subsequently
corrected this error in a notice dated April 12, 1996.
I.G. Ex. 4.
2

Security Act (Act), based on Petitioner’s exclusion or
suspension from a federal or State health care program
for reasons bearing on Petitioner's professional
competence, professional performance, or financial
integrity.

Petitioner requested a hearing. The case was assigned to
me for a hearing and a decision. I held a prehearing
conference by telephone, during which time the parties
advised me that they believed that the case could be
heard and decided without an in-person hearing. I
established a schedule for the submission of proposed
exhibits, briefs, and reply briefs. The I.G. submitted
four exhibits (I.G. Ex. 1 - 4) and a brief.’ Petitioner
submitted a brief and no exhibits. Each party submitted
a reply brief. Petitioner did not object to my receiving
into evidence the I.G.’s proposed exhibits. I admit into
evidence I.G. Ex. 1 - 4.

II. Issues. findings of fact and conclusions of law

The issues in this case are whether the I.G. has
authority to exclude Petitioner pursuant to section
1128(b) (5) of the Act and whether the two-year exclusion
that the I.G. imposed against Petitioner is reasonable.

I make the following findings of fact and conclusions of
law (Findings), which support my decision that the I.G.
has the authority to exclude Petitioner, but that the
two-year exclusion that the I.G. imposed is unreasonable
and must be modified so that Petitioner will be eligible
to apply to the I.G. for reinstatement on the date that
she is reinstated by the State of New York to participate
in the New York Medicaid program. I discuss my Findings
in detail, below.

1. On October 25, 1994, the New York Department of
Social Services (Department of Social Services)
excluded Petitioner from participating in the New
York Medicaid program for a period of two years.
I.G. Ex. 1, 2.

2. The suspension was for reasons bearing on
Petitioner’s professional competence, professional
performance, or financial integrity. I.G. Ex. 1 -
3, Decision at 5.

3 In her brief, the I.G. styled her submission as
a motion for summary disposition. In fact, I am deciding
this case based on the written evidence that has been
submitted. I am not issuing a summary disposition.
3

3. The I.G. is authorized to exclude Petitioner
pursuant to section 1128(b) (5) of the Act. Findings
1, 2; Decision at 5.

4. The I.G. did not prove that the acts for which
Petitioner was suspended caused financial damage to
the New York Medicaid program, and, thus, failed to
prove the presence of an aggravating factor.
Decision at 5 - 8.

5. Petitioner proved that she was suspended from
participating in the New York Medicaid program for a
period of less than three years, and, thus, proved
the presence of a mitigating factor. Decision at 6
- 8.

6. A two-year exclusion is not reasonable.
Decision at 8 - 11.

7.  %It is reasonable to modify the exclusion in this
case so that Petitioner will be eligible to apply to
the I.G. for reinstatement on the date that she is
reinstated by the State of New York to participate
in the New York Medicaid program. Decision at 11 -
12.

III. Discussion

A. The facts (Finding_1)

The material facts of this case are not disputed.
Petitioner is a physician. On October 25, 1994, the
Department of Social Services excluded Petitioner from
participating in the New York Medicaid program for a
period of two years. I.G. Ex. 1. The effective date of
the exclusion was 20 days from the date of the notice.
Id. at 2. Thus, Petitioner’s State exclusion commenced
on November 14, 1994, and will end on November 14, 1996.
Id. She will be eligible to apply to the State of New
York for reinstatement to participate in the New York
Medicaid program on that date.

The exclusion was based on a determination that
Petitioner had engaged in unacceptable practices, as
defined in State regulations. These unacceptable
practices consisted of the following:

1. Submitting or causing to be submitted a claim or
claims: for unfurnished medical care, services or
supplies; and for medical care, services or supplies
provided at a frequency or in an amount not
medically necessary.
4

2. Unacceptable record keeping, consisting of
failure by Petitioner to maintain records necessary
to fully disclose: the medical necessity for and
the nature and extent of the medical care, services
or supplies furnished by Petitioner; or to comply
with the requirements of State law.

3. Excessive services, consisting of furnishing or
ordering medical care, services or supplies that are
substantially in excess of the needs of patients.

4. Failure to meet recognized standards, consisting
of furnishing medical care, services or supplies:
that failed to meet professionally recognized
standards of health care or which were beyond the
scope of Petitioner's professional qualifications or
license.

I.G. Ex. l at 1-2.

The Department of Social Services's determination to
exclude Petitioner, and its findings of unacceptable
practices, were based on an audit of 25 records of care
provided or ordered by Petitioner. I.G. Ex. 1 at 6, I.G.
Ex. 2 at 5. The major finding of this audit was that
Petitioner inappropriately and excessively ordered
laboratory tests of patients, without proof that the
patients needed such tests or would benefit from them.
Id. The audit found, however, that, with two exceptions,
Petitioner’s clinical work was within acceptable
guidelines. Id.

There is no evidence in this case that Petitioner
profited unlawfully or wrongfully from the laboratory
tests that she ordered which the audit found to be
inappropriate. Moreover, although the Department of
Social Services concluded that Petitioner had submitted
or caused to be submitted inappropriate claims for
services, there is no evidence to show the dollar amount
of the claims that were made for the laboratory services.
Nor is there any evidence to show that the New York
Medicaid program made reimbursement payments for these
claims.

Petitioner appealed the determination of the Department
Social Services to exclude her to a State administrative
law judge. I.G. Ex. 2. In November 1995, Petitioner
withdrew her hearing request. Id. at 2.
5

B. The I.G.’s authoritv to exclude Petitioner
(Findings 2 ~ 3)

Section 1128(b)(5) of the Act authorizes the Secretary,
or her delegate, the I.G., to exclude an individual where
that individual is suspended or excluded from a federal
or State health care program, or is otherwise sanctioned
under such programs, for reasons bearing on that
individual’s professional competence, professional
performance, or financial integrity. I find that the
Department of Social Services' exclusion of Petitioner
from the New York Medicaid program constituted an
exclusion of Petitioner for reasons bearing on her
professional competence and professional performance.
Therefore, the I.G. is authorized to exclude Petitioner.

The reasons for the exclusion are self-evident from the
findings made by the Department of Social Services. That
agency found that Petitioner had: submitted or caused to
be submitted claims for unnecessary services, engaged in
improper record keeping, provided excessive services, and
failed to comply with professionally recognized standards
of health care, each of these findings related to
Petitioner’s performance as a physician and to her
professional competence.

I do not find that the Department of Social Services'
findings bear on Petitioner's financial integrity. There
was no finding that Petitioner sought to profit
wrongfully from her services. However, it is not
necessary to find that Petitioner was excluded for
reasons bearing on her professional competence,
professional performance, and her financial integrity in
order to find authority to exclude her under section
1128(b)(5). It is enough, for purposes of establishing
the I.G.’s authority to exclude Petitioner, that she was
excluded from participating in a State health care
program for any of the reasons specified in section
1128 (b) (5).

c. The presence or absence of aqqravating or
mitigating factors (Findings 4 - 5)

An exclusion imposed under one of the subsections of
section 1128 of the Act must be remedial and not
punitive. The purpose of section 1128 is to protect
federally funded health care programs and beneficiaries
and recipients of those programs from individuals or
entities who are not trustworthy to provide care.
Therefore, an exclusion imposed pursuant to any
subsection of section 1128, including section 1128(b) (5),
should be for a period of time that is necessary to
accomplish the Act’s remedial purpose.
6

The criteria for determining the reasonable length of any
exclusion imposed pursuant to section 1128 are contained
in regulations at 42 C.F.R. Part 1001. The regulation
which establishes the criteria for determining the
reasonable length of an exclusion imposed pursuant to
section 1128(b) (5) is 42 C.F.R. § 1001.601. This
regulation prescribes that an exclusion imposed pursuant
to section 1128(b) (5) of the Act will be for a period of
three years, unless there exist factors that the
regulation defines to be either aggravating or
mitigating, which may be a basis for an exclusion of more
or less than three years. 42 C.F.R. § 1001.601(b).

In this case, the I.G. alleges the presence of an
aggravating factor and concedes the presence of a
mitigating factor. The aggravating factor which the I.G.
alleges to be present is stated at 42 C.F.R. §
1001.601(b) (2) (i):

The acts that resulted in the exclusion,
suspension or other sanction under the Federal
or State health care program had, or could have
had, a significant adverse impact on Federal or
State health care programs or the beneficiaries
of those programs or other individuals; ....

The mitigating factor which the I.G. concedes to be
present is stated at 42 C.F.R. § 1001.601(b) (3) (i):

The period of exclusion, suspension or other
sanction under the Federal or State health care
program is less than 3 years; ....

There is no question that a mitigating factor exists in
this case. Petitioner was excluded from the New York
Medicaid program for a period of two years.

I do not find that the I.G. proved the presence of the
alleged aggravating factor.‘ The evidence offered by
the I.G. does not prove that Petitioner’s actions caused,
or even could have caused, a significant adverse
financial impact on the New York Medicaid program.

According to the I.G., the evidence in this case proves
that, by ordering unnecessary tests, Petitioner engaged
in conduct that had a significant adverse financial
impact on the New York Medicaid program. I.G.'s brief at
8. In effect, the I.G. argues that I should infer that,

4 I imposed on the I.G. the burden of proving the
existence of any alleged aggravating factors. See 42
C.F.R. § 1005.15(b).
7

by ordering unnecessary tests, Petitioner caused the New
York Medicaid program to make unnecessary reimbursement
payments for those tests. The I.G. argues further that
it need not prove the amount of payments made by the New
York Medicaid program for the unnecessary tests that
Petitioner ordered. The I.G. asserts that it is
axiomatic that payment by the New York Medicaid program
for any claim which is not properly reimbursable results
in significant financial damage to that program. The
I.G. cites Anthony Accuputo. Jr., DAB CR249 (1992), as
support for this assertion.

I would find that the I.G. proved the existence of an
aggravating factor if the I.G. had proved that
Petitioner’s ordering of unnecessary laboratory tests
resulted in or could have resulted in substantial
payments by the New York Medicaid program for items or
services for which reimbursement should not have been
made. The Accuputo decision notwithstanding, I do not
agree with the I.G.*s argument that proof of payment of
any amount of reimbursement by a Medicaid program for an
item or service for which reimbursement should not have
been made is proof of a “significant” adverse financial
impact on the program. To accept that argument would
mean that the word “significant” would be interpreted to
mean “any.” Such an interpretation does not comport with
the plain meaning of the word “significant.”

It is not necessary, however, for me to decide here what
would constitute a significant adverse financial impact
on the New York Medicaid program, within the meaning of
42 C.F.R. § 1001.601(b) (2) (I). Here, there is no
evidence that Petitioner’s ordering of unnecessary
laboratory tests either resulted in or even could have
resulted in any reimbursement payments -- much less,
significant reimbursement payments -- by the New York
Medicaid program.

There is no proof that Petitioner’s ordering of
unnecessary laboratory tests resulted in the payment by
the New York Medicaid program of any reimbursement for
those tests. The record of this case is simply devoid of
any evidence which proves the dollar amount of the claims
made for the unnecessary tests that Petitioner ordered,
or the amount of reimbursement, if any, paid by the New
York Medicaid program for such claims. No finding was
made by the Department of Social Services that the New
York Medicaid program paid any reimbursement for the
tests. The I.G. offered no evidence, separate from the
Department of Social Services’ findings, which would
establish that the New York Medicaid program paid
reimbursement for any of the tests.
8

There is no proof that Petitioner’s ordering of
unnecessary laboratory tests could have had an adverse
financial impact on the New York Medicaid program. Not
only did the I.G. not prove that the program paid
reimbursement for the tests, but the I.G. did not prove
that the New York Medicaid program might have made
significant reimbursement payments on any of the claims
made for those tests.

In order to prove the possibility of significant adverse
financial impact on the New York Medicaid program
resulting from reimbursement claims for unnecessary
tests, the I.G. would have to prove that the tests
ordered by Petitioner were for items or services that
were covered by the New York Medicaid program, and for
which the program would have paid reimbursement if
reimbursement claims were made. The I.G. did not offer
any evidence that the types of tests ordered by
Petitioner were covered services for which the New York
Medicaid program might have paid reimbursement.
Accordingly, the I.G. did not meet its burden of proof
because it failed to offer any evidence from which I
could conclude that Petitioner's ordering of unnecessary
laboratory tests either did have or could have had an
adverse financial impact, within the meaning of 42 C.F.R.
§ 1001.501(b) (2) (i).

D. Whether a two-year exclusion is reasonable
(Finding 6)

The existence of aggravating or mitigating factors ina
case does not mean that an exclusion of any particular
length is necessarily reasonable or unreasonable. The
regulation which governs exclusions imposed pursuant to
section 1128(b)(5) does not prescribe any formula for
determining what is reasonable, aside from establishing a
benchmark exclusion of three years where no aggravating
or mitigating factors are present. 42 C.F.R. §
1001.601(b) (1) - (3). In order to decide whether an
exclusion of more or less than three years is reasonable,
I must look at the evidence which relates to any
aggravating or mitigating factors, and decide what that
evidence shows about an excluded individual's
trustworthiness to provide care.

The I.G. seems to argue that I am without authority to
modify an exclusion that I find to be unreasonable.
According to the I.G., the length of an exclusion has
been left to the I.G.’s discretion. I.G.’s brief at 3.
And, according to the I.G., an administrative law judge
has no authority to review the I.G.'’s exercise of
discretion in imposing an exclusion. d.; See 42 C.F.R.
§ 1005.4(c) (5).
9

Although the I.G.’s argument is not entirely clear, the
I.G. appears to be asserting that her choice of the
length of an exclusion is immune from review because such
a determination is an act of discretion. If that is what
the I.G. is arguing, I find such argument to be without
merit.

The regulation relied on by the I.G. states that an
administrative law judge may not:

Review the exercise of discretion by the OIG to
exclude an individual or entity under section
1128(b) of the Act, or determine the scope or
effect of the exclusion, ....

42 C.F.R. § 1005.4(c) (5).

I do not read this regulation as precluding my review of
the issue of whether the length of an exclusion is
reasonable. The regulation plainly exempts from review
the I.G.’s discretion to impose, or not to impose, an
exclusion in a case involving section 1128(b) of the Act.
The regulation also exempts from review the I.G.’s
determination as to what would constitute a violation of
the terms of an exclusion. But the regulation says
nothing that would suggest that it exempts from review
the I.G.’s determination of the length of an exclusion.

Furthermore, the I.G.’s apparent interpretation of 42
C.F.R. § 1005.4(c)(5) would render meaningless 42 C.F.R.
§ 1005.20(b). This regulation states in relevant part,
that, in deciding a case, including a case brought
pursuant to section 1128 of the Act, the administrative
law judge may:

affirm, increase or reduce the penalties,
assessment or exclusion proposed or imposed by
the IG, or reverse the imposition of the
exclusion.

Although I have authority to review the length of the
exclusion imposed by the I.G., I do not have the
authority to simply substitute my judgment for that which
has been exercised by the I.G. The test that I apply in
reviewing the length of an exclusion is that of
reasonableness. I must sustain an exclusion if it
comports reasonably with the Act’s purpose of protecting
federally funded health care programs and program
beneficiaries and recipients from providers who are not
trustworthy. However, if the exclusion does not comport
reasonably with the Act’s remedial purpose, then I must
modify it so that it does comport with that purpose.
10

The presence of a mitigating factor in this case, not
offset by any aggravating factor, suggests that an
exclusion of less than the three-year benchmark stated in
42 C.F.R. § 1001.601(b) may be reasonable. However, that
does not mean that an exclusion of any particular
duration is reasonable. And, where a mitigating factor
is established, an exclusion is not per se reasonable
because it is for a period of less than the benchmark
period. See 42 C.F.R. § 1001.601(b).

The two-year exclusion which the I.G. imposed against
Petitioner is not reasonable. There is no evidence that
it comports with the Act's remedial purpose.

The only evidence in this case which addresses
Petitioner’s trustworthiness to provide care is the
record created by the Department of Social Services in
the State exclusion proceedings against Petitioner. It
shows that Petitioner ordered unnecessary tests and that,
in two instances, Petitioner’s treatment records failed
to comply with recognized standards of care. However,
the dates of this misconduct are not specified in the
findings of the Department of Social Services, nor are
they specified in the audit report that accompanies those
findings. I.G. Ex. 1. Therefore, upon the record before
me, the I.G. has not included any documentation regarding
whether the episodes upon which the Department of Social
Services premised its findings constitute a protracted
pattern of misconduct by Petitioner, or are relatively
isolated episodes of misconduct.

The Department of Social Services’ findings regarding
Petitioner’s lack of trustworthiness assume a great
importance in light of the paucity of evidence of
Petitioner’s misconduct. The Department of Social
Services found that Petitioner would be eligible to apply
for reinstatement to the New York Medicaid program on
November 14, 1996. That is a finding that Petitioner
will be untrustworthy to provide care at least until
November 14, 1996. It is also a finding that Petitioner
may be able to demonstrate that she is trustworthy on or
after that date.

The effect of the I.G.’s exclusion of Petitioner is that
she will not become eligible to apply to the I.G. for
reinstatement until late February of 1998. That is a
date nearly 15 months later than the date when Petitioner
will be eligible to apply to the State of New York for
reinstatement to the New York Medicaid program. I find
this exclusion to be unreasonable, given that the only
evidence of record relating to Petitioner’s
trustworthiness shows that she may become trustworthy to
provide care as early as November 14, 1996. The I.G. has
11
simply not established any rational or logical basis for
me to conclude that Petitioner must be considered to be
untrustworthy beyond November 14, 1996.

E. Modification of the exclusion (Finding 7)

I modify the exclusion that the I.G. imposed against
Petitioner so that she will be eligible to apply to the
I.G. for reinstatement on the date that the State of New
York reinstates her to participate in the New York
Medicaid program. This date will be no earlier than
November 14, 1996. The modification which I am directing
thus conforms the exclusion to the only credible evidence
of record relevant to when Petitioner will become
trustworthy to provide care. In effect, it makes the
exclusion imposed by the I.G. coterminous with that which
was imposed by the Department of Social Services.

My conclusion that the exclusion ought to be modified to
make it coterminous with that which was imposed by the
Department of Social Services should not be taken to mean
that such a result would be appropriate in every case of
an exclusion imposed pursuant to section 1128(b) (5). The
regulation which implements this section makes it clear
that the Secretary has concluded that a coterminous
federal exclusion is not necessarily appropriate in such
acase. 42 C.F.R. § 1001.601. The fact that the
Department of Social Services imposed an exclusion
against Petitioner which may end as early as November 14,
1996 did not necessarily obligate the I.G. to impose a
coterminous exclusion.

However, in this case, the only evidence of Petitioner’s
trustworthiness is that she may become trustworthy as
early as November 14, 1996. In light of that, the I.G.
should have developed additional evidence of Petitioner’s
lack of trustworthiness to support an exclusion that
would have not made Petitioner eligible to apply to the
I.G. for reinstatement until February 1998.

Also, I wish to make it clear that I am not modifying the
I.G.’s exclusion to end on November 14, 1996, because
Petitioner may not satisfy the State of New York that she
has become trustworthy to provide care as of that date.
November 14, 1996 is merely the date upon which
Petitioner will become eligible to apply to the state of
New York for reinstatement to the New York Medicaid
program. The State of New York appears to have
discretion not to reinstate Petitioner if she does not
prove herself to be trustworthy as of that date. The
I.G. is under no obligation to consider Petitioner’s
application for reinstatement if she has not satisfied
12

the State of New York that she is trustworthy to provide
care.

IV. Conclusion

I conclude that the two-year exclusion imposed by the
I.G. against Petitioner is unreasonable. I modify it so
that Petitioner's exclusion will be in effect until she
is reinstated by the State of New York to participate in
the New York Medicaid program.

/s/

Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Ruth Taylor Institute, DATE: August 21, 1996
Petitioner,

Docket No. C-96-100
Decision No. CR430

-v-

Health Care Financing
Administration.

DECISION

I decide that Petitioner does not have a right toa
hearing concerning HCFA's determinations that Petitioner
failed to comply substantially with Medicare
participation requirements.

I. Background

Petitioner is a skilled nursing facility (SNF) and a
participating provider in Medicare. The conditions for
participation in Medicare by SNFs are set forth in
regulations contained in 42 C.F.R. Part 483. As an SNF,
Petitioner is subject to the survey, certification, and
remedies provisions of 42 C.F.R. Part 488. Petitioner's
right to a hearing concerning an adverse determination by
HCFA, made pursuant to 42 C.F.R. Parts 483 and 488, is
established by 42 C.F.R. Part 498.

On December 9, 1995, Petitioner requested a hearing
concerning determinations that HCFA made on August 23,
1995 and on October 11, 1995, that Petitioner was not
complying substantially with Medicare participation
requirements. The case was assigned to me for a hearing
and a decision. At a prehearing conference which I
conducted by telephone, I raised ‘the issue of whether
Petitioner had a right to a hearing. The parties agreed
that the issue of whether Petitioner had a right to a
hearing could be heard and decided without the taking of
in-person testimony. The parties submitted briefs, reply
2

briefs, and exhibits.! I base my decision in this case
on the exhibits submitted by the parties, the governing
law, and the parties’ arguments.

II. Issues. findings of fact and conclusions of law

The issues in this case are whether Petitioner has a
right to a hearing concerning:

1. HCFA's August 23, 1995 determination; and
2. HCFA's October 11, 1995 determination.

I base my decision on the following findings of fact and
conclusions of law (Findings). I discuss my Findings in
detail, below.

1. On August 23, 1995, HCFA notified Petitioner
that HCFA had determined that Petitioner was not
complying substantially with Medicare participation
requirements.

2. In the August 23, 1995 determination, HCFA told
Petitioner that it must submit a plan of correction
to correct the deficiencies that were identified by
HCFA.

3. The plan of correction that Petitioner was told
to submit is not a directed plan of correction
within the meaning of relevant regulations.

4. On October 11, 1995, HCFA notified Petitioner
that HCFA had determined that, although Petitioner
had corrected some of the deficiencies identified by
HCFA on August 23, 1995, Petitioner continued not to

' Petitioner submitted 13 exhibits with its
initial brief which it designated “Exhibit A” through
“Exhibit M.” Petitioner submitted two additional
exhibits with its reply brief which it designated
“Exhibit N” and “Exhibit 0.” For purposes of uniformity,
I have redesignated these exhibits sequentially, as P.
Ex. 1 (which Petitioner submitted as “Exhibit A”),
through P. Ex. 15 (which Petitioner submitted as “Exhibit
0”). HCFA submitted four exhibits, designated as HCFA
Ex. 1 through HCFA Ex. 4. Neither party objected to my
admitting into evidence the exhibits that were offered by
the other party. I hereby admit into evidence P. Ex. 1 -
15 and HCFA Ex. 1 - 4.
3

be complying substantially with Medicare
participation requirements.

5. In the October 11, 1995 determination, HCFA told
Petitioner that HCFA would impose a remedy
consisting of denial of payment for new admissions.

6. HCFA did not impose the remedy of denial of
payment for new admissions, because, prior to the
date that the remedy was to be implemented, HCFA
determined that Petitioner had attained substantial
compliance with Medicare participation requirements.

7. HCFA did not impose a remedy against Petitioner,
either as a consequence of HCFA's August 23, 1995
determination, or as a consequence of HCFA's October
11, 1995 determination.

8. Petitioner is not entitled to a hearing.

9. HCFA may not give a provider a right to a
hearing where the provider has no right to a hearing
under applicable regulations.

10. HCFA's argument that the case is moot is
irrelevant.

III. Discussion

A. The facts (Findings 1. 2. 4 - 6)

On August 11, 1995, the State of New York Department of
Health (Department of Health) surveyed Petitioner on
behalf of HCFA. P. Ex. 1. On August 23, 1995, HCFA
advised Petitioner that the Department of Health had
found Petitioner not to be complying substantially with
Medicare participation requirements. Id. at 1. HCFA
advised Petitioner further that the Department of Health
had found the deficiencies to be so severe as to
constitute immediate jeopardy to the health and safety of
residents at Petitioner’s facility. Id. HCFA told
Petitioner that it concurred with the findings of the
Department of Health. Jd. at 3.

In the August 23, 1995 notice, HCFA told Petitioner that
Petitioner must submit a plan of correction to the
Department of Health. P. Ex. 1 at 1 - 2. HCFA
identified four specific elements that Petitioner had to
«

address in the corrective action plan. Id. These
consisted of the following:

1. The corrective action that Petitioner would
implement for those residents found to have
been affected by Petitioner's deficiencies;

2. How Petitioner would identify other
residents having the potential to be affected
by Petitioner’s deficiencies, and the
corrective action that Petitioner would take to
address these potential consequences;

3. The corrective actions that Petitioner
would implement to assure that deficiencies did
not recur; and

4. How Petitioner would monitor its corrective
action to assure that deficiencies did not
recur.

Id. HCFA told Petitioner that if, by September 3, 1995,
Petitioner did not resolve the deficiencies causing
immediate jeopardy to residents, then HCFA would
terminate Petitioner’s participation in Medicare. Id. at
3.

In the August 23, 1995 notice, HCFA advised Petitioner
that, if it disagreed with HCFA's determination,
Petitioner could request a hearing before an
administrative law judge. Id. at 2. Petitioner was told
that it must request the hearing within 60 days from its
receipt of the August 23, 1995 notice letter. Id.
Petitioner was advised also that it could question the
findings of deficiencies through an informal dispute
resolution process. Id.

Petitioner submitted a plan of correction which addressed
the deficiencies that were identified in the August 11,
1995 notice. HCFA Ex. 1. Petitioner opted also to
engage in the informal dispute resolution process in
order to challenge the findings of deficiencies. See P.
Ex. 3.

On August 30, 1995, the Department of Health conducted a
resurvey of Petitioner. P. Ex. 4. On October 11, 1995,
HCFA advised Petitioner that the Department of Health had
found that Petitioner had corrected its deficiencies to
the extent that there no longer existed deficiencies that
posed immediate jeopardy to the health and safety of
residents. Id. at 1. HCFA advised Petitioner
additionally that the Department of Health had found that
5

Petitioner continued not to be complying substantially
with Medicare participation requirements. Id. HCFA
advised Petitioner that it concurred with the Department
of Health’s findings. Id. at 2.

In the October 11, 1995 notice, HCFA advised Petitioner
that it would impose a remedy against Petitioner,
consisting of denial of payment for new admissions. Id.
The implementation date for this remedy was to be
November 9, 1995. Id.

Additionally, HCFA advised Petitioner that, inasmuch as
Petitioner's deficiencies included providing substandard
quality of care to residents, it would be necessary to
send a notice of the finding of substandard care to each
attending physician of each resident to whom this finding
applied. Id. at 1. HCFA told Petitioner also that, on
October 25, 1995, HCFA would publish in a newspaper
notice of its determination to deny Petitioner payment
for new admissions. Id. at 2.

In the October 11, 1995 notice, HCFA advised Petitioner
that, if Petitioner disagreed with the determination
stated in the notice, Petitioner had a right to request a
hearing before an administrative law judge. Id. at 2 -
3. Ina letter to Petitioner dated October 20, 1995,
HCFA restated that Petitioner could request a hearing
from the determination announced in the October 11, 1995
notice. P. Ex. 5. This letter was in response to a
letter from Petitioner's attorney, in which Petitioner's
attorney recited that HCFA had agreed that the October
11, 1995 determination superseded the August 23, 1995
determination. P. Ex. 15. In the October 20, 1995
letter, HCFA told Petitioner additionally that the
October 11, 1995 notice superseded the information that
HCFA had provided to Petitioner in its August 23, 1995
notice. P. Ex. 5; see P. Ex. 1.

HCFA did not implement the remedy of denial of payment
for new admissions. On October 24, 1995, the Department
of Health conducted a resurvey of Petitioner. HCFA Ex.
4; P. Ex. 12. On November 7, 1995, the Department of
Health advised Petitioner that it had determined that
Petitioner was in substantial compliance with Medicare
participation requirements. HCFA Ex. 4 at 1. The
Department of Health advised Petitioner that it would
notify HCFA that Petitioner had achieved substantial
compliance with participation requirements. Id. The
Department of Health told Petitioner, additionally, that
it would withdraw any recommendations that it had made
previously to HCFA that HCFA impose a remedy against
Petitioner. Id.
6

The record contains no communication from HCFA to
Petitioner in which HCFA states that it would not be
imposing the remedy of denial of payment for new
admissions. It is evident, however, that HCFA did not
impose this remedy against Petitioner.

There is no evidence of record to establish whether, on
October 25, 1995, or on any other date, HCFA published in
a newspaper a notice of its determination that Petitioner
was not substantially complying with Medicare
participation requirements. Nor is there evidence of
record to establish whether HCFA or the Department of
Health ever sent notices to individual physicians that
residents who were the patients of these physicians were
receiving substandard care from Petitioner. For purposes
of this decision, however, I am assuming that HCFA may
have taken both of these actions.

Petitioner avers that, as an additional consequence of
HCFA’s determination that Petitioner was not complying
substantially with Medicare participation requirements,
its nurse aide training program will be suspended.
Petitioner's Brief (P. Br.) at (unnumbered page) 9.

Also, according to Petitioner, a record of HCFA's finding
of noncompliance will be retained for up to four years.

id.

The record does not contain evidence which proves that
these averred additional consequences will occur. On the
other hand, HCFA has not denied that these asserted
additional consequences will occur. For purposes of this
decision, therefore, I am concluding that the
consequences of HCFA's finding of deficiencies averred by
Petitioner, consisting of maintenance by HCFA of a record
of its findings of Petitioner’s failure to comply with
participation requirements, and suspension of
Petitioner’s nurse aide training program, may occur.

B. Whether Petitioner has a right to a hearing
(Findings 3. 7. 8)

At issue in this case are two determinations by HCFA that
Petitioner was not complying substantially with Medicare
participation requirements. HCFA communicated its first
determination to Petitioner on August 23, 1995. P. Ex.
1. HCFA communicated its second ‘determination to
Petitioner on October 11, 1995. P. Ex. 4. In the notice
of each determination, HCFA announced that it intended to
impose a remedy against Petitioner. Each of the notices
advised Petitioner that it had a right to a hearing
concerning the determination announced in the notice.
7

HCFA now argues that Petitioner is not entitled toa
hearing concerning either determination. According to
HCFA, no remedy was ever imposed against Petitioner.
HCFA asserts that Petitioner has no right to a hearing
where HCFA determines Petitioner to be deficient in
complying with Medicare participation requirements, but
where HCFA does not impose a remedy against Petitioner.
Furthermore, according to HCFA, the issues which might be
heard and decided in this case are moot, inasmuch as
Petitioner is now complying substantially with Medicare
participation requirements and no remedy was imposed
against Petitioner.

Petitioner argues that each determination by HCFA
included the imposition of a remedy. Petitioner argues
additionally that the issues raised by these
determinations are not moot.

This case raises issues that coincide with those I heard
and decided in Fort Tryon Nursing Home, DAB CR425 (1996).
In the Fort Tryon case, the provider, an SNF, made a
hearing request concerning a determination by HCFA that
the provider was not complying substantially with
Medicare participation requirements. In the notice of
its determination, HCFA told the provider that HCFA was
going to impose remedies against it, consisting of denial
of payment for new admissions and termination of that
provider's participation in Medicare. Prior to the dates
that the remedies were to go into effect, the provider
satisfied HCFA that it had attained substantial
compliance with Medicare participation requirements.
Based on that, HCFA imposed no remedies against the
provider.

In Fort Tryon, I held that an SNF's hearing rights
concerning a determination made by HCFA are defined by
two regulations. These regulations are 42 C.F.R. §
488.408(g)(1), and 42 C.F.R. § 498.3(b) (12). The
language of the two regulations is similar, but not
identical.? The Fort Tryon decision reconciles the
language differences between the two regulations and
decides what the regulations mean.

2? Pursuant to 42 C.F.R. § 488.408, a provider may
request a hearing concerning “a certification of
noncompliance leading to an enforcement remedy.”
Pursuant to 42 C.F.R. § 498.3(b) (12), an SNF may request
a hearing concerning “the finding of noncompliance
leading to the imposition of enforcement actions
specified in § 488.406 of this chapter, ....
8

I held that the two regulations have the same meaning.
Fort Tryon, DAB CR425, at 5. Under either 42 C.F.R. §
488.408(g) (1) or § 498.3(b) (12), a provider may request a
hearing concerning a determination by HCFA that the
provider is not complying substantially with Medicare
participation requirements, only where HCFA actually
imposes a remedy against that provider. Id. The word
'remedy' is defined in 42 C.F.R. § 488.406. An action
taken by HCFA against a provider is a 'remedy' if that
action constitutes one of the remedies enumerated under
42 C.F.R. § 488.406. The provider does not have hearing
rights from an action by HCFA unless the action is
defined to be a remedy under 42 C.F.R. § 488.406.
Furthermore, a provider does not have a right to a
hearing from a threat by HCFA to impose a remedy as
defined in 42 C.F.R. § 488.406, if the remedy is not
implemented by HCFA. Id. at 5 - 6.

In Fort Tryon, there was no dispute that the remedies
proposed by HCFA, but never imposed, denial of payment
for new admissions and termination, would, if
implemented, be remedies within the meaning of 42 C.F.R.
§ 488.406. My decision in Fort Tryon that the provider
had no right to a hearing was based on the fact that the
proposed remedies were not imposed.

Petitioner does not dispute that the remedy that HCFA
proposed to implement in its October 11, 1995 notice,
denial of payment for new admissions, was not
implemented. Nor does Petitioner appear to be arguing
that, in the absence of a remedy, it would have a right
to a hearing. To that extent, then, Petitioner seems to
agree with the holding in Fort Tryon. Instead,
Petitioner argues that HCFA imposed remedies against
Petitioner, thereby giving Petitioner a right to a
hearing concerning HCFA's determinations.

According to Petitioner, HCFA imposed the remedy of a
directed plan of correction with its August 23, 1995
determination. And, according to Petitioner, the actions
which may have been taken by HCFA pursuant to the October
11, 1995 determination, consisting of publication of
HCFA's findings of deficiencies, notification of
individual providers by HCFA of findings of deficiencies,
maintenance of a record of HCFA's findings that
Petitioner was deficient, and suspension of Petitioner's
nurse aide training program, are ‘remedies.

I do not find that HCFA imposed any remedies, as
described in 42 C.F.R. § 488.406, against Petitioner,
either as a consequence of the August 23, 1995
determination, or as a consequence of the October 11,
9

1995 determination. Therefore, Petitioner has no right
to a hearing.

1. The Auqust 23. 1995 notice and
determination

I do not find that HCFA imposed any remedies against
Petitioner as a consequence of its August 23, 1995
determination. In the notice of that determination, HCFA
threatened to impose the remedy of termination of
Petitioner's participation in Medicare. P. Ex. 1 at 3.
However, HCFA never imposed that remedy. In that same
notice, HCFA told Petitioner that Petitioner must develop
and submit a plan of correction which addressed specific
concerns identified by HCFA. Id. at 1- 2. Petitioner
characterizes the plan that it developed in response to
the notice as being a directed plan of correction, which
is one of the remedies identified in 42 C.F.R. § 488.406.
I do not find that the plan of correction was a directed
plan of correction as is described in relevant
regulations.

One of the remedies described in 42 C.F.R. § 488.406 is a
directed plan of correction. 42 C.F.R. § 488.406(a) (7).
The phrase ‘directed plan of correction' is not defined
in 42 C.F.R. § 488.406. It is described by another
regulation, 42 C.F.R. § 488.424. Under that regulation:

HCFA, the State survey agency, or the temporary
manager (with HCFA or State approval) may
develop a plan of correction and HCFA, the
State, or the temporary manager require a
facility to take action within specified time-
frames.

It is apparent from 42 C.F.R. § 488.424 that a directed
plan of correction is a plan of correction in which the
specifics are first developed by HCFA or by an agent of
HCFA. HCFA then directs the facility to implement the
plan. Development of the specifics of the plan by HCFA
or its agents distinguishes a directed plan of correction
from a plan of correction that is developed by a facility
and is approved by HCFA. A plan of correction is not a
directed plan of correction within the meaning of the
regulations -- even assuming that HCFA tells a facility
that the facility must develop an acceptable plan of

3 under circumstances defined by the regulations,

HCFA or a State survey agency may appoint a temporary
manager of a facility. 42 C.F.R. §§ 488.406(a)(1),
488.415. Those circumstances do not apply here.
10

correction as a precondition to avoiding the imposition
of a remedy such as termination -- where HCFA or its
agents do not develop the specifics of the plan.

Indeed, the regulations distinguish between a directed
plan of correction that is developed by HCFA or its
agents, which is a remedy, and a plan of correction that
may be developed by a provider to address substantial
deficiencies that are found by HCFA. A provider which is
found to be substantially deficient must submit for
approval by HCFA a plan of correction that the provider
develops, regardless which remedy is implemented by HCFA.
42 C.F.R. § 488.402(d)(1). Where a provider submits such
a plan, the plan of correction is not a directed plan of
correction, it is an action by the provider that augments
any remedy that might be imposed by HCFA.

In the August 23, 1995 notice, HCFA told Petitioner to
submit a plan of correction to the Department of Health
within 10 days of Petitioner's receipt of the form which
specified the deficiencies identified by the Department
of Health. P. Ex. 1 at 1. Petitioner was told by HCFA
that the plan must describe specified remedial actions
which would be taken by Petitioner to address the
deficiencies identified by the Department of Health. Id.
at 1-2.

The plan which Petitioner submitted in response to this
instruction is not a directed plan of correction. HCFA
Ex. 1, P. Ex. 14. Although HCFA told Petitioner that it
had to submit a plan, and told Petitioner also what items
must be addressed by the plan, HCFA did not tell
Petitioner specifically what the plan must say. Neither
HCFA nor the Department of Health developed the specifics
of the plan of correction. Petitioner developed the plan
that it submitted in response to HCFA's requirement,
including the specific elements of that plan. HCFA Ex.
1; P. Ex. 14.

During the course of the parties' briefing of this case,
I expressed a concern to the parties that, assuming the
plan that Petitioner developed in response to the August
23, 1995 notice from HCFA was a directed plan of
correction and, thus, a remedy within the meaning of 42
C.F.R. § 488.406, then Petitioner might nonetheless not
have a right to a hearing concerriing the determination
contained in that notice. That is because Petitioner did
not request a hearing until December 9, 1995, more than
60 days after it received the August 23, 1995 notice. In
its reply brief, Petitioner argued that its request was
timely or that, alternatively, good cause existed for
Petitioner not making its request timely.
11

I do not decide the issues of whether Petitioner made a
timely request for a hearing from the August 23, 1995
notice, or whether it had good cause for not making a
request timely. It is unnecessary for me to do so,
because Petitioner had no right to a hearing concerning
the determination in the August 23, 1995 notice.

2. The October 11, 1995 notice and
determination

In its October 11, 1995 notice to Petitioner, HCFA
threatened that it would impose a denial of payment for
new admissions by Petitioner unless Petitioner complied
substantially with Medicare participation requirements.
P. Ex. 4 at 2. However, HCFA never imposed that remedy.
I do not find that HCFA imposed any other remedy as a
consequence of the October 11, 1995 notice.

The other actions which HCFA may take against Petitioner
-- publishing a notice of Petitioner's deficiencies,
notifying individual physicians of Petitioner's
deficiencies as they affected patients of those
physicians, maintenance of a record of HCFA's findings
that Petitioner was deficient, and suspension of
Petitioner's nurse aide training program -- are not
remedies described in 42 C.F.R. § 488.406. The fact that
HCFA may take these actions against Petitioner does not
give Petitioner any right to a hearing. Furthermore, 42
C.F.R. § 498.3(d)(11) specifies that the loss of nurse
aide training is not an initial determination by HCFA.
Thus, as to the loss of nurse aide training, the
regulation is explicit that it is not subject to
administrative review.

Petitioner argues also that, if at some date in the
future HCFA finds that Petitioner is again deficient, it
might impose a more stringent remedy against Petitioner
than it would otherwise impose. According to Petitioner,
HCFA could base its determination to impose a remedy
against Petitioner in the future not just on a future
finding of a deficiency, but on the findings which are at
issue here, as well. Because of this potential,
Petitioner argues that these deficiencies will lead to
the imposition of enforcement actions within the meaning
of the regulations. Therefore, according to Petitioner,
it would be a denial of due process for Petitioner not to
be given a hearing concerning the deficiencies that are
at issue here.

The provider in the Fort Tryon case made the same
assertion in that case. I concluded that, if HCFA were
ever to base a remedy on the deficiencies that were at
12

issue in Fort Trvon, then the provider would be entitled
to a hearing as to those deficiencies. Fort Trvon, DAB
CR425, at 7 - 8. I reach the same conclusion here.‘

c. Whether HCFA mav_qive a provider a riqht to a
hearing where the provider has no riqht to a hearing
under applicable regulations (Findina 9)

In both the August 23, 1995 notice and the October 11,
1995 notice, HCFA told Petitioner that it had a right to
a hearing concerning the determination that was announced
in the notice. In doing so, HCFA raises the question
whether it can confer on a provider a right to a hearing
where no right exists under applicable regulations. I
conclude that a provider's right to a hearing in any case
is defined by the applicable regulations. HCFA may not
confer on a provider a right to a hearing where that
right does not exist under the regulations.

HCFA did not intend to give Petitioner a right toa
hearing beyond whatever rights Petitioner had under the
regulations. It is evident from the context of the
hearing rights language in the August 23, 1995 and
October 11, 1995 notices, that the hearing right that
HCFA was advising Petitioner of in each notice was

4 Petitioner argues that it will not be entitled

to contest the findings of deficiencies from the 1995
surveys if it is again found deficient in future years.
P. Br. at 8. Petitioner cites the State Operations
Manual (SOM), section 7320, which provides:

A hearing about the current finding of
substandard quality of care will not examine
the previous 2 survey cycles' findings of
substandard quality of care.

This provision does not alter my conclusion that
Petitioner would have a right to a hearing if, in the
future, HCFA imposes remedies based, in part, on
Petitioner's 1995 deficiencies. First of all, it is not
clear that HCFA would interpret the SOM provision to
deprive Petitioner of a right to a hearing under those
circumstances. However, if HCFA were to argue that
Petitioner would not have a right to a hearing, based on
this provision, I would reject that argument. The SOM is
an interpretive guideline issued by HCFA. It is nota
regulation, and it does not have the force and effect of
law. Therefore, if the provision were applied in
contravention of 42 C.F.R. §§ 488.408 and 498.3(b)(12), I
would give no force or effect to the SOM provision.
13

predicated on the imposition by HCFA of the remedies that
were described in each notice. HCFA never imposed a
remedy.

However, even if HCFA had intended the notices to serve
as unconditional announcements to Petitioner of a right
to a hearing, the notices would not confer hearing rights
where none existed under the regulations. The
regulations are a statement by the Secretary of the
Department of Health and Human Services of the universe
of circumstances under which a provider has a right to a
hearing. HCFA has no authority to create hearing rights
beyond that which is explicitly stated in the
regulations.

In Fort Tryon, I observed that I and other administrative
law judges were receiving many requests for hearings in
cases involving HCFA that were either premature, or
where, in fact, no hearing rights existed. DAB CR425, at
9. The reason for that is the timing of the proposed
remedies announced in HCFA's notices to providers. Under
the regulations, a provider must request a hearing within
60 days from receipt of notice of an adverse
determination by HCFA. 42 C.F.R. § 498.40. However,
frequently, HCFA's notice to a provider announces HCFA's
intent to impose a remedy more than 60 days from the date
of the notice. In that situation, the provider has no
choice but to request a hearing before the date that the
remedy may be imposed.

D. Mootness (Finding_10)

HCFA contends, as it has in other cases, that
Petitioner's request for a hearing is moot, inasmuch as
HCFA imposed no remedy against Petitioner. I conclude
here, as I did in Fort Trvon, that it is unnecessary for
me to decide this issue, inasmuch as Petitioner has no
right to a hearing. Fort Trvon, DAB CR425, at 9.

IV. Conclusion

I conclude that Petitioner does not have a right to a
hearing. I dismiss Petitioner's request for a hearing.

/s/

Steven T. Kessel
Administrative Law Judge