Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Seth Yoser, M.D.
(O.L. No. 4-10-403 16-9),

Petitioner,
v.
The Inspector General.
Docket No. C-11-240
Decision No. CR2400

Date: July 15, 2011

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Disposition affirming the I.G.’s determination to exclude Petitioner Seth Yoser, M.D.,
from participation in Medicare, Medicaid, and all other federal health care programs for a
period of 15 years. The I.G.’s Motion and determination to exclude Petitioner are based
on section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(1). The
undisputed facts of this case demonstrate that the minimum five-year exclusion must be
imposed, and that the I.G.’s determination to enhance that period to 15 years, based on
the aggravating factors found at 42 C.F.R. § 1001.102(b)(1), (2), (5), and (9), is
reasonable. Accordingly, I grant the 1.G.’s Motion for Summary Disposition.

I. Procedural Background

Between June 1994 and March 2010, Petitioner Seth Yoder, M.D., was licensed to
practice medicine by the State of Tennessee. Between 2005 and 2008 he treated diseases
of the eye as part of a group practice known as Eye Specialty Group (ESG), formerly
known as Vitreoretinal Foundation (VRF).
In May 2009 Petitioner was charged with a series of federal crimes. An Information filed
in the United States District Court for the Western District of Tennessee, charged
Petitioner with 10 counts of Mail Fraud, in violation of 18 U.S.C. § 1341, two counts of
Wire Fraud, in violation of 18 U.S.C. § 1343, and 23 counts of Unlicensed Wholesale
Distribution of Prescription Drugs, in violation of 21 U.S.C. §§ 331(t), 333(b)(1)(D), and
353(e)(2)(A).

Petitioner appeared in the United States District Court with present counsel on July 15,
2009 and pleaded guilty to all 35 counts of the Information. He was sentenced on
February 18, 2010 to a 42-month term of imprisonment to be followed by two years’
supervised probation. In addition, he was ordered to pay restitution in the sum of
$400,000, a criminal fine of $10,000, and a special assessment of $3500.

The Tennessee Board of Medical Examiners (TBME) revoked Petitioner’s license to
practice medicine in its Consent Order of March 16, 2010. Petitioner and present counsel
signed the Consent Order. The TBME’s action was based explicitly on Petitioner’s
conviction, and the Consent Order included language finding that Petitioner’s crimes
were directly related to his practice of medicine, and were in violation of the Tennessee
Medical Practice Act, TENN. CODE ANN. § 63-6-101.

On November 30, 2010 the I.G. notified Petitioner that, based on his conviction, he was
to be excluded pursuant to the terms of section 1128(a)(1) of the Act for a period of 15
years. The I.G. notified Petitioner that the mandatory minimum five-year period of
exclusion was enhanced based on the presence of four aggravating factors. Acting
through present counsel, Petitioner sought review of the I.G.’s determination on January
27, 2011.

Pursuant to 42 C.F.R. § 1005.6, I attempted to convene a prehearing conference by
telephone on February 28, 2011. That attempt was unsuccessful. In order to avoid
further delay in establishing in a speedy, orderly, and fair manner procedures best suited
for addressing the issues presented by this case, I entered my Order of March 1, 2011.

In that Order I noted that it appeared likely this case could be decided in the context of a
motion for summary disposition filed by the I.G., and based on the parties’ written
submissions. Paragraph 9 of that Order set out the standards and procedures by which
summary disposition practice would proceed, and paragraph 3 assured the parties of a full
evidentiary hearing if circumstances warranted. By that Order I also established a
schedule for the submission of documents and briefs.

At paragraph 5(d) of that Order Petitioner was given the option of either filing a

Response Brief — the final brief in the exchange — or of giving notice of his intent not
to file such a brief. Petitioner submitted neither: he filed no Response Brief nor did he
give notice of his intent not to file. In those circumstances, paragraph 8 of the Order of
March 1, 2011, provided for the closure of the record in this case for purposes of 42
C.F.R. § 1005.20(c) on June 8, 2011.

The evidentiary record on which I decide the issues before me contains 14 exhibits. The
1.G. proffered 10 exhibits marked I.G. Exhibits 1-10 (1.G. Exs. 1-10). Petitioner
proffered four exhibits with his April 28, 2011 Answer Brief. They were originally
marked Petitioner’s Exhibits A-D, and were returned to be re-marked in compliance with
paragraph 10 of the March 1, 2011 Order and CRDP § 9. They were resubmitted marked
Petitioner’s Exhibits 7-10 (P. Exs. 7-10), still not compliant with CRDP § 9. In the
interests of avoiding further delay, I have not required Petitioner to re-mark them again.
In the absence of objection, I have admitted all proffered exhibits as designated by the
offering party.

II. Issues

The legal issues before me are limited to those set out at 42 C.F.R. § 1001.2007(a)(1). In
the context of this record, they are:

a. Whether the LG. has a basis for excluding Petitioner from participating
in Medicare, Medicaid, and all other federal health care programs pursuant
to section 1128(a)(1) of the Act; and

b. Whether the length of the proposed period of exclusion is unreasonable.

These issues must be resolved in favor of the I.G.’s position. Section 1128(a)(1) of the
Act mandates Petitioner’s exclusion, for his predicate conviction is not in dispute. A
five-year period of exclusion is the minimum period established by section 1128(c)(3)(B)
of the Act, 42 U.S.C. § 1320a-7(c)(3)(B). The enhancement of that period to 15 years is
not unreasonable because the four aggravating factors relied on by the I.G. found in 42
C.F.R. § 1001.102(b)(1), (2), (5) and (9) are fully established in the record, and because
Petitioner has not demonstrated any mitigating factor that would reduce the proposed
period of exclusion.

III. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the exclusion from
participation in Medicare, Medicaid, and all other federal health care programs of any
individual or entity convicted of a criminal offense related to the delivery of an item or
service under title XVIII of the Act (the Medicare program) or any state health care
program. The terms of section 1128(a)(1) are restated in similar language at 42 C.F.R.
§ 1001.101(a).

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual . . . by a Federal . . . court,” Act

§ 1128(4)(1); “when there has been a finding of guilt against the individual ... by a
Federal . . . court,” Act § 1128(i)(2); or “when a plea of guilty . . . by the individual . . .
has been accepted by a Federal . . . court,” Act § 1128(i)(3). These definitions are
repeated at 42 C.F.R. § 1001.2.

An exclusion based on section 1128(a)(1) is mandatory and the I.G. must impose it for a
minimum period of five years. Act § 1128(c)(3)(B), 42 U.S.C. § 1320a-7(c)(3)(B). The
regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory provision. The
mandatory minimum period of exclusion may be enhanced in some limited circumstances
and on the I.G.’s proof of certain narrowly-defined aggravating factors listed at 42 C.F.R.
§ 1001.102(b). In this case, the LG. relies on the four aggravating factors set out at 42
C.F.R. § 1001.102(b)(1), (2), (5) and (9) in seeking to enhance the period of Petitioner’s
exclusion to 15 years.

In cases such as this, where the I.G. proposes to enhance the period of exclusion by
relying on any aggravating factors, a petitioner may attempt to limit or nullify the
proposed enhancement through proof of certain mitigating factors, carefully defined at 42
C.F.R. § 1001.102(c)(1)-(3). In this case, Petitioner claims the benefit of the mitigating
factor set out at 42 C.F.R. § 1001.102(c)(3)(ii). Petitioner bears the burden of proof
regarding mitigating factors by a preponderance of the evidence. 42 C.F.R. § 1005.15(b)
and (c).

IV. Findings and Conclusions
I find and conclude as follows:

1. On his accepted plea of guilty on July 15, 2009, in the United States District Court for
the Western District of Tennessee, Petitioner Seth Yoser, M.D., was found guilty of 10
counts of Mail Fraud, in violation of 18 U.S.C. § 1341, two counts of Wire Fraud, in
violation of 18 U.S.C. § 1343, and 23 counts of Unlicensed Wholesale Distribution of
Prescription Drugs, in violation of 21 U.S.C. §§ 331(t), 333(b)(1)(D), and 353(e)(2)(A).
1G. Exs. 2, 3, 4, 5.

2. Petitioner was sentenced on his guilty plea in the United States District Court on
February 18, 2010. As part of his sentence, Petitioner was ordered to serve a 42-month
term of imprisonment, and was ordered to pay restitution in the sum of $400,000. I.G.
Exs. 4, 5, 7; P. Ex. 9.

3. The judgment of conviction, finding of guilt, and accepted plea of guilty described
above in Findings | and 2 constitute a “conviction” within the meaning of sections
1128(a)(1) and 1128(i)(1), (2), and (3) of the Act, and 42 C.F.R. § 1001.2.
4. A nexus and a common-sense connection exist between the criminal offenses to which
Petitioner pleaded guilty and of which he was convicted, as noted above in Findings 1, 2
and 3, and the delivery of an item or service under the Medicare program. I.G. Exs. 2, 3,
5, 8; P. Ex. 9; Berton Siegel, D.O., DAB No. 1467 (1994).

5. By reason of Petitioner’s conviction, a basis exists for the 1.G.’s exercise of authority,
pursuant to section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), to exclude
Petitioner from participation in Medicare, Medicaid, and all other federal health care
programs.

6. As a consequence of the same set of circumstances that served as the basis for the
conviction and exclusion described above, Petitioner has been the subject of an adverse
action by the Tennessee Board of Medical Examiners, to-wit: the revocation of his
license to practice medicine in the State of Tennessee effective March 16, 2010. I.G. Ex.
6.

7. Because the acts resulting in Petitioner’s conviction caused a financial loss to a
government program of more than $5000, the aggravating factor set out at 42 C.F.R.
§ 1001.102(b)(1) is present.

8. Because the acts that resulted in Petitioner’s conviction were committed over a period
of one year or more, the aggravating factor set out at 42 C.F.R. § 1001.102(b)(2) is
present.

9. Because Petitioner was sentenced to a term of imprisonment, the aggravating factor
set out at 42 C.F.R. § 1001.102(b)(5) is present.

0. Because Petitioner has been the subject of an adverse action by the Tennessee Board
of Medical Examiners based on the same set of circumstances that served as the basis for
the conviction and exclusion described above, the aggravating factor set out at 42 C.F.R.
§ 1001.102(b)(9) is present.

1. None of the mitigating factors set out at 42 C.F.R. § 1001.102(c)(1)-(3) are present.
1G. Ex. 10; P. Ex. 10.

2. The I.G.’s exclusion of Petitioner for a period of 15 years is supported by fact and
law, is within a reasonable range, and is therefore not unreasonable. Findings 1-11
above.

3. There are no disputed issues of material fact and summary disposition is
therefore appropriate in this matter. Michael J. Rosen, M.D., DAB No. 2096 (2007);
Thelma Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).
V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under Title XVIII of the Act (Medicare) or any state health care program.
Tamara Brown, DAB No. 2195 (2008); Thelma Walley, DAB No. 1367; Boris Lipovsky,
M.D., DAB No. 1363 (1992); Lyle Kai, R.Ph., DAB CR1262 (2004), rev'd on other
grounds, DAB No. 1979 (2005), aff’d sub nom. Kai v. Leavitt, Civ. No. 05-00514 (D.
Haw. July 17, 2006); see also Russell Mark Posner, DAB No. 2033, at 5-6 (2006).
Those two essential elements are fully demonstrated in the evidence before me, and their
demonstration is conceded by Petitioner.

Although the two elements essential to the basic exclusion are not the points on which
Petitioner rests his opposition to the I.G.’s actions, it may be helpful to point out briefly
the evidence of those two essential elements.

Petitioner’s conviction is shown by LG. Exs. 3, 4, and 5, and P. Ex. 9. His guilty pleas
were negotiated in terms set out in writing. 1.G. Ex. 3. The guilty pleas were tendered
and accepted on July 15, 2009, in satisfaction of the definition of “conviction” set out at
section 1128(i)(3) of the Act. I.G. Exs. 4, 5; P. Ex. 9. The judgment of conviction and
finding of guilt entered against him on February 23, 2010, satisfied the definitions of
“conviction” set out at sections 1128(i)(1) and 1128(i)(2) of the Act. LG. Ex. 5. The first
essential element is established by the record.

The language of the Information describes how “the defendant, Seth Yoser did
knowingly devise and intend to devise a scheme and artifice to defraud ESG, and
Medicare, in order to obtain money and property by means of false and fraudulent
representations, billings, and pretenses.” I.G. Ex. 2, at 2. The Information goes on to
assert that “It was further a part of said scheme that the diversion of said drugs by the
defendant, Yoser, would cause false billings to be submitted to Medicare, which would
ultimately be paid to ESG. As a result of the defendants actions, the false billings
submitted to Medicare totaled to approximately $1.6 millions.” I.G. Ex. 2, at 2-3. The
submission of false claims to the Medicaid or Medicare programs has been consistently
held to be a program-related crime within the reach of section 1128(a)(1). Douglas
Schram, R.Ph., DAB No. 1372 (1992); Dewayne Franzen, DAB No. 1165 (1990); Jack
W. Greene, DAB No. 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp. 835
(E.D. Tenn. 1990). I find the facts of Petitioner’s offenses demonstrate the required
nexus and common-sense connection between the criminal acts and the Medicaid and
Medicare programs. Berton Siegel, D.O., DAB No. 1467. The second essential element
is established by the record.
The LG. relies on four aggravating factors set out at 42 C.F.R. § 1001.102(b)(1), (2), (5),
and (9) in seeking to enhance the period of Petitioner’s exclusion to 15 years. Petitioner
concedes the presence of two aggravating factors, but denies the existence of two others.

The aggravating factor at 42 C.F.R. § 1001.102(b)(2) is present when “[t]he acts that
resulted in the conviction, or similar acts, were committed over a period of one year or
more.” The Information to which Petitioner pleaded guilty is clear in its recitation that
the scheme underlying the convictions lasted from July 1, 2002 to May 12, 2008, and the
specific overt acts relating to the convictions occurred between April 14, 2004 and April
30, 2008. I.G. Ex. 2, at 2, 6, 8. Thus, the “period of time” aggravating factor is present
here. Petitioner does not argue otherwise.

The aggravating factor set out at 42 C.F.R. § 1001.102(b)(5) is present when the
“sentence imposed by the court included incarceration.” In this case, Petitioner was
sentenced to imprisonment for 42 months. I.G. Ex. 5, at 2; P. Ex. 9, at 2. The
“incarceration” aggravating factor is therefore present here. Petitioner does not contest
the proof of this aggravating factor.

The aggravating factor set out at 42 C.F.R. § 1001.102(b)(1) is present when there is a
showing of financial loss to a Government program or other entities of more than $5000.
Petitioner asserts that “the government did not sustain any financial loss by virtue of his
criminal acts.” P. Ans. Br., 6. In making this argument, Petitioner alleges the presence

of a genuine dispute as to an issue of material fact on the point. If such a genuine dispute
of material fact were present, it would place the issue beyond application of the summary
disposition mechanism. This record, however, reveals no such genuine dispute, and
amply demonstrates a loss to the Medicare program of as much as $1,600,000.

The parties have concentrated their debate of this point on three documents. The first
document, admitted as I.G. Ex. 5, is a copy of the United States District Court’s
Judgment in a Criminal Case, apparently signed by the United States District Judge on
February 23, 2010. It reflects that restitution of $400,000 was ordered paid to “Medicare
and Medicaid Services.” I.G. Ex. 5, at 5. It bears a filing stamp dated April 15, 2010.
The second document, admitted as P. Ex. 9, is captioned “REDACTED
*A*M*E*N*D*E*D* JUDGMENT IN A CRIMINAL CASE.” It bears no filing stamp,
but is generally similar to I.G. Ex. 5 except for one entry: the payee of the ordered
$400,000 restitution on this exhibit reads “*VRF EYE SPECIALTY GROUP.” P. Ex. 9,
at 5. Neither of these first two documents bears the United States District Judge’s
original signature. The third document, admitted as I.G. Ex. 7, is a printout of electronic
docket entries — obtained through the so-called PACER system — related to the
proceedings against Petitioner in the United States District Court.

Petitioner relies on the change in the restitution-payee from “Medicare and Medicaid
Services” to “*VRF EYE SPECIALTY GROUP” to support his argument that “the
government did not sustain any financial loss” as a result of his crimes. The I.G.’s
position relies on the PACER printout to argue that the Amended Judgment “was never
executed.” I.G. Reply Br., 4. The I.G. characterizes the handwritten notations dated
March 31, 2010 on the “Return” portion of the original Judgment, I.G. Ex. 5, at 2, and the
April 15, 2010 filing stamp as indicating that the original Judgment — and thus the
original restitution-payee — remains the controlling document in terms of the identity of
the restitution-payee.

I am not convinced that the I.G. has properly interpreted the PACER printout, the
handwritten notations on the “Return” portion of the original Judgment, or the
significance of the April 15, 2010 filing stamp on the original Judgment. It seems much
more likely that the handwritten notations reflect the United States Marshal’s delivery (or
Petitioner’s surrender) to the Federal Correctional Institution at Memphis, Tennessee, on
March 31, 2010. I.G. Ex. 5, at 2. The April 15, 2010 filing stamp would be the logical
result of the United States Marshal’s filing of his copy of the original Judgment as proof
that the order of imprisonment had been executed. The PACER printout adds nothing to
clarify any of this: IG. Ex. 5 bears imprints identifying it as documents 22 and 29 in the
PACER list, and P. Ex. 9 has a similar imprint identifying it as PACER document 27, but
the dates and other entries on the PACER list show that six other documents were filed
between February 18 and April 15, 2010. Although some are described in terms that
suggest they might be helpful in understanding the situation, none have been proffered.
Thus, whether the original Judgment or the Amended Judgment represents the true
identity of the restitution-payee is impossible to determine on this record, and I explicitly
decline to rely on either. There are, however, other avenues to resolution of the “loss to
government program” question, and they do not require the weighing or evaluation of
competing evidence.

The first avenue begins with the May 12, 2009 Information, I.G. Ex. 2. That document
sets out an elaborate scheme by which Petitioner diverted prescription drugs — Visudyne
or Lucentis — from patients to himself in order that he might re-sell them. The drugs
were paid for by Medicare, I.G. Ex. 2, at 1; Medicare paid for them on the basis of
Petitioner’s false billings, I. G. Ex. 2, at 2-3; and “the false billings submitted to Medicare
totaled to approximately $1.6 millions.” I.G. Ex. 2, at 3. Specific transactions involving
mail fraud are itemized in the first 10 counts of the Information, and none involves less
than $39,000.

Now, the guilty pleas tendered by Petitioner were the result of negotiations, P. Ans. Br.,
4. The July 15, 2009 Plea Agreement reflects his and his attorney’s understanding of the
charges. LG. Ex. 3. It is significant that both Information and Plea Agreement were
executed well after Petitioner had agreed to cooperate with authorities in April 2009, for
that sequence makes it clear that Petitioner was perfectly aware of his exposure to
criminal charges and sanctions, and of what their exact bases and dimensions might be.
And so, in proffering a knowing and counseled guilty plea to the entire Information, he
admitted and bound himself by all the factual allegations set out in it, including the
alleged loss to Medicare of approximately $1,600,000. Susan Malady, R.N., DAB No.
1816 (2002); see also Dr. Frank R. Pennington, M.D., DAB No. 1786 (2001).

The second avenue begins with a Settlement Agreement executed well after the
negotiated Information was filed and Petitioner’s negotiated pleas accepted, and while
Petitioner awaited his eventual sentencing. I.G. Ex. 8. It was signed by Petitioner and
his present counsel on November 9 and 10, 2009 respectively, and Federal officials
signed it approximately one month later. LG. Ex. 8, at 13-14. Section II, paragraphs B
and C of the Settlement Agreement declare:

B. The United States contends that Dr. Yoser submitted or caused to be
submitted claims for payment to the Medicare Program (Medicare), Title
XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395hhh.

C. The United States contends that it has certain civil claims... against
Dr. Yoser for engaging in the following conduct during the period from
August 2006 to May 2008: improperly billing for the administration of one
vial of Lucentis to two patients, submitting multiple claims for the one vial
of Lucentis, when proper administration required that each patient be
administered one vial of Lucentis and any leftover be discarded... .

Section IIL, paragraphs 1 and 1(a) of the Agreement set out Petitioner’s response:

1. Dr. Yoser agrees to pay to the United States $1,600,000 (the
“Settlement Amount”). Dr. Yoser further agrees to pay $800,000 of the
Settlement Amount to the United States by electronic funds transfer
pursuant to written instructions to be provided by the United States. Dr.
Yoser agrees to make an electronic funds transfer of $800,000 no later than
30 days after the Effective Date of this Agreement.

a. The remaining sum, $800,000, is to be paid no later than one year or
earlier based on the sell of property located at 109 N. Main 1604/5,
Memphis, Tennessee 38103.

1G. Ex. 8, at 1-2.

Although provided an opportunity to do so, Petitioner has not offered to deny or explain
this Agreement, nor has he offered to argue that it is not conclusive evidence of the “loss
to government program” aggravating factor. On its face it is, and when considered in
combination with Petitioner’s guilty plea to the Information charging the same loss, it
10

leaves no room for genuine dispute as to the fact of government-program loss in excess
of $5000. The “amount of loss” aggravating factor is present here.’

The aggravating factor set out at 42 C.F.R. § 1001.102(b)(9) is present when a convicted
individual “has been the subject of any other adverse action by any . . . local government
agency or board, if the adverse action is based on the same set of circumstances that
serves as the basis for imposition of the exclusion.” Petitioner denies that this factor is
present, and “further disagrees that he has been convicted of any other offense besides
those which form the basis for the exclusion which resulted in adverse action by a local
government agency or board.” P. Ans. Br., 3. It may be best to analyze this
disagreement in the words Petitioner has chosen to frame it:

The voluntary loss of medical license is only an adverse action within the
meaning of 42 C.F.R. § 1001.102(b)(9) if the action is based on the same
set of circumstances that serve as the basis for imposition of the exclusion.
The exclusionary period of fifteen years in this matter is based upon loss to
the government, which did not occur and on healthcare fraud, which was
not included in the Information. Accordingly, the loss of license was
predicated on the conviction of Dr. Yoser of the unauthorized distribution
of pharmaceuticals and the use of wire and mail to transfer the monies
attendant to those transactions. At the very least, a fact issue has arisen
concerning this aggravating factor, and it should not be, as a matter of law,
an inescapable conclusion that the conviction in and of itself justifies the
fifteen year exclusion.

P. Ans. Br., 6-7.

Precisely what “fact issue has arisen concerning this aggravating factor” is simply not
apparent in this language, and as I have noted above, Petitioner declined the opportunity
to expand or refine it. The language quoted above seems to concede that when the
TBME suspended Petitioner’s license on March 16, 2010, its action was based on his
conviction of all the charges in the 35-count Information. Petitioner stipulated to the

' Petitioner’s sentencing hearing was initially set for November 5, 2009. LG. Ex. 4. He
signed the Settlement Agreement on November 9, 2009. LG. Ex. 8, at 14. The PACER
list of documents shows that the initial sentencing setting was vacated and continued on
November 4, 2009, and was continued twice more, on December 1, 2009 and January 26,
2010. LG. Ex. 7. This sequence of events might suggest that Petitioner’s sentencing was
first postponed to allow him to complete the Settlement Agreement, and later to
encourage his compliance with it. And if, as Petitioner claims, the true payee of his
$400,000 restitution was VRF, then VRF passed that exact sum on to the United States
pursuant to its own Settlement Agreement executed in May 2010. I.G. Ex. 9.
11

TBME that he was “convicted of felony charges of illegally and improperly committing
wire and mail fraud and improperly selling . . . non-narcotic legend drugs without a
proper license to do so.” IG. Ex. 6, at 2. Those are accurate descriptions of the crimes
identified in the Information and the United States District Court’s Judgment in a
Criminal Case. I.G. Exs. 2, 5; P. Ex. 9. Petitioner has offered no evidence or cogent
argument pointing to any other basis for the license revocation, and the TBME’s Consent
Order establishes that basis explicitly. I do not weigh or evaluate conflicting evidence on
the point because there is no conflicting evidence to be evaluated or weighed: all the
evidence shows that the “other adverse action” aggravating factor is present here.

Evidence relating to aggravating factors may be countered by evidence relating to any
mitigating factors set forth at 42 C.F.R. § 1001.102(c)(1)-(3). Here, Petitioner asserts that
in April 2009 he “participated with an investigation by the U. S. Attorney’s Office... and
cooperated . . . wore a wire and allowed recording of private conversations in an ongoing
investigation concerning pharmaceutical companies promoting off-label use.” P. Ans. Br.,
7; P. Ex. 10, at 2-4. Petitioner asserts that he is therefore entitled to claim benefit of the
mitigating factor set out at 42 C.F.R.

§ 1001.102(c)(3)(ii).

The mitigating factor Petitioner seeks to invoke may be claimed if:

(3) The individual’s or entity’s cooperation with Federal or State officials
resulted in —

(i) Others being convicted or excluded from Medicare, Medicaid and all
other Federal health care programs;

(ii) Additional cases being investigated or reports being issued by the
appropriate law enforcement agency identifying program vulnerabilities or
weaknesses; or

(iii) The imposition against anyone of a civil money penalty or
assessment under part 1003 of this chapter.

42 CFR. § 1001.102(c)(3).

Since Petitioner’s invocation of the mitigating factor is in the nature of an
affirmative defense, Petitioner bears the burden of proving it. This allocation of
the burden of proof is set out at 42 C.F.R. § 1005.15(b)(1). It is acknowledged in
Departmental Appeals Board (Board) decisions. Russell Mark Posner, DAB No.
2033; Stacey R. Gale, DAB No. 1941 (2004); Dr. Darren James, D.P.M., DAB
No. 1828, at 7-8 (2002); Barry D. Garfinkel, M.D., DAB No. 1572 (1996). And it
12

is particularly important that it be kept in mind now, given the procedural and
evidentiary context in which Petitioner’s claim of cooperation must be evaluated.

Petitioner’s willingness to assist authorities by cooperating in “an investigation by the
USS. Attorney’s Office . . .” in which he “wore a wire and allowed recording of private
conversations in an ongoing investigation” is not in and of itself a mitigating factor under
the regulation. Rather, the regulation requires that Petitioner’s activities must produce
positive results of a particularly-objective kind. The Board has made it plain that even
enthusiastic cooperation is not enough to invoke the mitigating factor unless it results in
the investigation of a new case or the issuance of a report. Hazem Garada, M.D., DAB
No. 2027 (2006); Marcia C. Smith, a/k/a Marcia Ellison Smith, DAB No. 2046 (2006);
Stacey R. Gale, DAB No. 1941.

Petitioner has offered no evidence whatsoever of any “significant or valuable cooperation
that yielded positive results . . . in the form of a new case actually being opened for
investigation or a report actually being issued.” Gale, DAB No. 1941, at 11. His
proffered evidence obviously fell short of that critical point when it failed to assert or
describe any such “positive results.” P. Ex. 10. But he certainly had reason and
opportunity to correct the deficiency if he could: the filing of I.G.’s Reply Brief put
Petitioner on notice that the I.G. denied the application of the mitigating factor because
no “positive results” had come of Petitioner’s cooperation. I.G. Reply Br., 6; 1.G. Ex. 10.
Nevertheless, although aware of the obvious need to plead facts that would create a
genuine issue as to the results of his cooperation, and although given an opportunity to do
so at paragraph 5(d) of the Order of March 1, 2011, Petitioner did nothing. He did not
file a Response Brief or proffer additional evidence, and thereby left the I.G.’s evidence
on the utter absence of “positive results” completely uncontradicted. As above, on this
point, I need not weigh or evaluate conflicting evidence about “positive results” because
there is no conflicting evidence to be considered. Petitioner’s only evidence of
cooperation is set out in P. Ex. 10, and nothing in that Exhibit so much as hints at positive
results in the form of a new case actually being opened or a report actually being issued.
All the evidence shows that no such results were derived from Petitioner’s cooperation.
I.G. Ex. 10. In the absence of such results, Petitioner is not entitled to claim the
mitigating factor set out at 42 C.F.R. § 1001.102(c)(3)(ii).

Petitioner maintains that the 15-year length of his exclusion is unreasonable. However,
the I.G.’s discretion in exclusion cases when weighing the importance of aggravating and
mitigating factors commands great deference when reviewed by an Administrative Law
Judge (ALJ). Jeremy Robinson, DAB No. 1905 (2004); Keith Michael Everman, D.C.,
DAB No. 1880 (2003); Stacy Ann Battle, D.D.S., et al., DAB No. 1843 (2002). The ALJ
may not substitute his or her own view of what period of exclusion might appear “best”
in any given case for the view of the I.G. on the same evidence; so long as the period
chosen by the LG. is within a reasonable range and is based on demonstrated criteria, the
ALJ must not alter it. Jeremy Robinson, DAB No. 1905; Joann Fletcher Cash, DAB No.

13

1725, at 20 (2000). The ALJ may reduce an exclusionary period only when she or he
discovers some meaningful evidentiary failing in the aggravating factors upon which the
1.G. relied, or when he or she discovers evidence reliably establishing a mitigating factor
not considered by the I.G. in setting the enhanced period. Jeremy Robinson, DAB No.
1905. Here, all four of the aggravating factors relied on by the I.G. have been established
as pleaded and Petitioner has not established the mitigating factor based on his
cooperation with authorities. Given these considerations, the I.G.’s determination to
enhance the term of Petitioner’s exclusion to 15 years is manifestly not unreasonable.
While comparisons with other cases are of limited utility and are certainly not
controlling, they can illustrate what a reasonable range has been understood to mean
when the ALJ examines a lengthy exclusion. Paul D. Goldenheim, M.D., et al., DAB
No. 2268, at 29 (2009). The length of this exclusion is well within a reasonable range
and is commensurate with the range established as reasonable in Russell Mark Posner,
DAB No. 2033; Stacey R. Gale, DAB No. 1941; Jeremy Robinson, DAB No. 1905;
Thomas D. Harris, DAB No. 1881 (2003); Fereydoon Abir, M.D., DAB No. 1764
(2001); Joann Fletcher Cash, DAB No. 1725.

Summary disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). Resolution
of a case by summary disposition is particularly fitting when settled law can be applied to
undisputed material facts. Marvin L. Gibbs, Jr., M.D., DAB No. 2279 (2009); Michael J.
Rosen, M.D., DAB No. 2096. The material facts in this case are undisputed and
unambiguous. They support summary disposition as a matter of settled law, and this
Decision issues accordingly.

VI. Conclusion

For the reasons set forth above, the I.G.’s Motion for Summary Disposition should be,
and it is, GRANTED. The I.G.’s exclusion of Petitioner Seth Yoser, M.D., from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of 15 years pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C.

§ 1320a-7(a)(1), is sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

John Crews, III, M.D.

(NPI:

1629169974),

Petitioner

Centers for Medic

Vv.

are and Medicaid Services.

Docket No. C-11-220

Decisi

Date:

D

ion No. CR2399

July 18, 2011

ECISION

Petitioner, John Crews, III, M.D., appeals the determination of the Centers for Medicare

and Medicaid Services (CMS) to revoke
supplier in the Medicare program for fai

his enrollment and billing privileges as a
ing to report an adverse legal action to the

Medicare contractor. For the reasons set forth below, I find that the undisputed facts

establish that CMS had a legitimate basi
privileges, and I grant the CMS motion

I. Background

Petitioner is a physician licensed to prac
of Virginia and in the Commonwealth o

s to revoke Petitioner’s enrollment and billing
‘or summary judgment.

tice medicine and surgery in the Commonwealth
f Pennsylvania. CMS Ex. 10, at 3; CMS Ex. 14,

at 1. Petitioner practiced medicine in Virginia until 2007, when he moved to
Pennsylvania to practice medicine. P. Br. at 1. On July 24, 2008, the Commonwealth of
Virginia Board of Medicine (VA Board) notified Petitioner that it had initiated

proceedings against Petitioner based on
certain laws and regulations governing tl

several allegations that he may have violated
e practice of medicine in Virginia. P. Br. at 1-2;

CMS Ex. 11. Disciplinary proceedings against Petitioner followed. CMS Exs. 12-13.
On February 6, 2009, the VA Board suspended Petitioner’s license to practice medicine
pursuant to a Consent Order. P. Br. at 1-2; CMS Ex. 14. The suspension and Consent
Order were based on the VA Board’s finding of nine separate violations related to
inadequate patient care. P. Br. at 1-2; CMS Ex. 14, at 1-4, 8. During this period,
Petitioner continued to practice medicine in Pennsylvania.

On June 1, 2010, National Government Services (NGS), the Medicare contractor for the
Commonwealth of Virginia, notified Highmark Medicare Services (HMS), the Medicare
contractor for the Commonwealth of Pennsylvania, that it had revoked Petitioner’s
Medicare billing privileges because Petitioner did not have a valid medical license in
Virginia. P. Ex. 1. As a result, HMS staff conducted a search revealing that the VA
Board suspended Petitioner’s license. CMS Exs. 10, 16. By letter dated June 8, 2010,
HMS notified Petitioner that he “failed to comply with the reporting requirement
specified in 42 C.F.R. § 424.516(d)(1)(ii),” which requires suppliers to report adverse
actions to Medicare within 30 days of the reportable event. CMS Ex. 2, at 1. Due to
Petitioner’s failure to report the suspension of his medical license in Virginia, HMS
revoked Petitioner’s enrollment as a supplier in the Medicare program, effective May 14,
2010, and instituted a one-year bar on reenrollment. CMS Ex. 2.

By letter dated July 28, 2010, Petitioner, through counsel, responded to the HMS June 8,
2010 revocation letter asserting that “[w]hile it is true that Dr. Crews’ Virginia license
was suspended, he was represented by a lawyer in those proceedings and believes that he
met all of his notification obligations.” CMS Ex. 3, at 1. Petitioner’s representative
continued, “[mJore importantly, Dr. Crews was always legally authorized to practice in
any state in which he rendered services.” Jd. Finally, Petitioner contends that the HMS
June 8, 2010 letter was sent to an old address and not received by Petitioner until July 13,
2010. CMS Ex. 3. HMS treated Petitioner’s letter as a corrective action plan (CAP),
although it was submitted more than 30 days after the revocation. By letter dated August
16, 2010, HMS considered and rejected Petitioner’s CAP, not for untimeliness, but for
insufficient evidence that he notified the contractor within 30 days as required by the
regulations. CMS Ex. 4.

Petitioner timely filed a request for reconsideration by letter dated August 20, 2010.

CMS Ex. 5.' Counsel for Petitioner again argued that he “was always represented by
counsel and believes that all proper notifications with respect to the status of his license
were made.” Jd. at 1. On November 19, 2010, HMS issued its reconsideration decision,
determining that HMS appropriately revoked his Medicare billing privileges and imposed

'T note that the June 8, 2010 and August 16, 2010 HMS letters may have first been
directed to a previous or incorrect address for Petitioner. This did not prejudice
Petitioner, however, because HMS processed Petitioner’s appeals as timely.
a one-year bar on reenrollment.” CMS Ex. 9, at 2-3. The contractor explained that the
suspension of Petitioner’s Virginia medical license was an adverse action requiring
notification within 30 days to each Medicare contractor with whom Petitioner is enrolled.
Id.

Petitioner requested a hearing by letter dated January 17, 2011, and the case was assigned
to me for decision. I issued an Acknowledgement and Pre-Hearing Order on January 24,
2011. CMS filed its motion for summary disposition (CMS Br.) accompanied by
proposed exhibits (Exs.) 1-15 on February 28, 2011. On March 8, 2011, CMS
supplemented its initial filing with proposed Ex. 16 and a proposed witness list. I admit
CMS Exs.1-16 without objection.

On March 31, 2011, Petitioner filed his opposition to the CMS motion for summary
disposition (P.Br.) and proposed Exs. 1-10. CMS filed a reply brief (CMS Reply) on
April 19, 2011, in which it responded to Petitioner’s argument and objected to
Petitioner’s proposed Exs. 9-10.> CMS Reply at 2 n.1. CMS argues that the two exhibits
are new evidence and should be excluded under 42 C.F.R. §§ 405.874(c)(5) and
498.56(e), because they were not previously presented at the reconsideration level.
Petitioner did not respond to the CMS objection. I will, however, admit the contested
exhibits into the record because they do not change the outcome of my decision. I
therefore admit P. Exs. 1-10 to the record.

II. Applicable Law

The regulations at 42 C.F.R. Part 424, subpart P, set out the requirements for enrollment
and reporting of changes to enrollment information. “Providers and suppliers must meet
and maintain these enrollment requirements to bill either the Medicare program or its
beneficiaries for Medicare covered services or supplies.” 42 C.F.R. § 424.500.

> The contractor established Petitioner’s revocation took effect on May 14, 2010.
Petitioner’s revocation, however, should have been effective on the date of his
suspension, February 6, 2009, pursuant to 42 CFR § 424.535(g). Nonetheless, Petitioner
states that he is not interested in retribution for the revocation period but only in having
his billing privileges restored. P. Br. 4-5. Based on either date, the one-year bar on
reenrollment is now over.

> P. Ex. 9 is an e-mail dated July 1, 2010, on behalf of Petitioner’s employer informing
him to “immediately cease rounding at [his] facilities until further notice.” P. Ex. 10 isa
letter, dated March 2, 2009 and directed to the “State Board of Medicine” for
Pennsylvania, from Petitioner’s attorney. He reported to the Pennsylvania Medical Board
a pending civil action against Petitioner in Virginia and provided the Consent Order
Petitioner entered into with the VA Board.
Section 424.535 lists the bases on which CMS may revoke a provider’s or supplier’s
Medicare billing privileges and provider or supplier agreement. The bases include a
failure to report provision (42 C.F.R. § 424.535(a)(9)) that cross-references 42 C.F.R. §
424.516(d)(1), which specifies:

(d) Reporting requirements for physicians, nonphysician
practitioners, and physician and nonphysician practitioner
organizations. Physicians, nonphysician practitioners, and physician
and nonphysician practitioner organizations must report the
following reportable events to their Medicare contractor within the
specified timeframes:

(1) Within 30 days—

(i) A change of ownership;
(ii) Any adverse legal action; or
(iii) A change in practice location.

The regulations define “final adverse action” to include “[s]uspension or revocation of a
license to provide health care by any State licensing authority.” 42 C.F.R. § 424.502.

Providers or suppliers who have had their billing privileges revoked “are barred from
participating in the Medicare program from the effective date of the revocation until the
end of the re-enrollment bar,” which is “a minimum of | year, but not greater than 3
years depending on the severity of the basis for revocation.” 42 C.F.R. § 424.535(c).

III. Issue

The issue is whether CMS was authorized to revoke Petitioner’s enrollment as a supplier
in the Medicare program.

IV. Discussion
A, Summary judgment is appropriate in this case

CMS argues that it is entitled to summary judgment. The Departmental Appeals Board
(Board) stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . . . The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of
law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. . . . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).

An ALJ’s role in deciding a summary judgment motion differs from its role in resolving a
case after a hearing. The ALJ should not assess credibility or evaluate the weight of
conflicting evidence. Holy Cross Vill. at Notre Dame, Inc, DAB No. 2291, at 5 (2009).
The Board has further stated, “[i]n addition, it is appropriate for the tribunal to consider
whether a rational trier of fact could regard the parties’ presentation as sufficient to meet
their evidentiary burden under the relevant substantive law.” Dumas Nursing and
Rehab., L.P., DAB No. 2347, at 5 (2010).

I have accepted all of Petitioner’s factual assertions as true and drawn all reasonable
inferences in his favor. In his hearing request, however, Petitioner generally claims,
“(t]he status of Dr. Crews’ license to practice medicine in Virginia . . . was appropriately
reported to Medicare.” Hearing Request at 2. This allegation alone, with no supporting
proof, is not an offer of evidence of specific facts showing that a dispute exists. A mere
scintilla of evidence is insufficient to establish a genuine factual dispute. Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). Absent any evidence to
support Petitioner’s blanket assertion, summary judgment is appropriate.

B. The undisputed evidence establishes that Petitioner did not properly report
the suspension of his license to practice medicine in Virginia as section
424.516(d)(1)(ii) required, and therefore CMS was authorized to revoke his
enrollment in Medicare under section 424.535(a)(9).

Petitioner signed an enrollment application agreeing to notify the Medicare contractor of
any final adverse action within 30 days. CMS Ex. 15, at 27. The application stated that a
State licensing authority’s suspension of a license to provide health care is considered an
adverse legal action that he must report. /d. at 14-15. It is undisputed that the VA Board
suspended Petitioner’s license to practice medicine on February 6, 2009. P. Br. at 1-2;
CMS Ex. 14, at 8.

Subsection 424.535(a)(9) authorizes CMS to revoke billing privileges where a provider
or supplier failed to comply with the reporting requirements including the requirement
that “[pJhysicians [and] nonphysician practitioners . . . must report . . . to their Medicare
contractor . . . [w]ithin 30 days . . . [a]ny adverse legal action.” 42 C.F.R.

§ 424.516(d)(1)(ii). A “[f]inal adverse action” is defined to include “[s]uspension or
revocation of a license to provide health care by any State licensing authority.” 42 C.F.R.
§ 424.502.

Although, as previously noted, Petitioner states in his hearing request that the status of his
“license to practice Medicare in Virginia and Pennsylvania was appropriately reported to
Medicare . . .” Petitioner has come forward with no evidence that could support any
reasonable inference that Petitioner reported his Virginia medical license suspension to
the Pennsylvania Medicare contractor, HMS. As the Board has explained, Petitioner
“may not rely on the denials in [his] pleadings or briefs, but must furnish evidence of a
dispute concerning a material fact,” in this case, evidence that he reported the adverse
action to HMS. Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010).

Petitioner argues instead that he was licensed in Pennsylvania when providing services in
that state and that he believed his attorney made any required disclosures regarding his
Virginia license suspension. See Hearing Request; P. Br. It is irrelevant that Petitioner
presumed that his attorney properly notified the Pennsylvania contractor. It was
Petitioner’s responsibility to assure that he properly reported all adverse actions to each
Medicare contractor with whom he contracted to provide services. It is also irrelevant
that Petitioner’s attorney may have notified the Pennsylvania Medical Board of his
suspension to practice in Virginia. See P. Ex. 10. Although, under his state medical
license, Petitioner may have been required to report the adverse actions based in Virginia
to the Pennsylvania Medical Board, his doing so is not relevant to the reporting
requirement at issue in this case — to report the adverse action to HMS.

Petitioner further argues that even assuming CMS is correct that Petitioner failed to
report the adverse action to the Medicare contractor, it “was an administrative error,” and
e has “not committed a substantive violation.” P. Br. at 4. Petitioner also states that the
“administrative error” was “perhaps the responsibility of [Petitioner], but not caused by
im.” Jd. Petitioner further asserts that “[p]rocedurally, CMS’ actions against
Petitioner] were much more egregious,” for “[h]e was denied the right to be heard, while
is billing privileges were revoked, effectively denying him the right to work as a
physician.” Id.

It is well-settled that a Petitioner is not deprived of due process when CMS provides
Petitioner sufficient notice of the legal basis for the revocation and a reasonable
opportunity to respond at the ALJ hearing level. See Green Hills Enters., LLC, DAB No.
2199, at 8 (2008); see also Abercrombie v. Clarke, 920 F.2d 1351, 1360 (7th Cir. 1990),
cert. denied, 520 U.S. 809 (1991) (holding that defects in formal notice may be cured
during the course of an administrative proceeding, and due process is satisfied as long as
the party is reasonably apprised of, and given opportunity to address, the issues in
controversy). The record reflects that, at each level of appeal, the Medicare contractor
provided Petitioner his process due under this administrative appeals process, such as
reviewing Petitioner’s arguments despite untimely requests and issuing a detailed

reconsideration decision. Moreover, the record does not demonstrate that the contractor
asserted a continually changing basis for revocation. Rather, the contractor has
consistently based Petitioner’s revocation on his failure to report the adverse action.

Although the contractor sent at least two of Petitioner’s notices to an address that was not
current for Petitioner, it is unclear whether that error is attributable to Petitioner or the
contractor. Regardless of responsibility, it remains inconsequential to my decision.
Petitioner concedes receiving notice, and I have provided Petitioner a reasonable
opportunity to respond to CMS’s basis for revocation. However, as discussed, Petitioner
has offered no evidence in support of his empty assertion that he reported his Virginia
medical license suspension to the Pennsylvania Medicare contractor.

Where a regulation speaks clearly on its face and applies to the question before me, I am
bound to follow it. See US Ultrasound, DAB No. 2302, at 8 (2010) (“Neither the ALJ nor
the Board is authorized to provide equitable relief by reimbursing or enrolling a supplier
who does not meet statutory or regulatory requirements.”). I am without authority to
address considerations of equity.

Vv. Conclusion

The undisputed evidence establishes that CMS was authorized under 42 C.F.R.

§ 424.535(a)(9) to revoke Petitioner’s enrollment and billing privileges for failing to
comply with the reporting requirements set out in section 424.516(d)(1)(ii) when
Petitioner did not report his Virginia license suspension to the Medicare contractor . I
therefore grant the CMS motion for summary judgment.

/s/

Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Rita Lemons d/b/a Experts Are Us Inc.,

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-226
Decision No. CR2398

Date: July 15, 2011

DECISION

Petitioner, Rita Lemons d/b/a Experts Are Us Inc., a durable medical equipment supplier,
appeals three reconsideration decisions dated November 23, 2010. The undisputed
evidence establishes that Petitioner was not in compliance with all Medicare program
requirements. As a consequence, I grant the motion of the Centers for Medicare and
Medicaid Services (CMS) for summary judgment and uphold CMS’s determinations to
deny Petitioner’s three applications for reenrollment in the Medicare program.

I. Background and Procedural History

In September of 2009, the Civil Remedies Division received a set of documents from
Petitioner. Petitioner’s submission was docketed as C-09-724 and assigned to
Administrative Law Judge (ALJ) Carolyn Cozad Hughes. Thereafter, Petitioner
submitted additional arguments and documents. After reviewing the documents, ALJ
Hughes concluded that Petitioner was seeking a review of a 2004 determination by a
CMS contractor revoking Petitioner’s Medicare billing privileges as a supplier of durable
medical equipment, prosthetics, orthotics, and supplies (DMEPOS) and review also of
dispositions of Petitioner’s subsequent applications. Experts Are Us, Inc., DAB CR2047,
at 2-4 (2009). ALJ Hughes determined that Petitioner had no right to ALJ review of the
2004 revocation because it occurred before the effective date of the statutory provision
that created this hearing right. /d. at 3. ALJ Hughes also concluded that Petitioner had
no right to review the contractor’s subsequent dispositions of Petitioner’s applications
because they were “applications for reinstatement” after revocation and, therefore, not
reviewable under 42 C.F.R. Part 498. Jd. at 4. ALJ Hughes consequently dismissed the
case.

Petitioner appealed the dismissal to the Appellate Division of the Departmental

Appeals Board (Board), and the appeal was assigned Docket No. A-10-38. In response to
an Order to Develop the Record, CMS stated that the three CMS contractor
determinations contained in Petitioner’s documents were denials of reenrollment
applications and that denials of reenrollment applications, like denials of enrollment
applications, were within an ALJ’s review authority. CMS’s position was contrary to its
prior position at the ALJ level, in which it had argued that these contractor
determinations were rejections of requests for reinstatement after revocation. CMS
suggested the case be remanded to ALJ Hughes. After upholding ALJ Hughes’
conclusion that she lacked authority to review the 2004 revocation, the Board remanded
the case for “further proceedings consistent with this decision” as to the remaining
denials of reenrollment applications dated August 1, 2007, December 11, 2007, and May
30, 2008. Experts Are Us, Inc., DAB No. 2322, at 12 (2010).

Thereafter, pursuant to 42 C.F.R. § 498.78(b), ALJ Hughes remanded the case to “CMS
or its Medicare contractor to reconsider its . . . determinations denying [Petitioner’s]
applications for reenrollment in the Medicare program.” Experts Are Us, Inc., DAB
CR2180, at 1 (2010). ALJ Hughes directed CMS or its contractor “to reconsider the
contractor’s initial determinations, dated August 1, 2007, December 11, 2007, and May
30, 2008, in accordance with 42 C.F.R. §§ 498.22 and 498.24.” Td. at 2.

Then, on September 2, 2010, Petitioner submitted the following documents: a 14-page
document titled “Appeal 2322”; a five-page document titled “Motion to Admit or Deny
Appeal 2322”; a two-page document titled “Re: Appeal 2322”; a three-page document
described as a “calculation table”; and 37 pages of attachments, such as phone an
insurance records. After reviewing Petitioner’s documents, the Board concluded that the
documents were most reasonably and fairly understood to be: (1) a request to reopen the
Board's decision in DAB No. 2322; (2) an appeal of the ALJ Remand Decision in DAB
CR2180; (3) a request to file additional evidence; and (4) a request for admissions and
subpoenas. Experts Are Us, Inc., DAB No. 2342, at 3 (2010).

The Board declined to reopen DAB No. 2322 and upheld the ALJ Remand Decision.
The Board also denied Petitioner’s request to file additional evidence, request for
admissions, and request for subpoenas. Jd. at 1.
Upon remand, CMS referred its contractor’s initial determinations dated August 1, 2007,
December 11, 2007, and May 30, 2008 to a Hearing Officer. On November 23, 2010, the
Hearing Officer issued reconsideration decisions on all three determinations upholding
the contractor’s initial denials. CMS Exhibits (Exs.) 1, 7, 12.

Petitioner timely appealed the three reconsideration decisions, and the case was then
assigned to me for possible hearing and decision. I issued an Acknowledgment and Pre-
Hearing Order, and in accordance with that order, CMS filed a Motion for Summary
Judgment and Supporting Brief-in-Chief (CMS Br.) accompanied by seventeen proposed
exhibits. I admit all CMS Exhibits into the record of this case. Petitioner submitted
Plaintiff’s Response and Supplement to Appeal (P. Br.) with multiple exhibits that were
not numbered in accordance with my Pre-Hearing Order. Petitioner also submitted her
own Motion for Summary Judgment; however, it contains no discernible argument
relevant to a showing of summary judgment and cites to no evidentiary support. I have
renumbered Petitioner’s proposed exhibits as P. Ex. 1, Pages 1-256 and admitted all the
documents Petitioner proposed into the record of this case. With this decision, I have
provided both Petitioner and CMS with a copy of Petitioner’s renumbered exhibits. I
also note that Petitioner references many documents, such as the affidavits of several
individuals (described as P. Exs. E-6 through E-10), which Petitioner did not include with
her bound submissions of proposed exhibits.

Although Petitioner raises a variety of issues in her response similar to Petitioner’s
positions in previous appeals, the only issues raised in response to CMS’s Motion for
Summary Judgment relate to whether CMS had a legitimate basis to deny each of
Petitioner’s three Medicare reenrollment applications in its November 23, 2010
reconsideration decisions. Moreover, Petitioner’s other arguments have been fully
addressed in previous iterations of this matter. See Experts Are Us, Inc., DAB No. 2342
(2010). Thus, I decline to address Petitioner’s numerous other allegations and requests
for relief in this decision.

II. Applicable Law

Section 1834(j)(1) of the Social Security Act, 42 U.S.C. § 1395m(j)(1), states the
requirements for the issuance and renewal of a supplier number for suppliers of medical
equipment and supplies. This section provides that “no payment may be made . . . for
items furnished by a supplier of medical equipment and supplies unless such supplier
obtains (and renews at such intervals as the Secretary may require) a supplier number.”

To participate in Medicare as a medical equipment supplier and to maintain a supplier
number and billing privileges, an entity must also meet the specific requirements, referred
to as “supplier standards,” set forth at 42 C.F.R. § 424.57(c) for suppliers of “durable
medical equipment, prosthetics, orthotics, and supplies.” 42 C.F.R. § 424.57(a). A
supplier seeking reenrollment must submit a new application and supporting
documentation, which must be validated before the entity can become a Medicare
supplier. See 42 C.F.R. § 424.505.

Regulations provide that CMS will deny a supplier’s application for Medicare billing
privileges, if it is found not to meet the supplier standards or other requirements in
section 424.57(c). 42 C.F.R. § 424.57(d), (e). Supplier standard eight requires a supplier
to allow CMS or CMS contractors to conduct on-site inspections to ascertain supplier
compliance with Medicare requirements. 42 C.F.R. § 424.57(c)(8). Also, a supplier
must maintain a physical facility on an appropriate site. 42 C.F.R. § 424.57(c)(7).
Furthermore, CMS may deny a supplier’s application for Medicare billing privileges if it
determines, based on an on-site review, that the supplier: (1) is no longer operational to
furnish Medicare covered items or services; or (2) otherwise fails to meet Medicare
enrollment requirements. 42 C.F.R. § 424.530(a)(5).

The “clear intent of [42 C.F.R. § 424.57(c)] is that a supplier must comply with each, and
not just some, of the enrollment standards in order to qualify for enrollment or re-
enrollment. As a consequence, a supplier seeking re-enrollment that fails to demonstrate
that it complies with even one of the regulatory standards will not qualify for re-
enrollment .... A supplier must comply with the /etter of the standards if it wishes to
enroll or be re-enrolled.” Palmetto Pharmacy & Diagnostic, Inc., DAB CR1529 (2006).

III. Issue, Findings of Fact, Conclusions of Law
A. Issue

The issue in this case is whether CMS is entitled to summary judgment on the grounds
that CMS had a legitimate basis to deny each of Petitioner’s three reenrollment
applications.

B. Applicable Standard

Summary judgment is appropriate when a case presents no issue of material fact, and its
resolution turns on questions of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-
48 (1986); Livingston Care Ctr. v. United States Dep’t of Health and Human Servs., 388
F.3d 168, 173 (6th Cir. 2004). See Illinois Knights Templar Home, DAB No. 2274, at 3-
4 (2009) (citing Kingsville Nursing Ctr., DAB No. 2234, at 3-4 (2009)).

The moving party may show the absence of a genuine factual dispute by presenting
evidence so one-sided that it must prevail as a matter of law, or by showing that the non-
moving party has presented no evidence “sufficient to establish the existence of an
element essential to [that party’s] case, and on which [that party] will bear the burden of
proof at trial.” Livingston Care Ctr., 388 F.3d at 173 (quoting Celotex Corp. v. Catrett,
477 US. 317, 323-24 (1986)). To avoid summary judgment, the non-moving party must
then act affirmatively by tendering evidence of specific facts showing that a dispute
exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11
(1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehab.
Ctr., DAB No. 1918 (2004).

To defeat an adequately supported summary judgment motion, the non-moving party may
not rely on the denials in its pleadings or briefs, but must furnish evidence of a dispute
concerning a material fact .... I/linois Knights Templar, DAB No. 2274, at 4;
Livingston Care Ctr., DAB No. 1871, at 5 (2003). In examining the evidence to
determine the appropriateness of summary judgment, I must draw all reasonable
inferences in the light most favorable to the non-moving party. See Brightview Care Ctr.,
DAB No. 2132, at 2, 9 (2007); Livingston Care Ctr., 388 F.3d at 168, 172; Guardian
Health Care Ctr., DAB No. 1943, at 8 (2004); but see Cedar Lake, DAB No. 2344, at 7;
Brightview, DAB No. 2132, at 10 (noting entry of summary judgment upheld where
inferences and views of non-moving party are not reasonable). However, drawing factual
inferences in the light most favorable to the non-moving party does not require that I
accept the non-moving party’s legal conclusions. Cedar Lake, DAB No. 2344, at 7;
Guardian, DAB No. 1943, at 11 (“A dispute over the conclusion to be drawn from
applying relevant legal criteria to undisputed facts does not preclude summary judgment
if the record is sufficiently developed and there is only one reasonable conclusion that
can be drawn from those facts.”).

C. Analysis

My findings and conclusions are in the italicized headings and subsequent discussions
below.

DL) CMS had a legitimate basis to deny Petitioner’s June 25, 2007 Medicare
reenrollment application because Petitioner was not in compliance with supplier
regulations.

On November 23, 2010, a hearing officer from Palmetto GBA, the Medicare contractor,
issued a reconsideration decision based on an August 1, 2007 initial determination
denying Petitioner’s reenrollment application dated June 25, 2007. CMS Ex. 1; CMS Ex.
6, at 18. The hearing officer determined that the initial determination should be upheld
and found Petitioner not in compliance with nine separate supplier standards. CMS Ex.
1, at 3-4. The hearing officer concluded Petitioner had not provided evidence to show
she had fully complied with the standards for which she was considered non-compliant in
the initial determination. The hearing officer did not identify any newly submitted
documentation, so I presume the hearing officer relied on the evidence used in the initial
determination. Jd.
I must exclude any documentary evidence that is submitted for the first time at the ALJ
level, unless Petitioner has established good cause for not submitting it previously. See
42 C.F.R. § 498.56(e). However, in this case, to fully consider the evidence in the light
most favorable to the non-moving party, and because I am not certain whether there is
new evidence due to the lack of any objection from CMS, I will not exclude any evidence
Petitioner has submitted that might establish compliance with the supplier standards.

It is undisputed that on May 7, 2007, a fraud investigator from the Medicare contractor
National Supplier Clearinghouse (NSC), attempted an on-site review at 6635 McCollum,
Missouri City, TX. CMS Ex. 3. The fraud investigator reported he encountered a
residence at Petitioner’s address of record without a sign identifying the business. Id. at
1-2, 6-10. However, the 6635 McCollum, Missouri City, TX address is not listed as the
official business location on Petitioner’s reenrollment application. CMS Ex. 6, at 5. This
address is listed instead as a medical record storage facility. CMS Ex. 6, at 8. Petitioner
objects to the contention that Petitioner submitted a reenrollment application for this
location. P. Br. at 3. There appears to be a genuine issue of disputed material fact as to
whether this location was an official business address for Petitioner. Nonetheless, CMS
also based its reconsideration decision on a July 18, 2007 on-site review at Petitioner’s
business location, which I need now also consider.

It is undisputed that on July 18, 2007, an NSC fraud investigator completed this on-site
review of Petitioner’s facility at 303 Ulrich Street, Ste. J, Sugarland, TX. CMS Ex. 4.
This is the address that appears as the official business address on Petitioner’s
reenrollment application. CMS Ex. 6, at 5. The fraud investigator found Petitioner not in
compliance with supplier standards: 1 (failure to comply with all licensure and
regulatory requirements); 4 (failure to have its own inventory); 5 (failure to advise of
rental/purchase option agreements); 6 (failure to have documentation of warranty
coverage); 8 (failure to make its location accessible to beneficiaries); 10 (failure to have a
comprehensive liability insurance policy); 12 (failure to have written instructions or
information for beneficiaries on the use of equipment); 14 (failure to have a repair or
service contract); and 20 (failure to maintain a complaint log). CMS Exs. 2 and 4.

The fraud investigator provided Petitioner written notice of each standard of non-
compliance on a “Site Visit Acknowledgement” Form. CMS Ex. 4, at 6; P. Ex. 1, at 34.
Petitioner signed that she received this information. /d. By signing this form, Petitioner
acknowledged the following: Petitioner had been provided notice of the 21 supplier
standards listed at 42 C.F.R. § 424.57; the NSC fraud investigator requested specific
items listed on the “Site Visit Acknowledgement” form to be faxed to the fraud
investigator within 2 business days; and notice that Petitioner’s failure to provide the
requested information could result in the denial or revocation of Petitioner’s Medicare
supplier billing number. CMS Ex. 4, at 6.

In her response, Petitioner claims that she faxed the fraud investigator nineteen pages that
evidenced her compliance with the applicable regulations. P. Br. at 3,25. However,
Petitioner does not proffer the full fax response but rather a fax transmission sheet
showing nineteen pages were faxed to the NSC fraud investigator on July 18, 2007. P.
Ex. 1, at 35-36. A mere scintilla of supporting evidence is not sufficient to overcome a
well-supported motion for summary judgment. “Ifthe evidence is merely colorable or is
not significantly probative, summary judgment may be granted.” Livingston Care Ctr. v.
Dep’t. of Health & Human Servs., No. 033489, 2004 WL 1922168, at 4 (6th Cir. 2004)
(quoting Anderson v. Liberty Lobby, 477 U.S. 242, at 249-50 (1986)). Therefore,
although I will consider and discuss other relevant exhibits from Petitioner that relate to
the supplier standards, the mere production of a fax transmission sheet will not in itself be
sufficient to establish a genuine issue of material fact for summary judgment purposes.

Clearly, a supplier must certify in its application for Medicare enrollment that it meets,
and will continue to meet, all the supplier standards to obtain and maintain Medicare
enrollment and billing privileges. 42 C.F.R. § 424.57(c). I will separately discuss
Petitioner’s purported compliance with each of the supplier standards CMS claims
Petitioner did not satisfy. I note that the failure to comply with just one supplier standard
would be a sufficient basis for the denial of Petitioner’s Medicare enrollment application.
See 1866I1CPayday.com, DAB No. 22839, at 13 (2009). However, in the interests of
clarity and completeness of the record, I have addressed every supplier standard noted in
the November 23, 2010 reconsideration decision based on the August 1, 2007 initial
determination denying Petitioner’s reenrollment application.

Supplier Standard I (failure to comply with all licensure and regulatory
requirements)

Supplier standard 1 states that a Petitioner must operate its business and furnish
Medicare-covered items in compliance with all applicable Federal and State licensure and
regulatory requirements. 42 C.F.R. § 424.57(c)(1) (2006). The fraud investigator
specifically requested Petitioner provide, within two business days: “TDH licenses, sales
tax permit, and IRS Form w[ith] EIN.” CMS Ex. 4, at 6. Petitioner provided CMS with
a sales and use tax permit and a state medical device distributor license. CMS Ex. 4, at 9;
CMS Ex. 6, at 21-25. There is no evidence in the record indicating that Petitioner
provided the fraud investigator with an IRS Form with EIN. The investigator had
previously noted that the Petitioner’s sales tax permit was missing the suite identifier.
CMS Ex. 4, at 3; CMS Ex. 4, at 9.

For purposes of summary judgment, I must review the evidence in the light most
favorable to Petitioner and draw all reasonable inferences in Petitioner’s favor. Because
Petitioner has come forward with some proof that Petitioner met state licensure and
regulatory requirements, and because it is unclear which specific laws CMS claims

Petitioner has not demonstrated compliance with, I conclude that CMS has not met its
burden of showing that there are no genuine issues of material fact for hearing and that it
is entitled to judgment as a matter of law with regard to Petitioner’s non-compliance with
supplier standard 1.

Supplier Standard 4 (failure to have its own inventory)

Supplier standard 4 requires that a supplier “[f]ills orders, fabricates, or fits

items from its own inventory or by contracting with other companies for the purchase of
items necessary to fill the order. If it does, it must provide, upon request, copies of
contracts or other documentation showing compliance with this standard. . . .” 42
C.F.R. § 424.57(c)(4) (2006). The fraud investigator specifically requested credit
agreements or invoices pursuant to supplier standard 4. CMS Ex. 4, at 6. Petitioner
provided a list of supplies she claims were in her inventory, including items such as hoyer
lifts, manual wheel chairs, motorized wheel chairs, speech generating devices, kangaroo
pumps, suction pumps, dialysis equipment and supplies, C-PAP/Bi-PAP equipment,
hospital beds, pressure reducing mattresses, stair lifter/climber, lymphedema pumps,
portable commode, tens units, and diabetic supplies. CMS Ex. 4, at 19. Petitioner also
provided access to diapers, expired diabetic supplies, surgical dressings, and a used
hoyer. CMS Ex. 4, at 4.

In Petitioner’s brief, Petitioner claims the business contracted with a wholesaler and
private individual to purchase equipment and supplies as needed for a fee. P. Br. at 25.
However, Petitioner did not come forward with any evidence of such credit agreements
or invoices. I conclude that there is no genuine issue of disputed material fact regarding
Petitioner’s failure to have her own inventory because Petitioner has submitted no
contracts or other documentation to show compliance with this supplier standard. Thus,
CMS is entitled to summary judgment with regard to Petitioner’s violation of supplier
standard 4.

Supplier Standard 5 (failure to advise of rental/purchase option agreements)

Supplier standard 5 “[a]dvises beneficiaries that they may either rent or purchase
inexpensive or routinely purchased durable medical equipment, and of the purchase
option for capped rental durable medical equipment, as defined in § 414.220(a) of this
subchapter. (The supplier must provide, upon request, documentation that it has provided
beneficiaries with this information, in the form of copies of letters, logs, or signed
notices).” 42 C.F.R. § 424.57(c)(5) (2006).

The fraud investigator specifically requested, within 2 business days, rental/purchase
option agreements and a “new policy with IRP notification” specifically pursuant to this
supplier standard. CMS Ex. 4, at 6. I can find no evidence in the record indicating that
Petitioner provided this documentation to the fraud investigator or other evidence that
would raise a genuine dispute of material fact with regard to whether Petitioner complied
with this standard.

I conclude that it is undisputed that Petitioner was not in compliance with supplier
standard 5, and CMS is entitled to summary judgment with regard to a violation of this
supplier standard.

Supplier Standard 6 (failure to have documentation of warranty coverage)

In accordance with supplier standard 6 a supplier must honor “all warranties expressed
and implied under applicable State law. A supplier must not charge the beneficiary or the
Medicare program for the repair or replacement of Medicare covered items or for
services covered under warranty. This standard applies to all purchased and rented items,
including capped rental items, as described in § 414.229 of this subchapter. The supplier
must provide, upon request, documentation that it has provided beneficiaries with
information about Medicare covered items covered under warranty, in the form of copies
of letters, logs, or signed notices.” 42 C.F.R. § 424.57(c)(6) (2006).

The fraud investigator specifically requested that Petitioner provide proof of warranty
coverage pursuant to this supplier standard. CMS Ex. 4, at 6. Petitioner provided a blank
“Customer Briefing Form” where a customer was to check that he or she received
detailed instruction on “Products and Warranty, Proof of Delivery and No Return policy.”
CMS Ex. 4, at 15. However, I can find no documentation indicating that Petitioner ever
provided CMS with product and warranty information provided to beneficiaries in the
form of letters, logs, or signed notices.

I therefore conclude that it is undisputed that Petitioner has not provided documentation
that she has provided beneficiaries with information about Medicare covered items
covered under warranty. I therefore find Petitioner is not in compliance with supplier
standard 6, and CMS is entitled to summary judgment.

Supplier Standard 8 (failure to make its location accessible to beneficiaries)

Supplier standard 8 “[p]ermits CMS, or its agents to conduct on-site inspections to
ascertain supplier compliance with the requirements of this section. The supplier location
must be accessible during reasonable business hours to beneficiaries and to CMS, and
must maintain a visible sign and posted hours of operation.” 42 C.F.R. § 424.57(c)(8)
(2006).

The fraud investigator specifically requested a receipt for a portable ramp or a protocol
for assisting beneficiaries. CMS Ex. 4, at 6. The fraud investigator took pictures of
Petitioner’s business, including a visible sign, and the fraud investigator was able to enter
Petitioner’s location during reasonable posted hours to interact with management and to
ascertain supplier compliance. /d. at 1-4, 21. Petitioner has also provided a July 26,
2007 email from Petitioner to the fraud investigator regarding handicapped accessibility
but provides no pictures allegedly attached to the email. P. Ex. 1, at 37.

I cannot conclude for purposes of summary judgment that Petitioner was in violation of
this supplier standard. There is no evidence of any notice provided to Petitioner as to
how the lack of a ramp specifically affected the accessibility of Petitioner’s location.
Further, Petitioner appears to dispute a genuine issue of material fact with regard to her
compliance with signage and staffing requirements pursuant to this supplier standard.
Thus, CMS has not met its burden and is not entitled to summary judgment with regard to
supplier standard 8.

Supplier Standard 10 (failure to have a comprehensive liability insurance policy)

Supplier Standard 10 provides that a supplier must have “a comprehensive liability
insurance policy in the amount of at least $300,000 that covers both the supplier’s

place of business and all customers and employees of the supplier. In the case of a
supplier that manufactures its own items, this insurance must also cover product liability
and completed operations. Failure to maintain required insurance at all times will result
in revocation of the supplier’s billing privileges retroactive to the date the insurance
lapsed.” 42 C.F.R. § 424.57(c)(10) (2006).

The fraud investigator specifically requested, within two business days, a
“{c]omprehensive liability insurance policy and/or the Certificate of Insurance showing
NSC as the certificate holder” pursuant to this supplier standard. CMS Ex. 4, at 6. The
fraud investigator noted on his site investigation report that Petitioner’s certificate
contained an incomplete address. Jd. at 3.

It appears that Petitioner provided the NSC investigator with a certificate of liability
insurance, in the requisite amount, but it had an incomplete address. CMS Ex. 4 at 3; P.
Ex. 1, at 44. On my inspection of the documents Petitioner submitted, I can determine
that the suite number is missing from Petitioner’s address on Petitioner’s certificate of
commercial general liability insurance. P. Ex. 1, at 44.

Thus, by coming forward with this evidence, Petitioner appears to raise a dispute as to a
genuine issue of material fact with regard to her compliance with supplier standard 10.
For purposes of summary judgment, I will not determine that Petitioner was in violation
with this supplier standard, despite CMS’s concerns about an incomplete address. I
therefore determine that CMS is not entitled to summary judgment with regard to this
supplier standard.
Supplier Standard 12 (failure to have written instructions or information for
beneficiaries on the use of equipment)

In accordance with supplier standard 12 a supplier “must be responsible for the delivery
of Medicare covered items to beneficiaries and maintain proof of delivery. (The supplier
must document that it or another qualified party has at an appropriate time, provided
beneficiaries with necessary information and instructions on how to use Medicare-
covered items safely and effectively).” 42 C.F.R. § 424.57(c)(12) (2006).

The fraud investigator specifically requested “[d]ocumentation for written
instruction/information on beneficiary use/maintenance of supply,” including
“educational material/training material” pursuant to this supplier standard. Petitioner
appears to have provided a blank one-page “Customer Briefing Form” checklist and a
one-page “Patient Post Education Form.” CMS Ex. 4 at 15, 19. Both of the forms are
totally devoid of any meaningful written instructions or information to assist Medicare
beneficiaries with their supplies. Jd.

Petitioner has not submitted more than a scintilla of supporting evidence on this issue,
and I conclude that it is undisputed that Petitioner did not provide appropriate
documentation with the necessary information and instruction on how to use Medicare
covered items safely and effectively. Therefore, Petitioner is not in compliance with this
supplier standard, and CMS is entitled to summary judgment.

Supplier Standard 14 (failure to have a repair or service contract)

To comply with Supplier Standard 14, a supplier “[m]ust maintain and replace at no
charge or repair directly, or through a service contract with another company, Medicare-
covered items it has rented to beneficiaries. The item must function as required and
intended after being repaired or replaced.” 42 C.F.R. § 424.57 (c)(14) (2006).

The fraud investigator specifically requested, within two business days, a repair
contract/service agreement and a return policy. Petitioner has not provided any
supporting evidence of such a repair contract/service agreement. Further, Petitioner
provided proof of a blank “No Return Policy” (CMS Ex. 4, at 14) and a 2003 document
signed by an apparent client certifying to the “No Return Policy” (P. Ex. 1, at 181), which
does not comport with the requirements of this supplier standard. Petitioner cites to her
exhibits “E” and “V” and CMS Ex. 4 to show she had the necessary inventory, credit
agreements, and repair contracts to comply with this supplier standard. P. Br. at 22.
However, after reviewing Petitioner’s exhibits, I do not find any such agreements.

Thus, I conclude that Petitioner has not raised a genuine issue of fact as to whether
Petitioner was in compliance with this supplier standard, and CMS is entitled to summary
judgment.

Supplier Standard 20 (failure to maintain a complaint log)

Supplier Standard 20 states that a supplier “[mJust maintain the following information on
all written and oral beneficiary complaints, including telephone complaints, it receives:
(i) The name, address, telephone number, and health insurance claim number of the
beneficiary. (ii) A summary of the complaint; the date it was received; the name of the
person receiving the complaint, and a summary of actions taken to resolve the complaint.
(iii) If an investigation was not conducted, the name of the person making the decision
and the reason for the decision.” 42 C.F.R. § 424.57 (c)(20) (2006).

The fraud investigator specifically requested that Petitioner provide him, within two
business days, a complaint log pursuant to this supplier standard. Petitioner has provided
an undated complaint from one of Petitioner’s clients. P. Ex. 1, at 213. The nature of the
complaint was apparently regarding the client’s concern regarding a visit from a federal
agent investigating his receipt of wheelchairs. Id.

I note that Petitioner only submitted one complaint, which does not comport with all the
information collection requirements of Supplier Standard 20. However, for purposes of
summary judgment, | will infer that Petitioner has raised a dispute as to a genuine issue
of material fact with regard to whether Petitioner maintained a compliant log in
compliance with this supplier standard. Thus, I do not find that CMS met its burden on
summary judgment with regard to supplier standard 20.

In sum, based on the undisputed facts, I find Petitioner did not meet the requirements of
multiple supplier standards. CMS clearly had a legitimate basis to deny Petitioner’s June
25, 2007 Medicare reenrollment application because Petitioner was not in compliance
with the applicable regulations and is thus entitled to summary judgment. See
1866I1CPayday.com, DAB No. 22839, at 13 (“[F]ailure to comply with even one supplier
standard is a sufficient basis for [denying] a supplier’s [Medicare] billing privileges.”).

2) CMS had a legitimate basis to deny Petitioner’s August 22, 2007 Medicare
reenrollment application because Petitioner was not in compliance with supplier
regulations.

The Medicare hearing officer also issued a November 23, 2010 reconsideration decision
based on a December 11, 2007 initial determination by the CMS contractor denying
Petitioner’s second reenrollment application dated August 22, 2007. CMS Exs. 7, 8, 11.

It is undisputed that on October 16, 2007, the same NSC fraud investigator attempted an
on-site inspection of a 6420 Richmond Avenue, Houston, TX address Petitioner listed on
the second reenrollment application. CMS Ex. 9; CMS Ex. 11, at 8; P. Br. at 6. The
fraud investigator found the office closed at 12:15 p.m. The fraud investigator left a
notice with regard to the inspection attempt that stated in part:

“{T]he visit was unsuccessful because the facility was closed or an
authorized representative was not available. A second unannounced
attempt will be made soon during your posted hours of operation. If

we are unable to complete the inspection, it may be concluded that this
company is not open for business. In addition, the company will be
determined to be in non-compliance with the 21 Medicare DMEPOS
Supplier Standards as listed in 42 C.F.R. 424.57(c), and it will be subject
to denial or revocation of its Medicare DMEPOS supplier number.”

CMS Ex. 10.

On October 17, 2007, the NSC fraud investigator made a second attempt at 11:40 a.m. to
inspect the facility. CMS Ex. 9. Again, the fraud investigator found the office closed.
He took pictures and completed a written report. Jd. CMS has also provided written
direct testimony to support the fraud investigator’s report. CMS Ex. 17, at 4.

Petitioner does not dispute that the office was locked and unattended during the fraud
investigator’s on-site visit on October 16, 2007. P. Br. at 2. Petitioner questions the site
visit the next day because she believes that the fraud investigator should have left notice
at that time if he in fact attempted to conduct a site inspection. P. Br. at 2. Nonetheless,
Petitioner argues that she was “locked out illegally” from the business during this
timeframe. Jd.

However, Petitioner cannot defeat CMS’s summary judgment motion on this issue
because Petitioner has not furnished any evidence of a dispute concerning a material fact
that, if proven, would affect the outcome of the case under governing law. Petitioner
does not support the claim that the office was illegally closed with any evidence.
Petitioner merely makes statements that Petitioner previously complained about this issue
to other governmental authorities. P. Br. at 2. Petitioner’s statements alone, without
supporting evidence or documentation, do not create a genuine issue of disputed material
fact.

CMS contends that it attempted, and was unable to conduct, an on-site review of
Petitioner’s facility during Petitioner’s posted hours of operation in October of 2007
because the facility was closed. In accordance with supplier standard 8, a Medicare
supplier must permit “CMS, or its agents to conduct on-site inspections to ascertain
supplier compliance with the requirements of this section. The supplier location must be
accessible during reasonable business hours to beneficiaries and to CMS....” 42 C.F.R.

§ 424.57(c)(8) (2007). The documentary evidence Petitioner has submitted does not
demonstrate Petitioner’s compliance with supplier standard 8 at the time of the on-site
review. Instead, Petitioner acknowledges that the office was closed and does not produce
any evidence to show why Petitioner was “locked out illegally.”

Furthermore, a showing that Petitioner was operational at some time prior to, or after, the
on-site review would not provide a basis for reversing the denial of Petitioner’s
enrollment application. CMS is authorized to deny a supplier’s Medicare billing
privileges based upon the failure to be accessible when the inspector attempted an on-site
review, regardless of whether it may have been operational at some earlier or later time.
See Mission Home Health., DAB No. 2310 (2010). CMS and its contractors have limited
resources and cannot be compelled to attempt multiple on-site inspections during a
potential enrollee’s posted business hours to determine if the facility complies with all
Medicare requirements. Thus, I find the CMS decision to deny Petitioner’s Medicare
enrollment and billing privileges was justified based upon the unrefuted observations of
the fraud investigator that Petitioner was not open and accessible during business hours
during the attempted on-site review in October of 2007.

Therefore, CMS is entitled to summary judgment with regard to its denial of Petitioner’s
August 22, 2007 Medicare reenrollment application. Petitioner clearly was not in
compliance with supplier standard 8, as it is undisputed that Petitioner did not permit
CMS, or its agents, to conduct an on-site inspection to ascertain supplier compliance with
applicable Medicare requirements.

3) CMS had a legitimate basis to deny Petitioner’s April 4, 2008 Medicare
reenrollment application because Petitioner was not in compliance with supplier
regulations.

The Medicare hearing officer also issued a November 23, 2010 reconsideration decision
based on a May 30, 2008 initial determination by a CMS contractor denying Petitioner’s
third reenrollment application dated April 4, 2008. CMS Exs. 12, 13, 16.

It is undisputed that on April 22, 2008 at 8:45 a.m., the same NSC fraud investigator
attempted an on-site inspection at Petitioner’s place of business at 6420 Richmond
Avenue, Houston, TX. Petitioner’s posted hours were 8:30 a.m. to 4:30 p.m. CMS Ex.
14, at 1,7. The fraud investigator discovered that a property management company had
placed a plaque on Petitioner’s door. CMS Ex. 14, at 7; CMS Ex. 17, at 4. The plaque
stated that the property management had changed the lock on Petitioner’s door due to the
delinquency of rent. /d. The notice further stated that Petitioner could obtain a key to the
office only upon payment of all delinquent amounts. Jd.

The fraud investigator left a notice of the attempted inspection. CMS Ex. 15. The notice
warned:
A representative of the National Supplier Clearing house attempted

to conduct an inspection of your company, Experts Are Us, Inc. The
first attempt was made today, 4/22/08; however, the visit was
unsuccessful because the facility was closed or an authorized
representative was not available. A second unannounced attempt will
be made soon during your posted hours of operation. If we are unable
to complete the inspection, it may be concluded that this company is not
open for business. In addition, the company will be determined to be in
non-compliance with the 21 Medicare DMEPOS Supplier Standards as
listed in 42 CFR 424.47(c), and it will be subject to denial or revocation
of its Medicare DMEPOS supplier number.

Id. The fraud investigator also provided written direct testimony to support his report.
CMS Ex 17, at 4.

The fraud investigator reported making a second attempt at a site inspection on April 23,
2008 at 8:30 a.m. and found the same plaque on Petitioner’s door. CMS Ex. 14; CMS
Ex. 17, at 4. Further, the fraud investigator reported that the Petitioner’s business phone
number was no longer listed with directory assistance, which suggests a violation of
supplier standard 9. CMS Ex. 14, at 10; CMS Ex. 17, at 4.

Petitioner disputes the second attempt at an on-site inspection on April 23, 2008 only.

P. Br. at 8. In support of her contention, Petitioner cites to affidavits that she did not
include with her submitted response brief and exhibits. Jd. However, for purposes of
summary judgment, even if I were to infer that the fraud investigator did not make a
second attempt at an on-site inspection on April 23, 2008, it is immaterial to my decision.

Like the October 2007 site visit discussed above, CMS contends that it attempted, but
was unable to conduct, an on-site review of Petitioner’s facility on April 22, 2008
because the facility was closed. The documentary evidence Petitioner has submitted does
not demonstrate Petitioner’s compliance with all Medicare requirements at the time of the
on-site inspection. Instead, Petitioner concedes that the office was closed on this date.

Again, CMS is authorized to deny a provider or supplier’s Medicare billing privileges
based upon the failure to be accessible when the inspector visited its address, regardless
of whether it may have been operational at some earlier or later time. See Mission Home
Health, DAB No. 2310. Only one attempted site visit is necessary during a potential
enrollee’s posted business hours, as CMS and its contractors have limited resources and
cannot be compelled to attempt multiple on-site inspections to determine if the facility is
in compliance with Medicare requirements. Thus, I find the CMS decision to deny
Petitioner’s Medicare enrollment and billing privileges was justified based upon the
uncontested observations of the fraud inspector that Petitioner was not open during
business hours during the attempted on-site inspection on April 22, 2008. Therefore,
CMS is entitled to summary judgment with regard to its denial of Petitioner’s April 4,
2008 Medicare reenrollment application.

IV. Conclusion

I deny Petitioner’s Motion for Summary Judgment. The undisputed facts establish that
CMS is entitled to summary judgment as a matter of law with regard to all three
reconsideration decisions dated November 23, 2010. I therefore grant summary
judgment in favor of CMS and sustain the denials of Petitioner’s Medicare reenrollment
applications.

/s/
Joseph Grow
Administrative Law Judge