Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
In the Case of:
Mohammad H. Azarpira, D.D.S., DATE: April 28, 1995
Petitioner,

Docket No. C-93-085
Decision No. CR372

-vo

The Inspector General.

DECISION

By letter dated April 23, 1993, the Inspector General
(I.G.) of the United States Department of Health and
Human Services (DHHS) notified Petitioner Mohammad H.
Azarpira' that, as a result of his failure to repay his
Health Education Assistance Loans (HEALS) or to enter
into an agreement to repay his HEALs, he was being
excluded under sections 1128(b)(14) [42 U.S.C. § 1320a-
7(b) (14) ) and 1892 [42 U.S.C. § 1395ccc) of the Social
Security Act (Act)? from participation in Medicare and in

' Petitioner is known also as M. Hassan Azarpira

and Hassan Azarpira. Petitioner's brief (P. Br.) at page
10; Petitioner's exhibit (P. Ex.) 5.

2? This Decision does not address Petitioner's
exclusion under section 1892 of the Act, for two reasons.
First, it is not clear that I have the authority to
review an exclusion imposed pursuant to section 1892.
See I.G.'s brief (I.G. Br.) at page 3; James F. Cleary,
D.D.S., DAB CR252 (1993); Charles K. Angelo, Jr., M.D.,
DAB CR290 (1993); and Joseph Marcel-Saint Louis, M.D.,
DAB CR320 (1994). Second, for purposes of my decision in
this case, the issue is moot, because I have found
Petitioner's exclusion to be authorized under section
1128(b) (14) of the Act.
2

the State health care programs enumerated in section
1128(h) of the Act [42 U.S.C. § 1320a-7(h)].?

By letter dated June 18, 1993, Petitioner timely
requested a hearing before an administrative law judge
(ALJ).* During a telephone prehearing conference held on
July 28, 1993, Petitioner stipulated that: 1) he had
received a HEAL; 2) he had not repaid his HEAL; and 3) he
was in default on his HEAL. August 2, 1993 Prehearing
Order. Petitioner requested, however, that Judge Leahy
hear the issue of whether, prior to his exclusion,
Petitioner was given all reasonable administrative
opportunities to repay his HEAL. Id. During this
conference also, the parties agreed the case could be
heard via an exchange of written briefs and documentary
evidence in lieu of an in-person hearing.’ Id.

Upon careful consideration of the record before me, I
find that there exist no facts of decisional significance
genuinely in dispute and that the only matters to be
decided are the legal implications of the undisputed
material facts. I find that DHHS has taken all
reasonable steps available to secure Petitioner's
repayment of his HEALs. Consequently, it was reasonable
for the I.G. to exclude Petitioner from participation in

3 The State health care programs from which
Petitioner has been excluded include Medicaid, the
Maternal and Child Health Services Block Grant under
Title V of the Act, and the Block Grants to States for
Social Services under Title XX of the Act. Unless
otherwise indicated, hereafter I refer to the State
health care programs from which Petitioner has been
excluded as "Medicaid."

‘4 This case was assigned originally to
Administrative Law Judge Mimi Hwang Leahy. The case was
reassigned to me on April 14, 1995.

5 In this Decision, I cite the I.G.'s motion for
summary disposition and accompanying brief as I.G. Br. at
(page). I cite Petitioner's response as P. Br. at
(page). I cite the I.G.'s reply to Petitioner's response
as I.G. R. Br. at (page).

The I.G. submitted 28 exhibits (I.G. Exs. 1-28) with her
motion for summary disposition. Petitioner submitted
seven exhibits (P. Exs. 1-7) with his opposition. The
parties did not object to the admission of each other's
proposed exhibits. Thus, I am admitting I.G. Exs. 1-28
and P. Exs. 1-7 into evidence.
3

Medicare and to direct his exclusion from participation
in Medicaid. Social Security Act, section 1128(b) (14)
(42 U.S.C. § 1320a-7(b)(14)]. Further, I conclude that
the period of exclusion directed and imposed against
Petitioner by the I.G. is reasonable. 42 C.F.R. §
1001.1501.

APPLICABLE LAW

Section 1128(b) (14) of the Act [42 U.S.C. § 1320a-
7(b) (14) ) provides in pertinent part as follows:

(b) PERMISSIVE EXCLUSION.-The Secretary [of DHHS] may
exclude the following individuals and entities from
participation in any program under title XVIII [Medicare]
and may direct that the following individuals and
entities be excluded from participation in any State
health care program [defined in subsection (h) of this
section as including, but not limited to, Medicaid):

(14) DEFAULT ON HEALTH EDUCATION LOAN OR SCHOLARSHIP
OBLIGATIONS.-Any individual who the Secretary
determines is in default on repayments of
scholarship obligations or loans in connection with
health professions education made or secured, in
whole or in part, by the Secretary and with respect
to whom the Secretary has taken all reasonable steps
available to the Secretary to secure repayment of
such obligations or loans...

Social Security Act, section 1128(b)(14) [42 U.S.c. §
1320a-7(b) (14) ).
ISSUES
The only issue in this case is whether, prior to his
exclusion, Petitioner was given all reasonable
administrative opportunities to repay his HEALs.
FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. While studying dentistry, Petitioner applied for and
received the following HEALs:

$10,000.00 1984/February I.G. Exs. 3, 25
3,000.00 1984/April I.G. Exs. 4, 25
2,500.00 1985/January I.G. Exs. 5, 6, 25
8,865.00 1985/March I.G. Exs. 7, 8, 25

4,000.00 1985/June I.G. Exs. 9, 10, 25
4

11,750.00 1985 /November I.G. Exs. 11, 12, 25
15,000.00 1986/June I.G. Exs. 13, 14, 25

2. HEALs are insured by the United States Government.
I.G. Ex. 25.

3. Due to Petitioner's failure to repay his seven HEAL
notes as promised, judgment in the amount of $90,039.93
was entered against him in favor of the Student Loan
Marketing Association (SLMA), which had purchased his
notes. The judgment was entered on October 2, 1990, in
the United States District Court, Northern District of
Illinois, Eastern Division, Case No. 90 C 3248. I.G.
Exs. 17, 18.

4. SLMA assigned its judgment to the United States
Government and submitted a claim to the Health Resources
and Services Administration (HRSA) of the Public Health
Service (PHS) of DHHS for the amount due. I.G. Exs. 20,
21, 25, 26.

5. By letter dated January 30, 1991, Petitioner was
notified by HRSA that $92,023.00 was due in payment of
his HEALs as of January 18, 1991. HRSA instructed
Petitioner on how, if he was unable to remit the total
due within 30 days, he could request entry into a
repayment agreement. I.G. Ex. 22.

6. Petitioner failed to make any payment in response
and failed to respond to the instructions on how to enter
into a repayment agreement. I.G. Ex. 25.

7. By letter dated April 4, 1991, Petitioner was
notified by HRSA that $93,453.42 was due in payment of
his HEALs as of March 31, 1991. Petitioner was advised
that his case would be referred to the United States
Attorney for enforced collection if he failed to indicate
within 15 days how he intended to resolve his delinquent
indebtedness. I.G. Ex. 23.

8. Petitioner failed to make any payment in response and
failed to respond in writing to this letter. I.G. Ex.
25.

9. By letter dated July 17, 1991, Petitioner was
notified by HRSA that $95,261.31 was due in payment of
his HEALS as of July 17, 1991. Petitioner was advised
again that his case would be referred to the United
States Attorney for enforced collection if he failed to
indicate within 15 days how he intended to resolve his
delinquent indebtedness. I.G. Ex. 24.
5

10. Petitioner failed to make any payment in response
and failed to respond in writing to this letter. I.G.
Ex. 25.

11. Petitioner was notified by HRSA, in a document dated
November 10, 1992 and entitled Certificate of
Indebtedness, that he owed $105,050.22 in payment of his
HEALs as of October 31, 1992. HRSA noted that Petitioner
had failed to make any payments and had failed to respond
to any of the instructions on how to enter into a
repayment agreement. As a result, HRSA notified
Petitioner that his debt had been referred to the
Department of Justice for enforcement of the judgment
entered against him. I.G. Ex. 25.

12. Petitioner failed to make any payment in response to
HRSA's notice and failed to respond to the instructions
on how to enter into a repayment agreement. I.G. Br. at
7.

13. By letter dated December 14, 1992, HRSA again sent
Petitioner instructions on how to establish a repayment
agreement. HRSA advised Petitioner that, as an
alternative, Petitioner could establish an offset
agreement by which his Medicare and/or Medicaid
reimbursements would be applied to his account. HRSA
further advised Petitioner as follows:

If you are unwilling or unable to negotiate an
offset or repayment agreement within 60 days, we
will immediately refer your case to the Office of
the Inspector General (OIG) for initiation of an
exclusion from participation in the Medicare program
+ . + [and] any State health care program, including
Medicaid . . . until your entire debt has been
repaid.

I.G. Ex. 27.

14. Petitioner failed to make any payment in response,
failed to respond to the instructions on how to enter
into a repayment agreement, and failed to provide the
information and signed statement necessary to establish
an offset agreement. I.G. Br. at 8.

15. Petitioner failed to make any payment on his HEALs
until June 1993, after his exclusion had become
effective. On June 30, 1993, Petitioner made a $50.00
payment through the U.S. Attorney's office. P. Ex. 4.

16. The repayment agreement Petitioner entered into with
the U.S. Attorney's office in the summer of 1993, after
6

his exclusion had become effective, does not pay even the
interest that accrues each month on his HEALS. I.G. Br.
at 9, footnote 4; I.G. R. Br. at 1-2; P. Ex. 4.

17. Petitioner remains in default on repayment of his
HEALS, and he now owes a balance in excess of
$112,000.00. I.G. R. Br. at 2.

18. The Secretary has taken all reasonable steps
available to secure repayment of Petitioner's HEALs. 42
C.F.R. § 1001.1501(a) (2); Finding 13.

19. The Secretary has delegated to the I.G. the
authority to exclude individuals and entities from
participation in Medicare and to direct exclusion from
participation in Medicaid. 53 Fed. Reg. 12993 (1988);
see also 1987 U.S.C.C.A.N. 682, 695.

20. The period of exclusion which the I.G. imposed and
directed against Petitioner is reasonable. 42 C.F.R. §
1001.1501.

DISCUSSION

I. The I.G. has the authority to exclude Petitioner
from participating in Medicare and to direct that
Petitioner be excluded from participating in Medicaid.

Section 1128(b) (14) of the Act [42 U.S.C. § 1320a-

7(b) (14) ] provides that the Secretary (or her delegate,
the I.G.) may exclude a party from participating in
Medicare and Medicaid who:

is in default on repayments of scholarship
obligations or loans in connection with health
professions education made or secured, in whole
or in part, by the Secretary and with respect
to whom the Secretary has taken all reasonable
steps available to the Secretary to secure
repayment of such obligations or loans... .

There is no dispute that Petitioner's HEAL obligations
arise from loans made "in connection with health
professions education." There is also no dispute that
Petitioner defaulted on repayment of his HEALs.
Therefore, if I conclude that the Secretary took "all
reasonable steps available" to secure repayment from
Petitioner of his HEALS, I must find that the I.G. had
authority to exclude Petitioner under section 1128(b) (14)
of the Act (42 U.S.C. § 1320a-7(b) (14) ].
7

The efforts made by HRSA to obtain Petitioner's repayment
of his HEAL debt included sending notices to Petitioner
over a nearly two-year period. Specifically, notices
were sent to Petitioner on January 30, 1991 (I.G. Ex.
22); April 4, 1991 (I.G. Ex. 23); July 17, 1991 (I.G. Ex.
24); November 10, 1992 (I.G. Ex. 25); and December 14,
1992 (I.G. Ex. 27). Petitioner never followed HRSA's
instructions for establishing a repayment agreement, nor
did he send any payment in response.

In the last notice, sent to Petitioner on December 14,
1992, Petitioner was advised that an alternative method
of repayment would be for him to enter into an offset
agreement. Under an offset agreement, Petitioner's
Medicare and Medicaid reimbursements would be applied to
his HEALs. Petitioner did not provide the information
and signed statement necessary to establish an offset
agreement.

Petitioner asserts that these efforts do not constitute
"all reasonable steps available" on the part of the
Secretary to secure repayment of Petitioner's HEALs.
Petitioner argues that "(s]Jending me a letter with
financial statement forms every now and then does not
resolve anything." P. Br. at 8.

The record reflects, however, that Petitioner was sent
numerous demands to repay his HEALs. Petitioner knew he
was in default. Yet, notwithstanding this knowledge,
Petitioner made no payment from October 1, 1989, when his
payments were to have begun (I.G. Ex. 25), until June
1993, after his exclusion had become effective. P. Ex.
4.

Petitioner alleges that his income was not high enough to
support much repayment during the years through 1992 and
that he could not afford the monthly payments demanded in
negotiations with DHHS. However, even assuming this is
true, Petitioner's refusal to complete the financial
statements necessary to enter into a repayment agreement
prevented HRSA from knowing what Petitioner could afford.

Petitioner's negotiations with the U.S. Attorney's office
and his repayment "agreement with the U.S. Justice
Dept.," have resulted in his making some payments on his
HEALs. P. Br. at 3-4; I.G. Br. at 8-9. Any payments
made, however, were made after his exclusion had become
effective. Further, Petitioner's payments have been too
small to pay even the interest that accrues on his HEALs.
Specifically, PHS reports that interest of $700.00 per
month accrues on Petitioner's HEAL debt. I.G. Br. at 9,
footnote 4.
8

PHS is unwilling to stay Petitioner's exclusion for a
repayment schedule that would fail to reduce Petitioner's
HEAL debt. I do not construe the statutory phrase "(a)ll
reasonable steps available" to mean that the Secretary
must excuse individuals' repayment obligations based on
their financial status. Nor do I construe it to mean
that the Secretary should accept repayment arrangements
which do not accomplish the objective of repayment, or
which require the Secretary to enter into agreements that
are not in the public interest. See James F. Cleary,
D.D.S., DAB CR252 at 12-13 (1993).

The intent of Congress in enacting section 1128(b) (14) of
the Act was, in part, to provide the Secretary with a
mechanism by which she could assert some leverage over
individuals who default on their HEALS. Thus, section
1128(b) (14) is, among other things, a debt collection
tool by which the Secretary can collect a debt once
voluntary persuasion has failed. In assuming
Petitioner's HEAL debt, the Secretary acquired the right
-- and the obligation -- to collect on that debt. See
Charles K. Angelo, Jr., M.D., DAB CR290 at 11 (1993).

Section 1128(b)(14) of the Act requires the Secretary
only to take all reasonable steps available to secure
repayment. I construe the term "all reasonable steps
available" to mean all reasonable and legitimate means of
debt collection. The relevant regulation states that all
reasonable steps will have been taken to collect a HEAL
debt if PHS offers a debtor a Medicare and Medicaid
reimbursement offset arrangement as required by section
1892 of the Act prior to the I.G.'s imposing an
exclusion. 42 C.F.R. § 1001.1501(a) (2).

The Secretary reasonably could infer, from Petitioner's
conduct, that Petitioner was unlikely to repay his debt
voluntarily. The Secretary provided Petitioner with many
opportunities to repay his debt and to enter into a
repayment agreement. Petitioner was offered the
opportunity to enter into a Medicare and Medicaid
reimbursement offset agreement prior to his exclusion.
Petitioner did not avail himself of any of these
opportunities for repayment. I conclude that the
Secretary did that which was necessary to establish
conclusively that all reasonable steps available were
taken to collect Petitioner's HEAL debt. 42 C.F.R. §
1001.1501(a) (2).

I have found that the Secretary took all reasonable steps
to collect Petitioner's HEAL debt prior to excluding him.
Consequently, I find that the I.G. had the authority to

exclude Petitioner from participating in Medicare and to
9

direct that Petitioner be excluded from participating in
Medicaid. Social Security Act, section 1128(b)(14) [42
U.S.C. § 1320a-7(b)(14)]; 42 C.F.R. § 1001.1501.

II. The period of exclusion imposed and directed
against Petitioner by the I.G. under section 1128(b) (14)
of the Act is reasonable.

The notice of exclusion which the I.G. sent to Petitioner
advised him that his exclusion would remain in effect
until his debt was completely satisfied. Thus, in this
case, only when Petitioner's HEALs are fully repaid, will
Petitioner's HEAL debt have been resolved to the
satisfaction of the Secretary. 42 C.F.R. § 1001.1501;°
I.G. Br. at 12-15.

Under the circumstances of this case, in which
Petitioner:

(1) failed to respond to instructions on how to
enter into a repayment agreement;

(2) failed to provide the information and signed
statement necessary to establish an offset
agreement;

(3) made his first payment only after his exclusion
had become effective; and

(4) has never made payments large enough to pay even
the interest that accrues on his HEALs;

exclusion until Petitioner's HEALs are fully repaid is a
reasonable course of action.

6 I note, however, that under 42 C.F.R. §
1001.1501(b), if Petitioner's obligations are otherwise
resolved to PHS' satisfaction, Petitioner may be eligible
for reinstatement prior to having fully repaid his HEALs.
However, this does not detract from my finding that it is
reasonable here that Petitioner remain excluded until his
HEALS have been fully repaid.
10
CONCLUSION

The Secretary has taken all reasonable steps available to
secure Petitioner's repayment. Consequently, it is
reasonable for the I.G. to exclude Petitioner from
participating in Medicare and to direct that he be
excluded from participating in Medicaid. Furthermore,
the period of exclusion imposed by the I.G. is
reasonable.

/s/

Jill S. Clifton
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
In the Case of:

Hospicio en el Hogar

de Utuado, DATE: April 24, 1995
Petitioner,
- veo Docket No. C-94-360

Decision No. CR371
Health Care Financing
Administration.

DECISION

Petitioner requested a hearing from a determination by
the Health Care Financing Administration (HCFA) to
terminate Petitioner's participation in the Medicare
program. The case was assigned to me for a hearing and a
decision. On November 1, 1994, I conducted a hearing in
San Juan, Puerto Rico.

I have considered the applicable law and regulations, the
evidence which I received at the hearing, and the
parties' arguments.! I conclude that HCFA proved, by a
preponderance of the evidence, that Petitioner failed to
comply with conditions governing its participation in
Medicare. Therefore, HCFA was authorized to terminate
Petitioner's participation in Medicare.

I. Issues, findings of fact, and conclusions of law

The issue in this case is whether HCFA was authorized to
terminate Petitioner's participation in the Medicare
program. In deciding that HCFA was authorized to
terminate Petitioner's participation, I make specific
findings of fact and conclusions of law. After each
finding or conclusion, I cite to the page or pages of the
decision at which I discuss the finding or conclusion.

' In this decision, I refer to specific excerpts
from the transcript of the hearing as "Tr. at (page)."
2

In a case where a provider requests a hearing
from a determination by HCFA to terminate its
participation in Medicare, HCFA must prove, by
a preponderance of the evidence, that the
determination to terminate the provider's
agreement is authorized. Pages 6 - 10.

The elements of HCFA's burden of persuasion
consist of proving that:

a. There exist participation requirements to
which Petitioner may be held accountable.
Pages 10 ~ 11.

b. Petitioner has not complied with Medicare
participation requirements. Pages 11 -
12.

c. Petitioner's failure to comply with

Medicare participation requirements
substantially limits Petitioner's capacity
to render adequate care or adversely
affects the health and safety of
Petitioner's patients. Pages 12 - 13.

HCFA did not deny Petitioner due process when
it terminated Petitioner's participation in
Medicare after a May 6, 1994 resurvey of
Petitioner without first affording Petitioner
the opportunity to correct deficiencies that
were identified at the resurvey. Pages 13 -
15.

HCFA proved, by the preponderance of the
evidence, that Petitioner failed to comply with
conditions of participation in the Medicare
program. HCFA proved that Petitioner failed to
comply with conditions:

a. establishing the duties of the medical
director of a hospice, contained in 42
C.F.R. § 418.54. Pages 21 - 25.

b. requiring the creation and revision of a
plan of care for each patient of a
hospice, contained in 42 C.F.R. § 418.58.
Pages 25 - 28.

c. defining the duties of a hospice's
interdisciplinary group, contained in 42
C.F.R. § 418.68. Pages 28 - 29.
3

5. HCFA was authorized to terminate Petitioner's
participation in the Medicare program. Pages
29 - 30.

II. Discussion
A. Ba round

Petitioner is a hospice, operating in Utuado, Puerto
Rico. A hospice is described under section 1861(dd) (1)
of the Social Security Act (Act) as a Medicare provider
which offers care and services to a terminally ill
beneficiary pursuant to a written plan of care
established and periodically reviewed by the
beneficiary's attending physician, the hospice's medical
director, and its interdisciplinary group.

A hospice provides its care and services in the
beneficiary's home, on an outpatient basis, and, in some
instances, on a short-term inpatient basis. Act, section
1861(dd) (2) (A) (ii). -Hospice services include: nursing
care, physical and other therapy, medical social
services, home health aide services, medical supplies,
physicians' services, short-term inpatient care, and
counseling. Id., section 1861(dd)(1)(A) - (H). In
addition, a hospice provides bereavement counseling for
the immediate family of a terminally ill beneficiary.
Id., section 1861(dd) (2) (A) (i).

On March 10, 1994, Petitioner was surveyed on behalf of
HCFA by the Puerto Rico Department of Health. HCFA Ex.
15 at 1. The purpose of the survey was to determine
whether Petitioner was complying with the requirements of
the Medicare program.

On March 23, 1994, HCFA advised Petitioner that it had
determined that Petitioner was not complying with
Medicare conditions of participation. HCFA Ex. 15 at 1.
HCFA advised Petitioner that it had determined that
Petitioner was not complying with seven conditions
governing Petitioner's participation in Medicare. Id.
These conditions are found in the following regulations:
42 C.F.R. §§ 418.50 (general provisions); 418.54 (medical
director); 418.58 (plan of care); 418.62 (informed
consent); 418.80 (core services); 418.86 (physician

2? Under the Medicare program, an individual is
considered to be "terminally ill" if that individual has
a medical prognosis that he or she is expected to live
six months or less. Act, section 1861(dd) (3) (A).
4

services); and 418.92 (physical therapy, occupational
therapy, and speech-language pathology) .?

HCFA advised Petitioner that, based on the findings that
Petitioner was not complying with conditions of
participation in Medicare, HCFA intended to terminate
Petitioner's participation as a provider of services in
the Medicare program. However, HCFA invited Petitioner
to submit a plan of correction to HCFA to correct the
deficiencies that had been identified at the March 10
survey. HCFA Ex. 15 at 2. HCFA implied that, if
Petitioner submitted a plan of correction which HCFA
found to be acceptable, and the deficiencies were found
to be corrected at a resurvey of Petitioner, then HCFA
would not terminate Petitioner's participation in
Medicare. Id.

On April 7, 1994, Petitioner submitted a plan of
correction to HCFA. HCFA Ex. 16. On April 19, 1994,
HCFA notified Petitioner that HCFA had found the plan not
to be fully acceptable. HCFA Ex. 17. In this
communication to Petitioner, HCFA advised Petitioner that
it could submit a revised plan of correction within 10
days. Id. There is no evidence that Petitioner
submitted a revised plan of correction to HCFA.

3 HCFA now asserts that, in its original notice
to Petitioner, it advised Petitioner that it was not
complying with eleven conditions of participation in
Medicare. The additional conditions of participation
which HCFA found Petitioner not to be complying with are
found at 42 C.F.R. §§ 418.56 (professional management) ;
418.68 (interdisciplinary group); 418.74 (central
clinical records); and 418.88 (counseling services).
HCFA concedes that the March 23, 1994 notification to
Petitioner did not mention these four additional
conditions. However, the statement of deficiencies which
was prepared after the March 10 survey, and which was
transmitted to Petitioner along with the March 23, 1994
notice, did cite these additional conditions. HCFA Ex.
15 at 10 ~- 12, 19 - 30, 34 - 35. I make no findings in
this decision as to whether the notice which HCFA sent to
Petitioner on March 23, 1994 adequately notified
Petitioner of the additional deficiencies found by HCFA.
My reason for not doing so is that the findings made by
HCFA based on the May 6, 1994 resurvey of Petitioner
supersede those made at the initial survey of March 10,
1994.
5

On May 6, 1994, HCFA conducted a second survey of
Petitioner in order to determine whether Petitioner was
complying with the requirements for participation in
Medicare. HCFA found that Petitioner continued to be
noncompliant with conditions of participation in
Medicare. HCFA Exs. 18, 19. The conditions of
participation which HCFA found Petitioner to continue to
contravene are contained in regulations at 42 C.F.R. §§
418.50 (general provisions); 418.54 (medical director) ;
418.58 (plan of care); and 418.68 (interdisciplinary
group). On May 23, 1994, HCFA advised Petitioner of
these findings, and advised it further that HCFA had
affirmed its previous determination to terminate
Petitioner's participation in the Medicare program. HCFA
Ex. 19.

This case addresses the issue of whether HCFA was
authorized to terminate Petitioner's participation in
Medicare due to Petitioner's failure to comply with any
of the four conditions of participation which HCFA found
Petitioner not to be complying with, based on the May 6,
1994 resurvey of Petitioner.

Petitioner's alleged previous failure to comply with
other conditions of participation is not at issue.‘

B. The parties' arguments as to issues of law

This case involves issues of law concerning the
interpretation and application of the Act and relevant
regulations. I decided some of these same issues in
Arecibo Medical Hospice Care, DAB CR363 (1995) and in

‘4 This case does not involve the issue of
whether, at the resurvey of Petitioner, HCFA would be
required to evaluate Petitioner's compliance based on
what Petitioner had promised in its plan of correction.
That is so because HCFA never accepted the plan of
correction. However, had HCFA accepted the plan of
correction, then I would have had to decide whether the
terms of the plan became the operative criteria for
assessing whether Petitioner was complying with the
conditions of participation addressed in the plan. And,
had I found that the terms of the plan became the
operative criteria, then I would have had to evaluate the
evidence in this case on the basis of whether it proved
that Petitioner was not complying with the terms of the
plan of correction.
6

Hospicio en el Hogar de Lajas, DAB CR366 (1995).° As to
those issues, I reach the same conclusions here as I did
in Arecibo and Lajas.

1. Burden of persuasion

a. Allocation to HCFA of the burden of
persuasion

In Arecibo and Lajas, I held that HCFA had the burdens of
coming forward with evidence and proving, by the
preponderance of the evidence, that its determination to
terminate the providers’ participation in Medicare was
justified.® Arecibo at 8 - 13; Lajas at 6 - 8. I
conclude the same here. I do not agree with HCFA’s
argument that the burden of persuasion should be
allocated to Petitioner.

Neither the Act nor regulations governing hearings in
provider termination cases specifically allocate the
burden of persuasion to a particular party. Act,
sections 205(b), 1866(b)(2)(A), (h)(1); 42 C.F.R. Part
498; Lajas at 6. However, the Secretary has given
administrative law judges broad authority to manage the
presentation and receipt of evidence in hearings
concerning whether terminations of participation are
justified. 42 C.F.R. § 498.60(b) (3). From this, I
conclude, as I did in Arecibo and Lajas, that
administrative law judges who preside over hearings
concerning the propriety of terminations of participation
in Medicare have discretion to allocate the burden of
persuasion consistent with the requirements of due
process.

It is both consistent with the requirements of due
process and efficient to allocate to HCFA the burdens of
coming forward and proving, by a preponderance of the

5 As in this case, Arecibo and Lajas involved the
propriety of terminations by HCFA of hospices’
participation in the Medicare program. The same attorney
represented the petitioners in Arecibo, Lajas, and the
present case. The briefs which HCFA and the petitioners
submitted in Arecibo, Lajas, and this case make the same
arguments as to the legal issues which are common to the
three cases.

6 In this decision, I use the term "burden of
persuasion" to refer collectively to the burdens of
coming forward with evidence of a fact and of proving
that fact by a preponderance of the evidence.
7

evidence, that Petitioner failed to comply with
conditions of participation in Medicare. As I held in
Arecibo and Lajas, in a termination case, HCFA will have
obtained from a survey of the provider the facts which
HCFA believes justify the determination that the provider
is not complying with conditions of participation. HCFA
is thus in the best position to identify the facts which
support its determination and to prove those facts.

Allocating the burden of persuasion to the provider would
be neither fair nor efficient. The provider would be
placed in the position of having to prove a negative
proposition ~- that it did not fail to comply with
conditions of participation -- without knowing what or
how much evidence might be necessary to establish that
proposition. Allocating the burden of persuasion to the
provider would invite a massive and unfocused submission
of evidence from the provider.

HCFA advances two arguments to support its assertion that
the burden of persuasion should be allocated to
Petitioner. HCFA's first argument is that the
administrative hearing is essentially an appellate review
of the interpretations of law and the findings of fact of
the State agency surveyors who performed the survey on
which HCFA bases its determination to terminate a
provider's participation.

HCFA asserts that the surveyors must be deferred to
because they have professional expertise. HCFA
posthearing memorandum at 25 ~ 28. HCFA argues that,
given the professional expertise of the surveyors, their
interpretations of regulations and their fact findings
and opinions are presumptively correct and must be
accorded "immense weight." Id. at 28. Based on this
analysis, HCFA argues that a provider who challenges a
surveyor's interpretation of a regulation, or who
challenges a surveyor's findings of fact, must prove that
the surveyor's interpretation or findings are "clearly
erroneous" in order to prevail. Id. HCFA asserts,
alternatively, that findings made by surveyors must be
sustained if they are supported by “substantial
evidence." Id. at 8.

This analysis mischaracterizes the purpose of the
administrative hearing guaranteed to providers by
Congress. It mischaracterizes also the role of the State
agency surveyors in conducting inspections on behalf of
HCFA. HCFA's characterization of the hearing as an
appellate review of interpretations and findings made by
surveyors ignores the fact that Congress directed that
providers whose participation in Medicare is terminated
8

by HCFA be afforded de novo hearings. Congress directed
that the provider whose participation in Medicare is
terminated under the authority of section 1866(b) of the
Act be afforded a right to a hearing to the same extent
as that which is offered to claimants for Social Security
benefits under section 205(b) of the Act. Act, section
1866(h) (1). Section 205(b) has been interpreted
uniformly and often as conferring a right to a de novo
hearing.

The purpose of an administrative hearing in a case
involving a determination by HCFA to terminate a
provider’s participation under the authority of section
1866(b) of the Act is to decide whether the applicable
law and the evidence establish a basis for termination.
In a de novo hearing, no presumption of correctness
attaches to HCFA’s determination. The administrative law
judge must evaluate the law and evidence independently.

The regulations which govern surveys of providers by
State agency surveyors provide that surveyors are
“professionals who use their judgment, in concert with
Federal forms and procedures, to determine compliance

- . . .% 42 C.F.R. § 488.26(a) (3). The regulations
affirm that surveyors are supposed to have expertise in
the activities of the providers which they survey, as
well as knowledge of applicable law and regulations.
Surveyors are expected to use their expertise in
conducting surveys and in evaluating the facts that they
uncover at surveys.

In a hearing concerning the results of a survey, a
surveyor may qualify as an expert witness.’ His or her
opinion as to the meaning of facts may be instructive,
particularly as to the effect that failure by a provider
to comply with Medicare participation requirements may
have on that provider’s ability to provide care to
patients consistent with the requirements of the Act and
regulations. The credible opinion of a surveyor as to an
issue of fact may be dispositive if not rebutted by
evidence offered by the provider.

7 I do not read the regulation as qualifying all
surveyors as expert witnesses. The regulation
establishes the criteria for surveyors’ performance. In
a hearing concerning a survey, HCFA may qualify a
surveyor to be an expert witness. A provider may
challenge a surveyor’s qualifications to testify as an
expert witness. HCFA bears the burden of proving that
any purported expert has the qualifications to testify as
an expert witness.
9

But the fact that surveyors may qualify as expert
witnesses does not suggest that they have been vested
with the authority to interpret the law on behalf of the
Secretary. Neither does it suggest that their opinions
are entitled to a presumption of correctness. There is
nothing in the Act or in regulations that vests State
agency surveyors with authority to interpret law or which
requires their opinions to be afforded special weight.

HCFA's second argument is that a provider whose
participation in Medicare has been terminated by HCFA
should be regarded as an applicant for relief, benefits,
or a privilege. HCFA couples this characterization of
providers with the general principle of administrative
law that, in administrative hearings, the burden of
persuasion is on the applicant, to argue that the burden
of persuasion falls on Petitioner.

HCFA made the identical argument in Arecibo and Lajas. I
found it to be unpersuasive in both cases. Arecibo at 11
~ 13; Lajas at 7 - 8. It is not reasonable to
characterize a provider as an "applicant" who seeks
relief, benefits, or a privilege from HCFA. It is a much
more accurate characterization to view the provider as
having a quasi-contractual relationship with Medicare
that HCFA intends to terminate. In a case involving a
determination to terminate a provider's participation in
Medicare, the provider has already received a privilege
from HCFA which HCFA has determined to extinguish. That
provider's ongoing business activities -- and, in some
cases, its very existence -- will be ended as a
consequence of HCFA's termination of the provider's
participation in Medicare.

A provider does not have an unqualified right to retain
its provider status. A provider's relationship with HCFA
and the Medicare program is governed by the Act,
regulations, and the provider agreement. HCFA may
terminate a provider's participation in Medicare when the
provider has not complied substantially with the
requirements of participation.

In Arecibo and Lajas, I discussed the authorities which
HCFA relies on to support its characterization of
Petitioner as an "applicant." Arecibo at 10 - 13; Lajas
at 8. I concluded that those authorities were not
persuasive. The text on administrative law and the
judicial decisions cited by HCFA to support its argument
restate the general principle that, in an administrative
hearing, the burden of persuasion should be allocated to
the applicant. I am not questioning those authorities.
10

However, for the reasons I have explained above, it is
not reasonable to characterize Petitioner as an
“applicant.”

HCFA relies also on a decision by the Appeals Council of
the Social Security Administration Office of Hearings and
Appeals, Jefferson Memorial Hosp. Ass'n v. Health Care
Financing Administration, Docket No. PS-109, at 17
(1983), to support its argument that the burden of
persuasion should be allocated to Petitioner. As I
explained in Arecibo, I do not find that decision to be
persuasive authority to allocate the burden of persuasion
to Petitioner. Indeed, it may be read to support my
conclusion that the burden of persuasion should be
allocated to HCFA. Arecibo at 12 - 13.

b. The elements of HCFA's burden of
persuasion

HCFA's burden of persuasion in a case involving a
determination to terminate a provider's participation in
Medicare consists of three elements. The three elements
are: (1) the existence of participation requirements
which Petitioner allegedly has not complied with; (2) the
facts which establish that Petitioner has failed to
comply with a Medicare participation requirement; and (3)
that Petitioner's failure to comply with participation
requirements is so substantial as to justify terminating
Petitioner's participation in Medicare.

First, HCFA must prove the existence of the participation
requirements which it alleges that Petitioner has not
complied with. Participation requirements are stated
both in the Act and in implementing regulations. For
example, 42 C.F.R. Part 418 contains numerous regulations
which express both conditions and standards of
participation for a hospice.

If HCFA is relying on the plain language of a section of
the Act or a regulation, it need only identify that
language in order to meet this first element of its
burden of persuasion. For example, in Arecibo and Lajas,
HCFA asserted that the providers failed to comply with
the plain language of 42 C.F.R. § 418.58(b), a section
which governs the way in which hospices are required to
review patient plans of care and to document their
reviews. Arecibo at 19 - 22; Lajas at 17 - 18.

HCFA assumes additional burdens when it relies on an
interpretation of law that is not apparent from the plain
meaning of the law. In that event, HCFA must prove that
11

its interpretation is reasonable and that the provider
had notice of that interpretation.

In both Arecibo and Lajas, I held that the Secretary
delegated authority to HCFA to interpret reasonably the
criteria which governed the participation of providers.
Arecibo at 22; Lajas at 12 - 13. There may be
ambiguities in some regulations which are susceptible to
reasonable interpretation by HCFA. However, the
authority to interpret regulations does not translate
into authority to write requirements into regulations
which are not reasonably described by the language of
those regulations. HCFA does not have the authority to
use the vehicle of interpretation to create participation
requirements which exceed the specific requirements of
the Act or regulations. Nor does HCFA have authority to
interpret ambiguous language in a way that is not
reasonable.

HCFA has the duty to communicate its reasonable
interpretations of the Act or regulations to providers as
a prerequisite to holding providers accountable for
complying with those interpretations. In Arecibo and
Lajas, I held that HCFA could not hold the providers
responsible for complying with an interpretation of a
regulation which was not apparent from the face of the
regulation and which HCFA had not communicated to the
providers. Arecibo at 25; Lajas at 13.

HCFA argues that providers have a duty to comply with
applicable participation requirements. HCFA asserts that
this duty extends to complying with HCFA's
interpretations of law even if HCFA does not communicate
these interpretations to providers. I do not disagree
with HCFA that providers are obligated to comply with
HCFA's interpretations of the law, where HCFA interprets
the law reasonably, and where HCFA puts providers on
notice of its interpretations. However, providers are
not obligated to divine HCFA's interpretation of a law
where the interpretation, albeit reasonable, is not
apparent from the face of the law, and where HCFA has not
communicated the interpretation to providers.

HCFA asserts that I have held previously that providers
have the duty to comply with HCFA's interpretations,
citing my decision in Long Medical Laboratory, DAB CR334,
at 11 - 12 (1994). In the Long Medical Laboratory case,
I held that the provider had a duty to comply with an
unambiguous and explicit requirement of the Act. Where a
requirement stated in the Act or in a regulation is
explicit, HCFA has no obligation to communicate the
requirement to a provider as a prerequisite to holding
12

the provider accountable to it. But, the Long Medical
Laboratory decision did not hold that HCFA may hold a
provider accountable to an interpretation of law which is
not apparent from the plain meaning of the enactment,
without first communicating that interpretation to the
provider.

The second element of HCFA's burden of persuasion is to
prove the facts which establish that a provider has
failed to comply with a Medicare participation
requirement. The evidence which proves these facts may
consist of the testimony of surveyors as to the findings
that they made when they surveyed the provider. It may
consist also of supporting materials, such as patient
records, obtained by the surveyors from the provider.

HCFA must establish contested facts by a simple
preponderance of the evidence. In other words, the
weight of the evidence offered by HCFA must be sufficient
to establish a prima facie case and to overcome any
rebuttal evidence offered by the provider.

Finally, HCFA must prove, again by a preponderance of the
evidence, that a provider's failure to comply with
participation requirements is so substantial as to
justify terminating the provider's participation in
Medicare. The Act authorizes the Secretary to terminate
a provider's participation in Medicare where the provider
fails to comply substantially with the provisions of the
provider participation agreement, the Act, and
implementing regulations, or with a mandated corrective
action plan. Act, section 1866(b)(2)(A). The Secretary
has delegated this authority to HCFA. 42 C.F.R. §
489.53(a)(1), (3).

The Act does not define what is meant by failure to
comply substantially. Regulations establish a test for
substantial noncompliance by stating that a provider will
be found to have failed to comply with conditions of
participation in Medicare where its deficiencies are of
such character as to substantially limit its capacity to
render adequate care or where they adversely affect the
health and safety of patients. 42 C.F.R. § 488.24(a).
Thus, in order to prove a basis to terminate a provider's
participation in Medicare, HCFA must prove that the
provider's deficiencies are substantial within the
meaning of 42 C.F.R. § 488.24(a).

Termination of participation is a remedy to protect
against possible future failures of performance by a
provider, and not a punishment for past wrongs. In any
case in which HCFA seeks to justify terminating a
13

provider's participation in Medicare, the ultimate
question is whether the deficiencies established by HCFA
predict a likelihood that the provider will not be able
to deliver care in the future consistent with the
requirements of the Act and regulations. The Act and
regulations make it plain, however, that an inference may
be drawn from substantial failure by a provider to comply
with participation requirements that the provider is
likely to remain deficient.

There are circumstances where the impact of a provider's
deficiency on that provider's capacity to provide care or
on the health and safety of patients is evident from the
deficiency itself. For example, in Arecibo and Lajas, I
held that the providers' failure to schedule reviews of
patient plans of care or to document reviews of those
plans constituted failure to comply with a basic
requirement of hospice operations, that being the need to
plan the care provided to patients and to monitor and
evaluate the effects of the care that the patients were
receiving from the hospice and its personnel. Arecibo at
26; Lajas at 19 - 20. The providers' failure to plan
care was on its face a failure to comply with a
fundamental prerequisite for participation in the
Medicare program. It was apparent from the failure of
the providers to plan their patients' care that they were
not capable of providing care consistent with the
requirements of the Act and regulations.

There may be circumstances where the impact of a
deficiency on a provider's ability to provide care or on
the health and safety of patients is not apparent from
the facts establishing the existence of the deficiency.
A finding that a provider has violated a condition of
participation does not necessarily flow automatically
from a finding that the provider has not complied with a
Medicare participation requirement. See Lajas at 19.
Moreover, evidence of isolated examples of deficiencies
in providing care may not be sufficient to establish an
overall failure by the provider to provide care
consistent with the requirements of the Act or
regulations.

Thus, in some cases, HCFA may have to prove not only the
existence of a deficiency, but may have to offer
additional evidence to prove that the deficiency is
substantial within the meaning of 42 C.F.R. § 488.24(a)
and the Act. That evidence may consist of evidence which
proves the impact of the deficiency on the provider's
ability to provide care or on the health and safety of
patients. In proving impact, expert opinion as to the
14

likely impact of the deficiency on the capacity of the
provider to provide care may be important.

2. Alleged denial of due process to
Petitioner

Petitioner asserts that HCFA denied Petitioner the
opportunity to comply with Medicare participation
requirements, in violation of the requirements of 42
C.F.R. § 488.28. Petitioner posthearing brief at 7 - 9.
This alleged failure by HCFA, according to Petitioner,
denied Petitioner due process. Id. The providers in
Arecibo and Lajas made the same argument. Arecibo at 5 -
8; Lajas at 8 - 10. In both of those cases, I found the
argument to be unpersuasive. Id. I find the argument to
be unpersuasive in this case as well.

Petitioner bases its argument on its contention that, at
the May 6, 1994 resurvey, the surveyors found Petitioner
to be out of compliance with a standard contained in a
regulation which the surveyors who conducted the March
10, 1994 survey had not cited as a basis for their
conclusion that Petitioner was deficient.* According to
Petitioner, the fact that it was found to be deficient
with respect to a standard not cited previously, gave it
the right to submit a new plan of correction to HCFA to
address that deficiency and all other deficiencies that
were identified at the May 6, 1994 resurvey.

The regulation that Petitioner relies on to support its
argument is 42 C.F.R. § 488.28. This regulation provides
that, where HCFA determines that a provider is not
complying with a standard of participation established in
a regulation, it will give that provider an opportunity
to submit a plan of correction explaining how the
provider will correct the deficiency.

The regulations which govern a provider's participation
in Medicare as a hospice state broad conditions of
participation in the Medicare program. 42 C.F.R. Part
418. For each of the conditions, the regulations state
specific performance criteria as subparts. These
performance criteria are the standards which are referred
to in 42 C.F.R. § 488.28. In surveying a provider for
compliance with Medicare participation requirements, HCFA
may determine that a provider is not complying with one

8’ The standard is set forth at 42 C.F.R. §
418.58(b) and is part of the condition governing plans of
care that hospices create and maintain for their
patients.
15

or more standards of participation, without concluding
that the provider's failure to comply is so substantial
as to constitute a failure to comply with a condition of
participation. In that event, HCFA is obligated, under
42 C.F.R. § 488.28, to give the provider an opportunity
to correct the deficiency. But, where HCFA determines
that a failure by a provider to comply with a standard or
standards is so substantial as to constitute a failure to
comply with an overall condition of participation, HCFA
is not obligated to give that provider the opportunity to
correct the deficiency.

HCFA was not required by 42 C.F.R. § 418.28 to give
Petitioner an opportunity to correct the deficiencies
that were identified at the May 6, 1994 resurvey. It is
true, as Petitioner asserts, that the surveyors who
resurveyed Petitioner on May 6, 1994 found that
Petitioner failed to comply with standards of
participation, including a standard which was not cited
in the report of deficiencies generated after the initial
survey on March 10, 1994. However, the surveyors, and
HCFA, concluded that Petitioner's failure to comply with
these standards was so substantial as to constitute a
failure to comply with conditions of participation.

c. Analysis of the parties' arguments and
contentions concerning Petitioner's compliance

with conditions of participation for hospices

HCFA asserts that, as of the May 6, 1994 resurvey of
Petitioner, Petitioner was not complying with four
conditions of participation in Medicare. These
conditions are stated in 42 C.F.R. §§ 418.50, 418.54,
418.58, and 418.68. I analyze HCFA's and Petitioner's
arguments and the evidence offered by the parties
relevant to each of these four conditions of
participation pursuant to the elements of HCFA's burden
of persuasion that I have described at Part II.B.1.b. of
this decision.

1. Petitioner's alleged failure to comply

with the general provisions condition of
participation stated in 42 C.F.R. § 418.50

HCFA makes two arguments concerning Petitioner's alleged
failure to comply with the requirements of 42 C.F.R. §
418.50. First, HCFA asserts that the regulation states,
as a condition of participation in the hospice program,
that hospices comply with conditions stated elsewhere in
42 C.F.R. Part 418. HCFA avers that Petitioner failed to
comply with this asserted condition of participation
because it failed to comply with conditions of

16

participation stated elsewhere. Second, HCFA asserts
that the regulation may be read, along with other
regulations, to establish as a condition of participation
that hospices provide laboratory services to their
patients. HCFA avers that Petitioner failed to comply
with this asserted condition because Petitioner did not
provide laboratory services to a patient.

I do not find that Petitioner failed to comply with the
requirements of 42 C.F.R. § 418.50. Moreover, even if
Petitioner may have failed technically to comply with the
requirements of this regulation, the evidence does not
establish the deficiency to be so substantial as to prove
that Petitioner failed to comply with a condition of
participation in Medicare.

I do not agree with HCFA's assertion that 42 C.F.R. §
418.50 recites a condition of participation in Medicare
that hospices comply with conditions of participation
stated elsewhere in the regulations. This assertion
relies on the language of 42 C.F.R. § 418.50(a). That
subsection states, as a standard of participation, and
not as a condition of participation, that "[a] hospice
must maintain compliance with the conditions of this
subpart and subparts D and E of .. . [42 C.F.R. Part
418)."

Contrary to HCFA's argument, 42 C.F.R. § 418.50(a) does
not say that a failure by a hospice to comply with any
condition of participation in 42 C.F.R. Part 418 shall
also be a failure to comply with the condition of
participation stated in 42 C.F.R. § 418.50. It states,
at most, that a failure to comply with a condition of
participation stated elsewhere in the regulations may be
construed to constitute a failure to comply with one of
the standards contained in 42 C.F.R. § 418.50. HCFA has
offered no evidence to establish how a failure by a
hospice to comply with this standard, based on its
failure to comply with a condition stated elsewhere,
would satisfy the test for a condition-level deficiency
contained in 42 C.F.R. § 488.24.

More important, I am not persuaded by HCFA's argument
because it would lead to a result which is unnecessary
and which the Secretary did not intend. HCFA's argument
is an attempt to turn every failure by a hospice to meet
a condition of participation into a failure by that
hospice to meet two conditions of participation. I
considered this argument in Lajas, and concluded there,
as I do here, that the Secretary did not intend that a
hospice's failure to comply with a condition of
participation should be construed automatically to
17

constitute a failure to comply with two conditions of
participation. Lajas at 20 - 21.

A finding that a hospice manifests a condition-level
deficiency justifies termination of that hospice's
participation in Medicare. The finding that a hospice
has failed to comply with a condition of participation is
a finding that the hospice cannot deliver care consistent
with the requirements of the Act and regulations or that
it is jeopardizing the health and safety of its patients.
It is wholly unnecessary to make a condition-level
deficiency appear more egregious than it actually is by
tacking on automatically to each finding of a condition-
level deficiency a finding of a second condition-level
deficiency.

HCFA bases its second argument that Petitioner failed to
comply with the condition of participation stated in 42
C.F.R. § 418.50 on the findings of the surveyor who
performed the May 6, 1994 resurvey and its assertion that
the participation requirements for hospices required
Petitioner to provide laboratory services to its
patients. In this instance, the facts are not contested.
However, HCFA's assertion that the conditions for
participation of hospices in Medicare include a
requirement that hospices provide laboratory services to
their patients is not supported either by the plain
meaning of the regulations or by a reasonable
interpretation of those regulations. Moreover, even if I
were to find that this asserted obligation is implied in
the regulations, there is no evidence in this case that
HCFA ever communicated it to Petitioner.

At the May 6, 1994 resurvey of Petitioner, HCFA's
surveyor selected at random 10 patient records for
review. These records included the patient records of an
individual known for purposes of this case as patient #
2. HCFA Ex. 21. The records of patient # 2 establish
that, on March 18, 1994, a physician ordered that a blood
test be administered to the patient. Id. at 3 - 4. The
nurse who performed the test gave the specimen to the
patient's family. She instructed the family to take the
specimen to a laboratory, and to provide the hospice with
the test results that the laboratory reported. Tr. at
86. The surveyor who conducted the May 6, 1994 resurvey
learned from Petitioner's staff that, as of the date that
the blood test was performed on patient # 2, Petitioner
did not have an agreement with a laboratory to provide
laboratory services for Petitioner's patients. Id. at 86
- 87.
18

HCFA argues that hospice participation requirements
include the requirement that hospices provide laboratory
services to their patients. HCFA argues that
Petitioner's failure either to provide laboratory
services on its own, or to have an agreement with a
laboratory to provide such services, is a failure to
comply with this requirement. HCFA asserts that the
alleged requirement that hospices provide laboratory
services to their patients is either stated or implied in
the regulations which govern hospices and is incorporated
by reference into 42 C.F.R. § 418.50(b) (2) and (3),
either as an “other covered service," as a "reasonable
and necessary service," or as a service that is
consistent with "accepted standards of practice."

The general provisions regulation states, at 42 C.F.R. §
418.50(b), that a hospice must be primarily engaged in
providing the care and services described at 42 C.F.R. §
418.202. Additionally, it states that a hospice must:

(1) [m]Jake nursing services, physician
services, and drugs and biologicals routinely
available on a 24-hour basis;

(2) [m]ake all other covered services available
on a 24-hour basis to the extent necessary to
meet the needs of individuals for care that is
reasonable and necessary for the palliation and
management of terminal illness and related
conditions; and

(3) (p]rovide these services in a manner
consistent with accepted standards of practice.

42 C.F.R. § 418.50(b) (1) - (3).

Laboratory services are not among the services listed in
42 C.F.R. § 418.202. HCFA argues that the obligation to
provide laboratory services may be found in 42 C.F.R. §
418.92(b). From this, HCFA asserts that laboratory
services are among the "other covered services" described
in 42 C.F.R. § 418.50(b) (2) that hospices are obligated
to provide to their patients.

HCFA argues also that laboratory services are "reasonable
and necessary for the palliation and management of
terminal illness and related conditions." From this,
HCFA asserts that the obligation of a hospice to provide
laboratory services to its patients is implied in 42
C.F.R. § 418.50(b) (2).
19

Finally, HCFA asserts that "accepted standards of
practice" for hospices includes providing laboratory
services. HCFA asserts that the requirement that a
hospice provide laboratory services to its patients is
therefore implied by 42 C.F.R. § 418.50(b) (3).

None of these arguments relate reasonably to the language
of the regulations. For that reason, I find them to be
without merit.

Neither the Act nor regulations support HCFA's contention
that the "other covered services" that a hospice must
provide include laboratory services. There is no
explicit requirement in the Act or in the regulations
that hospices provide laboratory services to their
patients. As HCFA concedes, the Act says nothing about
an obligation to provide laboratory services.
Furthermore, there is not even an implied obligation in
the regulations for a hospice to provide laboratory
services to its patients.

First, I do not read 42 C.F.R. § 418.50 as requiring
hospices to provide services to their patients beyond
those that are listed as "covered services" in 42 C.F.R.
§ 418.202. The covered services described in 42 C.F.R. §
418.202 are a complete list of services that a
participating hospice is required to provide to its
patients and to members of patients' families. The
phrase "other covered services" in 42 C.F.R. §
418.50(b)(2) does not refer to services in addition to
those which are described in 42 C.F.R. § 418.202. It
refers only to the manner in which a hospice must provide
those services which are described in 42 C.F.R. § 418.202
and which are not enumerated in 42 C.F.R. § 418.50(b) (1).
Thus, "other covered services" means services not listed
in 42 C.F.R. § 418.50(b) (1) that are listed in 42 C.F.R.
§ 418.202.

Moreover, even if 42 C.F.R. § 418.202 did not comprise a
complete list of the services that hospices are obligated
to provide, there is no requirement stated elsewhere in
the regulations that hospices provide laboratory
services. The regulation which HCFA relies on as
allegedly directing hospices to provide laboratory
services as other covered services, 42 C.F.R. § 418.92,
cannot be construed reasonably to require hospices to
provide laboratory services.

That regulation governs only the manner in which a
hospice must provide laboratory services if it chooses to
provide them. It contains two relevant subparts. 42
C.F.R. § 418.92(b)(1) states that:
20

(ijf the hospice engages in laboratory testing
outside of the context of assisting an
individual in self-administering a test .. .,
such testing must be in compliance with all
applicable requirements of part 493 of this
chapter.

The other relevant subpart, 42 C.F.R. § 418.92(b) (2),
states that:

{i]f the hospice chooses to refer specimens for
laboratory testing to another laboratory, the
referral laboratory must be certified... in
accordance with the applicable requirements of
part 493 of this chapter.

Neither of these subparts require a hospice to provide
laboratory services. They may be read reasonably only to
impose requirements on hospices to assure that tests are
performed consistent with the requirements of 42 C.F.R.
Part 493, to the extent that hospices elect to perform
the tests or to refer them elsewhere.

I make no finding as to whether HCFA is correct in its
assertion that laboratory services are reasonable and
necessary for the palliation and management of terminal
illnesses and related illnesses. I do not, because such
services are not covered services. It may be reasonable
or even good medical practice for hospices to provide
laboratory services to patients. However, the issue is
not whether hospices ought to provide laboratory services
but whether, under the regulations governing their
participation in Medicare, they are required to provide
such services.

HCFA reads 42 C.F.R. § 418.50(b)(3) as requiring hospices
to provide to their patients all services that are
generally accepted by the hospice community as being
within that community's standards of practice. That is
not what the regulation requires. The term "these
services" in 42 C.F.R. § 418.50(b)(3) can be construed
reasonably to mean only those services described
elsewhere in the regulations which govern hospices as
covered services that hospices are obligated to provide
to their patients. The subsection requires that covered
services be provided in a manner that is consistent with
accepted standards of practice. It does not impose on
hospices any obligation to provide services in addition
to those services described elsewhere in the regulations
as covered services. For the reasons which I discuss
above, laboratory services are not covered services.
21

I would not find Petitioner to have failed to comply with
a requirement that it provide laboratory services to its
patients even if I were to conclude, as HCFA urges, that
the requirement is implied in the regulations. It would
not be reasonable to find that a hospice should infer
from the regulations that it is required to provide
laboratory services. The regulations do not mention this
requirement. HCFA has offered no evidence to show that
it ever communicated to Petitioner its conclusion that
the regulations contain an implied requirement that
hospices provide laboratory services.

2. Petitioner's alleged failure to comply
with the medical director condition of
participation stated in 42 C.F.R. § 418.54

HCFA argues that Petitioner failed to comply with the
condition of participation stated in 42 C.F.R. § 418.54.
This regulation describes the duties of a hospice's
medical director. It states that:

(t]he medical director must be a hospice
employee who is a doctor of medicine or
osteopathy who assumes overall responsibility
for the medical component of the hospice's
patient care program.

The regulation does not define the terms "overall
responsibility" or "medical component." However, these
terms are not ambiguous. The plain meaning of this
regulation is that the medical director of a hospice must
assume supervisory and management responsibility for the
medical services that the hospice provides to its
patients.

HCFA asserts that Petitioner failed to comply with the
requirements of this regulation in two respects. First,
HCFA argues that Petitioner's medical director failed to
discharge his responsibility to assure that Petitioner's
interdisciplinary group participated in the planning of
patient care as is required under the regulations.
Second, HCFA asserts that. Petitioner's medical director
failed to assure that Petitioner obtain properly executed
certifications of terminal illness for its patients.

Petitioner did not comply with the medical director
requirement in 42 C.F.R. § 418.54. Petitioner's medical
director was obligated, as part of the responsibility to
manage the medical component of Petitioner's operations,
to assure that Petitioner's interdisciplinary group
participated in the planning of patient care as is
required by the regulations. Petitioner's medical
22

director bore responsibility for assuring that Petitioner
obtained a properly executed certification of terminal
illness for each of Petitioner's patients. The
preponderance of the evidence establishes that
Petitioner's medical director failed to perform these
obligations.

HCFA bases its arguments on the following evidence.

° The surveyor who conducted the May 6, 1994
resurvey of Petitioner testified that in none
of the 10 treatment records that she reviewed
was there evidence that Petitioner's
interdisciplinary group periodically reviewed
the patient's plan of care according to a
schedule established in the plan of care. Tr.
at 98 - 99.

° The surveyor testified also that in none of the
patient records she reviewed was there evidence
that Petitioner had obtained certifications
that the patients were eligible for continued
hospice care after their initial period of
care. Id. at 98.

I find this evidence to be persuasive.

Petitioner did not rebut credibly HCFA's evidence as to
failure of Petitioner's interdisciplinary group to
perform regularly scheduled reviews of plans of care.
Petitioner offered the testimony of Dr. Dimas Broco
Hernandez, Petitioner's medical director. Tr. at 218 -
22. Dr. Broco Hernandez testified that Petitioner's
interdisciplinary group would meet weekly to discuss
patients' cases. Tr. 219 - 20. Dr. Broco Hernandez
asserted that the hospice staff was supposed to have made
a written record of the weekly meetings. However,
Petitioner did not offer any written evidence of such
alleged weekly reviews to corroborate Dr. Broco
Hernandez’ testimony. Moreover, Petitioner did not offer
any documents from the records of the 10 patients
reviewed by the surveyor to impeach her testimony.

It is apparent from the scheme of hospice operations
envisioned by the regulations that a hospice's medical
director bears responsibility for assuring that the
hospice's interdisciplinary group discharge its functions
properly. While the regulations do not charge the
medical director explicitly with supervising the
activities of the interdisciplinary group, the
regulations do require the medical director to supervise
the entire medical component of hospice operations. 42
23

C.F.R. § 418.54. This responsibility includes
supervision of the activities of the interdisciplinary
group, inasmuch as the interdisciplinary group is central
to the medical component of a hospice's services.

The planning and management of patient care through the
development and revision of plans of care is an essential
element of the medical component of hospice operations.
42 C.F.R. § 418.58. A hospice's interdisciplinary group
plays a critical role in the planning of care to be
administered by a hospice to its patients. The
interdisciplinary group bears direct responsibility,
along with the medical director of the hospice, for
creation of and review of plans of care. Id.; 42 C.F.R.
§ 418.68. The interdisciplinary group is thus a central
player in the administration of the medical component of
a hospice's operations. It is the explicit duty of the
medical director to participate in the establishment of
and review of plans of care. 42 C.F.R. § 418.58(a),

(b).

I conclude also that Petitioner's medical director was
responsible for assuring that Petitioner obtain properly
executed certifications of terminal illness for each of
Petitioner's patients. The preponderance of the evidence
in this case is that Petitioner failed systematically to
obtain properly executed certifications for its patients.
The systematic failure to obtain properly executed
certifications is a failure to perform the supervisory
responsibilities described in 42 C.F.R. § 418.54.

A hospice's medical director bears responsibility for
supervising the certification of patients to receive
hospice care. Consistent with requirements in the Act,
the regulations which govern hospices require that
patients who receive care from hospices be certified as
having a terminal illness. 42 C.F.R. §§ 418.20, 418.22.
The regulations make it the responsibility of the hospice
to obtain these certifications. 42 C.F.R. § 418.22.
Certifications must be obtained at intervals specified in

° This regulation provides that plans of care
must be established and reviewed by, among others, the
medical director or "physician designee." The regulation
does not define of whom a "physician designee" consists.
Apparently, however, the physician designee would be an
individual who is designated by the hospice to serve in
lieu of the medical director in establishing and
reviewing plans of care. Petitioner has not argued that
it appointed a physician designee to serve in lieu of its
medical director.
24

the regulations. 42 C.F.R. §§ 418.21, 418.22(a). Each
certification of terminal illness must specify that the
patient's prognosis is for a life expectancy of six
months or less if the patient's illness runs its normal
course. 42 C.F.R. § 418.22(b).

The regulations specify that initial and subsequent
certifications of a patient's terminal illness must be
signed by the hospice's medical director or by a member
of the interdisciplinary group. 42 C.F.R. §
418.22(c)(1)(i), (2).

This requirement makes it plain that certification of
patients as being eligible to receive hospice care is a
part of the medical component of hospice operations, even
as is the administration of care to hospice patients. A
hospice's medical director is responsible for assuring
that certifications are made in compliance with the Act
and regulations as part of his or her responsibility for
supervising the medical component of hospice operations.

Petitioner argues that failure by a hospice to obtain
properly executed certifications of eligibility for
hospice care for its patients relates only to the
question of whether the hospice should receive
reimbursement from Medicare for its services. Petitioner
asserts that there is no requirement in the conditions of
participation that a hospice obtain properly executed
certifications of eligibility. Therefore, according to
Petitioner, it cannot be held accountable under the
medical director condition of participation for failure
to obtain properly executed certifications.

I do not agree with this argument. It is true, as
Petitioner asserts, that the regulations governing
patient certifications are in a different subpart of 42
c.F.R. Part 418 than are the conditions of participation.
The certification regulations are in Subpart B of Part
418, whereas the conditions of participation are in
Subparts C, D, and E of Part 418. However, that does not
suggest that certifications are outside of the medical
component of hospice operations. I conclude that
obtaining certifications of terminal illness for patients
is a part of the medical component of a hospice's
operations. The certification is based on a medical
diagnosis. It is the document which authorizes a hospice
to assume responsibility for a patient's care and to
provide palliative, as opposed to curative, care.

The regulations do not state, as a condition of
participation, that hospices obtain properly executed
certifications. However, inasmuch as certifications fall
25

within the medical component of hospice operations, the
regulations must be read as requiring that a hospice
medical director assure that properly executed
certifications be obtained.

There remains the question of the impact of the failure
of Petitioner's medical director to discharge the
supervisory responsibilities required by the regulation.
I conclude that the failures in this case are so
substantial as to establish a failure to comply with the
condition of participation described in 42 C.F.R. §
418.54.

The requirement that a hospice's interdisciplinary group
actively participate in the planning of patients' care is
a central element in the scheme of operations to which
the regulations require hospices to adhere. It is
manifest from the regulations that a hospice cannot
provide care adequately to its patients unless its
interdisciplinary group assumes the required role in
Planning and monitoring patient care. So also is it
evident from the regulations that a hospice cannot
provide care adequately to its patients unless it assures
that these patients are indeed terminally ill. The
purpose of hospice care is palliative. The providing of
palliative care to a patient on the assumption that the
patient is terminally ill, without the requisite
certification of terminal illness, may jeopardize that
patient's health and safety, because if the patient is
not, in fact, terminally ill, he or she may require more
aggressive medical treatment than the hospice is ina
position to provide,

3. Petitioner's alleged failure to comply
with the plan of care condition stated in
42 C.F.R. § 418.58

HCFA argues that Petitioner failed to comply with the
condition stated in 42 C.F.R. § 418.58. This regulation
governs the plans of care that hospices are obligated to
create and review for each of their patients.” The
regulation requires a hospice to establish and maintain a
written plan of care for each of its patients. It
requires also that care provided to each hospice patient
must be in accordance with a plan of care.

© The central issue in the Arecibo and Lajas
cases was whether the providers in those cases complied
with the plan of care regulation. I discussed the
requirements of the plan of care regulation in both
cases. Arecibo at 13 - 16, 19 - 25; Lajas at 16 - 19.
26

The regulation contains three subparts which enunciate
standards that a hospice must adhere to in establishing
and reviewing its plans of care. For each patient, a
plan of care must be established by the patient's
attending physician, the hospice's medical director or
physician designee, and the hospice's interdisciplinary
group, prior to providing care to that patient. 42
C.F.R. § 418.58(a). Each plan of care must be reviewed
and updated at intervals specified in the plan by the
patient's attending physician, the hospice's medical
director or physician designee, and the hospice's
interdisciplinary group. 42 C.F.R. § 418.58(b). All
reviews must be documented. Id. Each plan of care must
include an assessment of the patient's needs and must
identify the services to be provided to the patient,
including the management of discomfort and symptom
relief. 42 C.F.R. § 418.58(c). Each plan of care must
state in detail the scope and frequency of services
needed to meet the patient's needs, as well as those of
the patient's family. Id.

HCFA's central assertion concerning Petitioner's alleged
noncompliance with the plan of care regulation is that
Petitioner's interdisciplinary group failed to conduct
the reviews mandated under 42 C.F.R. § 418.58(b). HCFA
asserts also that, in one instance, Petitioner failed to
meet the needs of a patient's family as is required under
42 C.F.R. § 418.58(c).

The evidence which HCFA relies on to support these
assertions consists of excerpts of the medical records of
four patients (patients # 2, # 5, # 6, and # 7), as well
as the testimony of the surveyor who conducted the May 6,
1994 resurvey of Petitioner. The evidence establishes
that, for all of these patients, extensive periods of
time elapsed without documented reviews of the patient's
plan of care by Petitioner's interdisciplinary group.

The essentially unrefuted evidence is that Petitioner's
interdisciplinary group had not reviewed the plan of care
for patient # 2 between June 18, 1993 and May 6, 1994,
the date of the resurvey. Tr. at 119. The
interdisciplinary group had not reviewed the plan of care
for patient # 6 in the five months that preceded the
resurvey. Tr. at 126. The plan of care for patient # 7
had not been reviewed in the three months that preceded
the resurvey. Tr. at 125.

Furthermore, the weight of the evidence is that
Petitioner did not establish schedules pursuant to which
plans of care were supposed to be reviewed. Neither the
records of patient # 6 or # 7 stated a schedule for
27

reviewing the plans of care for these patients. HCFA
Exs. 23, 24.

The only evidence which Petitioner offered to counter
this evidence was the testimony of Dr. Broco Hernandez.
However, his testimony that Petitioner's
interdisciplinary group met weekly to discuss plans of
care is not corroborated by any documentation. See Tr.
at 219 - 20. Indeed, it is undercut substantially by the
evidence that HCFA obtained which shows that plans of
care were not reviewed according to any cognizable
schedule.

Petitioner argues that HCFA's allegation of noncompliance
with the provisions of 42 C.F.R. § 418.58(b) is based on
an incorrect interpretation of the regulation. HCFA,
according to Petitioner, is misreading this subsection to
require plans of care to state the dates when reviews
will be conducted. This requirement is not found in the
regulation, according to Petitioner.

I am not persuaded by this argument. The provider made
the same argument in Lajas. The regulation requires a
hospice to conduct reviews of each of its plans of care
"at intervals specified in the plan... ." 42 C.F.R. §
418.58(b). I read this requirement to give the hospice
the option to establish a review schedule based either on
the calendar or on some event specified in the plan of
care such as a change in the patient's condition. Lajas
at 11. However, what the evidence establishes in this
case is that Petitioner's plans of care were not reviewed
according to any cognizable schedule. The deficiency is
Petitioner's failure to conduct regular reviews of its
plans of care and to document reviews.

The preponderance of the evidence in this case proves
that Petitioner was neither scheduling periodic reviews
of the plans of care for its patients, nor was it
reviewing the plans according to a schedule. The
evidence establishes further that, if Petitioner was
conducting any scheduled reviews of plans of care, it was
not documenting those reviews. These failures by
Petitioner are failures to comply with the explicit
requirements of 42 C.F.R. § 418.58(b).

I do not find that Petitioner failed to comply with the
requirements of 42 C.F.R. § 418.58(c). HCFA bases its
assertion that Petitioner did not comply with this
subsection on unrefuted evidence that Petitioner failed
to establish a bereavement plan of care to deal with the
death of patient #5. Tr. at 122. HCFA's assertion that
Petitioner failed to comply with this subsection rests
28

ultimately on an interpretation of the subsection to
require a hospice to create a new or revised plan of care
to address any change in a patient's condition. HCFA
made that same argument in Arecibo. I concluded that
this requirement, while not necessarily unreasonable, was
not apparent from the face of the subsection. Arecibo at
22 - 25. I found that HCFA had not communicated this
interpretation to the provider. I reach that same
conclusion and finding here.

The failure of Petitioner's interdisciplinary group to
conduct reviews of Petitioner's plans of care and to
document those reviews is so substantial as to constitute
a violation of the condition of participation stated in
42 C.F.R. § 418.58. In Arecibo and Lajas, I held that
the requirement that plans of care be reviewed
periodically by a hospice's interdisciplinary group and
that these reviews be documented is fundamental to the
appropriate discharge of a hospice's treatment
obligations to its patients. Arecibo at 25 - 26; Lajas
at 19 - 20.

A hospice cannot meet its critical responsibility to
manage the care it provides to its dying patients to
maximize the patients' physical comfort and to relieve
the patients and their families of the emotional stress
caused by the patients' death without planning the
patients' care and without systematically reviewing that
care. Lajas at 20. Petitioner's failure to perform this
essential function substantially limited its capacity to
render adequate care. Furthermore, its failure had the
potential to adversely affect the health and safety of
Petitioner's patients.

4. Petitioner's alleged failure to comply
with the interdisc inary group condition
of participation stated in 42 C.F.R. §
418.68

HCFA argues that Petitioner failed to comply with the
condition of participation stated in 42 C.F.R. § 418.68.
This regulation establishes the condition that a hospice
create an interdisciplinary group or groups to manage the
care of its patients. It requires that the
interdisciplinary group participate in the establishment
of each plan of care that a hospice prepares for a
patient. 42 C.F.R. § 418.68(b)(1). It requires also
that the interdisciplinary group participate in the
periodic review and updating of each plan of care. 42
C.F.R. § 418.68(b) (3). These requirements thus mirror
the requirement contained in 42 C.F.R. § 418.58 that a
29

hospice's interdisciplinary group participate in the
creation and revision of each patient's plan of care.

HCFA asserts that Petitioner's interdisciplinary group
failed generally to participate in the review of plans of
care. It supports this assertion with the same evidence
it offered to show that plans of care were not being
reviewed by Petitioner's interdisciplinary group in
accordance with the requirements of 42 C.F.R. § 418.58.

I discussed that evidence in the preceding section of
this decision. For reasons that I have stated, I find it
to be persuasive.

HCFA argues also that, with respect to patient # 8, there
was a failure by Petitioner's interdisciplinary group to
participate in the planning of the patient's care. That
assertion is based on the fact that, while the patient
was listed by Petitioner as one of its patients, the
patient was being cared for by another hospice.
Petitioner asserts that this de facto transfer of the
patient was due to the remote location of Utuado and the
difficulties that Petitioner experienced in attending to
the patient's needs. It is unnecessary for me to make
findings as to patient # 8 to resolve any of the issues
in this case, and I do not.

The failure of Petitioner's interdisciplinary group to
participate in the planning of care and in reviews of
plans of care is a failure of the condition of
participation stated in 42 C.F.R. § 418.68. The
regulation makes it plain that the obligation to plan
care is a critical element of the interdisciplinary
group's duties. It reinforces the requirements of the
plan of care regulation. As I find above, it is not
possible for a hospice to discharge its obligations to
its patients consistent with the requirements of law if
it does not utilize its interdisciplinary group in the
manner required by the regulations.

TII. Conclusion

HCFA proved by a preponderance of the evidence that, as
of May 6, 1994, Petitioner was not complying with three
conditions of participation stated in 42 C.F.R. Part 418.
These conditions are: medical director (42 C.F.R §
418.54); plan of care (42 C.F.R. § 418.58); and
interdisciplinary group (42 C.F.R. § 418.68).
Essentially, HCFA proved that Petitioner was derelict in
its responsibility to manage and care for the needs of
its patients in a way that jeopardized Petitioner's
capacity to render adequate care and which had the
30

potential to affect adversely the health and safety of
Petitioner's patients. Based on this, HCFA had the
authority to terminate Petitioner's participation in
Medicare.

/s/

Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Alicia Pinto, DATE: April 13, 1995
Petitioner,

Docket No. C-94-331
Decision No. CR369

~vwo-

The Inspector General.

DECISION

By letter dated February 9, 1994, Alicia Pinto, the
Petitioner herein, was notified by the Inspector General
(I.G.), of the United States Department of Health & Human
Services (HHS), that it had been decided to exclude
Petitioner for a period of five years from participation
in the Medicare, Medicaid, Maternal and Child Health
Services Block Grant, and Block Grants to States for
Social Services programs.’ The I.G.'s rationale was that
exclusion, for at least five years, is mandated by
sections 1128(a)(2) and 1128(c) (3) (B) of the Social
Security Act (Act) because Petitioner had been convicted
of a criminal offense relating to neglect or abuse of
patients in connection with the delivery of a health care
item or service.

Petitioner filed a timely request for review of the
I.G.'s action. The I.G. moved for summary disposition.

Because I have determined that there are no facts of
decisional significance genuinely in dispute, and that
the only matters to be decided are the legal implications
of the undisputed facts, I have decided the case on the
basis of the parties' written submissions. I grant the
I.G.'s motion for summary disposition.

! In this decision, I refer to all programs from
which Petitioner has been excluded, other than Medicare,
as "Medicaid."
2

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

APPLICABLE LAW

Sections 1128(a)(2) and 1128(c)(3)(B) of the Act make it
mandatory for any individual who has been convicted of a
criminal offense relating to neglect or abuse of patients
in connection with the delivery of a health care item or
service to be excluded from participation in the Medicare
and Medicaid programs for a period of at least five
years,

FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCL)?

1. During the period relevant to this case, Petitioner
was employed as a certified nursing assistant (C.N.A.) at
the Sarah R. Neuman Nursing Home (Home), located in
Mamaroneck, New York. I.G. Exs. 1, 5, 9.

2. On July 30, 1991, Petitioner was charged, by
information, with having committed the offense of "wilful
violation of the health laws" under New York State Public
Health Law, section 12-b(2), by violating Public Health
Law, section 2803-d, subdivision 7. I.G. Ex. 1.

3. Specifically, the information alleged that, on
February 21, 1991, Petitioner had slapped a female
resident of the Home. I.G. Ex. 1.°

4. Petitioner's case was tried before a jury in the Rye
Town Justice Court in Westchester County. I.G. Ex. 2.

2? The I.G. submitted a brief in support of her
motion for summary disposition. Petitioner submitted a
letter dated January 5, 1995, which I construed to be her
response brief. The I.G. submitted a reply.

The I.G. submitted nine exhibits with her initial brief.
I cite the I.G.'s exhibits as "I.G. Ex. (number)." I
admit into evidence I.G. Exs. 1 - 9. Petitioner did not
submit any exhibits.

3 I do not disclose the name of this individual,
so as to respect her privacy.
3

5. On July 15, 1992, the jury found Petitioner guilty of
one count of wilful violation of the public health laws,
a misdemeanor. I.G. Ex. 2.

6. On October 28, 1992, judgment was formally entered
against Petitioner, and she was sentenced to six months
probation, one year conditional discharge, and twenty
hours of community service in a local hospital. I.G. Ex.
3.

7. The record contains an affidavit of the assistant
nursing care coordinator at the Home, in which she states
that the person whom Petitioner was convicted of abusing
was a patient at the Home on February 21, 1991. I.G. Ex,
9.

8. The affidavit evidence and other record evidence,
which show the nursing assistance required by the
individual whom Petitioner was convicted of abusing,
establish that the individual was a "patient" of the
Home. I.G. Exs. 5 - 9.

9. The record contains this patient's admission record
to the Home. I.G. Ex. 6.

10. The patient at issue suffered from at least two
serious diseases and required continuous nursing support
in her activities of daily living. I.G. Exs. 6 ~ 9.

11. According to the affidavit of the assistant nursing
care coordinator, a C.N.A. performs patient care duties,
which include handling, transferring, feeding, and
bathing of patients, and using equipment such as
wheelchairs and other devices. I.G. Ex. 9.

12. Petitioner regularly aided the patient at issue by
performing patient care duties for her. I.G. Ex. 9.

13. The incident which led to Petitioner's conviction
occurred while Petitioner was placing the patient in her
wheelchair. I.G. Ex. 5.

14. Petitioner was convicted of a criminal offense,
within the meaning of section 1128(i)(1) of the Act.
FFCL 6.

15. Petitioner was convicted of a criminal offense,
within the meaning of section 1128(i)(2) of the Act.
FFCL 5.
4

16. The criminal offense of which Petitioner was
convicted relates to neglect or abuse of patients in
connection with the delivery of a health care item or
service, within the meaning of section 1128(a) (2) of the
Act. FFCL 1 - 13.

17. The Secretary of HHS has delegated to the I.G. the
authority to determine, impose, and direct exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 21,662
(1983).

18. The five-year exclusion imposed and directed against
Petitioner by the I.G. is for the minimum period required
by the Act. Act, sections 1128(a) (2), 1128(c) (3) (B).

19. Under section 1128(a)(2) of the Act, a conviction
within the meaning of section 1128(i) mandates exclusion.
The administrative law judge is not authorized to look
behind the conviction to determine its validity.

20. Neither the I.G. nor an administrative law judge is
authorized to reduce the five-year minimum mandatory
period of exclusion.

21. The I.G. properly excluded Petitioner from
participation in the Medicare and Medicaid programs for
five years, as required by sections 1128(a)(2) and
1128(c)(3)(B) of the Act. FFCL 1 - 20.

PETITIONER'S ARGUMENT

Petitioner contends that, notwithstanding the jury
verdict against her, she was not guilty of striking the
elderly woman who was in her care at the Home. She
believes that her lack of mastery of the English
language, plus poor legal representation, caused her to
be wrongfully convicted. Petitioner's Brief at 1 - 6.

DISCUSSION

The law relied upon by the I.G. to exclude Petitioner
requires, initially, that the excluded individual has
been convicted of a criminal offense. Petitioner, a
C.N.A., was charged with wilful violation of the health
laws, which charge was based on Petitioner's alleged
intentional and unlawful striking of a female resident at
the Home who was in Petitioner's care at the time. FFCL
1-3. A jury found Petitioner guilty of the charge.
FFCL 4, 5. The court thereupon sentenced Petitioner.
FFCL 6.
5

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

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

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

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

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

In the case at hand, sections 1128(i)(1) and (2) are
clearly applicable. FFCL 14, 15. Petitioner was found
guilty by a jury, and the court entered a judgment of
conviction against Petitioner. FFCL 5, 6. Thus,
Petitioner must be regarded as having been "convicted"
for purposes of the mandatory exclusion law.

Next, the statute requires that the criminal offense must
have been related to the neglect or abuse of patients in
connection with the delivery of a health care item or
service (although not necessarily related to the Medicare
or Medicaid programs) .

In this regard, the undisputed evidence establishes that
the abused person was a 95-year-old patient at the Home,
and that Petitioner, in her capacity as a health care
worker there, was performing a patient care duty for this
patient -- i.e., placing her in a wheelchair -- at the
time Petitioner struck her.‘ I.G. Ex. 6; FFCL 7, 8, 13.
Petitioner's wilful use of unjustified and harmful
physical force under these circumstances reasonably
constitutes patient abuse in connection with the delivery

4 Petitioner herself does not deny that this
person is a nursing home patient. Petitioner's Brief at
2-3.
6

of health care services, within the meaning of section
1128(a)(2) of the Act. Petitioner was convicted under
N.Y. Pub. Health L. § 2803-d(7), which pertains to
patient abuse, and states that "any person who commits an
act of physical abuse, neglect or mistreatment, . .

shall be deemed to have violated this section and shall
be liable for a penalty pursuant to section twelve of
this chapter. ..." I.G. Ex. 4. Thus, Petitioner's
conviction for her act of physical violence to a patient
of the Home, satisfies the requirement of section
1128(a)(2) that there be a conviction" ...ofa
criminal offense relating to neglect or abuse of patients
in connection with the delivery of a health care item or
service." Act, section 1128(a) (2); FFCL 16.

Lastly, Petitioner maintains that she did not, in fact,
strike the patient at issue. Petitioner's Brief at 1 -
3, 5. However, under section 1128(a) (2), proof that a
relevant criminal conviction has occurred ends the
inquiry as to whether mandatory exclusion is justified.
See DeWayne Franzen, DAB 1165 (1990). The administrative
law judge is not authorized to look behind the conviction
to determine its validity (FFCL 19), or entertain claims
of innocence, or consider evidence intended to mitigate
the minimum mandatory exclusionary period. Peter J.
Edmonson, DAB CR163 (1991), aff'd, DAB 1330 (1992);

Richard G. Philips, D.P.M., DAB CR133 (1991), aff'd, DAB
1279 (1991); Janet Wallace, L.P.N., DAB CR155 (1991),
aff'd, DAB 1326 (1992). An appellate panel of the
Departmental Appeals Board has held that the intent of
the individual in committing the criminal offense is not
relevant under section 1128(a)(2) of the Act. Summit
Health Limited, DAB 1173 (1990). Consequently,
Petitioner's explanations are not relevant or material to
the outcome of this case.

CONCLUSION

Petitioner's exclusion from the Medicare and Medicaid
programs, for at least five years, is mandated by
sections 1128(a) (2) and 1128(c) (3) (B) of the Act because
of her conviction of a criminal offense related to the
neglect or abuse of patients in connection with the
delivery of a health care item or service. FFCL 21.
Neither the I.G. nor an administrative law judge
isauthorized to reduce the five-year minimum mandatory
period of exclusion. FFCL 20. Jack W. Greene, DAB CR19,
aff'd, DAB 1078 (1989), aff'd sub nom., Greene v.
Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990).

7

The five-year exclusion is, therefore, sustained.

/s/

——

Joseph K. Riotto
Administrative Law Judge