Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Russell McDow, M._D.,
(PTAN: 004683L19; NPI: 1780678391),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-283
Decision No. CR4591

Date: April 25,2016

DECISION

I sustain the determination of a Medicare contractor, as ratified by the Centers for
Medicare & Medicaid Services (CMS), to revoke the Medicare billing privileges of
Petitioner, Russell McDow, M.D. CMS is authorized to revoke Petitioner’s Medicare
billing privileges by section 1842(h)(8) of the Social Security Act (Act) and by 42 C.F.R.
§ 424.535(a)(3). I do not have the authority to overturn CMS’s exercise of discretion
under the Act and the implementing regulation.

I. Background

Petitioner requested a hearing in order to challenge the determination, as affirmed on
reconsideration, to revoke his Medicare billing privileges. CMS moved for summary
judgment. Petitioner opposed the motion. With its motion CMS filed eight proposed
exhibits, identified as CMS Ex. 1-CMS Ex. 8. Petitioner filed six proposed exhibits,
which I identify as P. Ex. 1-P. Ex. 6, in opposition to the motion. I receive both parties’
proposed exhibits into the record.
Although CMS styled its motion as a motion for summary judgment it is unnecessary that
I decide whether the criteria for summary judgment are met here. First, CMS offered no
witnesses on its behalf. Petitioner offered himself as a witness but he failed to comply
with my pre-hearing order directing that he offer his proposed testimony as an affidavit or
sworn declaration. My pre-hearing order explicitly barred him from offering testimony
that was not presented as an affidavit or declaration. Moreover, even if I were to allow
him to testify, he has not proposed any testimony that relates to any fact that is material to
the outcome of this case. As I discuss in more detail below, the gravamen of Petitioner’s
argument is that CMS should not have exercised its discretion to revoke Petitioner’s
Medicare billing privileges. As I explain, CMS’s exercise of discretion is not an issue
that I have the authority to address.

II. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether CMS has discretion to revoke Petitioner’s Medicare billing
privileges.

B. Findings of Fact and Conclusions of Law

Section 1842(h)(8) of the Act authorizes the Secretary of Health and Human Services and
her delegate, CMS, to terminate or to refuse to review a Medicare enrollment agreement
with a physician or a supplier of Medicare services who “has been convicted of a felony
under Federal or State law for an offense which the Secretary determines is detrimental to
the best interest of the [Medicare] program.” Regulations implement the statutory
language at 42 C.F.R. § 424.535(a)(3). The regulation provides that CMS may revoke a
Medicare provider or supplier’s billing privileges for reasons that include:

(3) Felonies.
(i) The provider, supplier, or any owner or managing employee of
the provider or supplier was, within the preceding 10 years,
convicted .. . of a Federal or State felony offense that CMS
determines is detrimental to the best interests of the Medicare
program and its beneficiaries.

(ii) Offenses include, but are not limited in scope or severity to —

[...]

(D) Any felonies that would result in mandatory exclusion
under section 1128(a) of the Act.
There is no dispute that Petitioner was convicted of a felony in United States District
Court, Eastern District of Virginia, within 10 years of the date of the revocation of his
billing privileges (July 20, 2015). On June 20, 2006, Petitioner was convicted of the
felony offense of obtaining hydrocodone, a controlled substance, by fraud, forgery,
deception or subterfuge, in violation of 21 U.S.C. § 843(a)(3). CMS Ex. 2 at 1-2. That
conviction is for a criminal offense that is related to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled substance within the meaning of
section 1128(a)(4) of the Act, and it is a basis for a mandatory exclusion under that
section.

CMS plainly is authorized to revoke Petitioner’s billing privileges, either under the broad
language of the Act and 42 C.F.R. § 424.535(a)(3) or under the more specific language of
42 CFR. § 424.535(a)(3)(ii)(D). Petitioner concedes that he was convicted of a felony
within 10 years of the revocation determination. Moreover, the felony consisted of
unlawfully obtaining hydrocodone (a controlled substance) by fraud, forgery, deception
or subterfuge, a crime of moral turpitude that is precisely the sort of offense for which the
Act and implementing regulation authorize revocation. Furthermore, Petitioner’s crime
mandates exclusion pursuant to section 1128(a)(4) of the Act and is thus defined
specifically as a crime for which revocation is authorized pursuant to 42 C.F.R.

§ 424.535(a)(3)(ii)(D).

Petitioner raises several arguments in opposition to CMS’s motion. I find these to be
without merit.

First and foremost, Petitioner concedes that CMS has discretionary authority to revoke
Petitioner’s billing privileges but he asserts that CMS exercised that authority
inappropriately in this case. Petitioner contends that he committed his offense at a
remote point in time — now more than a decade ago — and that he not only has paid the
price for his crime but that he has been fully rehabilitated. He describes in detail his
rehabilitation process and argues that he is now a valued member of both his local
medical community and the community in general. Petitioner argues that revoking his
billing privileges is a hollow exercise of authority by CMS that would hurt him
unnecessarily and his community as well.

I do not have the authority to address these arguments. At bottom, they attack CMS’s
right to exercise its discretion consistent with the provisions of law. Whether Petitioner
makes a compelling equitable case or whether I might agree with CMS’s exercise of
discretion or not is irrelevant. CMS has the authority to revoke Petitioner’s billing
privileges because he was convicted of a felony within 10 years of the date of its
contractor’s determination and I have no authority to question that exercise of discretion.
Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 17, 19 (2009).
Second, Petitioner argues that it is unfair and a denial of due process to now argue that
CMS may revoke his billing privileges on the ground that he was convicted of a felony
mandating exclusion pursuant to section 1128(a)(4) of the Act. That is so, according to
Petitioner, because he was never provided notice of this basis for revoking his billing
privileges. It is true that the reconsideration determination in his case does not explicitly
cite 42 C.F.R. § 424.535(a)(3)(ii)(D) as a basis for CMS’s authority to revoke. But, the
reconsideration determination does cite the regulation that includes this subsection, 42
CFR. § 424.535(a)(3). That citation is sufficient to inform Petitioner that any of the
regulation’s subparts — to the extent that they are applicable — come into play in
establishing CMS’s authority to revoke Petitioner’s billing privileges. I conclude that the
reconsideration determination gave Petitioner adequate notice of the grounds for
revocation.

Finally, Petitioner asserts that revocation is invalid in this case because of an intervening
action by CMS that falls between the date of his conviction and the revocation
determination. He contends that on or about November 6, 2013, he filed a Medicare
reenrollment application with CMS’s contractor and in that application he fully disclosed
his 2006 conviction. CMS Ex. 3. He argues that the contractor reviewed that application
and determined to renew Petitioner’s enrollment and billing privileges notwithstanding
his disclosure of his prior felony conviction. That, according to Petitioner, was an
implicit determination by the contractor that Petitioner’s enrollment was no detriment,
either to the Medicare program or to its beneficiaries. He argues that the subsequent
determination to revoke his billing privileges was not only inconsistent with the 2013
determination but that CMS was effectively estopped by that prior determination.

There is nothing in either the Act or implementing regulations to bar CMS from
exercising its legal authority to revoke a supplier’s billing privileges even if it has
previously approved that supplier’s enrollment in the face of facts that might justify
revocation. Moreover, and as CMS argues, it has the authority to review the validity of a
supplier’s enrollment even outside of the regular cycle of applications for renewal.

42 C.F.R. § 424.515(d)(1). There is thus no legal basis to overturn CMS’s determination.
Nor do I have the authority to apply principles of estoppel to overturn CMS’s
determination. As a general rule, principles of equitable estoppel do not apply to this
type of case.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2015-H-2912)

Complainant,
v.

Albert S. Fox
d/b/a Bottle Shop,

Respondent.
Docket No. C-15-3706
Decision No. CR4590

Date: April 19, 2016

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, Albert S. Fox d/b/a Bottle Shop, located at 100 North
Courtland Street, Chamberlain, South Dakota 57325, and by filing a copy of the
complaint with the Food and Drug Administration’s (FDA) Division of Dockets
Management. The complaint alleges that Bottle Shop impermissibly sold cigarettes to
minors and failed to verify, by means of photo identification containing a date of birth,
that the purchasers were 18 years of age or older, thereby violating the Federal Food,
Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations,
21 C.F.R. pt. 1140. CTP seeks to impose a $500 civil money penalty against Respondent
Bottle Shop. During the hearing process, Respondent has failed to comply with two
separate judicial directions regarding CTP’s discovery request, and has now also failed
to comply with a third judicial order to submit its pre-hearing exchange date by

April 11,2016. I therefore strike Respondent’s answer and issue this decision of

default judgment.
I. Procedural History

CTP began this matter on August 27, 2015 by serving an administrative complaint
seeking a $500 civil money penalty on Respondent Bottle Shop, at 100 North Courtland
Street, Chamberlain, South Dakota 57325. Respondent timely filed an answer to CTP’s
complaint on September 25, 2015. Administrative Law Judge Diane Townsend-
Anderson issued an Acknowledgement and Prehearing Order (APHO) on October 15,
2015, that set deadlines for parties’ submissions, including the November 16, 2015
deadline to request that the opposing party provide copies of documents relevant to this
case. Additionally, the APHO stated that a party receiving such a request must provide
the requested documents no later than 30 days after the request.

CTP served Respondent with its request for documents on November 16, 2015. On
December 22, 2015, CTP filed a Motion to Compel Discovery indicating that Respondent
did not respond to its request within the time limit. See 21 C.F.R. § 17.23(a). On the
same date, CTP also filed a motion requesting that all pre-hearing exchange deadlines be
extended. In a December 22, 2015 letter issued under the direction of Judge
Townsend-Anderson, Respondent was given until January 6, 2016, to object to CTP’s
motion. On December 22, 2015, Judge Townsend-Anderson also extended the parties’
pre-hearing exchange deadlines.

On January 14, 2016, the case was reassigned to Administrative Law Judge

Steven T. Kessel. On February 19, 2016, Judge Kessel issued an order granting CTP’s
Motion to Compel Discovery and again extending the pre-hearing exchange deadlines.
The Order gave Respondent until March 9, 2016 to comply with CTP’s discovery
request. Judge Kessel stated in the Order that:

Failure to do so may result in sanctions, including the issuance of an Initial
Decision and Default Judgment finding Respondent liable for the violations
listed in the Complaint and imposing a civil money penalty. Within five (5)
days of Respondent’s deadline to comply with discovery, CTP must file a
status report notifying me whether Respondent has complied with
discovery.

On March 14, 2016, CTP filed an Updated Status Report and a Motion to Impose
Sanctions advising that Respondent had not complied with Judge Kessel’s February 19,
2016 Order. In its Updated Status Report, CTP asked that any existing deadlines be
extended.' In its Motion to Impose Sanctions, CTP asked that Respondent’s answer be

' As I am issuing a default decision, it is unnecessary to rule on CTP’s March 14, 2016
motion to extend deadlines.
stricken and that a default judgment be issued. On March 24, 2016, CTP filed its pre-
hearing exchange. On April 4, 2016, this case was transferred to me. Respondent’s pre-
hearing exchange was due on April 11,2016 as ordered by Judge Kessel on February 19,
2016. Respondent has submitted nothing to date.

IL. Striking Respondent’s Answer

Respondent has failed to comply with the Acknowledgment and Pre-Hearing Order that
required a timely response to discovery requests, has failed to comply with the Order
compelling discovery responses to be provided by March 9, 2016, and has failed to meet
the April 11,2016 Pre-hearing exchange deadline as ordered by the Acknowledgement
and Pre-Hearing Order. Respondent did not comply with any of CTP’s discovery
requests. In addition, Respondent did not respond to CTP’s Motion to Compel
Discovery, despite being given the opportunity to do so. Additionally, Respondent failed
to file its Pre-hearing exchange by the April 11, 2016 deadline. Respondent’s failure to
effectively prosecute and defend actions taken over the course of the proceedings have
interfered with the orderly and speedy processing of this case, further warranting
imposition of sanctions. See 21 C.F.R. § 17.35(a) (1)(2) and (3).

Due to Respondent’s failure to comply with three separate judicial orders as described
above, I am striking Respondent’s Answer, issuing this default decision, and assuming
the facts alleged in CTP’s complaint to be true. See 21 C.F.R. § 17.35(c) (3), 17.11 (a).
The harshness of the sanctions I impose upon either party must relate to the nature and
severity of the misconduct or failure to comply, and I find the failure to comply here to be
egregious, warranting striking the answer and issuing a decision without further
proceedings. See 21 C.F.R. § 17.35(b). Respondent did not comply with any of the three
orders, nor did it provide any adequate justification for not doing so.

III. Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered. Therefore, I am
required to issue an initial decision by default if the complaint is sufficient to justify a
penalty. 21 C.F.R. § 17.11(a). Accordingly, I must determine whether the allegations in
the Complaint establish violations of the Act.

For purposes of this decision, I assume the facts alleged in the Complaint are true and
conclude the default judgment is merited based on the allegations of the Complaint and
the sanctions imposed on Respondent for failure to comply with the orders. 21 C.F.R.
§ 17.11. Specifically:

e At approximately 9:55 a.m. on November 29, 2014, at Respondent’s business
establishment, 100 North Courtland Street, Chamberlain, South Dakota 57325, an
FDA-commissioned inspector observed Respondent’s staff selling a package of
Marlboro cigarettes to a person younger than 18 years of age;

e Ina warning letter dated December 30, 2014, CTP informed Respondent of the
inspector’s November 29, 2014 observations, and that such actions violate federal
law, 21 C.F.R. § 1140.14(a) . The letter further warned that Respondent’s failure
to correct its violation could result in a civil money penalty or other regulatory
action;

e At approximately 8:04 p.m. on April 23, 2015, at Respondent’s business
establishment, 100 North Courtland Street, Chamberlain, South Dakota 57325,
FDA-commissioned inspectors documented Respondent’s staff selling a package
of Marlboro Gold Pack cigarettes to a person younger than 18 years of age. The
inspector also observed that staff failed to verify, by means of photographic
identification containing a date of birth, that the purchaser was 18 years of age or
older.

These facts establish Respondent Bottle Shop’s liability under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is misbranded
if sold or distributed in violation of regulations issued under section 906(d) of the Act.

21 U.S.C. § 387f(d); see 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b). The
Secretary of the U.S. Department of Health and Human Services issued the regulations at
21 CFR. pt. 1140 under section 906(d) of the Act. 21 U.S.C. § 387a-1; see 21 U.S.C.

§ 387f(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010). Under 21 CFR.

§ 1140.14(a), no retailer may sell cigarettes to any person younger than 18 years of age.
Under 21 C.F.R. § 1140.14(b)(1), retailers must verify, by means of photographic
identification containing a purchaser’s date of birth, that no cigarette purchasers are
younger than 18 years of age.

A $500 civil money penalty is permissible under 21 C.F.R. § 17.2.

Order

For these reasons, I enter default judgment in the amount of $500 against Respondent
Albert S. Fox d/b/a Bottle Shop. Pursuant to 21 C.F.R. § 17.11(b), this order becomes
final and binding upon both parties after 30 days of the date of its issuance.

/s/
Catherine Ravinski
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Barry Kaplowitz, M.D.
(OI File No. M-11-40374-9),

Petitioner,
v.
The Inspector General.
Docket No. C-16-149
Decision No. CR4587

Date: April 15, 2016

DECISION

The Inspector General (IG) of the United States Department of Health and Human
Services excluded Petitioner, Barry Kaplowitz, M.D., from participation in Medicare,
Medicaid, and all other federal health care programs based on Petitioner’s federal felony
conviction related to the delivery of a health care item or service under Medicare or a
state health care program. For the reasons discussed below, I conclude that the IG has a
basis for excluding Petitioner because he was convicted of the offense of making false
statements in health care matters in violation of 18 U.S.C. § 1035(a)(2). I affirm the 20-
year exclusion period because the IG has proven two aggravating factors, and there are
no mitigating factors present. | also affirm that the effective date of Petitioner’s
exclusion is October 20, 2015.

I. Background
By letter dated September 30, 2015, the IG notified Petitioner that, pursuant to section

1128(a)(1) of the Social Security Act, 42 U.S.C. § 1320a-7(a)(1), he was being excluded
from participation in Medicare, Medicaid, and all federal health care programs for a
minimum period of 20 years, effective 20 days from the date of the letter. IG Exhibit
(Ex.) 1 at 1. In the letter, the IG informed Petitioner of the factual basis for the exclusion,
stating:

This exclusion is due to your conviction as defined in section 1128(i) (42
U.S.C. 1320a-7(i)), in the United States District Court, Southern District of
Florida, Miami Division, of a criminal offense related to the delivery of an
item or service under the Medicare or a State health care program,
including the performance of management or administrative services
relating to the delivery of items or services, under any such programs.

IG Ex. | at 1. The IG extended the exclusion period from the statutory minimum of five
years to 20 years based on the presence of two aggravating factors. IG Ex. | at 1-2. As
for the two aggravating factors, the IG found: (1) The loss to the Government or other
entity as a result of Petitioner’s criminal acts was greater than $5,000; and (2) The
sentence the District Court imposed included 60 months of incarceration. IG Ex. | at 1-
2; 42 C.F.R. § 1001.102(b)(1) and (5). The IG did not consider any mitigating factors.
IG Ex. 1; see 42 C.F.R. § 1001.102(c).

Petitioner, through counsel, timely filed a request for hearing before an administrative
law judge on December 2, 2015. On December 21, 2015, I convened a prehearing
conference by telephone pursuant to 42 C.F.R. § 1005.6, during which I clarified the
issues of the case and established a schedule for the submission of prehearing briefs and
exhibits. The schedule and summary of the prehearing conference was memorialized in
my Order and Schedule for Filing Briefs and Documentary Evidence (Order), dated
December 22, 2015.

Pursuant to the Order, the IG filed an Informal Brief (IG Br.) along with five proposed
exhibits (IG Exs. 1-5). Petitioner thereafter filed his Informal Brief (P. Br.) and six
proposed exhibits (P. Exs. 1-6). The IG then filed a reply brief (IG Reply). The IG has
objected to Petitioner’s six exhibits on the basis that these submissions are irrelevant and
immaterial. IG Reply at 2-3. The IG’s objections are not without merit. I find, however,
that Petitioner’s exhibits are sufficiently relevant and material to the circumstances
surrounding his conviction and my determination as to whether the IG’s exclusion falls
within a reasonable range, and I admit them. See Jeremy Robinson, DAB No. 1905 at 2
(2004) (“‘[T]he circumstances of a particular case’ drive the weight that a decisionmaker
can give the aggravating and mitigating factors.” (quoting 57 Fed. Reg. 3298, 3314
(January 29, 1992))). I therefore admit the parties’ briefs and exhibits into the record.
Both parties agreed that an in-person hearing was not necessary for me to decide this
case. IG Br. at 7; P. Br. at 9-10. Therefore, I am deciding this case based on the written
submissions and documentary evidence. See Order § V.
IL. Issues

The regulations limit the issues in this case to whether there is a basis for exclusion, and,
if so, whether the length of the exclusion that the IG has imposed is unreasonable.
42 C.F.R. § 1001.2007(a)(1)-(2).

Il. Jurisdiction
I have jurisdiction to decide this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.
IV. Findings of Fact, Conclusions of Law, and Analysis!

1. Petitioner’s conviction for the offense of false statements in connection with
health care matters mandates his exclusion from all federal health care
programs for a minimum of five years.

The Social Security Act (Act) requires the exclusion of any individual or entity from
participation in all federal health programs based on four types of criminal convictions.
42 U.S.C. § 1320a-7(a). In this case, the IG relied on section 1320a-7(a)(1) as the legal
basis to exclude Petitioner, which states:

(a) Mandatory exclusion

The Secretary shall exclude the following individuals and entities
from participation in any Federal health care program (as defined in section
1320a—7b(f) of this title):

(1) Conviction of program-related crimes

Any individual or entity that has been convicted of a criminal
offense related to the delivery of an item or service under title XVIII
or under any State health care program.

Id. § 1320a-7(a)(1).

The IG argues that Petitioner’s exclusion is required based on his conviction for the
offense of false statements in health care matters pursuant to 42 U.S.C. § 1320a-7(a)(1).
IG Br. at 1-3. Petitioner does not dispute that exclusion is warranted or that his felony
conviction was for a criminal offense related to the delivery of an item or service under
Medicare. P. Br. 1-2; see 42 U.S.C. § 1320a-7(a)(1). Petitioner concedes that a five-year

' My findings of fact and conclusions of law are set forth in italics and bold font.
exclusion is required and states that “‘the only issue . . . in this matter is whether the 20-
year period of exclusion is unreasonable.” P. Br. at 3. As discussed below, I agree with
the parties that exclusion is mandated.

On May 8, 2014, the United States Attorney for the Southern District of Florida filed an
11-count indictment alleging that Petitioner and/or three co-defendants committed
various crimes involving the Medicare program, to include conspiracy to commit health
care fraud and wire fraud, wire fraud, health care fraud, false statements relating to health
care matters, conspiracy to defraud the United States and pay and receive health care
kickbacks, and the payment of kickbacks in connection with a federal health care benefit
program, yielding gross proceeds totaling $39 million. IG Ex. 3. Following a jury trial,
Petitioner was found guilty on/y of Count 8 of the indictment, making false statements
relating to health care matters. The jury found he was not guilty of the offenses of wire
fraud and conspiracy to commit health care fraud and wire fraud, and the jury was unable
to reach a verdict regarding the offenses of health care fraud. IG Ex. 4 at 1-2. All counts,
other than Count 8 pertaining to false statements, were dismissed without prejudice on
the motion of the United States. IG Ex. 5 at 1. Although the United States Sentencing
Guidelines contained in the United States Sentencing Commission’s Guidelines Manual
(USSG) provided an advisory sentencing range of 121 to 151 months of incarceration for
Petitioner’s offense (see P. Ex. 2 at 1), Petitioner was sentenced to serve 60 months in
prison, which is the maximum sentence of incarceration allowed by law for the offense.”
IG Ex. 5 at 1; see IG Ex. 3 at 23 and 18 U.S.C. § 1035(a)(2). In addition to the maximum
period of incarceration that was imposed, supervised release was ordered for a period of
three years following Petitioner’s release from imprisonment. IG Ex. 5 at 3. The District
Court ordered that Petitioner abide by a number of special conditions during his post-
release period of supervised release, to include:

Health Care Business Restriction - The defendant shall not own,
directly or indirectly, or be employed, directly or indirectly, in any health
care business or service, which submits claims to any private or
government insurance company, without the Court’s approval.

* OR Ok

Relinquishment of Licensure — Upon request of the appropriate
regulatory agency, the defendant shall relinquish his/her license to said

“ Pursuant to the USSG, “the sentence may be imposed at any point within the
applicable guideline range, provided that the sentence . . . is not greater than the
statutorily authorized maximum sentence.” USSG § 5G1.1(c)(1). In this case, the 121 to
151 months guideline range exceeded the maximum penalty of five years that was
authorized by statute, and therefore, the sentence imposed could not exceed the maximum
statutory penalty of five years. See 18 U.S.C. § 1035(a)(2).
agency. The defendant is on notice that such relinquishment is permanent
and will be considered disciplinary action.

IG Ex. 5 at 4 (emphasis in original). Finally, Petitioner was ordered to pay $2,946,322 in
restitution, which is also the “Total Amount of Loss,” to the Centers for Medicare and
Medicaid Services. The judgment indicated that Petitioner had joint and several liability
for this debt with various co-defendants who were listed by name. IG Ex. 5 at 5-6.

Count 8 of the indictment, which was the sole count resulting in a conviction, states the
following:

COUNT 8
False Statements Relating to Health Care Matters
(18 U.S.C. § 1035)

1. Paragraphs 1 through 24 of the General Allegations section of this
Indictment are realleged and incorporated by reference as though fully set
forth herein.

2. In or about late January, 2011, in Miami-Dade and Broward
Counties, in the Southern District of Florida, and elsewhere, the defendant,

BARRY KAPLOWITZ,

in any manner involving a health care benefit program, knowingly and
willfully made a materially false, fictitious, and fraudulent writing and
document, knowing the same to contain a materially false, fictitious, and
fraudulent statement and entry, in connection with the delivery and
payment for health care benefits, items, and services, that is, the defendant
signed a document falsely certifying that, beginning on January 13, 2011,
intensive outpatient services would be furnished under his care with a
written plan to be reviewed every thirty days, when in truth and in fact, and
as the defendant then and there well knew, such services would not be and
were not furnished under his care beginning on January 13, 2011 witha
written plan to be reviewed every 30 days.

In violation of Title 18, United States Code, Sections 1035(a)(2)
and 2.

IG Ex. 3 at 13-14.
The offense of false statements in health care matters, pursuant to 18 U.S.C. § 1035(a)(2),
states:

(a) Whoever in any matter involving a health care benefit program,
knowingly and willfully—

ek

(2) makes any materially false, fictitious, or fraudulent statements or
representations, or makes or uses any materially false writing or
document knowing the same to contain materially false, fictitious, or
fraudulent statement or entry . . . in connection with the delivery of
or payment for health care benefits, items, or services, shall be fined
under this title or imprisoned not more than 5 years, or both.

While Petitioner does not dispute that his conviction mandates exclusion pursuant to
section 1128(a)(1), he argues that his felony conviction, prison sentence, and requirement
to pay $2,946,322 in restitution is comparatively unfair considering that a nurse
practitioner who was not charged with any offenses “committed Medicare fraud while
under [his] supervision.” P. Br. at 8. However, Petitioner “does not deny his actions or
his conviction,” and he states that “he would certainly not have assumed that risk in
exchange for the grand total of $1,250.00 per month” he received for the services that
resulted in his conviction. P. Br. at 8-9. Petitioner was convicted of making false
statements related to health care matters, and his false statements resulted in a loss of
more than $2.9 million to the Medicare program. He was unquestionably convicted of a
criminal offense related to the delivery of a health care item or service. 42 U.S.C.

§ 1320a-7(a)(1); see 18 U.S.C. § 1035(a)(2).

2, A 20-year minimum exclusion is not unreasonable based on the presence of
two aggravating factors and no mitigating factors.

As previously discussed, the Act requires a minimum exclusion period of five years when
the exclusion is mandated under section 1320a-7(a). 42 U.S.C. § 1320a-7(c)(3)(B). The
IG increased the minimum exclusion period from five years to 20 years based on his
consideration of two aggravating factors. IG Ex. 1 at 1-2. The IG has the discretion to
impose an exclusion longer than the minimum period when there are aggravating factors
present. See 42 C.F.R. § 1001.102.

The IG asserts that the presence of two aggravating factors warrants an exclusion for 20
years, and neither the IG nor Petitioner has argued that there are any mitigating factors

present that may be considered as a basis for reducing the period of exclusion to no less
than five years. See 42 C.F.R. § 1001.102(a)-(c). The first aggravating factor is that the
loss to a Government program or other entity as a result of Petitioner’s criminal conduct
was greater than $5,000. Jd. § 1001.102(b)(1); IG Ex. 5 at 5. Second, Petitioner was
sentenced to a period of incarceration for 60 months. 42 C.F.R. § 1001.102(b)(5); IG Ex.
5 at 2. Petitioner “does not dispute the imposition of the 60-month period of
incarceration, and he is not permitted, in this forum, to dispute the amount of restitution
that has been assigned to him.” P. Br. at 3 (citing 42 C.F.R. § 1001.2007(d)). Petitioner
argues that “the 20-year period of exclusion is unreasonable” and requests that I “reduce
it to five (5) years to run concurrently with the period of incarceration.” P. Br. at 3.

Petitioner does not dispute that the loss to Medicare as a result of his criminal conduct
was $2,946,322, but argues that “he has been assigned as restitution the value of
services” that an unindicted nurse practitioner who he supervised “provided and/or failed
to provide.” P. Br. at 3-4. Petitioner argues that his “conduct in this matter consisted of
failing to adequately supervise mental health services provided by [the nurse
practitioner],” and this nurse practitioner “committed Medicare fraud by failing to
provide the services for which she billed Medicare and signing blank treatment forms.”

P. Br. at 3-4. Petitioner points out that he “thas paid a tremendous price, both personally
and professionally” (P. Br. at 8), while the nurse practitioner was not indicted or
convicted of any crime and remains licensed. P. Br. at 4 (citing P. Exs. 2 and 5).
Regardless of whether a nurse practitioner who allegedly committed fraud unfairly
escaped prosecution, Petitioner acknowledges, pursuant to 42 C.F.R. § 1001.2007(d), that
e cannot challenge the amount of restitution in these proceedings. P. Br. at 1. The order
of judgment clearly stated that the total amount of loss was $2,946,322. IG Ex. 5. at 5.
As the IG points out, the financial loss to the Medicare program was more than 580 times
the $5,000 minimum amount that triggers consideration of the aggravating factor. IG Br.
at 4-5. The nearly $3 million in restitution ordered clearly supports that the large amount
of loss is a significant aggravating factor. See Jeremy Robinson, DAB No. 1905 at 12
(determining that loss of 41 times the minimum amount required for aggravating factor
supported a 15-year exclusion); Juan De Leon, Jr., DAB No. 2533 (2013) (sustaining
20-year exclusion based on three aggravating factors including financial loss of
$750,000, criminal conduct over 20 months, and sentence including incarceration, as well
as one mitigating factor of government cooperation); Craig Richard Wilder, DAB No.
2416 at 9 (2011) (establishing an 18-year exclusion based on three aggravating factors
including financial loss of over $4,000,000, criminal conduct over two years, and other
convictions, as well as one mitigating factor of government cooperation).

Furthermore, Petitioner was sentenced to the maximum period of incarceration for the
offense of false statements in health care matters pursuant to 18 U.S.C. § 1035(a)(2). The
period of incarceration, 60 months, is quite significant, especially considering that
Petitioner was a first-time criminal offender. See P. Br. at 8; P. Ex. 2 at 6. Nonetheless,
the five-year sentence imposed was approximately half the amount of incarceration listed
as the reasonable sentencing range of 121-151 months provided for in the USSG. IG Ex.
5 at 2; P. Ex. 2 at 1; see USSG § 2B1.1 and Sentencing Table. While Petitioner was
convicted of a single count involving false statements, the conduct was so significant
that it exposed him, as a first-time offender, to the maximum sentence afforded by law.
18 U.S.C. § 1035(a)(2). The IG properly considered the lengthy period of incarceration
to be an aggravating factor in this case. See Jason Hollady, M.D., DAB No. 1855 at 12
(2002) (stating that a nine-month period of incarceration was “relatively substantial”).

The IG did not consider any mitigating factors in this case, and Petitioner concedes that
no mitigating factors exist. P. Br. at 9; see 42 C.F.R. § 1001.102(c). Therefore, there is
no basis to mitigate the aggravating factors that the IG considered.

In summary, the 20-year period of Petitioner’s exclusion is not unreasonable based on the
two aggravating factors present in this case. The amount of loss caused by Petitioner’s
criminal conduct is extraordinary, in that it is well more than 500 times higher than the
threshold $5,000 amount of loss necessary to trigger consideration of this aggravating
factor. In addition, Petitioner was ordered to be incarcerated for the maximum 60-month
duration allowed by law. A 20-year period of exclusion is reasonable owing to the
gravity of the financial loss to Medicare and the length of incarceration imposed.
Petitioner’s criminal conduct resulted in a loss of nearly $3 million to the Medicare
program and demonstrates his untrustworthiness in dealing with health care programs.
While Petitioner was acquitted of more serious charges involving health care and wire
fraud, his conviction for making false statements nonetheless demonstrates a lack of
integrity. Congress clearly did not limit exclusions to only those individuals who
committed fraud themselves, and sought to exclude individuals who were convicted of
criminal offenses that are related to the delivery of an item or service under the Medicare
program. 42 U.S.C. § 1320a-7(a)(1). I therefore conclude that the 20-year period of
exclusion is not unreasonable.

V. Effective Date of Exclusion

The effective date of the exclusion, October 20, 2015, is established by regulation, and
Iam bound by that provision. 42 C.F.R. §§ 1001.2002(b), 1005.4(c)(1).

VI. Conclusion

For the foregoing reasons, I affirm the IG’s decision to exclude Petitioner from
participation in Medicare, Medicaid, and all other federal health care programs for a
minimum period of 20 years, effective October 20, 2015.

/s/
Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Catherine Lynne Cameron, R.N.
(OI File No. H-15-4-2128-9),

Petitioner,
v.
The Inspector General.
Docket No. C-16-140
Decision No. CR4586
Date: April 14, 2016
DECISION

The Inspector General (IG) of the United States Department of Health and Human
Services excluded Petitioner, Catherine Lynne Cameron, a registered nurse, from
participating in Medicare, Medicaid, and all federal health care programs for three years.
Ms. Cameron requested a hearing to dispute the length of exclusion. For the reasons
explained below, I conclude that the three-year exclusion period is not unreasonable in
light of one aggravating factor and one mitigating factor present in this case.

I. Case Background and Procedural History

In a letter dated September 30, 2015, the IG notified Ms. Cameron that, pursuant to

42 U.S.C. § 1320a-7(b)(1), she was being excluded from participating in Medicare,
Medicaid, and all federal health care programs for a period of three years effective
October 20, 2015. IG Exhibit (Ex.) 1. The IG based the exclusion on Ms. Cameron’s
conviction in the Coxsackie Town Court of the State of New York of a misdemeanor
offense related to fraud, theft, embezzlement, breach of fiduciary duty, or other financial
misconduct in connection with the delivery of any health care item or service. The IG
cited one aggravating and one mitigating factor in determining the length of exclusion.
As aggravating, the IG cited Ms. Cameron’s exclusion from the New York Medicaid
program, which was based on the same circumstances that served as the basis for the IG’s
exclusion. As mitigating, the IG cited the fact that Ms. Cameron was convicted of fewer
than three misdemeanor offenses and the entire loss to the Government or other
individual or entity as a result of the acts resulting in her conviction or similar acts was
less than $1,500. IG Ex. 1 at 1-2.

Ms. Cameron, through counsel, timely filed a request for a hearing with the Civil
Remedies Division (CRD) to dispute the exclusion. The CRD Director administratively
assigned this case to me to hear and decide. On December 30, 2015, I convened a
prehearing conference by telephone, the substance of which is summarized in my
Prehearing Order and Conference Summary (Prehearing Order) of that same date.
During the prehearing conference, counsel for Ms. Cameron conceded that there was a
basis for the IG to exclude Ms. Cameron under 42 U.S.C. § 1320a-7(b)(1), and agreed
that the only issue to be decided was whether the three-year length of the exclusion was
unreasonable. Prehearing Order 4 3. The IG filed a brief (IG Br.) on February 3, 2016,
with IG Exs. | through 7. Ms. Cameron then filed a brief (P. Br.) on March 2, 2016, with
P. Ex. 1. The IG filed a reply brief (IG Reply) on March 16, 2016.

II. Issue

The parties agree that the only issue currently before me is whether the length of the
three-year exclusion imposed by the IG is unreasonable. See Prehearing Order {| 3; IG
Br. at 1-2; P. Br. at 1-2; see also 42 C.F.R. § 1001.2007(a)(1)(ii).

Ill. Jurisdiction

I have jurisdiction to decide the issue stated above. 42 U.S.C. § 1320a-7(f); 42 C.F.R.
§§ 1001.2007, 1005.2(a).

IV. Decision on the Written Record

Petitioner did not object to any of the IG’s seven proposed exhibits. Therefore, I admit
IG Exs. 1-7 into the record. The IG did not object to P. Ex. 1. Therefore, I admit P. Ex. 1
into the record. Prehearing Order § 5; Civil Remedies Division Procedures (CRDP)

§ 14(e).

Neither party has offered any witness testimony requiring cross-examination nor has
either party requested an in-person (video) hearing. Prehearing Order §j 4; IG Br. at 6;
P. Br. at 9-10; CRDP § 16(b). Accordingly, because there is no need for any in-person
hearing, I issue this decision based on the written record. CRDP § 19(b), (d).
V. Findings of Fact, Conclusions of Law, and Analysis’

The IG may exclude any individual from participation in Medicare, Medicaid, and any
federal health care program defined in 42 U.S.C. § 1320a-7B(f), who has been convicted
for an offense that occurred after August 21, 1996, under Federal or State law:

(A) of a criminal offense consisting of a misdemeanor
relating to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct —

(i) in connection with the delivery of a health care item or
service, or

(ii) with respect to any act or omission in a health care
program (other than those specifically described in
subsection (a)(1)) operated by or financed in whole or in
part by any Federal, State, or local government agency; or

(B) of a criminal offense relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other
financial misconduct with respect to any act or omission in a
program (other than a health care program) operated by or
financed in whole or in part by any Federal, State, or local
government agency.

42 U.S.C. § 1320a-7(b)(1); see 42 C.F.R. § 1001.201(a).

It is undisputed that on October 25, 2013, Ms. Cameron pled guilty to seventh-degree
criminal possession of a controlled substance and second-degree falsifying of business
records, both misdemeanors. IG Ex. 5. Ina disciplinary proceeding before the New
York State Education Department, Office of Professional Discipline, State Board of
Nursing, Ms. Cameron acknowledged that her two misdemeanor convictions were the
result of stealing medication from a state correctional facility where she worked and
altering facility records to conceal the theft.’ IG Ex. 7 at 8; see IG Ex. 3. Ms. Cameron
does not dispute that her convictions for criminal possession of a controlled substance

' My findings of fact and conclusions of law appear in bold and italics.

> The Specifications of Professional Misconduct that Ms. Cameron signed as part of a
Consent Order in the professional disciplinary proceeding reference three additional
misdemeanor offenses for which Ms. Cameron was convicted, but appear to be wholly
distinct from her theft of medication from the correctional facility. IG Ex. 7 at 8-10.
and falsification of business records related to the theft of a controlled substance provide
the IG with a sufficient basis to exclude her under 42 U.S.C. § 1320a-7(b)(1). Therefore,
I turn to whether the length of Ms. Cameron’s exclusion is unreasonable.

I. There is one aggravating factor (42 C.F.R. § 1001.201(b)(2)(vi)) and one
mitigating factor (42 C.F.R. § 1001.102(c)(3)(i)) present in this case.

The presumptive length of an exclusion imposed under 42 U.S.C. § 1320a-7(b)(1) is three
years “unless the Secretary determines in accordance with published regulations that a
shorter period is appropriate because of mitigating circumstances or that a longer period
is appropriate because of aggravating circumstances.” 42 U.S.C. § 1320a-7(c)(3)(D).

The regulations establish certain circumstances that the IG may consider as aggravating
factors to increase an exclusion period and circumstances that the IG may consider as
mitigating factors to decrease an exclusion period. 42 C.F.R. § 1001.201(b)(2)-(3).
Relevant here, the aggravating factors include, among other things:

Whether the individual or entity was convicted of other
offenses besides those which formed the basis for the
exclusion, or has been the subject of any other adverse action
by any Federal, State or local government agency or board, if
the adverse action is based on the same set of circumstances
that serves as the basis for the imposition of the exclusion.

Id. § 1001.201(b)(2)(vi). The mitigating factors include, among other things:

The individual or entity was convicted of 3 or fewer offenses,
and the entire amount of financial loss (both actual loss and
reasonably expected loss) to a Government program or to
other individuals or entities due to the acts that resulted in the
conviction and similar acts is less than $1,500[.]

Id. § 1001.201(b)(3)(i). Ms. Cameron does not dispute the presence of the aggravating
and mitigating factors cited in the IG’s exclusion notice. P. Br. at 4, 9; see IG Ex. 1 at 2.

A, Aggravating factor: the New York Office of the Medicaid Inspector
General excluded Ms. Cameron from the New York Medicaid
program.

In a letter dated September 14, 2015, the New York State Office of the Medicaid
Inspector General (OMIG) notified Ms. Cameron that OMIG was excluding her from the
New York Medicaid program. IG Ex. 6 at 1. OMIG stated that Ms. Cameron’s exclusion
from Medicaid was based on:
New York State regulations authorizing the immediate
exclusion of a person who has been convicted of, or pled
guilty to... a crime which relates to or results from:

a. the furnishing of or billing for medical care,
services or supplies; or

b. participation in the performance of management or
administrative services relating to furnishing
medical care, services or supplies... .”

IG Ex. 6 at 1.

The exclusion notice letter does not say exactly which conviction formed the basis for
OMIG’s action. However, OMIG’s exclusion of Ms. Cameron from the New York
Medicaid program is more likely than not based on her two October 25, 2013
misdemeanor convictions. Petitioner stole medication from her work at a correctional
facility, and then altered records to cover up her theft. IG Ex. 6; IG Ex. 7 at 8. The theft
of medication and subsequent cover up by falsifying records is indeed related to the
furnishing of medical care, services, or supplies, or the participation in the performance
of administrative services related to such care, services, or supplies. See IG Ex. 6 at 1.
There is no evidence that Ms. Cameron had other convictions that could arguably be
related to furnishing medical care, services, or supplies. See IG Ex. 7 at 8-10 (explaining
Ms. Cameron’s other convictions were for theft of items from a department store, theft of
gasoline from a gas station, and misdemeanor contempt). Accordingly, the only
reasonable conclusion is that OMIG was referring to Ms. Cameron’s two October 23,
2013 misdemeanor convictions in its exclusion notice letter to her. Those two
misdemeanor convictions also serve the basis of the IG’s exclusion of Ms. Cameron from
Medicare, Medicaid, and all federal health care programs. IG Ex. | at 1-2. Thus, the
evidence establishes the aggravating factor in 42 C.F.R. § 1001.201(b)(2)(vi) because it
shows that Ms. Cameron has been the subject of an adverse action by a state agency, and
the adverse action adverse action is based on the same set of circumstances that serves as
the basis for the imposition of the exclusion.

B. Mitigating factor: Ms. Cameron was convicted of fewer than three
misdemeanors and her criminal conduct or related acts resulted in
financial loss to the government or other entity of less than $1,500.

On April 13, 2013, Ms. Cameron entered into a plea agreement in which she agreed to
plead guilty to seventh-degree possession of a controlled substance in violation of New
York Penal Law § 220.03, and second-degree falsification of a business record in
violation of New York Penal Law § 175.05. IG Ex. 4. Ms. Cameron had also been
charged with petit theft, a misdemeanor, but she did not plead guilty to that offense as
part of the plea agreement. IG Ex. 4. On October 23, 2013, the trial court accepted Ms.
Cameron’s guilty plea to the two offenses stated above. IG Ex. 5. Under New York law,
both seventh-degree possession of a controlled substance and second-degree falsification
of a business record are “class A” misdemeanors. N.Y. Penal Law §§ 175.05, 220.03.
Further, there is no evidence in the record that Ms. Cameron’s offenses resulted in any
financial loss to the government or other individual or entity. The trial court sentenced
Ms. Cameron to criminal fines, but did not order any restitution. IG Ex. 5. Indeed, the
IG concedes that Ms. Cameron’s offenses “caused no demonstrable financial loss” to the
government or otherwise. IG Br. at 5. Therefore, the evidence before me establishes the
mitigating factor in 42 C.F.R. § 1001.201(b)(3)(i) because it shows that Ms. Cameron
was convicted of two misdemeanors and those offenses caused no financial loss.

2. A three-year exclusion period is not unreasonable.

I must uphold the IG’s determination as to the length of exclusion if it is not
unreasonable. 42 C.F.R. § 1001.2007(a)(1)(ii). The Secretary of Health and Human
Services explained in the preamble to the final rule establishing the exclusion regulations:
“So long as the amount of time chosen by the [JIG is within a reasonable range, based on
demonstrated criteria, the [administrative law judge] has no authority to change it under
this rule. We believe that the deference § 1001.2007(a)[] grants to the [JIG is
appropriate, given the []IG’s vast experience in implementing exclusions under these
authorities.” 57 Fed. Reg. 3327, 3321 (Jan. 29, 1992). It is the quality of the aggravating
(or mitigating) factors that is most important when considering the length of exclusion
and not the sheer number of aggravating factors that are present in a given case. The
preamble further indicates:

We do not intend for the aggravating and mitigating factors to
have specific values; rather, these factors must be evaluated
based on the circumstances of a particular case. For example,
in one case many aggravating factors may exist, but the
subject’s cooperation with the [JIG may be so significant that
it is appropriate to give that one mitigating factor more
weight than all of the aggravating. Similarly, many
mitigating factors may exist in a case, but the acts could have
had such a_ significant physical impact on program
beneficiaries that the existence of that one aggravating factor
must be given more weight than all of the mitigating. The
weight accorded to each mitigating and aggravating factor
cannot be established according to a rigid formula, but must
be determined in the context of the particular case at issue.

57 Fed. Reg. at 3314-3315.
Ms. Cameron argues that the three-year exclusion period is unreasonable because a
“nuanced assessment of the aggravating and mitigating factor show that they are not
equal in weight and that the mitigating factor should have been given greater weight
resulting in an exclusion below the three-year benchmark as provided for” in 42 C.F.R.

§ 1001.201(b). P. Br. at 5. She argues that the aggravating factor in this case is premised
on the results of Ms. Cameron’s professional disciplinary proceeding because it was that
disciplinary proceeding that subsequently triggered OMIG’s exclusion of her from the
New York Medicaid program. P. Br. at 5. She also notes that OMIG’s exclusion of her
has no defined period, and she is “free to request enrollment or reinstatement in the New
York Medicaid Program,” which thus lessens the severity of OMIG’s exclusion action.

P. Br. at 8. Ms. Cameron also points to her prior substance addiction as the underlying
cause for her criminal conduct and professional misconduct, but asserts that she has
sought treatment and addressed her addiction “in a substantive way.” P. Br. at 6-7; P. Ex.
1. Additionally, according to Ms. Cameron, if considering the “circumstances
surrounding the factors that are present,” the IG should have recognized the weakness of
the aggravating factor, given more weight to the mitigating factor, and thus reduced the
exclusion period below three years. P. Br. at 6.

Ms. Cameron’s description of the OMIG exclusion from the New York Medicaid
program is not accurate. OMIG did not mention the results of Ms. Cameron’s
disciplinary proceeding in its notice letter, but instead cited a New York regulation that
authorizes exclusion from Medicaid based on a medical-care related criminal conviction.
See IG Ex. 6 at | (citing N.Y. Comp. Codes R & Regs. tit. 18 § 515.7(c)). Even if OMIG
obtained knowledge of Ms. Cameron’s convictions based on the outcome of her
professional disciplinary proceeding, the actual exclusion from the New York Medicaid
program, and thus the aggravating factor in this case, was based on Ms. Cameron’s
misdemeanor convictions. Moreover, the fact that Ms. Cameron may have been able to
apply for reinstatement in the New York Medicaid program after OMIG exclusion does
not guarantee that she would have actually been reinstated to that program. Indeed, she
remained excluded from the New York Medicaid program at the time the IG excluded her
from all federal health care programs, which greatly undercuts Ms. Cameron’s argument.
Therefore, I do not find Ms. Cameron’s arguments on these points to be persuasive.

In addition, substance addiction is not a recognized mitigating factor, as Ms. Cameron
concedes in her brief (P. Br. at 7), yet she has attempted to use her addiction to reduce,
i.e., mitigate, the weight of the aggravating factor. See 42 C.F.R. § 1001.201(b)(3). The
regulations only permit consideration of the factors specifically identified as aggravating
or mitigating. Jd. Ms. Cameron has used her prior substance addiction problem to frame
her overall argument and then asks that I consider the “circumstances surrounding” the
aggravating and mitigating factors. P. Br. at 6-7. However, while it is laudable that Ms.
Cameron has sought treatment for what she argues was the root cause of her criminal
conduct, I cannot consider that fact to mitigate the weight of the aggravating factor in this
case.
The mitigating factor in this case warrants a fair amount of weight. Ms. Cameron
ultimately pled guilty to two misdemeanor offenses and did not cause any financial loss
to the government or anyone else. IG Ex. 5. Her criminal conduct does not appear to
have been motivated by profit or defrauding the government or other entity of money.
Instead, the facts of Ms. Cameron’s case support her position that she stole the morphine
to supply her substance addiction problem. IG Ex. 7 at 8; P. Ex. 1. Nevertheless, there
can be no doubt that Ms. Cameron’s criminal offenses were serious. She used her
position as a health care practitioner to access controlled substances unlawfully and then
covered up her theft by falsifying documents. IG Ex. 7 at 8. That conduct, regardless of
its motivation, has the potential to impact health care programs in a serious way. For that
reason the mitigating factor, while worthy of some weight, should not receive the
substantial amount of weight for which Ms. Cameron argues.

Therefore, I conclude that a three year exclusion period is not unreasonable.
VI. Conclusion

I affirm the IG’s determination to exclude Petitioner from participating in Medicare,
Medicaid, and all federal health care programs for a period of three years.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In re CMS LCD COMPLAINT:
Judith A. Roussel,
Continuous Positive Airway Pressure (CPAP)

Docket No. C-16-334
Decision No. CR4584

Date: April 14, 2016

DECISION DISMISSING CASE

Judith Roussel (Aggrieved Party) submitted correspondence dated February 4, 2016,
which the Civil Remedies Division (CRD) docketed as a Local Coverage Determination
(LCD) appeal. Under 42 C.F.R. § 426.410(b), I am required to determine if an LCD
complaint is “acceptable,” including whether it is “valid” under 42 C.F.R. § 426.400.

After reviewing the Aggrieved Party’s filing, I concluded that it was not an acceptable
and valid LCD complaint. I notified the Aggrieved Party of this conclusion in a February
29, 2016 Order. The Order stated:

[T]he complaint is missing information necessary to constitute a valid
complaint: the appeal letter does not identify the contractor using the LCD,
nor the specific provision or provisions adversely affecting the Aggrieved
Party; nor has the Aggrieved Party included a statement from her treating
physician and clinical or scientific evidence that shows the LCD is
unreasonable.

Therefore, the Aggrieved Party has one opportunity to amend her complaint
pursuant to the relevant regulation. 42 C.F.R. 426.410(c)(1). If she does
not submit an acceptable amended complaint, then I must issue a decision
dismissing the unacceptable complaint. 42 C.F.R. 426.410(c)(2).
The Aggrieved Party should submit the following:

Beneficiary-identifying/aggrieved party information: (i) Name; (ii)
Mailing address; (iii) State of residence, if different from mailing
address; (iv) Telephone number, if any; (v) Health Insurance Claim
number, if applicable; (vi) E-mail address, if applicable.

If the beneficiary has a representative, the representative-identifying
information must include: (i) Name; (ii) Mailing address;

(iii) Telephone number; (iv) E-mail address, if any; (v) Copy of the
written authorization to represent the beneficiary

Treating physician written statement (42 C.F.R. 426.400(c)(3)[:] The
regulations require a copy of a written statement from the treating
physician that the beneficiary needs the service that is the subject of the
LCD. The regulations specify that the statement must be from the
treating physician and the statement may be in the form of a written
order for the service or other documentation from the beneficiary’s
medical records indicating that the beneficiary needs the service.
LCD-identifving information: (i) the name of the contractor using the
LCD; (ii) Title of the LCD being challenged; (ii) The specific provision
of the LCD adversely affecting the aggrieved party.

Aggrieved Party statement: A statement from the Aggrieved Party
explaining what service is needed and why the Aggrieved Party thinks
that the provisions(s) of the LCD is (are) not valid under the
reasonableness standard.

Clinical or scientific evidence: Copies of clinical or scientific evidence
that support the complaint and an explanation for why the Aggrieved
Party thinks that this evidence shows that the LCD is not reasonable.

The amended complaint must be in writing and should be filed no later than
30 days from the date of this Order.

The Aggrieved Party failed to make any filing, and thus this complaint remains
unacceptable within the terms of 42 C.F.R. § 426.410(b). Accordingly, I dismiss the
complaint. 42 C.F.R. § 426.410(c)(2).

/s/
Scott Anderson
Administrative Law Judge


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

Center for Tobacco Products,
(FDA No. FDA-2015-H-2782)

Complainant,
v.

In Chul Lee and Hye Jung Lee
d/b/a Parks Place / Shell,

Respondent.
Docket No. C-15-3585
Decision No. CR4582

Date: April 13, 2016

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an administrative
complaint on Respondent, In Chul Lee and Hye Jung Lee d/b/a Parks Place / Shell,
located at 608 West Yelm Avenue, Yelm, Washington 98597’, and by filing a copy of the
complaint with the Food and Drug Administration’s (FDA) Division of Dockets
Management. The complaint alleges that Parks Place / Shell impermissibly sold
cigarettes to minors and failed to verify, by means of photo identification containing a
date of birth, that the purchasers were 18 years of age or older, thereby violating the
Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its
implementing regulations, 21 C.F.R. pt. 1140. CTP seeks to impose a $500 civil money
penalty against Respondent Parks Place / Shell. During the hearing process, Respondent

‘On December 17, 2015, CTP’s Motion for Leave to Amend its complaint to correct
Respondent’s address was granted. The original complaint listed Respondent’s address
as 608 Yelm Avenue, Yelm, Washington 98597.
has failed to comply with two judicial directions regarding CTP’s discovery request. I
therefore strike Respondent’s answer and issue this decision of default judgment.

I. Procedural History

CTP began this matter on August 21, 2015 by serving an administrative complaint
seeking a $500 civil money penalty on Respondent Parks Place / Shell, at 608 West Yelm
Avenue, Yelm, Washington 98597. Respondent timely filed an answer to CTP’s
complaint on September 18,2015. Administrative Law Judge Steven T. Kessel issued
an Acknowledgement and Prehearing Order (APHO) on October 15, 2015, that set
deadlines for parties’ submissions, including the November 16, 2015 deadline to request
that the opposing party provide copies of documents relevant to this case. Additionally,
the APHO stated that a party receiving such a request must provide the requested
documents no later than 30 days after the request.

CTP served Respondent with its request for documents on December 16, 2015. On
January 22, 2016, CTP filed a Motion to Compel Discovery indicating that Respondent
did not respond to its request within the time limit. See 21 C.F.R. § 17.23(a). On the
same date, CTP also filed a motion requesting that all pre-hearing exchange deadlines be
extended. In a February 18, 2016 letter issued under the direction of Judge Kessel,
Respondent was given until March 4, 2016, to object to CTP’s motion. On February 18,
2016, Judge Kessel also issued an Order that extended the parties’ pre-hearing exchange
deadlines.

On March 8, 2016, CTP filed an updated status report requesting that its Motion to
Compel Discovery be granted and that deadlines applicable to CTP be extended. The
updated status report stated that Respondent had not objected to CTP’s Motion to Compel
discovery or produced any documents responsive to CTP’s request for production of
documents.

On March 14, 2016, Judge Kessel issued an order granting CTP’s Motion to Compel
Discovery and extending the pre-hearing exchange deadlines. The Order allowed
Respondent until March 30, 2016 to comply with CTP’s discovery request. Judge Kessel
stated in the Order that:

Failure to do so may result in sanctions, including the issuance of an Initial
Decision and Default Judgment finding Respondent liable for the violations
listed in the Complaint and imposing a civil money penalty. Within five (5)
days of Respondent’s deadline to comply with discovery, CTP must file a
status report notifying me whether Respondent has complied with
discovery.
On April 4, 2016, this case was reassigned to me. On April 4, 2016, CTP filed a motion
to extend deadlines? On April 4, 2016, CTP also filed a Status Report and a Motion to
Impose Sanctions advising that Respondent had not complied with Judge Kessel’s March
14, 2016 Order. In its Motion to Impose Sanctions, CTP asked that Respondent’s answer
be stricken and that a default judgment be issued.

IL. Striking Respondent’s Answer

Respondent has failed to comply with the Acknowledgment and Pre-Hearing Order that
required a timely response to discovery requests, and Respondent has failed to comply
with the Order compelling discovery responses to be provided by March 30, 2016.
Respondent did not comply with any of CTP’s discovery requests. In addition,
Respondent did not respond to CTP’s Motion to Compel Discovery, despite being given
the opportunity to do so. Respondent’s failure to effectively prosecute and defend actions
taken over the course of the proceedings have interfered with the orderly and speedy
processing of this case, further warranting imposition of sanctions. See 21 C.F.R.

§ 17.35(a) (1)(2) and (3).

Due to Respondent’s failure to comply with the Acknowledgment and Pre-Hearing
Order, and Respondent’s failure to comply with the Order compelling discovery
responses, I am striking Respondent’s Answer, issuing this default decision, and
assuming the facts alleged in CTP’s complaint to be true. See 21 C.F.R.

§ 17.35(c) (3), 17.11(a). The harshness of the sanctions I impose upon either party must
relate to the nature and severity of the misconduct or failure to comply, and I find the
failure to comply here sufficiently egregious to warrant striking the answer and issuing a
decision without further proceedings. See 21 C.F.R. § 17.35(b). Respondent did not
comply with the order nor did it provide any adequate justification for not doing so.

III. Default Decision

Striking Respondent’s Answer leaves the Complaint unanswered. Therefore, I am
required to issue an initial decision by default if the complaint is sufficient to justify a
penalty. 21 C.F.R. § 17.11(a). Accordingly, I must determine whether the allegations in
the Complaint establish violations of the Act.

For purposes of this decision, I assume the facts alleged in the Complaint are true and
conclude the default judgment is merited based on the allegations of the Complaint and
the sanctions imposed on Respondent for failure to comply with the orders. 21 C.F.R.
§ 17.11. Specifically:

* As I am issuing a default decision, it is unnecessary to rule on CTP’s April 4, 2016
motion to extend deadlines.
e Atapproximately 10:59 a.m. on April 4, 2014, at Respondent’s business
establishment, 608 West Yelm Avenue, Yelm, Washington 98597, an FDA-
commissioned inspector observed Respondent’s staff selling a package of Camel
cigarettes to a person younger than 18 years of age. The inspector also observed
that staff failed to verify, by means of photographic identification containing a
date of birth, that the purchaser was 18 years of age or older;

¢ Ina warning letter’ dated May 29, 2014, CTP informed Respondent of the
inspector’s April 4, 2014 observations, and that such actions violate federal law,
21 CFR. § 1140.14(a) and (b)(1). The letter further warned that Respondent’s
failure to correct its violations could result in a civil money penalty or other
regulatory action;

e At approximately 1:31 p.m. on April 25, 2015, at Respondent’s business
establishment, 608 West Yelm Avenue, Yelm, Washington 98597, FDA-
commissioned inspectors documented Respondent’s staff selling a package of
Camel Crush Regular Fresh cigarettes to a person younger than 18 years of age.
The inspector also observed that staff failed to verify, by means of photographic
identification containing a date of birth, that the purchaser was 18 years of age or
older.

These facts establish Respondent Parks Place / Shell’s liability under the Act. The Act
prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if sold or distributed in violation of regulations issued under section 906(d)
of the Act. 21 U.S.C. § 387f(d); see 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. § 1140.1(b).
The Secretary of the U.S. Department of Health and Human Services issued the
regulations at 21 C.F.R. pt. 1140 under section 906(d) of the Act. 21 U.S.C.

§ 387a-1; see 21 U.S.C. § 387£(d)(1); 75 Fed. Reg. 13,225, 13,229 (Mar. 19, 2010).
Under 21 C.F.R. § 1140.14(a), no retailer may sell cigarettes to any person younger than
18 years of age. Under 21 C.F.R. § 1140.14(b)(1), retailers must verify, by means of
photographic identification containing a purchaser’s date of birth, that no cigarette
purchasers are younger than 18 years of age.

A $500 civil money penalty is permissible under 21 C.F.R. § 17.2.

*In the warning letter, Respondent was Shell / Food Mart.
Order

For these reasons, I enter default judgment in the amount of $500 against Respondent In
Chul Lee and Hye Jung Lee d/b/a Parks Place / Shell. Pursuant to 21 C.F.R. § 17.11(b),
this order becomes final and binding upon both parties after 30 days of the date of its
issuance.

/s/
Catherine Ravinski
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Briana L. Boyd, M.D.,
(OI File No. H-14-43010-9),

Petitioner,
v.

The Inspector General.

Docket No. C-15-3593

Decision No. CR4583

Date: April 12, 2016
DECISION

The Inspector General (IG) of the United States Department of Health and Human
Services excluded Briana L. Boyd, M.D. (Dr. Boyd or Petitioner) from participation in
Medicare, Medicaid, and all other federal health care programs because the Kentucky
Board of Medical Licensure (Licensure Board) revoked Dr. Boyd’s medical license. The
IG stated that the exclusion would last until Dr. Boyd regains her Kentucky medical
icense and the IG reinstates her. Dr. Boyd requested a hearing before an Administrative
Law Judge to dispute the exclusion.

Because the Licensure Board revoked Dr. Boyd’s medical license based on lying on a
icense renewal application, operating a vehicle under the influence of alcohol and
prescription medications, seriously injuring other individuals due to her intoxication, and
being found guilty of two felony offenses and one misdemeanor offence related to her
intoxication, I conclude that the Licensure Board revoked Dr. Boyd’s medical license for
reasons bearing on her professional competence and professional performance. Further, I
conclude that the IG excluded Petitioner for the minimum length of time permitted under
law. Therefore, I affirm the IG’s exclusion.

I. Background

The IG issued a notice on May 29, 2015, in which he notified Dr. Boyd that she was
being excluded from participating in Medicare, Medicaid, and all federal health care
programs based on the revocation, suspension, loss, or surrender of her medical license
while a formal disciplinary proceeding was pending before the Licensure Board for
reasons bearing on her professional competence, professional performance, or financial
integrity. IG Exhibit (Ex.) 1; 42 U.S.C. § 1320a-7(b)(4). The IG stated that the exclusion
would remain in effect until the IG reinstated her; however, the IG advised that before he
could reinstate her, Dr. Boyd must regain her Kentucky medical license. IG Ex. 1 at 1.

Petitioner timely requested a hearing to dispute the exclusion. On October 21, 2015, I
held a telephonic prehearing conference, the substance of which is summarized in my
October 22, 2015 Order and Schedule for Filing Briefs and Documentary Evidence
(Order). In compliance with the prehearing submission schedule outlined at the
conference, the IG submitted a brief (IG Br.) along with three exhibits (IG Exs. 1-3).
Petitioner submitted a brief (P. Br.) and eight exhibits (P. Exs. 1-8). The IG filed a reply
brief (IG Reply). Because Petitioner requested to testify in her own defense, I permitted
her to submit written direct testimony in the form of an affidavit or declaration, which
Petitioner did (P. Affidavit). 42 C.F.R. § 1005.16(b). Petitioner also attached documents
marked as Exhibit A to the affidavit.

II. Decision on the Record

Neither party objected to any of the proposed exhibits. Therefore, I admit IG Exs. 1-3
and P. Exs. 1-8 into the record. See Order § 3; Civil Remedies Division Procedures
(CRDP) § 14(e).

The IG indicated that he did not believe a hearing was necessary in this case and that he
did not have any witnesses to offer. IG Br. at 7. Petitioner provided her own testimony
in writing; however, the IG declined the opportunity to cross-examine Petitioner.
Therefore, I issue this decision based on the written record. CRDP § 19(b), (d).

Although the IG did not wish to cross-examine Petitioner, the IG objected to Petitioner’s
written direct testimony and the documents marked as Exhibit A as irrelevant because
most of it involves collateral attacks on the Licensure Board’s revocation decision. As
discussed below, I agree with the IG that most of Petitioner’s testimony directly or
indirectly contests the Licensure Board’s revocation proceeding and decision; however, I
receive Petitioner’s written direct testimony into the record because some of it is relevant.
I do not admit Exhibit A into the record as a substantive exhibit because it relates to the
testimony involving collateral attacks on the Licensure Board decision.
III. Issue

Whether a state licensing authority revoked Petitioner’s medical license for reasons
bearing on her professional competence or professional performance.

IV. Jurisdiction

I have jurisdiction to hear and decide this case. 42 C.F.R. §§ 1001.2007(a)(1)-(2),
1005.2(a); see also 42 U.S.C. § 1320a-7(f)(1).

V. Findings of Fact, Conclusions of Law, and Analysis
My findings of fact and conclusions of law are set forth in italics and bold font.

A, There is a basis for Petitioner’s exclusion pursuant to 42 U.S.C. § 1320a-
7(b)(4)(A), and the IG has proven each required element under the statute.

The IG cites 42 U.S.C. § 1320a-7(b)(4) as the basis for Petitioner’s permissive exclusion.
IG Ex. 1. The statute provides, in pertinent part:

(b) PERMISSIVE EXCLUSION. — The Secretary may
exclude the following individuals and entities from
participation in any Federal health care program

2 OR

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

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

Thus, the elements that the IG must prove in this case are: (1) a state licensing authority
(2) revoked Petitioner’s medical license (3) for reasons bearing on Petitioner’s
professional competence, professional performance, or financial integrity. 42 C.F.R.

§ 1001.501(a)(1). For the reasons stated below, I find that the IG has proven each of
these elements.
I. The Licensure Board is the licensing authority for physicians in the
Commonwealth of Kentucky.

By statute, the Kentucky legislature established “an independent board to be known as
the State Board of Medical Licensure which shall exercise all medical and osteopathic
licensure functions heretofore exercised by the State Board of Health.” Ky. Rev. Stat.
Ann. § 311.530. The Licensure Board has broad authority in regard to licensing
physicians, which includes: establishing licensing qualifications; administering an
examination to new applicants; licensing physicians already licensed in another state;
promulgating regulations and a code of conduct for physicians; and “[i]ssu[ing],
deny[ing], suspend[ing], limit[ing], restrict[ing], and revok[ing] any licenses or permits
that may be issued by the board, and to reprimand or to place licensees on probation.”
Ky. Rev. Stat. Ann. §§ 311.565, 311.591(7)(c). Therefore, I conclude that the Licensure
Board is a state licensing authority for purposes of 42 U.S.C. § 1320a-7(b)(4).

2. The Licensure Board revoked Petitioner’s license to practice as a
physician in Kentucky.

Dr. Boyd was licensed to practice medicine in Kentucky (License No. 40671). IG Ex. 2
at 1, 2; IG Ex. 3 at 1; P. Ex. 3 at 1; P. Affidavit J 1. On December 3, 2012, Dr. Boyd was
involved in an automobile accident, which resulted in criminal charges of driving under
the influence of alcohol. IG Ex. 2 at 2, 7.

Due to the accident, on July 23, 2013, the Licensure Board issued a complaint charging
Dr. Boyd with being a chronic alcoholic and engaging in dishonorable, unethical, and
unprofessional conduct. IG Ex. 2 at 2. On October 17, 2013, the Licensure Board issued
an amended complaint in which it added charges that Dr. Boyd had pled guilty to the
criminal charges related to the automobile accident and that she lied on her application to
renew her medical license. IG Ex. 2 at 3. At some point before January 14, 2014, the
Licensure Board issued an emergency order suspending Dr. Boyd’s medical license. IG
Ex. 2 at 1. On January 14-15, 2014, a Licensure Board hearing officer held a hearing on
both the Licensure Board’s charges and emergency suspension order. IG Ex. 2 at 1; P.
Ex. 3. On January 23, 2014, the hearing officer upheld the emergency suspension order
because there was enough evidence that Dr. Boyd’s violation of law “constituted an
immediate danger to the health, welfare, or safety of Dr. Boyd’s patients or the general
public.” IG Ex. 2 at 1. On March 17, 2014, the hearing officer signed a decision in
which he made findings of fact and conclusions of law, and provided a recommended
order. IG Ex. 2. The hearing officer concluded that Dr. Boyd violated the statutory
provisions that the Licensure Board charged her with violating and recommended that the
Licensure Board “take any appropriate action against [Dr. Boyd’s] license to practice
medicine for those violations[.]” IG Ex. 2 at 23-26, 28.
Although on March 31, 2014, Dr. Boyd filed exceptions to the hearing officer’s findings,
conclusions, and recommendation, on May 20, 2014, the Licensure Board’s Hearing
Panel B issued an Order of Revocation in which it accepted and adopted the hearing
officer’s findings, conclusions, and recommendations. IG Ex. 3; Hearing Request,
Exhibit B at 28-35. Specifically, the Order of Revocation stated that:

The license to practice medicine held by Briana L. Boyd,
M.D., is hereby REVOKED and she may not perform any act
which constitutes the “practice of medicine” as that term is
defined by [Kentucky Revised Statutes] KRS 311.550(10) —
the diagnosis, treatment, or correction of any and all human
conditions, ailments, diseases, injuries, or infirmities by any
and all means, methods, devices, or instrumentalities — in the
Commonwealth of Kentucky.

IG Ex. 3 at 1-2. The Order of Revocation notified Dr. Boyd that she had a right to
judicial review in the Jefferson Circuit Court, and notified her that the revocation of her
license became effective 30 days after Dr. Boyd or Dr. Boyd’s counsel received the
order. IG Ex. 3 at 3. Petitioner acknowledges that the revocation is in effect. Hearing
Request at 3.

Based on these facts, I conclude that for purposes of 42 U.S.C. § 1320a-7(b)(4), the
Licensure Board revoked Petitioner’s license to practice medicine in Kentucky.

Dr. Boyd asserts that the Licensure Board’s revocation is not final and cannot serve as a
basis for the IG’s exclusion because review of the Order of Revocation is still ongoing in
the courts of Kentucky. Hearing Request at 3. It is true that Dr. Boyd did seek judicial
review; however, on October 10, 2014, the Jefferson Circuit Court affirmed the Order of
Revocation. P. Ex. 8 at 1; Hearing Request, Exhibit B at 17-27, 68-78. Dr. Boyd moved
to vacate the Circuit Court’s October 10, 2014 Opinion and Order; however, the Circuit
Court overruled that motion. P. Ex. | at 1-11; P. Ex. 8. Dr. Boyd appealed this matter to
the Kentucky Court of Appeals and this appeal is still pending. Hearing Request, Exhibit
B at 5-8; Exhibit D.

The IG argues that the Licensure Board’s Order of Revocation is a final order and
effective regardless as to any pending judicial review of the order. IG Br. at 4. I agree
with the IG. The relevant Kentucky statute defines a “Final order” as “‘an order issued by
the hearing panel that imposes one (1) or more disciplinary sanctions authorized by this
chapter.” Ky. Rev. Stat. Ann. § 311.550(20). Petitioner’s revocation is such a
disciplinary sanction. See id. § 311.565(1)(c). Further, “[e]xcept for final orders denying
an application or reregistration for licensure or emergency orders temporarily suspending,
limiting, or restricting a physician’s license, all final orders of the board affecting a
physician’s license shall become effective thirty (30) days after notice is given to the

licensee... .” Jd. § 311.593(1). Significantly, the same section of the statute providing
this effective date provision for final orders also provides physicians with judicial review
rights; however, the statute does not state that the Licensure Board’s final order of
discipline will be stayed or otherwise affected pending the outcome of judicial review.
Id. § 311.593(2).

Petitioner also argues that the Order of Revocation is fundamentally flawed due to
significant due process violations that occurred during both the hearing officer and
Licensure Board hearing panel levels of administrative adjudication in Dr. Boyd’s
revocation case. P. Br. at 2, 6-7; P. Affidavit 45. Petitioner also asserts that the factual
findings of the hearing officer are wrong as to whether Petitioner is a chronic alcoholic or
knowingly lied to the Licensure Board, and Petitioner testifies and submits evidence in
support of her position that she is not an alcoholic. P. Affidavit §§j 1-4; P. Exs. 4-6.

I am precluded from considering Petitioner’s arguments. As stated in the regulations
governing this case:

When the exclusion is based on the existence of ... a
determination by another Government agency, or any other
prior determination where the facts were adjudicated and a
final decision was made, the basis for the underlying .. .
determination is not reviewable and the [excluded]
individual or entity may not collaterally attack it either on
substantive or procedural grounds in this appeal.

42 C.F.R. § 1001.2007 (emphasis added); see also Travers v. Shalala, 20 F.3d 993, 998
(9th Cir. 1994); Anderson v. Thompson, 311 F. Supp. 2d at 1128 (D. Kan. 2004).
Petitioner has an appeal pending with the Kentucky Court of Appeals. It is that forum,
and not this one, that can provide Petitioner with review of the Licensure Board’s
proceedings and decision. Should a Kentucky court overturn the license revocation,
Petitioner may obtain reinstatement from the IG. 42 C.F.R. § 1001.3005.

3. The Licensure Board revoked Petitioner for reasons bearing on
Petitioner’s professional competence or professional performance.

The IG asserts that the Licensure Board’s findings that Petitioner is a chronic alcoholic
and that Petitioner falsely indicated in her license renewal application that she had no
criminal charges pending against her at a time when she did are sufficient evidence that
the Licensure Board revoked Petitioner’s medical license for reasons bearing on her
professional competence and professional performance. IG Br. at 5-6. Petitioner
disputes that the license revocation bears on her professional competence or performance
because: the criminal conduct in this matter involves a motor vehicle accident that does
not reflect on her ability to practice medicine; Petitioner is not a chronic alcoholic;
Petitioner’s misrepresentation to the Licensure Board about the existence of criminal
charges was not knowingly made and, in any event, was negligible because the Licensure
Board knew of those charges; and Petitioner has not been previously disciplined,
excluding the Licensure Board’s revocation. P. Br. at 2-4; P. Affidavit 9 5, 7.

As indicated above, I have no authority to review the basis for the Licensure Board’s
revocation decision. As a result, I must discern whether the reasons for revocation have a
“bearing” on Petitioner’s professional competence or professional performance. I agree
with the IG that they do because the actual reasons for revocation need not directly
involve actions Petitioner took in relation to being a physician. They merely need to have
some relationship to Petitioner’s professional competence or professional performance.

The following are relevant excerpts from the Findings of Fact and Conclusions of Law of
the Licensure Board’s hearing officer:

The Board’s charges arose out of an automobile accident that
occurred around 5 am on December 3, 2012, when Dr.
Boyd’s car collided with another automobile on Man o’ War
Boulevard in Lexington, Kentucky. As a result of the
accident she was charged with driving under the influence
and with two counts of assault.

The assault charges were filed due to the serious physical
injuries suffered by the two occupants of the other automobile
involved in the accident.

On October 17, 2013, the Board issued the Amended
Complaint which included the additional charges that Dr.
Boyd had pled guilty to criminal charges related to the
automobile accident in violation of .KRS 311.595(4), and that
she had violated KRS 311.595(1) by lying on her application
to renew her medical license.

The preponderance of the evidence supports the conclusion
that Dr. Boyd has repeatedly made false statements in order to
conceal the degree to which she was impaired at the time of
the accident and in an effort to diminish her own
responsibility for causing the automobile accident.
An early example of Dr. Boyd's refusal to take responsibility
for her misconduct was her failure to admit on her application
to renew her medical license on December 31, 2012, that
criminal charges were pending against her.

Dr. Boyd had signed and submitted her application and
answered “no” to the following question: “Since you last
registered, to your knowledge, have you become the subject
of any criminal investigation or are any criminal charges
pending against you?”

There is no dispute that criminal charges were pending
against her at the time she submitted the application.

The preponderance of the evidence supports the conclusion
that Dr. Boyd knowingly presented false information
regarding the status of criminal charges when she submitted
the application for renewal of her medical license on
December 31, 2012.

On September 19, 2013, Dr. Boyd pled guilty to Assault, 2nd
Degree; Wanton Endangerment, Ist Degree (amended); and
Operating a Motor Vehicle While Under the Influence of
Alcohol, with Aggravator.

Dr. Boyd was sentenced on October 31, 2013, to
imprisonment for a number of years but was released from
jail on shock probation on December 23, 2013. She was
ordered to pay restitution, is subject to court monitoring, and
will remain on probation until 2018.

Dr. Boyd violated KRS 311.595(1) by submitting an
application for renewal of her medical license on which she
knowingly and falsely answered “no” to the question whether
she had become the subject of a criminal investigation or had
any criminal charges pending against her since she last
registered as a physician.
Dr. Boyd violated KRS 311.595(4) by pleading guilty to
Assault in the second degree, a Class C felony under KRS
508 020(2), and to Wanton Endangerment in the first degree,
a Class D felony under KRS 506.080(2).

Thus, at the least, Dr. Boyd has violated KRS 311.595(7)
engaging in the periodic use of alcohol in an amount that
suggests an alcohol use disorder, and her excessive
consumption of alcohol on one occasion was the direct cause
of the accident and legal proceedings against her.

Pursuant to KRS 311.595(9), a physician is subject to
discipline if she has “engaged in dishonorable, unethical, or
unprofessional conduct of a character likely to deceive,
defraud, or harm the public or any member thereof.”

Under KRS_ 311.597(4), dishonorable, unethical, or
unprofessional conduct includes “conduct which is calculated
or has the effect of bringing the medical profession into
disrepute,” which can encompass “any departure from, or
failure to conform to the principles of medical ethics of the
American Medical Association.”

Under the American Medical Association’s Principles of
Medical Ethics a physician is required to be honest in all
professional interactions and to respect the law.

Dr. Boyd has violated KRS 311.595(9), as illustrated by KRS
311.597(4), by bringing the medical profession into disrepute
and by violating the Principles of Medical Ethics when she
lied on her application for renewal of her medical license,
when she operated her motor vehicle while under the
influence of alcohol and prescription medications, when she
caused serious physical injuries to other individuals as a result
of her intoxication, and when she was guilty of two felony
offenses and one misdemeanor offense for that misconduct.

IG Ex. 2 at 2, 3, 4, 6, 7, 23-24, 25-26.
10

As summed up by the hearing officer in his conclusions of law, Petitioner’s felonious
conduct involving the physical harm to others, alcohol abuse, and knowingly falsifying
information on a medical license renewal application, all support the conclusion that she
engaged in dishonorable, unethical, and unprofessional conduct. This conclusion, by the

earing officer, confirms that the reasons for Petitioner’s revocation had a bearing on
Petitioner’s professional competence and professional performance. See Gursheel S.
Dhillon, M.D., DAB CR2633, at 4 (2012). It is also confirmed by the hearing officer’s
January 23, 2014 decision upholding the Licensure Board’s immediate suspension of Dr.
Boyd’s license for violations of law that “constituted an immediate danger to the health,
welfare, or safety of Dr. Boyd’s patients or the general public.” IG Ex. 2 at 1 (emphasis
added). Therefore, I conclude that for purposes of 42 U.S.C. § 1320a-7(b)(4),
Petitioner’s medical license was revoked for reasons bearing on her professional
competence and professional performance.

Petitioner testified that she is eligible to reapply for her medical license two years after
the Order of Revocation became effective. Petitioner further testified that she intends to
reapply and stated that “it is of material and substantial importance that she not be
excluded from this program based upon ‘professional incompetence, financial integrity or
professional performance.’” P. Affidavit § 6. However, the case before me is purely
derivative to the Licensure Board’s case. I have not found that Petitioner violated any
statute or rule. I have merely determined that the actions of the Licensure Board permit
the IG to exclude Petitioner. This decision is neither meant to help nor harm Petitioner in
any future efforts she may make to regain her medical license.

B. The length of Petitioner’s exclusion is reasonable as a matter of law.

Pursuant to 42 U.S.C. § 1320a-7(c)(3)(E), the period of exclusion “shall not be less than
the period during which the individual’s or entity’s license to provide health care is
revoked, suspended, or surrendered . . . .” Because Petitioner has not asserted that her
medical license has been reinstated, I conclude that the period of exclusion is mandated
by law under 42 U.S.C. § 1320a-7(c)(3)(E), based on the facts in the record.

VI. Conclusion

I affirm the IG’s determination to exclude Petitioner from participating in Medicare,
Medicaid, and all federal health care programs pursuant to 42 U.S.C. § 1320a-7(b)(4).

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Legend Oaks Healthcare and Rehabilitation — North,
(CCN: 67-6251),
Petitioner,
v.
Centers for Medicare & Medicaid Services
Docket No. C-15-2884
Decision No. CR4581

Date: April 12, 2016

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
impose two per-instance civil money penalties, each in the amount of $1950, against
Petitioner, Legend Oaks Healthcare and Rehabilitation — North, a skilled nursing facility.

I. Background

Petitioner requested a hearing to challenge CMS’s remedy determination. CMS filed a
brief and seven proposed exhibits that it identified as CMS Ex. 1 - CMS Ex. 7. Petitioner
filed a brief and four proposed exhibits that it identified as P. Ex. 1 — P. Ex. 4. I receive
the parties’ exhibits into the record. Neither side requested a hearing for the purpose of
cross-examining witnesses. Consequently, this case is ready for a decision based on the
parties’ written submissions.

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

The issues are whether Petitioner failed to comply substantially with Medicare
participation requirements and whether CMS’s remedy determination is reasonable.

B. Findings of Fact and Conclusions of Law

CMS asserts that Petitioner failed to comply substantially with two Medicare
participation requirements. First, it contends that Petitioner failed to comply with 42
C.F.R. § 483.60(a). This section requires, among other things, that a skilled nursing
facility provide pharmaceutical services, including the dispensing and administering of
drugs, to meet the needs of each of its residents. Second, CMS asserts that Petitioner
failed to comply with 42 C.F.R. § 483.25, which requires that a skilled nursing facility
provide each of its residents with the care and services necessary to attain the highest
practicable level of functioning consistent with the resident’s plan of care.

CMS asserts that Petitioner failed to comply with these requirements in that it failed to
provide medication to a resident that had been prescribed by that resident’s treating
physician. The resident whose care is at issue, Resident 19, suffers from multiple
medical problems. Her complaints included severe and frequent episodes of pain. CMS
Ex. 2 at 70, 79. The resident’s treating physician prescribed multiple medications and
these included a prescription for Norco, a controlled substance. /d. at 8. The physician
directed that Norco be administered to Resident 19 every six hours for pain management.
Id.

Because Norco is a Schedule II controlled substance, prescriptions for the medication
may not be refilled by telephone, fax, or electronically. CMS Ex. 3 at 4. In order to refill
Resident 19’s prescription, Petitioner’s staff was obligated to obtain a written prescription
signed by the resident’s physician. CMS asserts — and the evidence establishes — that
Petitioner’s staff failed timely to obtain a written refill prescription from the resident’s
physician. CMS Ex. 2 at 45-47, 50, 54. Petitioner ran out of its supply of Norco.
Consequently, Resident 19 did not receive Norco pursuant to the physician’s orders.

The resident’s treatment record included an instruction that Norco be reordered after
March 11, 2015. CMS Ex. 2 at 98. However, Petitioner did not attempt to contact
Resident 19’s physician in order to get the prescription refilled until March 14, 2015 and
was unable to get a refill until March 19. Jd. at 63. As a consequence, Resident 19 did
not receive Norco as prescribed by her physician for a five-day period. During that
period the resident expressed pain levels as high as “9” on a 10-point scale. Id.

These facts establish Petitioner’s noncompliance with the requirements of 42 C.F.R.
§§ 483.25 and 483.60(a). Resident 19 had a physician’s order for Norco and a directive
that it be administered to the resident once every six hours. Petitioner failed to comply
with the physician’s order because it failed timely to have the resident’s prescription
refilled. That constituted both a failure to provide Resident 19 with prescription drugs
prescribed to meet her needs and to provide the resident with care that was consistent
with her plan of care.

Petitioner argues that Resident 19 is an individual with a long history of medication-
seeking behavior and suggests that she was inventing pain symptoms in order to obtain
controlled substances, including Norco. It contends that the resident and her physician
ad agreed to wean her off controlled substances but that neither the resident nor her
physician told Petitioner about this agreement. See P. Ex. 2 at 2. It argues that the non-
refill of the resident’s prescription for Norco was consistent with the plan worked out
between the resident and her physician. It avers that the only reason that the physician
eventually reordered Norco for Resident 19 was that he capitulated to pressure from
Petitioner’s staff. See Id. It asserts that it should be held harmless for the alleged
agreement not to continue administering Norco to the resident.

I find these assertions to be unpersuasive. Petitioner has produced no records of any
communications between its staff and Resident 19’s physician — either prior to or
contemporaneous with the events that are at issue here — documenting an effort by the
physician to wean Resident 19 from Norco or other controlled substances. There is
nothing in the resident’s plan of care to suggest such an effort nor are there nursing notes
that show it. Nor is there any evidence to suggest that the physician told Petitioner’s
staff, when the staff finally asked him to refill the resident’s prescription, that he was
discontinuing his order for Norco. There is no physician’s order to that effect nor is there
anything in the record to show that there were telephone conversations between the
physician and Petitioner’s staff during which he communicated an intent to discontinue
the prescription for Norco. Indeed, the record is devoid of any contemporaneous
communication suggesting that the resident’s physician wanted to discontinue
administration of this medication.

Petitioner was obligated to follow Resident 19’s physician’s orders absent something
from the physician that changed or modified them. Its records established that Resident
19 was supposed to be receiving Norco at six-hour intervals. Petitioner was required
faithfully to follow that order and that meant doing what was necessary to assure that
there was a supply of the medication on hand in order to administer it to the Resident. It
is not excused from that duty by the possibility of a secret agreement — if one existed —
between the physician and the resident to discontinue administration of the medication.

Furthermore, there is no evidence showing that Petitioner failed to administer the
medication to Resident 19 because of an alleged secret agreement. The failure was due to
Petitioner’s staff’s not timely reordering the medication. The staff waited until its supply
of Norco was exhausted before attempting to reorder it.

CMS imposed the two per-instance penalties of $1950 under the authority of 42 C.F.R.
§ 488.438(a)(2), which allows for the imposition of civil money penalties of between
$1000 and $10,000 for each instance of substantial noncompliance. The penalties
imposed by CMS were at the lower end of the permissible range for per-instance
penalties.

There are regulatory criteria for deciding what is a reasonable penalty amount. 42 C.F.R.
§§ 488.438(f)(1)-(4), incorporating 42 C.F.R. § 488.404 by reference at 42 C.F.R.

§ 488.438(f)(3). These factors include the seriousness of noncompliance, a facility’s
noncompliance history, its culpability, and its financial condition. Neither CMS nor
Petitioner offered arguments relating to these factors. However, it is apparent from the
evidence of record that Petitioner’s noncompliance was relatively serious. Not only did it
deprive Resident 19 of pain medication that the resident’s doctor had ordered as
necessary, but the failure of the staff timely to seek a refill of the resident’s prescription
demonstrates a lack of understanding by the staff of the need to execute physician’s
orders promptly and completely. I conclude that this lack of understanding put other
residents besides Resident 19 at risk. Given that, the two per-instance penalties of $1950
are entirely reasonable.

/s/
Steven T. Kessel
Administrative Law Judge