Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
(FDA No. FDA-2013-H-0564)

Complainant
v.

CHRSISR LLC
d/b/a Smokers Stop Convenience Store,

Respondent.
Docket No. C-13-762
Decision No. CR2851

Date: July 11, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving an
administrative complaint on Respondent, CHRSISR LLC d/b/a Smokers Stop
Convenience Store, at 206 Dixwell Avenue, New Haven, Connecticut 06511, and
by filing a copy of the complaint with the Food and Drug Administration's (FDA)
Division of Dockets Management. The complaint alleges that Smokers Stop
Convenience Store impermissibly sold cigarettes or smokeless tobacco to a minor
or minors and failed to verify the purchaser’s or purchasers’ ages by means of
photo identification containing a date of birth, violating the Federal Food, Drug,
and Cosmetic Act (Act), 21 U.S.C. § 301 et seq., and its implementing regulations,
21 C.F.R. Part 1140. CTP seeks to impose a $500 civil money penalty against
Respondent Smokers Stop Convenience Store.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on May 15, 2013, CTP served the
complaint on Respondent Smokers Stop Convenience Store by United Parcel
Service. In the complaint and accompanying cover letter, CTP explained that,
within 30 days, Respondent should pay the penalty, file an answer, or request an
extension of time in which to file an answer. CTP warned Respondent that, if it
failed to take one of these actions within 30 days, an Administrative Law Judge
could, pursuant to 21 C.F.R. § 17.11, issue an initial decision ordering it to pay the
full amount of the proposed penalty.

Respondent Smokers Stop Convenience Store has neither filed an answer within
the time prescribed, nor requested an extension of time within which to file an
answer. Pursuant to 21 C.F.R. § 17.11, l assume that the facts alleged in the
complaint (but not its conclusory statements) are true. Specifically:

e At Respondent's business establishment, 206 Dixwell Avenue #A, New
Haven, Connecticut 06511, at approximately 10:41 AM on June 27, 2012,
an FDA-commissioned inspector observed Respondent’s staff sell
cigarettes or smokeless tobacco to a person younger than 18 years of age;

e At Respondent's business establishment, 206 Dixwell Avenue #A, New
Haven, Connecticut 06511, at approximately 10:41 AM on June 27, 2012,
an FDA-commissioned inspector observed Respondent’s staff fail to verify,

by means of photo identification containing the bearer's date of birth, that a

purchaser of cigarettes or smokeless tobacco was 18 years of age or older;

e Ina warning letter issued September 6, 2012, CTP informed Respondent of
the inspector's June 27, 2012 observations, and that such actions violate
ederal law, 21 C.F.R. §§ 1140.14(a) and 1140.14(b)(1). The letter further
warned that if Respondent failed to correct its violations, a civil money
penalty or other regulatory action could occur;

e At approximately 9:37 AM on December 24, 2012, at Respondent's
business establishment, 206 Dixwell Avenue #A, New Haven, Connecticut
06511, an FDA commissioned inspector observed Respondent’s staff sell a
package of Marlboro Menthol cigarettes to a person younger than 18 years
of age; staff also failed to verify, by means of photo identification
containing the bearer's date of birth, the purchaser’s age.

These facts establish Respondent Smokers Stop Convenience Store'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 issued the
regulations at 21 C.F.R. Part 1140 under section 906(d) of the Act. 21 U.S.C.
387(a); see 21 U.S.C. § 387f(d)(1); 75 Fed. Reg. 13,229 (Mar. 10, 2010). Under
21 C.F.R. § 1140.14(a), no retailer may sell cigarettes or smokeless tobacco to any
person younger than 18 years of age. Under 21 C.F.R. § 1140.14(b)(1), retailers
must verify, by means of photo identification containing the bearer's date of birth,
that no person purchasing cigarettes or smokeless tobacco is 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 CHRSISR LLC d/b/a Smokers Stop Convenience Store. 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/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.
Dollar Haven LLC,

Respondent.

Docket No. C-13-783

FDA Docket No. FDA-2013-H-0584
Decision No. CR2850

Date: July 9, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Dollar Haven LLC, alleging facts and legal
authority sufficient to justify the imposition of a civil money penalty of $2,000.
Respondent did not timely answer the Complaint, nor did Respondent request an
extension of time within which to file an answer. Therefore, I enter a default
judgment against Respondent and order that Respondent pay a civil money penalty
in the amount of $2,000.

CTP began this case by serving a Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The Complaint alleges that Respondent’s staff
impermissibly offered individual cigarettes for sale in its establishment,
unlawfully sold regulated tobacco products to minors and, prior to these
transactions, failed to verify that the tobacco purchasers were of sufficient age,
thereby violating the Federal Food, Drug, and Cosmetic Act (Act) and its
implementing regulations found at 21 C.F.R. Part 1140. CTP seeks a civil money
penalty of $2,000.

On May 21, 2013, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that, within 30 days, Respondent
should pay the penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that, if it failed to take one of
these actions within 30 days, an Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering Respondent to pay the full
amount of the proposed penalty. Respondent did not take one of the required
actions within the time provided by regulation.

lam required to issue a default judgment if the Complaint is sufficient to justify a
penalty, and the Respondent fails to answer timely or to request an extension. 21
C.F.R. § 17.11(a). For that reason, I must decide whether a default judgment is
appropriate here, and I conclude that it is merited based on the allegations of the
Complaint and Respondent’s failure to answer them.

For purposes of this decision, I assume the facts alleged in the Complaint are true.
21 C.F.R. § 17.11(a). Specifically, CTP alleges the following facts in its
Complaint:

e Respondent owns Dollar Haven LLC, a business that sells tobacco products
and is located at 111 Derby Avenue, New Haven, Connecticut 06511.

e On June 26, 2012, an FDA-commissioned inspector observed two
violations of regulations found at 21 C.F.R. Part 1140 while inspecting
Respondent’s establishment. Specifically, Respondent violated 21 C.F.R. §
1140.14(a) when, at approximately 10:20 AM, Respondent’s staff sold a
package of Newport Box 100s cigarettes to a person younger than 18 years
of age. During this same transaction, Respondent’s staff failed to verify, by
means of photographic identification containing the bearer’s date of birth,
the age of the tobacco purchaser as required by 21 C.F.R. § 1140.14(b)(1).

¢ On September 6, 2012, CTP issued a Warning Letter to Dollar Haven LLC
regarding the inspector’s observations from June 26, 2012. In addition to
describing the violations, the letter advised Respondent that the FDA may
initiate a civil money penalty action or take other regulatory action against
Respondent if Respondent failed to correct the violations. The letter also
stated that it was Respondent’s responsibility to comply with the law.
¢ On September 25, 2012, Janett Quintero, manager of Respondent’s
establishment, responded, by telephone, to CTP’s Warning Letter on behalf
of Respondent. She stated that “the clerk who committed the violation no
longer works at the register.” She also stated that she had spoken with the
staff about checking the identification of customers purchasing tobacco
products.

e On November 20, 2012, CTP acknowledged, in writing, receipt of the
establishment’s response and reminded Respondent of its continuing
obligation to be in compliance with the law.

e On January 3 and 9, 2013, FDA-commissioned inspectors documented
additional violations during a subsequent inspection of the establishment.
Specifically, a person younger than 18 years of age was able to purchase a
package of Marlboro cigarettes at approximately 12:54 PM on January 3,
2013. Prior to this transaction, Respondent’s staff did not verify that the
tobacco purchaser was 18 years of age or older by checking the purchaser’s
photographic identification. The inspectors also observed that
Respondent’s establishment offered individual cigarettes for sale in
violation of 21 C.F.R. § 1140.14(d).

These facts establish that Respondent is liable 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. § 387c(a)(7)(B); 21 C.F.R § 1140.1(b). Under 21
C.F.R. § 1140.14(a), no retailer may sell cigarettes or smokeless tobacco to any
person younger than 18 years of age. Under 21 C.F.R. § 1140.14(b)(1), a retailer
must verify, by means of photo identification containing the bearer’s date of birth,
that no person purchasing cigarettes or smokeless tobacco is younger than 18 years
of age. Under 21 C.F.R. § 1140.14 (d), no retailer may break or otherwise open
any cigarette package to sell or distribute individual cigarettes or a number of
unpackaged cigarettes that is smaller than the quantity in the minimum cigarette
package size of 20 cigarettes. See also 21 C.F.R. § 1140.16(b).

Here, Respondent’s staff sold cigarettes or smokeless tobacco to a minor or minors
on two separate occasions, June 26, 2012, and January 3, 2013. Prior to those
transactions, Respondent’s staff did not verify that the tobacco purchasers were 18
years of age or older by checking their photographic identification as required by
the regulations. In addition, during a two-part inspection on January 3 and 9,
2013, FDA-commissioned inspectors documented Respondent’s establishment
offering individual cigarettes for sale in violation of the foregoing regulations.
Respondent’s actions and omissions on two occasions at the same retail outlet
constitute violations of law for which a civil money penalty is merited.
Accordingly, I find that a civil money penalty of $2,000 is permissible under 21
C.F.R. § 17.2 and order one imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Miami-Sunshine Health Care, Inc.,
(PTAN: 10-9379),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-495
Decision No. CR2849

Date: July 3, 2013

DECISION

Petitioner, Miami-Sunshine Health Care, Inc., a home health agency, appeals the
reconsideration decision dated January 28, 2013, affirming the revocation of its Medicare
enrollment and billing privileges effective August 19, 2012. The undisputed evidence
establishes that Petitioner was not in compliance with Medicare program requirements
for 10 Medicare beneficiaries for whom it submitted claims for home health care
services. As a consequence, I grant the motion of the Centers for Medicare and Medicaid
Services (CMS) for summary judgment and uphold CMS’s determination to revoke
Petitioner’s Medicare enrollment and billing privileges effective August 19, 2012.

I. Background and Procedural History

By letter dated June 27, 2012, Palmetto GBA (Palmetto), a CMS contractor, informed
Petitioner that CMS was revoking Petitioner’s Medicare billing privileges and
terminating Petitioner’s provider agreement effective August 19, 2012, because Petitioner
failed to comply with the Medicare enrollment requirements pursuant to 42 C.F.R.
§ 424.535(a)(1). CMS Exhibit (Ex.) 1; P Ex. B. Palmetto also informed Petitioner that it
was establishing a Medicare re-enrollment bar for a period of three years. CMS Ex. | at
2; P. Ex. B at 2. Specifically, the revocation letter stated that:

Under 42 CFR 424.535(a)(1) CMS may revoke a currently enrolled

provider or supplier’s Medicare billing privileges and any corresponding
provider agreement when the suppliers are not in compliance with the
enrollment requirements specifically outlined in Section 15(a)5
(Certification Statement for 855A application) that states: “I will not
knowingly present or cause to be presented a false or fraudulent claim for
payment by Medicare, and I will not submit claims with deliberate ignorance
or reckless disregard of their truth or falsity.”

CMS Ex. | at 1.

Petitioner timely filed a request for reconsideration of CMS’s decision. CMS Ex. 1 at 3.
On January 28, 2013, CMS issued a reconsidered determination that upheld the
revocation based on Petitioner’s noncompliance with Medicare enrollment requirements.
CMS Ex. | at 3-5. CMS found with respect to 10 beneficiaries that there was no
evidence that Dr. Gonzalez was the treating physician; there was no claim for services
from Dr. Gonzalez for these 10 patients even though Petitioner claimed there was a valid
certification for home health services from Dr. Gonzalez for these beneficiaries.

Petitioner filed a hearing request (HR) with the Civil Remedies Division of the
Departmental Appeals Board on March 4, 2013 and the case was assigned to me for
hearing and decision.

In accordance with my Acknowledgment and Initial Docketing Order dated March 8,
2013, CMS filed on April 5, 2013, a Motion for Summary Judgment and brief (CMS Br.),
with nine exhibits (CMS Exs. 1-9). In its brief, CMS stated that Petitioner obligated itself
to full compliance with “the Medicare laws, regulations, and program instructions that
apply to this provider” which include the standards governing Medicare-reimbursable
iome health services. CMS Br. at 1-2. CMS contends that such services may be
provided only to a beneficiary who is under the care of a physician, and a physician must
certify the necessity for home health services for the beneficiary, after a face-to-face
encounter. CMS argues that Petitioner billed Medicare without valid certifications from
a physician, who was involved in the treatment, care or monitoring of identified
beneficiaries and this billing practice constituted noncompliance.’ CMS Br. at 2.

' Tn its brief, CMS stated that to the extent this constitutes a modification of the
previously-articulated basis for the revocation, such a modification is permissible. CMS
Br. at 2, nl citing Green Hills Enterprises, LLC, DAB No. 2199 (2008)(it is permissible

Petitioner did not initially file its rebuttal response as directed by my order by April 25,
2013. On May 6, 2013, I issued an Order to Show Cause why I should not dismiss this
matter as abandoned or for failure to follow my directives. Later that day, Petitioner
filed its brief in opposition to CMS’s motion (P. Br.) together with P. Exs. A-M and 1-20,
and, later, at my directive, it filed on May 16, 2013, its showing of good cause for its
failure to file its response by April 25, 2013. On June 3, 2013, I issued my ruling on
Petitioner’s good cause, indicating that while an error by counsel is generally not
sufficient to show good cause for missing an important deadline, it was apparent from
Petitioner’s response that the circumstances here warranted my exercise of discretion in
Petitioner’s favor. I allowed Petitioner’s May 6, 2013 response into the record.

CMS then filed its reply to Petitioner’s motion in opposition to CMS’ motion for
summary judgment. CMS Reply.

II. Applicable Law

The Medicare statute defines “home health services” as “items and services furnished to
an individual, who is under the care of a physician . . . under a plan (for furnishing such
items and services to such individual) established and periodically reviewed by a
physician... .” 42 U.S.C. § 1395x(m). Home health services are covered by Medicare
“only if... a physician certifies .. . that. . . home health services . . . are or were
required because the individual is or was confined to his home . . . and needs or needed
skilled nursing care... .” 42 U.S.C §§ 1395f(a)(2)(C), 1395n(a)(2)(A).

A home health agency may receive Medicare payment for home health services for
individuals only after the home health agency has obtained a valid certification from a
physician that the individual is homebound and requires home health services. 42 U.S.C
§§ 1395f(a)(2)(C), 1395n(a)(2)(A). Home health services must be furnished while the
individual is under the care of a physician, and a physician must establish and
periodically review a plan of care for furnishing the services. 42 C.F.R.

§ 424.22(a)(iii),(iv). Also, the certifying physician is required to know the Medicare
beneficiary’s medical status, and therefore there must be a face-to-face encounter with
the individual, 42 C.F.R. § 424.22(a); Medicare Benefit Policy Manual, CMS Publication
100-102, Ch. 7 (Home Health Services), § 30.5.1.1. The face-to-face encounter must be
“related to the primary reason the patient requires home health services ....” 42 C.F.R.
§ 424.22(a)(1)(v).

A physician and the home health agency personnel must review a Medicare beneficiary’s
plan of care at regular intervals. 42 C.F.R. § 484.18(b). Also, the home health agency is
required to “promptly alert the physician” to significant changes that suggest a need to
alter the plan of care. 42 C.F.R. § 484.18(b). The home health agency consults with the

for CMS to state alternative grounds for its determination provided the petitioner has the
opportunity to respond to those grounds during the administrative proceeding).
individual’s physician to obtain approval of any “additions or modifications to the
original plan” of care. 42 C.F.R. § 484.18(a).

Section 424.535(a) of 42 C.F.R. authorizes CMS to “revoke a currently enrolled provider
or supplier’s Medicare billing privileges and any corresponding provider agreement or
supplier agreement” for reasons including, as relevant here:

(1) Noncompliance. The provider or supplier is determined not to be in
compliance with the enrollment requirements described in this section,
or in the enrollment application applicable for its provider or supplier type... .

Ill. Analysis

A. Issue

The issue in this case is whether CMS is entitled to summary judgment on the grounds
that CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing
privileges.

B. Applicable Standard

Summary judgment is appropriate when a case presents no issue of material fact, and its
resolution turns on questions of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-
48 (1986); Livingston Care Ctr. v. United States Dep’t of Health and Human Servs., 388
F.3d 168, 173 (6th Cir. 2004); see also Illinois Knights Templar Home, DAB No. 2274,
at 3-4 (2009) (citing Kingsville Nursing Ctr., DAB No. 2234, at 3-4 (2009)). The moving
party may show the absence of a genuine factual dispute by presenting evidence so one-
sided that it must prevail as a matter of law, or by showing that the non-moving party has
presented no evidence “sufficient to establish the existence of an element essential to
[that party’s] case, and on which [that party] will bear the burden of proof at trial.”
Livingston Care Ctr., 388 F.3d at 173 (quoting Celotex Corp. v. Catrett, 477 U.S. 317,
323-24 (1986)). To avoid summary judgment, the non-moving party must then act
affirmatively by tendering evidence of specific facts showing that a dispute exists.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); see
also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing and Rehab. Ctr., DAB No.
1918 (2004).

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

The role of an ALJ in deciding a summary judgment motion differs from the ALJ’s role
in resolving a case after a hearing. The ALJ should not assess credibility or evaluate the
weight of conflicting evidence. Holy Cross Vill. at Notre Dame, DAB No. 2291, at 4-5

(2009).

C. Findings of Fact and Conclusions of Law

1. CMS was authorized to change its revocation basis because Petitioner
had notice and opportunity to respond during this administrative
proceeding.

Petitioner admits that CMS was legally authorized to amend its initial basis for
revocation.

The Departmental Appeals Board (Board) has consistently held that after an
administrative appeal has commenced, a federal agency may assert and rely on new or
alternative grounds for the challenged action or determination as long as the non-federal
party has notice of, and a reasonable opportunity to respond to, the asserted new grounds
during the administrative proceeding. Green Hills Enters., LLC, DAB No. 2199 (2008).
See also Abercrombie v. Clarke, 920 F.2d 1351, 1360 (7th Cir. 1990), cert. denied, 520
U.S. 809 (1991) (holding that defects in formal notice may be cured during the course of
an administrative proceeding, and due process is satisfied as long as the party is
reasonably apprised of, and given opportunity to address, the issues in controversy); St.
Anthony Hosp. v. Sec’y, Dep't of Health and Human Servs., 309 F.3d 680, 708 (10th Cir.
2002) (“To establish a due process violation [in an administrative proceeding], an
individual must show he or she has sustained prejudice as a result of the allegedly
insufficient notice.”).

It is evident from CMS’s many briefs in this matter that CMS chooses to revoke
Petitioner’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(1) on the grounds
that Petitioner failed to maintain the required conformance “to the Medicare laws,
regulations, and program instructions that apply to this provider.” CMS Br. at 1; CMS
Ex. 2 at 38. I provided Petitioner with ample opportunity to refute CMS’s determination
that it had been found noncompliant based on failure to comply with Medicare laws and
regulations.

2. The undisputed evidence shows CMS had a legitimate basis to revoke
Petitioner’s Medicare billing privileges effective August 19, 2012 because
Petitioner was not in compliance with Medicare requirements for home
health certifications for 10 Medicare beneficiaries.

Any home health agency that seeks to enroll as a provider in the Medicare program must
complete a CMS 855A enrollment application. Petitioner completed a CMS 855A and
signed the Certification Statement at Section 15 of the CMS 855A enrollment
application. CMS Ex. 3. Petitioner’s signature “binds this provider to the laws,
regulations, and program instructions of the Medicare program.” CMS Ex. 3 at 4. CMS
contends that Petitioner submitted claims for home health services which did not conform
to “the Medicare laws, regulations, and program instructions that apply to this provider.””
CMS Br. at 2. CMS argues that by signing a CMS 855A Certification Statement and
enrolling in the Medicare program, Petitioner agrees to comport with all Medicare laws
of general applicability and those that apply specifically to home health agencies. In
addition, according to CMS, the text of the CMS 855A places Petitioner on notice that
failure to comply with Medicare laws may be a basis for the revocation of Petitioner’s
enrollment in the Medicare program in the future.

CMS determined to revoke Petitioner’s Medicare billing privileges after an internal CMS
inquiry revealed that the signature of Dr. Gonzalo Gonzalez and his National Provider
Identifier (NPI) appeared as the certifying physician on an extraordinarily high number of
home health claims for Medicare beneficiaries submitted by a number of home health
agencies in the Miami area.’ CMS Br. at 8; CMS Ex. 7. CMS contends that Petitioner
submitted Medicare home health claims on behalf of 30 individuals and named Dr.
Gonzalez as the certifying physician in each instance; however, CMS’s Medicare
reimbursement records for Dr. Gonzalez do not indicate that he was involved in the care

> Specifically, CMS refers to the requirement that home health agencies may only
receive Medicare reimbursement for services provided to individuals who are under the
care of a physician, and the physician must have a face-to-face encounter with the
individuals and certify the necessity of the home health services. CMS contends that
these requirements were not met with respect to claims Petitioner submitted for 30
individuals. CMS Br. at 9.

> CMS found that for calendar year 2011, nearly 1,000 Medicare beneficiaries were
allegedly certified as requiring home health services with Dr. Gonzalez identified by the
home health agency as the alleged certifying physician. In calendar 2012, more than
1,200 beneficiaries were so certified as requiring home health services with Dr. Gonzalez
identified by the home health agency as the certifying physician. CMS Ex. 7 at 2.
of those 30 individuals. CMS Br. at 9-10; CMS Exs. 5 and 6; CMS Ex. 7 at 2. Thus,
CMS contends that Petitioner’s submission of Medicare claims for individuals who were
not under the care of a physician constituted noncompliance, and that CMS had a
legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges.
Finally, CMS notes that Petitioner voluntarily relinquished its license to operate a home
health agency to Florida’s Agency for Health Care Administration, effective February 20,
2013, and, therefore, Petitioner cannot be enrolled in the Medicare program because
under applicable Medicare requirements a home health agency must satisfy state
licensure requirements. CMS Br. at 12-13; 42 C.F.R. § 424.516(a)(2). CMS also points
out that under the Medicare certification requirements a cessation of business is deemed
to be a voluntary termination of the provider’s Medicare provider agreement. 42 C.F.R.
§ 489.52(b)(3). Thus CMS contends that Petitioner’s relinquishment of its license and the
cessation of operation as a home health agency constitutes an additional basis for the
revocation of Petitioner’s enrollment and billing privileges.

Petitioner argues that the evidence CMS presents does not prove that these 30 individuals
were not under the care of Dr. Gonzalez. P. Br. at 2. Petitioner contends that it has no
legal or contractual authority as a home health agency over Dr. Gonzalez and therefore
as no way of knowing anything about the Medicare Part B claims Dr. Gonzalez or his
employer clinic, Vortex Medical Center, submits for services he renders to his or its
patients. P. Br. at 2. Petitioner then contends it possessed, and offered as evidence, all
the legally required home health documents necessary to submit a claim for the home
ealth services it argues it rendered to 20 beneficiaries.* P. Br. at 2, P. Exs. 1-20.°
Petitioner contends that based on this documentation it would have no reason to know or
doubt that a valid and ongoing patient/physician relationship existed between Dr.
Gonzalez and these 20 beneficiaries. Petitioner also argues that CMS is holding
Petitioner to a strict liability standard in that because Dr. Gonzalez or his employer clinic
did not submit a Part B claim for the patients at issue, Petitioner should have its
enrollment and billing privileges revoked. Petitioner contends that it can comply only
with its own standards of conduct and those it has contractual privity with or control over,
and that it has no privity or control over Dr. Gonzalez or his employer clinic. P. Br. at 6-

* Petitioner makes no mention and presents no evidence whatsoever with respect to 10
beneficiaries specifically named by CMS, as early as the reconsideration determination,
for whom Dr. Gonzalez did not bill for services and for whom CMS determined Dr.
Gonzalez was not the treating physician who could certify the necessity for home health
services. See Palmetto notice letter dated January 28, 2012 attached to RFH as Exhibit 2
at 4; CMS Reply at 4.

* These 20 exhibits contain what purport to be the proper certifying physician records for
20 beneficiaries. They consist of the initial prescription, the Plan of Care, Verbal Orders,
a signed Face-to-Face Encounter form, and Discharge Orders all allegedly signed by Dr.
Gonzalez. P. Exs. 1-20.
7. Petitioner contends it has no independent legal obligation to speak with the certifying
| physician directly unless one of the enumerated obligations listed at 42 C.F.R.

§ 484.18(b) is present, such as if there is a significant change in the patient’s condition.
P. Br. at 8. Finally, Petitioner contends that summary judgment is inappropriate here as
there are numerous facts in dispute. P. Br. at 9.

In order to determine whether CMS had a legitimate basis for revoking Petitioner’s
billing privileges for submitting home health claims that allegedly had no physician
certification, Petitioner would have to submit at least documentary evidence such as
medical records or sworn testimonial evidence from the Medicare beneficiaries which
reasonably establish that Dr. Gonzalez had actually treated them and appropriately
certified them as in need of home health agency services for all the 30 of the
beneficiaries questioned by CMS. However, even though Petitioner was on notice from
January 28, 2012 of 10 named beneficiaries for whom CMS alleged no valid physician
certification, Petitioner did not and has not submitted any documentation for these 10
identified patients. Thus, Petitioner has presented no evidence whatsoever to suggest that
these 10 patients were under Dr. Gonzalez’s care for home health services in accordance
with 42 C.F.R. § 424.22. And, Petitioner does not dispute that it billed Medicare for
services Dr. Gonzalez purportedly approved for these beneficiaries. Petitioner suggests
that CMS should have requested medical records from Dr. Gonzalez or from his
employer, Vortex Medical Center. However, Petitioner has not provided any explanation
as to why this should be necessary. It does not explain why Petitioner did not submit for
these 10 patients the prescriptions, plans of care, face-to-face encounter documentation,
and other certification paperwork that it submitted for the other 20 patients. The only
inference I can make is that the documentation does not exist. It should: Petitioner
should have this information in its own medical records if Petitioner was submitting
claims for payment to Medicare for home health services for these 10 patients. Also, if
Petitioner did not have this information available, despite its obligation to have these
records in its possession, it could have provided sworn declarations from the 10
beneficiaries stating that Dr. Gonzalez was their treating physician. No such
documentation was presented.

The law clearly requires that a physician must be involved in the certification of an
individual for home health services and a physician’s ongoing involvement in the care of
that individual.° 42 U.S.C §§ 1395f(a)(2)(C), 1395n(a)(2)(A). Medicare program

° Petitioner argues that it is being held to a strict liability standard on the basis that Dr.

Gonzalez or his employer did not submit a Part B claim for services for the patients at
issue and they do not have authority or control over Dr. Gonzalez. P. Br. at 7. However,
tort concepts such as “imputed liability” and “strict liability” are irrelevant to federal
administrative enforcement proceedings against noncompliant suppliers and providers.
The Departmental Appeals Board has made clear that a strict liability standard is not
being applied simply because a facility is held to “standards enunciated in the relevant
guidance echoes these statutory requirements: “[t]he patient must be under the care of a
physician who is qualified to sign the certification statement and plan of care... A
patient is expected to be under the care of the physician who signs the plan of care and
the physician certification.” Medicare Benefit Policy Manual, 100-101, § 30.3. The
physician must base his certification of the need for home health services upon a face-to-
face encounter with the patient and the encounter must be related to the primary reason
the patient requires home health services. 42 C.F.R. § 424.22(a).

Because Petitioner failed to provide any evidence with respect to 10 patients which
would show that these patients were under the care of Dr. Gonzalez and that Dr.
Gonzalez certified the necessity of home health care services for them, I find Petitioner
did not conform to “the laws, regulations, and program instructions of the Medicare
program.” By signing the Certification Statement at Section 15 of the CMS 855A
enrollment application, Petitioner was bound to comply with all applicable legal
requirements. CMS Ex. 3 at 4. Thus, I find that CMS was authorized to revoke
Petitioner’s Medicare billing privileges effective August 19, 2012 for noncompliance
with the enrollment application applicable for its provider or supplier type pursuant to 42
CFR. § 424.535(a)(1).

3. There is no genuine dispute of material fact which could overcome
CMS’s motion for summary judgment because Petitioner did not present
any evidence of specific facts showing a dispute exists with respect to 10
patients.

To avoid summary judgment, the non-moving party must act affirmatively by tendering
evidence of specific facts showing that a dispute exists regarding an essential element of
the case. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n. 11
(1986). A mere scintilla of supporting evidence is not sufficient to overcome a well-
supported motion for summary judgment. “If the evidence is merely colorable or is not
significantly probative, summary judgment may be granted.” Livingston Care Ctr. v.
Dep't. of Health & Human Services, 388 F.3d 168, 173 (6th Cir. 2004) (quoting
Anderson vy. Liberty Lobby, 477 U.S. 242, at 249-250 (1986)).

While Petitioner did present arguably relevant evidence with respect to 20 of the
Medicare beneficiaries who were allegedly certified by Dr. Gonzalez as in need of those
services as the treating physician and for which Petitioner claimed payment for home

participation requirements. Tri-County Extended Care Center, DAB No. 2060, at

5 (2007); see also Martha & Mary Lutheran Services, DAB No. 2147 (2008); Lake Mary
Health Care, DAB No. 2081 (2007). Here Petitioner is merely being held to Medicare
requirements to which it agreed to when it applied to enroll in the Medicare program.
health care services, it failed to present any evidence whatsoever for 10 patients even
though it was on notice of the names of the disputed patients since January 28, 2012.

Although I am required to draw all reasonable inferences in the light most favorable to
Petitioner in deciding CMS’s motion for summary judgment, Petitioner is required to
come forward with specific evidence to show a genuine issue of material fact exists.
Petitioner has presented no evidence with respect to specific facts showing that a dispute
exists as to these 10 patients. Therefore, without any such evidence, I cannot draw an
inference in Petitioner’s favor that Dr. Gonzalez provided the requisite certifications for
these 10 patients. In fact, Petitioner has not presented any evidence sufficient to establish
the existence of a genuine factual dispute. Thus, CMS is entitled to summary judgment.

4. While CMS had a legitimate basis to revoke Petitioner’s enrollment
and billing privileges effective August 19, 2012, the fact that Petitioner no
longer has a valid license from the State of Florida to operate a home
health agency is an additional basis for revoking Petitioner’s Medicare
enrollment and billing privileges.

Petitioner does not dispute that it voluntarily relinquished its license to operate a home
health agency as of February 20, 2013. CMS Ex. 9. In order to satisfy Medicare
enrollment requirements, a home health agency must be in compliance with state
licensure requirements at C.F.R. §§ 424.516(a)(2) and 484.12(a). Petitioner’s
relinquishment of its license and cessation of business amounts to a voluntary termination
of its Medicare provider agreement and constitutes a separate and additional basis for the
revocation of Petitioner’s Medicare enrollment and billing privileges effective as of
February 20, 2013.

IV. Conclusion

Petitioner has not shown that a genuine issue of material fact exists with regard to CMS’s
challenge that a physician did not certify 10 of Petitioner’s patients pursuant to Medicare
home health care requirements. As a result, I must sustain CMS’s determination to
revoke Petitioner’s Medicare enrollment and billing privileges because the undisputed
evidence shows that Petitioner was not compliant with Medicare program requirements.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.

Pop Kab LLC
d/b/a Pops Grocery,

Respondent.

Docket No. C-13-718
FDA Docket No. FDA-2013-H-0513

Decision No. CR2847

Date: July 2, 2013

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) filed an Administrative Complaint
(Complaint) against Respondent, Pop Kab LLC d/b/a Pops Grocery, alleging facts
and legal authority sufficient to justify the imposition of a civil money penalty of
$250. Respondent did not timely answer the Complaint, nor did Respondent
request an extension of time within which to file an Answer. Therefore, I enter a
default judgment against Respondent and assess a civil money penalty of $250.

CTP began this case by serving the Complaint on Respondent and filing a copy of
the Complaint with the Food and Drug Administration’s (FDA) Division of
Dockets Management. The Complaint alleges that Respondent impermissibly sold
tobacco products to a minor, failed to verify that a purchaser of cigarettes or
smokeless tobacco was 18 years of age or older and sold individual cigarettes,
thereby violating the Federal Food, Drug, and Cosmetic Act (Act), 21 U.S.C.
§ 301 et seq., and its implementing regulations, Cigarettes and Smokeless
Tobacco, 21 C.F.R. Part 1140 (2012). CTP seeks a civil money penalty of $250.

On May 6, 2013, CTP served the Complaint on Respondent by United Parcel
Service, pursuant to 21 C.F.R. §§ 17.5 and 17.7. In the Complaint and
accompanying cover letter, CTP explained that within 30 days, Respondent should
pay the proposed penalty, file an answer, or request an extension of time within
which to file an answer. CTP warned Respondent that if it failed to take one of
these actions within 30 days, an Administrative Law Judge could, pursuant to 21
C.F.R. § 17.11, issue an initial decision ordering Respondent to pay the full
amount of the proposed penalty.

Respondent has not filed an answer within the time provided by regulation, nor
has it timely requested an extension. Pursuant to 21 C.F.R. § 17.11(a), lam
required to “assume the facts alleged in the [C]omplaint to be true” and, if those
facts establish liability under the Act, issue a default judgment and impose a civil
money penalty. Accordingly, I must determine whether the allegations in the
Complaint establish violations of the Act.

Specifically, CTP alleges the following facts in its Complaint:

e Respondent owns Pops Grocery, an establishment that sells tobacco
products and is located at 267 Grand Avenue, New Haven, Connecticut
06513. Complaint § 2.

e On July 2, 2012, at approximately 1:33 PM, an FDA-commissioned
inspector observed two violations at Respondent’s establishment. The
inspector observed a violation of 21 C.F.R. § 1140.14(a), a regulation
prohibiting the sale of cigarettes or smokeless tobacco to a person younger
than 18 years of age. The inspector also observed a violation of 21 C.F.R.

§ 1140.14(b)(1), a regulation requiring retailers to verify, by means of
photo identification containing a purchaser’s date of birth, that no purchaser
of cigarettes or smokeless tobacco is younger than 18 years of age.
Complaint § 9.

e On July 11, 2012, CTP issued a Notice of Compliance Check Inspection to
Respondent, “stating that an inspection had been conducted on July 2,
2012, and that during this inspection a minor was able to enter the
establishment and purchase a regulated tobacco product at approximately
1:33 PM.” The Notice further indicated that the violation was not
necessarily the only violation observed. Complaint § 9.

¢ On September 13, 2012, CTP issued a Warning Letter to Respondent
regarding the inspector’s observations from July 2, 2012. The letter
explained that the observations constituted violations of regulations found
at 21 C.F.R. § 1140.14(a) and 1140.14(b)(1), and that the named violations
were not necessarily intended to be an exhaustive list of all violations at the
establishment. The Warning Letter went on to state that if Respondent
failed to correct the violations, Respondent’s inaction could result in a civil
money penalty or other regulatory action by the FDA and that Respondent
is responsible for complying with the law. Complaint 4 9.

e CTP received no response to the Warning Letter from Respondent, though
United Parcel Service records demonstrate that an individual named “POP”
received the Warning Letter on September 14, 2012. Complaint § 10.

e During a two-part inspection conducted on December 24, 2012, and
January 2, 2013, FDA-commissioned inspectors documented an additional
violation at Respondent’s establishment. The inspectors documented a
violation of 21 C.F.R. § 1140.14(d) “for selling individual cigarettes.”
Complaint § 1.

These facts establish that Respondent is liable under the Act. The Act prohibits
misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if distributed or offered for sale in any state in violation of regulations
issued under section 906(d) of the Act. 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R

§ 1140.1(b). The Secretary issued the regulations at 21 C.F.R. Part 1140 under
section 906(d) of the Act. 21 U.S.C. § 387(a); 21 U.S.C. § 387f(d)(1); 75 Fed.
Reg. 13,229 (Mar. 10, 2010). The regulations prohibit the sale of cigarettes or
smokeless tobacco to any person younger than 18 years of age. 21 C.F.R.

§ 1140.14(a). The regulations also require retailers to verify, by means of photo
identification containing the purchaser’s date of birth, that no purchasers of
cigarettes or smokeless tobacco are younger than 18 years of age. 21 C.F.R.

§ 1140.14(b)(1). Finally, the regulations prohibit retailers from “break[ing] or
otherwise open[ing] any cigarette or smokeless tobacco package to sell or
distribute individual cigarettes... .” 21 C.F.R. § 1140.14(d).

Taking the above alleged facts as true, Respondent had three violations of
regulations contained in 21 C.F.R. Part 1140 within a six month period.
Specifically, Respondent had two violations on July 2, 2012, and one violation
during a two-part inspection conducted on December 24, 2012, and January 2,
2013. Respondent’s actions violated the prohibition against selling cigarettes or
smokeless tobacco to persons younger than 18 years of age. 21 C.F.R.

§ 1140.14(a). Respondent’s actions also violated the requirement that retailers
verify, by means of photo identification containing a purchaser’s date of birth, that

no purchaser of cigarettes or smokeless tobacco is younger than 18 years of age.
21 C.F.R. § 1140.14(b)(1). Finally, Respondent’s actions violated the prohibition
against selling individual cigarettes. 21 C.F.R. § 1140.14(d). Therefore,
Respondent’s actions constitute violations of law for which a civil money penalty
is merited.

The regulations require me to impose a civil money penalty in an amount that is
either the maximum provided for by law or the amount sought in the Complaint,
whichever is smaller. 21 C.F.R. § 17.11(a)(1)-(2). The regulations currently
allow a maximum penalty of $500 for a third violation within a six month period.
21 C.F.R. § 17.2. CTP, however, has requested a fine in the amount of $250.
Therefore, I find that a civil money penalty of $250 is warranted and so order one
imposed.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Srinivasa R. Venkatesh, M.D.,!
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-13-275
Decision No. CR2845

Date: June 27, 2013

DECISION

Srinivasa R. Venkatesh, M.D. (Petitioner), a member of Cyfair Pulmonary Associates,
appeals an unfavorable reconsidered determination related to the effective date of his
Medicare billing privileges. TrailBlazer Health Enterprises, LLC (TrailBlazer), an
administrative contractor acting on behalf of the Centers for Medicare and Medicaid
Services (CMS), determined that Petitioner’s effective date of enrollment in the Medicare
program is September 4, 2012, with a retrospective billing period commencing August 6,
2012. For the reasons stated below, I affirm TrailBlazer’s determination.

' This case was originally captioned with Cyfair Pulmonary Associates as the Petitioner.
However, based on the record in this matter, and the fact that the Request for Hearing and
Petitioner’s brief were filed by Srinivasa R. Venkatesh, M.D., I have concluded that Dr.
Venkatesh is actually the “affected party” in relation to the initial determination. See

42 C.F.R. §§ 498.2 (definition of “affected party”), 498.40(a) (“affected party” may
request a hearing before an administrative law judge), 498.42 (“The parties to the hearing
are the affected party and CMS... .”).
I. Background and Procedural History

Dr. Venkatesh, a physician, enrolled as a supplier in the Medicare program in 1982. See
Petitioner’s Request for Hearing (RFH). In March of 2012, CMS requested that several
members of Cyfair Pulmonary Associates revalidate certain information with Medicare
pursuant to 42 C.F.R. § 424.515. See CMS Exhibit (Ex.) 2, at 1; CMS Brief (Br.) at 1.
Cyfair Pulmonary Associates began the revalidation process for three physicians,
including Dr. Venkatesh, but requested an extension for revalidation for each of three
physicians. CMS Ex. 4. Two of the physicians’ revalidation information was accepted,
iowever, CMS did not receive revalidation information for Dr. Venkatesh. See CMS Ex.
4. Petitioner’s extension for revalidation of enrollment for Dr. Venkatesh expired on
May 22, 2012, and his enrollment in the Medicare program was deactivated on that date
for failing to submit the required revalidation documentation. CMS Ex. 2, at 1; CMS Br.
at 1-2; RFH.

Several months later, Petitioner discovered that his Medicare claims were not being paid.
CMS Ex. 4. On September 4, 2012, TrailBlazer received revalidation documentation in
the form of an enrollment application and a reassignment application (CMS Forms 855]
and 855R) to reassign benefits from Dr. Venkatesh to Cyfair Pulmonary Associates via
the internet-based Provider Enrollment Chain and Ownership System (PECOS). CMS
Ex. 2, at 1; CMS Ex. 6; CMS Br. at 8. TrailBlazer notified Petitioner on September 10,
2012 that Dr. Venkatesh’s Medicare enrollment application was approved effective
September 4, 2012, based on the date of receipt of the application. CMS Ex. 5, at 1.

Petitioner filed a timely request for reconsideration of TrailBlazer’s September 10, 2012
initial determination seeking Medicare billing privileges retroactive to May 22, 2012 (i.e.,
the date Dr. Venkatesh’s Medicare billing privileges were deactivated). CMS Ex. 4. Ina
November 6, 2012 reconsidered determination, TrailBlazer explained that Dr.
Venkatesh’s application was received on September 4, 2012, and the effective date “will
be changed to August 6, 2012 and a revised PTAN confirmation letter will be mailed to
the supplier,” which Trailblazer did in a letter dated November 6, 2013.2 CMS Exs. 1; 2,
at 2.

On January 4, 2013, Petitioner timely filed his RFH. In response to my January 9, 2013
Acknowledgment and Pre-hearing Order (Order), CMS filed a brief (CMS Br.) and six

> In both of its determinations in this case, TrailBlazer erroneously characterized the
beginning of the retrospective billing period to be the “effective date.” See Jorge M.
Ballesteros, DAB CR2067, at 2 (2010) (“CMS apparently sets enrollment effective dates
30 days prior to the date of application”). Therefore, I interpret the determinations to
mean that the “effective date” is the beginning of the retrospective billing period and not
the enrollment effective date. Rizwan Sadig, M.D., DAB CR2401, at 5-6 (2011).
exhibits (CMS Exs. 1-6). Petitioner filed a letter in response to the CMS brief (P. Br.).
In the absence of an objection, I admit CMS Exs. | through 6 into the record. Because
neither party provided a list of proposed witnesses or written direct testimony, I will not
hold an in-person hearing in this matter. The record is closed and I decide this matter
based on the written record. Order § 11.

IL. Discussion
A. Issue

Whether CMS had a legitimate basis for finding that September 4, 2012, is the effective
date of Petitioner’s Medicare enrollment and that Petitioner could retrospectively bill for
services rendered to Medicare beneficiaries on or after August 6, 2012.

B. Findings of Fact, Conclusions of Law, and Analysis®

The Social Security Act (Act) authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations governing the enrollment process for providers and
suppliers.’ 42 U.S.C. §§ 1302, 1395cc(j). Under the Secretary’s regulations, a provider
or supplier who seeks billing privileges under Medicare must “submit enrollment
information on the applicable enrollment application. Once the provider or supplier
successfully completes the enrollment process . .. CMS enrolls the provider or supplier
into the Medicare program.” 42 C.F.R. § 424.510(a).

I. TrailBlazer received Dr. Venkatesh’s completed Medicare enrollment
application on September 4, 2012.

CMS asserts that on September 4, 2012, TrailBlazer received Petitioner’s signed and
dated enrollment application via PECOS. CMS Exs. 2, at 1; 6, at 5; CMS Br. at 2.
Petitioner does not dispute this date of receipt. Therefore, I find that TrailBlazer received
Petitioner’s signed and dated application on September 4, 2012.°

> My findings of fact and conclusions of law are set forth in italics and bold font.

* Petitioner is considered a “supplier” for purposes of the Act and the regulations. See
42 U.S.C. § 1395x(d), (u); see also 42 C.F.R. § 498.2. A “supplier” furnishes services
under Medicare and the term applies to physicians or other practitioners that are not
included within the definition of the phrase “‘provider of services.” 42 U.S.C. § 1395x(d).

> In his request for reconsideration, Petitioner initially argued that his revalidation
documentation was submitted in March of 2012. CMS Ex. 4. Petitioner does not reassert
this in his RFH or brief and the record does not reflect any evidence that Petitioner filed
an enrollment application in March of 2012.
2. TrailBlazer properly concluded that Dr. Venkatesh’s enrollment as a
supplier in the Medicare program was effective on September 4, 2012,
with a retrospective billing period commencing on August 6, 2012.

By letter dated September 10, 2012, TrailBlazer notified Petitioner that Dr. Venkatesh’s
Medicare supplier enrollment application, which had been received on September 4,
2012, was approved. CMS Ex. 5, at 1. TrailBlazer set September 4, 2012, as Dr.
Venkatesh’s effective billing date. CMS Ex. 5, at 1. On reconsideration, TrailBlazer
amended Dr. Venkatesh’s “effective date” to August 6, 2012, noting that this date was 30
days prior to the receipt of the application. CMS Ex. 2.

The relevant regulation concerning the effective date of Medicare enrollment states:

The effective date for billing privileges for physicians,
nonphysician practitioners, and physician and nonphysician
practitioner organizations is the later of the date of filing of a
Medicare enrollment application that was subsequently
approved by a Medicare contractor or the date an enrolled
physician or nonphysician practitioner first began furnishing
services at a new practice location.

42 C.F.R. § 424.520(d) (emphasis added). The “date of filing” is the date that the
Medicare contractor “receives” a signed provider enrollment application that the
Medicare contractor is able to process to approval. 73 Fed. Reg. 69,726, 69,769 (Nov.
19, 2008); see also Caroline Lott Douglas, PA, DAB CR2406, at 5-7 (2011); Rizwan
Sadiq, M.D., DAB CR2401, at 5. Because TrailBlazer received a complete, approvable
application on September 4, 2012, TrailBlazer properly considered this date as the
effective date for billing privileges.

Further, under the regulations set forth below, CMS may permit limited retrospective
billing if a practitioner meets all program requirements.

Physicians, nonphysician practitioners and physician and
nonphysician practitioner organizations may retrospectively
bill for services when a physician or nonphysician
practitioner or a physician or a nonphysician practitioner
organization have met all program requirements, including
State licensure requirements, and services were provided at
the enrolled practice location for up to—
(1) 30 days prior to their effective date if circumstances
precluded enrollment in advance of providing services to
Medicare beneficiaries, or

(2) 90 days [in certain emergencies not applicable to this
case].

42 CFR. § 424.521 (a).

In the present matter, the earliest effective date for retrospective billing privileges that
could be granted was 30 days prior to September 4, 2012. Thirty days prior to September
4, 2012, is August 5, 2012.° Thus, TrailBlazer made a legally proper discretionary
decision to permit retrospective billing to August 6, 2012.

3. Lam not authorized to grant Petitioner’s requests for equitable relief.

In the current appeal, Petitioner raises a number of reasons why I should grant him a
greater period of retrospective billing than that afforded in the reconsidered
determination. Petitioner claimed that an office manager “‘was in communication with
both Medicare and PECOS . . . May through August 2012” and “[u]nbeknownst to
[Petitioner, his] Medicare number remained inactive.” RFH. Further, Petitioner asserted
that: his office manager did not “follow up on renewing [Petitioner’s] provider number”;
Petitioner has “been providing care for the elderly in Houston area for the last 30 years
without any problem as a participating provider”; and Petitioner provided services for
several months in good faith and for the benefit of Medicare beneficiaries while
Petitioner’s Medicare enrollment was deactivated. P. Br. Finally, Petitioner requests that
I reinstate him “as a participating physician of Medicare from May 22, 2012, ona
selective individual basis” and Petitioner “promise[s] that this issue will never happen
again, as [Petitioner] will be diligent in making sure that . . . provider numbers will stay
up to date.” P. Br. Petitioner’s arguments are not legal in nature and amount to an appeal
to equity.

I do not have the authority to grant equitable relief. See US Ultrasound, DAB No. 2302,
at 8 (2010). I cannot grant an exemption to Petitioner under the regulations set forth at 42
C.F.R. §§ 424.520(d) and 424.521(a), which are binding on me. See 1866/CPayday.com,
L.L.C., DAB No. 22839, at 14 (2009) (“[a]n ALJ is bound by applicable laws and
regulations and may not invalidate either a law or regulation on any ground... ”).

° August 5, 2012 was a Sunday. TrailBlazer apparently determined to grant Medicare
billing privileges commencing on August 6, 2012, 29 days prior to the receipt of Dr.
Venkatesh’s application.
III. Conclusion

For the reasons explained above, I affirm CMS’s determination that Petitioner’s effective
date of enrollment is September 4, 2012, with a retrospective billing period commencing
August 6, 2012.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Pamela D. Cowell, M.D.,
(NPI: 1619934429),
Petitioner,
v.
Centers for Medicare & Medicaid Services.

Docket No. C-13-91
Decision No. CR2842

Date: June 25, 2013

DECISION

Petitioner, Pamela D. Cowell, M.D., is a physician who practices in Washington State
and has participated in the Medicare program as a supplier of services. To maintain her
Medicare billing privileges, she was required to resubmit and recertify the accuracy of
her enrollment information. 42 C.F.R. § 424.515. Thereafter, the Centers for Medicare
& Medicaid Services (CMS) approved her re-enrollment with an effective date of April 7,
2012. Petitioner now challenges that effective date.

CMS moves for summary judgment. For the reasons set forth below, I grant CMS’s
motion, and find that CMS appropriately granted Petitioner’s re-enrollment effective
April 7, 2012.!

' CMS has submitted a motion for summary judgment and supporting brief (CMS Br.)
with nine exhibits (CMS Exs. 1-9). Petitioner declined to respond to CMS’s motion, but
submitted a letter, dated January 16, 2013, “questioning the legality of responding to
documents” from this office, because, in error, my acknowledgment and pre-hearing
order included the incorrect NPI (National Provider Identifier). In an order dated January
29, 2013, I directed Petitioner to submit her pre-hearing exchange, her response to CMS’s
CMS properly determined the effective date for Petitioner’s
Medicare revalidation enrollment, because the evidence
establishes that she filed her enrollment application on May
7, 2012, and her effective date can be no earlier than the
date she filed her application.’

To receive Medicare payments for services furnished to program beneficiaries, a
Medicare supplier must be enrolled in the Medicare program. 42 C.F.R. §§ 424.500;
424.505. “Enrollment” is the process used by CMS and its contractors to: 1) identify the
prospective supplier; 2) validate the supplier’s eligibility to provide items or services to
Medicare beneficiaries; 3) identify and confirm a supplier’s owners and practice location;
and 4) grant the supplier Medicare billing privileges. 42 C.F.R. § 424.502. To enroll in
Medicare, a physician must complete and submit an enrollment application. 42 C.F.R.
§§ 424.510(d)(1); 424.515(a). To maintain her billing privileges, she must, every five
years, resubmit and recertify the accuracy of her enrollment information by submitting a
new application. 42 C.F.R. § 424.515.

An enrollment application is either a CMS-approved paper application or an electronic
process approved by the Office of Management and Budget. 42 C.F.R. § 424.502. In
this case, Petitioner was required to submit her revalidation information on form CMS-
8551. See 71 Fed. Reg. 20,753, 20,756 (April 21, 2006); Medicare Program Integrity
Manual, CMS Pub. 100-08, ch. 15 § 15.1.2.

The application must include “complete, accurate, and truthful responses” to all
questions. The supplier must submit

all required documentation . . . to uniquely identify the . . .
supplier. This documentation may include, but is not limited
to, proof of the legal business name, practice location, social
security number (SSN), tax identification number (TIN),
National Provider Identifier (NPI), if issued, and owners of
the business.

42 C.F.R. §§ 424.510(d)(2); 424.515(a). The applicant must also submit all
documentation necessary to establish that she is eligible to provide Medicare-covered
services to Medicare beneficiaries. 42 C.F.R. § 424.510(d)(2)(iii)(B).

motion, and her correct NPI. She did not respond. I therefore closed the record and issue
this decision based on the record before me.

* I make this one finding of fact/conclusion of law.

> CMS program manuals are found at http://www.cms.gov/Manuals/IOM/list.asp.
When CMS determines that a physician meets enrollment requirements, it grants her
Medicare billing privileges, which means that she can submit claims and receive
payments from Medicare for covered services provided to program beneficiaries. For
physicians and some other practitioners, the effective date for billing privileges “is the
later of the date of filing” a subsequently approved enrollment application or “the date an

enrolled physician . . . first began furnishing services at a new practice location.” 42
C.F.R. § 424.520(d) (emphasis added).

If a physician meets all program requirements, CMS allows her to bill retrospectively for
up to “30 days prior to their effective date if circumstances precluded enrollment in
advance of providing services to Medicare beneficiaries.” 42 C.F.R. § 424.521 (a)(1).

Here, Petitioner is a physician who owns and operates a practice in obstetrics and
gynecology. In order to revalidate her Medicare enrollment, she submitted an application
(CMS-855]) to the Medicare contractor, Noridian Administrative Services. CMS Ex. 2 at
28. The application was post-marked July 29, 2011, and the contractor received it on
August 2, 2011. CMS Ex. | at 2 (Oien Decl. § 4); CMS Ex. 2 at 1. Unfortunately, the
application was lacking, and, after considerable effort on the contractor’s part, Petitioner
eventually submitted the requested additional documentation. CMS Ex. | at 2 (Oien
Decl. {§ 4-7); CMS Ex. 3 at 1, 2. However, the contractor found discrepancies with
respect to Petitioner’s Social Security information, so it could not approve her
enrollment. CMS Ex. 1 at 2 (Oien Decl. f§ 8, 9). After attempting, unsuccessfully, to
resolve the problem, the contractor ultimately denied her application. CMS Ex. | at 2-
(Oien Decl. fj 10-15); CMS Ex. 4.

By letter dated December 28, 2011, the contractor advised Petitioner that her application
was denied, that all her Medicare payments were on hold until she furnished the missing
information, and that her Medicare PTAN (Provider Transaction Access Number) was
deactivated and would be reopened only if she submitted the missing information “within
the proper timeframe.” The letter directed her to submit a corrective action plan within
30 calendar days. The letter also advised her of her appeal rights. CMS Ex. 4. Petitioner
did not submit a corrective action plan. She did not appeal, and the deadline for appeal
has long since passed. CMS Ex. 1 at 3 (Oien Decl. § 18). The contractor’s determination
is therefore final and binding. 42 C.F.R. §§ 424.545; 498.20 (b).

On February 7, 2012, Petitioner advised the contractor that she had obtained a new Social
Security card, thus resolving the problems with her Social Security information. The
contractor advised her to submit a new enrollment application. CMS Ex. | at 3 (Oien
Decl. § 19). Three months passed, and, on May 7, 2012, Petitioner filed a new
enrollment application (CMS-855]), which, after obtaining additional documentation,
CMS subsequently approved. CMS Ex. 5; CMS Ex. | at 4 (Oien Decl. {J 20-23). May
7, 2012 is therefore the date Petitioner filed her “subsequently approved enrollment
application.” Factoring in that she may bill retrospectively for up to 30 days prior to May
7, CMS properly determined that the earliest allowable effective date for her Medicare
enrollment is April 7, 2012. 42 C.F.R. §§ 424.520(d); 424.521(a)(1).

That Petitioner may have provided otherwise-billable services to Medicare beneficiaries
does not alter this result. See Request for Hearing. She is simply not entitled to
Medicare payment for those services because she was not enrolled in the program when
she provided them. See US Ultrasound, DAB No. 2302 at 8 (2010).

For these reasons, I grant CMS’s motion for summary judgment and find that CMS
appropriately granted Petitioner’s Medicare re-enrollment effective April 7, 2012.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Ezinne U. Ubani,
(OI File No. 6-10-40414-9),

Petitioner,
v.
The Inspector General.
Docket No. C-13-266
Decision No. CR2841

Date: June 24, 2013

DECISION

Petitioner, Ezinne U. Ubani, appeals the determination of the Inspector General for the
U.S. Department of Health and Human Services (1.G.) to exclude her from participating
in Medicare, Medicaid, and all federal health care programs pursuant to section
1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)) for a 30-year
period. For the reasons discussed below, I find the I.G. was authorized to exclude
Petitioner. I further find that the 30-year period of exclusion is reasonable.

I. Background

The L.G. notified Petitioner, by letter dated September 28, 2012, that she was being
excluded pursuant to section 1128(a)(1) of the Act from participation in Medicare,
Medicaid, and all federal health care programs for a 30-year period. The I.G. advised
Petitioner that the exclusion was based on her felony conviction in the United States
District Court, Southern District of Texas, of criminal offenses related to the delivery of
an item or service under Medicare or state health care programs. I.G. Ex. 1.
I convened a prehearing telephone conference with the parties, which I summarized in
my Order and Schedule for Filing Briefs and Documentary Evidence dated February 13,

2013. During the prehearing conference, I explaine
represented by counsel, and Petitioner decided to pri

Pursuant to my scheduling order, I asked the parties

to Petitioner her right to be
‘oceed representing herself.

to answer essential questions on the

short-form briefs sent to them, together with any additional arguments and supporting
documents they wished to submit. The I.G. filed his short-form brief together with
exhibits (I.G. Exs.) 1 through 5. Petitioner submitted her short form brief (P. Br.), her
written testimony of two pages (also submitted with her hearing request), her written
response of two pages to the I.G. Exclusion Notice (also submitted with her hearing
request), and four exhibits (P. Exs. 1-4).’ The I.G. chose not to file a reply brief. In the

absence of objection, I admit into evidence I.G. Exs

. 1-5 and P. Exs. 1-4.

The parties indicated in their respective briefs that this case does not require an in-person
hearing. Therefore, the record is now closed, and I decide this case based on the written

record.

IL. Discussion

A. Issues

The scope of my review here is limited. 42 C.F.R. § 1001.2007(a)(1). The issues before

me are:

e Whether the IG. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to

section 1128(a)(1) of the Act; and

¢ Whether the length of the proposed period of exclusion of thirty years is

unreasonable.

B. Findings of Fact and Conclusions of La

‘Ww

1. Petitioner was found guilty of one count of Conspiracy to Commit Health
Care Fraud and two counts of False Statements for use in Determining
Rights for Benefit and Payment by Medicare, Aiding and Abetting.

' Petitioner also submitted the same four exhibits with her hearing request, but she
labeled them differently as Petitioner’s exhibits. For clarity, I will refer to Petitioner’s

exhibits as those she labeled and submitted with her

short form brief.
The United States charged Petitioner as an owner and operator of Family Healthcare
Group, Inc., d/b/a Family Healthcare Services, a home healthcare provider. I.G. Ex. 2 at
7, 8. Petitioner was also a registered nurse licensed by the State of Texas and acted as
Family Healthcare Services’ Director of Nursing. 1.G. Ex. 2 at 8; LG. Ex. 4 at 1.

On October 7, 2010, Petitioner was indicted with 13 other individuals and found guilty of
willful and knowing participation in a scheme to enrich themselves through health care
fraud and kickbacks for the period of approximately April 2006 through August 2009.
1.G. Ex. 2 (Count | of the Grand Jury Indictment); I.G. Ex. 3. Petitioner was found guilty
of conspiracy to commit health care fraud based on her participation in a “scheme and
artifice to defraud a healthcare benefit program affecting commerce . . [Medicare] . . .
and to obtain, by means of materially false and fraudulent pretenses, representations, and
promises, money and property owned by, and under the custody and control of,
[Medicare], in connection with the delivery of and payment for health care benefits,
items, and services,” in violation of 18 U.S.C. §§ 1347 and 1349. I.G. Ex. 2 at 10-11;
1G. Ex. 3. Petitioner, along with her other co-conspirators, was found guilty of falsifying
patient files to make it appear that Medicare beneficiaries qualified for, and received,
services even though those services were not medically necessary or were not actually
provided. I.G. Ex. 2 at 12-13.

Petitioner was also charged with, and found guilty of, making false statements in patient
files that were used to determine Medicare benefits and payments in violation of

42 U.S.C. § 1320a-7b(a)(2) and 18 U.S.C. § 2. LG. Ex. 2 at 20-21; I.G. Ex. 3.
Specifically, from April 2008 to August 2009, Petitioner and other co-conspirators
described symptoms that were non-existent and services that were not rendered for
Medicare beneficiary H.A. LG. Ex. 2 at 21. Further, from June 2008 to August 2009,
Petitioner and other co-conspirators described symptoms that were non-existent and
services that were not rendered for Medicare beneficiary J.A. I.G. Ex. 2 at 21.

2. Petitioner was convicted of a criminal offense for purposes of section
1128(a)(1) of the Act.

The Secretary of the U.S. Department of Health and Human Services must exclude from
participation in the Medicare and Medicaid programs any individual convicted of a
criminal offense related to the delivery of an item or service under Medicare or a state
health care program. Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)); see also 42 C.F.R.

§ 1001.101(a). An individual is considered convicted of a criminal offense when: (1) a
judgment of conviction has been entered against him or her in a federal, state, or local
court whether an appeal is pending or the record of the conviction is expunged; (2) there
is a finding of guilt by a court; (3) a plea of guilty or no contest is accepted by a court; or
(4) when the individual has entered into any arrangement or program where judgment of
conviction is withheld. Act § 1128(i) (42 U.S.C § 1320a-7(i)(3)); see also 42 C.F.R.

§ 1001.2.
A jury of the United States found Petitioner guilty of the felony criminal offenses of
conspiracy to commit health care fraud and for making false statements for use in
determining rights for benefits and payment by Medicare. LG. Ex. 2; LG. Ex. 3.

She was sentenced and a judgment of conviction was entered against her. 1.G. Ex. 3.

I therefore find that Petitioner was convicted of a criminal offense within the meaning of
the exclusion statute.

3. Petitioner’s conviction requires exclusion under section 1128(a)(1)
because her criminal conduct related to the delivery of an item or service
under Medicare.

A conviction is related to the delivery of a health care item or service under Medicare or
a state health care program if there is a “common-sense connection or nexus between the
offense and the delivery of an item or service under the program.” Scott D. Augustine,
DAB No. 2043, at 5-6 (2006)(citations omitted). Here, Petitioner was convicted of
conspiracy to specifically defraud the Medicare program and for making false statements
for use in determining Medicare benefits and payment. I.G. Ex. 2 at 10, 20-21; 1G. Ex. 3
at 1. Certainly, conspiracy to commit health care fraud against the Medicare program is
related to the delivery of items of services under a federal health care program. See, e.g.,
Salvacion Lee, M.D., DAB No. 1850 (2002) (upholding an ALJ’s finding of conspiracy
to commit bribery as related to the delivery of an item or service under Medicare). Also,
Petitioner’s conviction for making false statements to Medicare under 42 U.S.C. § 1320a-
7b bears an obvious nexus between the offense and the delivery of an item or service
under the Medicare program considering that Petitioner made the false statements in
order to receive payment for services covered under the Medicare program.

Thus, I conclude that Petitioner’s conviction here is directly related to the delivery of an
item or service under the Medicare program within the meaning of section 1128(a)(1) of
the Act, and I find the requisite “nexus or common-sense connection” between the
conduct giving rise to Petitioner’s offense and the delivery of Medicare services.

Petitioner confirmed that she was convicted of a criminal offense, but she disagrees with
the outcome of her trial and the decision reached by the jury to convict her on the charge
of conspiracy to commit health care fraud. P. Br. at 2. She contends that the decision to
charge her was based on the false premise that she was a part owner of Family Healthcare
Services instead of merely an employee.” P. Br. at 2-3.

> The Indictment set forth that Family Healthcare Services was owned and operated by
Petitioner, her husband, and two others. I.G. Ex. 2 at 8.
Petitioner’s arguments amount to collateral attacks on the accuracy of the charges
underlying her conviction. Regulation explicitly precludes any such collateral attack on
Petitioner’s conviction:

When the exclusion is based on the existence of a criminal conviction .. .
where the facts were adjudicated and a final decision was made, the basis
for the underlying conviction . . . is not reviewable and the individual or
entity may not collaterally attack it either on substantive or procedural
grounds in this appeal.

42 C.F.R. § 1001.2007(d). Excluding individuals based on criminal convictions provides
protection for federally funded programs and their beneficiaries and recipients, without
expending program resources to duplicate existing criminal processes. Lyle Kai, R. Ph.,
DAB No. 1979, at 8 (2005). Statutory and regulatory authority require exclusion under
the circumstances if the elements of section 1128(a)(1) are met. Thus, I must uphold the
exclusion and may not consider Petitioner’s collateral attacks on her underlying
conviction.

4. Based on the aggravating factors in this case and the absence of any
mitigating factors, the 30-year exclusion falls within a reasonable range.

An exclusion imposed under section 1128(a) of the Act shall be for a minimum period of
five years. Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a),
1001.2007(a)(2). The period of exclusion may be extended based on the presence of
specified aggravating factors. 42 C.F.R. § 1001.102(b). Only if the aggravating factors
justify an exclusion of longer than five years are mitigating factors considered as a basis
for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).
Evidence that does not pertain to one of the aggravating or mitigating factors listed in the
regulation may not be used to decide whether an exclusion of a particular length is
reasonable.

Here, I find the following factors serve as a basis for lengthening the period of exclusion:
1) the acts resulting in the conviction, or similar acts, resulted in a financial loss to
Medicare of $5,000 or more; 2) the acts that resulted in the conviction were committed
over a period of one year or more; 3) the sentence the court imposed included
incarceration; and 4) the convicted individual has a prior criminal, civil or administrative
sanction record. I.G. Br. at 6-8.

Financial loss to Medicare (42 C.F.R. § 1001.102(b)(1). Restitution has long been
considered a reasonable measure of program losses. Craig Richard Wilder, DAB

No. 2416, at 9 (2011). Here, the U.S. District Court ordered Petitioner to pay $2,500,000
in restitution to the Medicare program. I.G. Ex. 3 at 5. Because the financial losses were
significantly in excess of the threshold amount of $5,000 for aggravation (almost 500

times greater), the I.G. may justifiably increase significantly the period of exclusion.
See Jeremy Robinson, DAB No. 1905 (2004) (determining that restitution in an amount
that is “very substantially greater than the statutory standard” is characterized as an
“exceptional aggravating factor”).

Duration of crime (42 C.F.R. § 1001.102(b)(2). Petitioner was found guilty of
committing criminal acts over a period of three years, from April 2006 to August 2009
for the first count, and from April 2008 to August 2009 for the other counts. I.G. Ex. 3;
1.G. Ex. 2 at 10, 21. Petitioner’s three years of criminal conduct lasted more than three
times longer than necessary to constitute an aggravating factor.

Incarceration (42 C.F.R. § 1001.102(b)(5). The court sentenced Petitioner to 97 months
(approximately eight years) of imprisonment, which is substantial. I.G. Ex. 3 at 2.

See Jason Hollady, M.D., DAB No. 1855, at 12 (2002) (characterizing a nine-month
incarceration as “relatively substantial”).

Prior Administrative Sanction Record (42 C.F.R. §1001,102(b)(6)).° Following her
conviction, Petitioner voluntarily surrendered her Registered Nurse License and her
Vocational Nurse License to the Texas Board of Nursing when it brought a disciplinary
action against her. 1.G. Ex. 4. Based on this action, the Texas Health and Human
Services Commission, Office of Inspector General, excluded Petitioner from the Texas
Medicaid program and other federally funded health care programs. I.G. Ex. 5. Both the
surrendering of her licenses pursuant to a disciplinary proceeding and her exclusion from
the state Medicaid program constitute prior administrative sanctions even if they arose
from the same set of circumstances forming the basis of the I.G.’s exclusion of Petitioner.
See, e.g., David L. Gordon, M.D., DAB CR327, at 13 (1994).

Petitioner does not deny the existence of these aggravating factors. P. Br. at 5. Petitioner
contends generally that mitigating factors exist that support reducing the length of her
exclusion, but she failed to allege the elements of any of the type of mitigating factors
that the I.G. could consider to offset the aggravating factors. P. Br. at 5-6; 42 C.F.R.

§ 1001.102(c).

The I.G. may decide that periods of exclusion longer than the five-year minimum are
reasonable and necessary to fight health care fraud, and here four serious aggravating
factors are indisputably present. Petitioner was found guilty and convicted of knowingly

> T note that the Texas Board of Nursing proceeding could have also been considered an
aggravating factor under 42 C.F.R. § 1001.102(b)(9) as an adverse action by a state board
on the same set of circumstances that served as the basis for imposing the exclusion.
and willingly committing offenses related to Medicare. The egregious circumstances and
results of her acts amply justify the exclusion imposed, and I find that her 30-year

exclusion falls within a reasonable range.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Raj Ahluwalia, M.D.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-342
ALJ Ruling No. 2013-11

Date: June 19, 2013

DISMISSAL

Petitioner, Raj Ahluwalia, M.D., is a California-based orthopedic surgeon, who wishes to
challenge the effective date for his enrollment in the Medicare program, but he did not
file his hearing request within the 60 days allotted by statute. The Centers for Medicare
& Medicaid Services (CMS) moves to dismiss.

For the reasons discussed below, I dismiss as untimely Petitioner’s hearing request.'
Petitioner is not entitled to a hearing because he did not file
a timely hearing request and no good cause justifies

extending the time for filing.’

Section 1866(h)(1) of the Social Security Act (Act) grants hearing rights to providers and
suppliers of Medicare services “to the same extent as is provided in section 205(b)” of the

' CMS has submitted a motion/brief (CMS Br.) and four exhibits (CMS Exs. 1-4).
Petitioner has submitted a brief (P. Br.) and three exhibits (P. Ex. 1-3).

? [make this one finding of fact/conclusion of law.
Act. Section 205(b) dictates that a petitioner’s hearing request “must be filed within sixty
days” after he receives notice of an adverse decision. Act § 205(b)(1); accord, 42 C.F.R.
§ 498.40(a). The statute itself does not require an administrative agency to extend this
filing deadline, no matter how compelling the affected party’s reason.>

Here, however, the applicable regulations include an exception to the 60-day filing
deadline. They echo the statutory requirement that an affected party, who would be
entitled to a hearing under 42 C.F.R. Part 498, must file his request in writing within 60
days of the day he receives notice of the determination that he wishes to appeal.’ But the
regulation adds that the administrative law judge (ALJ) may extend the time for filing, if
he/she finds good cause. 42 C.F.R. § 498.40.

The regulations do not define good cause but leave that determination to the ALJ. See
Taos Living Ctr., DAB No. 2293 at 12 (2009) (holding that the ALJ “has discretion to
extend the period for a facility to file... if... the ALJ finds ‘good cause’ for the late
filing”). For the most part, the ALJs who handle Part 498 appeals have been guided by
the Social Security Administration’s (SSA’s) regulatory definition of good cause:
circumstances beyond a party’s ability to control.° See, e.g., NBM Healthcare Inc., DAB
CR2500 (2012), aff'd, DAB 2477 (2012); Michael Reiner, M.D., DAB CR2547 (2012);
Oak Park Healthcare Ctr., DAB CR1917 (2009); Green County Care Ctr., DAB CR1716
(2007); Casa Del Sol Senior Care Ctr., DAB CR1418 (2006); The Heritage Ctr., DAB
CR1219 (2004); Hillcrest Healthcare, L.L.C., DAB CR976 (2002), aff'd, DAB No. 1879
(2003); Roy Hollins/Western Reference Lab., DAB CR1055 (2003); Hammonds Lane
Ctr., et al., DAB CR913, aff'd, DAB No. 1853 (2002); John Knox Village Care Ctr.,
DAB CR963 (2002); Attalla Health Care, DAB CR954 (2002); Parkview Care Ctr.,

* Indeed, not all late requests for hearing under section 205(b) can be extended, even if
the affected party has a very good reason for the late filing. Appeals of certain civil
money penalties, assessments, and exclusions from participation in federal health care
programs must be dismissed if not filed timely. The regulations governing those
proceedings provide no exceptions. See, e.g., Act § 1128(f)(1); 42 C.F.R. § 1005.2.

* Receipt of the notice is “presumed to be 5 days after the date on the notice unless there
is a showing that it was, in fact, received earlier or later.” 42 C.F.R. §§ 498.40(a)(2),
498.22(b)(3).

* Under SSA’s regulations, the ALJ considers: 1) the circumstances that kept the
affected party from making the request on time; 2) whether any SSA action misled him;
3) whether the affected party understood the requirements for filing; and 4) whether the
affected party had any physical, mental, educational, or linguistic limitation that
prevented him from filing a timely request or from understanding or knowing about the
need to file a timely request for review. 20 C.F.R. §§ 404.911(a), 404.933(c). SSA’s
regulations also provide an extensive list of non-inclusive examples of situations that may
constitute good cause. Id. § 404.911(b).
DAB CR785 (2001); Cmty. Care Ctr. of Seymour, DAB CR758 (2001); Meadowbrook
Manor, DAB CR764 (2001); Sedgewick Health Care Ctr., DAB CR596 (1999); Jackson
Manor Health Care, Inc., DAB CR545 (1998); Hospicio San Martin, DAB CR387
(1995), aff'd, DAB No. 1554 (1996). In fact, as far as I can determine, this is the only
standard articulated by any adjudicator.

For its part, the Departmental Appeals Board “has never attempted to provide an
authoritative or complete definition of the term... .” Hillcrest Healthcare, L.L.C., DAB
No. 1879 at 5 (2003). Certainly, the Board has consistently supported dismissal when it
found that a party did not show good cause under “any reasonable definition of that
term.” See, e.g., Brookside Rehab. & Care Ctr., DAB No. 2094 at 6-7 (2007).
Otherwise, it has not articulated any definition, but adjudicates case-by-case.

In any event, applying SSA’s definition makes eminently good sense. SSA’s regulations
implement the same statutory provision as the section 498 regulations — section 205(b) of
the Act. The SSA definition has been subject to notice-and-comment rulemaking. If
anything, an adjudicator could justifiably hold potential providers and suppliers to a more
stringent standard than that set forth in the SSA regulation. See Cary Health & Rehab.,
DAB No. 1771 at 21, n. 5 (2001) (finding “considerably more justification” for holding
the affected party to the rules, and “considerably less justification” for such a party’s
inaction in response to federal notices where that affected party is not an individual or a
program beneficiary, but a provider/supplier who hopes to participate in federal
programs).

Further, because no one, in this case or elsewhere, has proposed an alternative, I see no
reason to depart from the most widely-employed standard for determining “good cause”
in the context of a section 205(b) hearing. If an ALJ correctly applies the “good cause”
standard long employed by the largest administrative review body in the country (and
probably in the world), he/she can hardly be found to have abused his/her discretion or
acted arbitrarily.

Here, Petitioner Ahluwalia applied for enrollment in the Medicare Part B program.

The Medicare contractor, Palmetto GBA, approved his application, effective February 20,
2012, with billing privileges from January 20, 2012. CMS Ex. 2. Petitioner Ahluwalia
sought reconsideration, challenging the effective date. In a reconsidered determination
dated July 10, 2012, the Contractor denied his request. CMS Ex. 4. The contractor’s
letter included notice of Petitioner’s appeal rights, advising: “You must file your appeal
within 60 calendar days after the date of receipt of this decision ....” CMS Ex. 4 at 1.
The letter told him to submit his appeal to this office, and provided the address of the
Civil Remedies Division of the Departmental Appeals Board, or, alternatively, to file his
appeal electronically at the Departmental Appeals Board electronic filing system website.
CMS Ex. 4 at 1-2. The letter also referred him to 42 C.F.R. § 498 for an explanation of
his appeal rights.

Assuming five days for delivery of the notice letter, Petitioner’s hearing request should
ave been filed no later than September 13, 2012. Petitioner faxed a hearing request to
this office on January 28, 2013, well after the regulatory filing deadline had passed.

His hearing request must therefore be dismissed, unless he shows good cause for the late
filing.

Petitioner claims that, with the assistance of his billing service, he prepared a hearing
request “[s]ometime between August 1, 2012 and August 13, 2012,” and that the request
“was mailed by [his] billing service . . . on or about August 13, 2012....” P. Br. at 3; P.
Ex. 2 at 2 (Turner Decl. § 8); see P. Ex. 1 at 3 (Ahluwalia Decl. § 14). After months had
passed with no response, his billing service contacted the Departmental Appeals Board
and learned that no request had been filed. It then faxed a copy of the request. P. Ex. 2 at
2-3 (Turner Decl. § 9).

Based on these representations, I do not find good cause for Petitioner’s untimely filing.
Petitioner has not established that either he or his billing service ever mailed his hearing
request. Petitioner claims no personal knowledge that it was mailed. He did not mail it
imself, cannot identify the individual who purportedly mailed it, and does not know the
date it was purportedly mailed. P. Ex. 1 at 3 (Ahluwalia Decl. § 14). Instead, he shifts all
responsibility to his billing service.

But James Turner, the general manager of Petitioner’s billing service, is likewise unable
to establish that he or anyone else from his service timely mailed the hearing request.

All he can say with certainty is that it should have gone out with the office mail sometime
after August 1, when it was dated. He does not claim that he mailed it himself; he does
not identify the individual, or even the position of the individual, who purportedly mailed
it. He does not explain the process by which his service insures that documents are
mailed. He does not even know with certainty the date it was purportedly mailed.
Instead, he refers to the “request dated August 1, 2012” having been “mailed by [his]
office on or about August 13, 2012 . . . as part of our usual practice of collection and
processing correspondence for mailing.” P. Ex. 2 at 2 (Turner Decl. § 8).

Petitioner well understood the importance of filing his hearing request timely. Doing so
was within his ability to control. He did not take reasonable steps to assure that the
request was timely filed. He waited months after the filing deadline before he contacted
this office. He has therefore not established good cause for the late filing. See SSA v.
Parham, Recommended Decision, App. Div. Dkt. A-07-109 at 5-6 (2007), affirming
DAB CR1600 (2007), (in which the Board agreed that the affected party failed to show
good cause where she “understood the nature and gravity of the proceedings” and “was
capable of following the clear instructions in the Inspector General’s notice to preserve
her appeal rights”; the Board also found that a gap between the date on her hearing
request and the date of mailing “called into question her credibility’).
On motion of a party, or on his/her own motion, an ALJ may dismiss a hearing request
that was not timely filed, if the time for filing was not extended. 42 C.F.R. § 498.70(c).
Because Petitioner did not file his hearing request within 60 days of receiving the
contractor’s notice letter, and no good cause justifies my extending the time for filing,

I grant CMS’s motion and dismiss Petitioner’s hearing request. 42 C.F.R.

§ 498.70(c).

/s/
Carolyn Cozad Hughes
Administrative Law Judge