The Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the case of: )
)
Sandra Hernandez a/k/a Sandra Meza, ) Date: August 20, 2009
)
Petitioner, )
)
-Vv.- ) Docket No. C-09-320
) Decision No. CR1994
The Inspector General. )
)
DECISION

Petitioner, Sandra Hernandez, asks review of the Inspector General’s (I.G.’s)
determination to exclude her for five years from participation in Medicare, Medicaid, and
all federal health care programs under section 1128(a)(1) of the Social Security Act (Act).
For the reasons discussed below, I find that the I.G. is authorized to exclude Petitioner,
and that the statute mandates a minimum five-year exclusion.

I. Background

Petitioner was a registered nurse employed as a surveyor for the Texas Department of
Aging and Disability Services, the state agency responsible for nursing home inspections.
I.G. Ex. 2. She accepted $2000 from Bill Lofton, the administrator of a nursing home
whose facility she was charged with inspecting. I.G. Ex. 2. On August 14, 2006, she
pled no contest in a Texas State Court to one misdemeanor count of “Gift to Public
Servant by Person in his Jurisdiction,” a class A misdemeanor. The court entered an
order of deferred adjudication. She was sentenced to one year of probation, allowed to
complete 32 hours of community service work in lieu of serving four days in jail, and
required to pay $2000 in restitution, a $1000 fine, and various court costs and supervision
fees. LLG. Ex. 3.

In a letter dated December 31, 2008, the I.G. advised Petitioner that, because she had
been convicted of a criminal offense related to the delivery of an item or service under
the Medicare or state health care program, the I.G. was excluding her from participation
in Medicare, Medicaid, and all federal health care programs for a period of five years.
1.G. Ex. 1. Section 1128(a)(1) of the Act authorizes such exclusion. Petitioner requested
review, and the matter has been assigned to me for resolution.

The parties agree that an in-person hearing is not required and that the matter may be
resolved based on written submissions. I.G. Br. at 5;' P. Br. at 5. The parties have
submitted their briefs. With its brief, the I.G. submitted ten exhibits (I.G. Exs. 1-10).
Petitioner submited no additional exhibits. The I.G. filed a reply brief.

Petitioner has objected to the admission of I.G. Exs. 8 and 9. I.G. Ex. 8 is a state
administrative law judge’s proposed decision, which recommends revoking Petitioner’s
nursing license. I.G. Ex. 9 is the opinion and order of the Texas Board of Nursing, which
modifies the proposed decision and revokes Petitioner’s nursing license.” Petitioner
argues that these documents are irrelevant and inadmissible because they involve

ifferent issues and different parties; because the proposed decision was modified; and
because the nursing board’s decision is under appeal.

Review of the two documents shows that, in fact, they primarily address whether, based
on her August 2006 criminal conviction, Petitioner’s nursing license should be revoked.
The state administrative body considered facts underlying her conviction, which relate
irectly to the matter before me. See Dewayne Franzen, DAB No. 1165, at 6 (1990);
Emma Voloshin, M.D., DAB CR1179, at 3 (2004) (to determine whether a crime is
program-related, adjudicator may go beyond the four corners of the statute under which
the individual was convicted). In any event, I am specifically authorized to accept
evidence of “crimes, wrongs, or acts other than those at issue in the instant case” in order
to show “motive, opportunity, intent, knowledge, preparation, identity, lack of mistake, or
existence of a scheme.” 42 C.F.R. § 1005.17(g).

Petitioner can hardly complain that the state matters involved different parties since she
herself was represented there; only the I.G. was not. That the proposed decision was
modified does not make it inadmissible, particularly where the modifications are set forth
in the Board’s decision. I.G. Ex. 9. Nor has Petitioner provided any support for

' Contrary to Civil Remedies Division procedures, the I.G. submitted a brief
without numbering its pages. In the interest of time, we have numbered them rather than
returning the document to the I.G. for correction.

> Revocation of her nursing license is an independent basis for excluding
Petitioner from program participation. Act § 1128(b)(4). It is also considered an
aggravating factor which could justify increasing the period of suspension beyond the
mandatory five years. 42 C.F.R. §1001.102(b)(9).
excluding these documents simply because she has appealed them. I therefore admit into
evidence I.G. Exs. 1-10.

Although I admit I.G. Exs. 8 and 9, as the discussion below shows, I need not rely on
either document to reach a decision since the criminal information and the criminal
court’s judgment, by themselves, establish a basis for the I.G.’s exclusion.

II. Issues

The sole issue before me is whether the I.G. has a basis for excluding Petitioner from
program participation. Because an exclusion under section 1128(a)(1) must be for a
minimum period of five years, the reasonableness of the length of the exclusion is not an
issue. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

II. Discussion

Petitioner must be excluded for five years because she was
convicted of a criminal offense related to the delivery of an
item or service under the Medicare or a state health
program, within the meaning of section 1128(a)(1) of the
Act.

Section 1128(a)(1) of the Act requires that the Secretary of Health and Human Services
exclude an individual who has been convicted under federal or state law of a criminal
offense related to the delivery of an item or service under Medicare or a state health care
program.’ 42 C.F.R. § 1001.101.

While acknowledging that a no contest plea falls within the statutory definition of
“conviction,” Petitioner nevertheless argues that she was not “convicted” of a criminal
offense because the court “deferred further proceedings without entering an adjudication
of guilt.” P. Br. at 2. The Departmental Appeals Board (Board) has consistently rejected
this and similar arguments, and characterizes as “well established” the principle that the
term “conviction” includes “diverted, deferred and expunged convictions regardless of
whether state law treats such actions as a conviction.” Henry L. Gupton, DAB No. 2058,
at 8 (2007).

In Gupton, the Board explained why, in these I.G. proceedings, the federal definition of
“conviction” must apply. That definition differs from many state criminal law

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

+ The term “state health care program” includes a state’s Medicaid program. Act
§ 1128(h)(1); 42 C.F.R. § 1320a-7(h)(1).
definitions. For exclusion purposes, Congress deliberately defined “conviction” broadly
to ensure that exclusions would not hinge on the state criminal justice policies. Quoting
the legislative history, the Board explained:

The rationale for the different meanings of “conviction” for
state criminal law versus federal exclusion law purposes
follows from the distinct goals involved. The goals of
criminal law generally involve punishment and rehabilitation
of the offender, possibly deterrence of future misconduct by
the same or other persons, and various public policy goals.
[footnote omitted] Exclusions imposed by the I.G., by
contrast, are civil sanctions, designed to protect the
beneficiaries of health care programs and the federal fisc, and
are thus remedial in nature rather than primarily punitive or
deterrent. . . . In the effort to protect both beneficiaries and
funds, Congress could logically conclude that it was better to
exclude providers whose involvement in the criminal system
raised serious concerns about their integrity and
trustworthiness, even if they were not subjected to criminal
sanctions for reasons of state policy.

Gupton, at 7-8. L agree with the Board’s analysis and conclude that Petitioner was
convicted within the meaning of the Act.

Next Petitioner argues that nothing in the state criminal statute, under which she was
convicted, refers specifically to Medicare or a state health program, so the LG. has not
established that her crime was “related to” the delivery of a healthcare item or service
under Medicare or any state health care program.

An offense is related to the delivery of an item or service under the Medicare or state
health care program if there is “a nexus or common-sense connection” between the
conduct giving rise to the offense and the delivery of the item or service. Lyle Kai, R.Ph.,
DAB No. 1979 (2005); Berton Siegel, D.O., DAB No. 1467 (1994). Here, Petitioner is
correct that the state criminal statute does not refer specifically to Medicare or any state
health care program. Rather it applies generally to a wide array of public servants who
are not allowed to accept gifts from those they regulate. But the statute should not be
read in a vacuum. The charge on which Petitioner was convicted is set forth in the
criminal information, which specifies that she was an RN surveyor with the state agency
“conducting inspections of nursing facilities” and that she accepted money from Bill
Lofton, knowing that “said Bill Lofton was subject to regulation and inspection” by her
and the state agency that employed her. I.G. Ex. 2. The state court found that “the
evidence substantiates the said defendant’s guilt of the offense of GIFT TO PUB[LIC]
SERVANT BY PERSON IN HIS JURISDICTION, MISDEMEANOR A, occurring on
10" January, 2006, as charged in the information. ...” I.G. Ex. 3, at 1 (emphasis in

original).

Thus, the criminal information and court adjudication order establish that Petitioner was a
state surveyor who knowingly took money from someone whose facility she was
responsible for inspecting. The state survey process is critical to the delivery of care and
services under the Medicare and state health care programs because it is the principle
means for assuring that the items and services provided in nursing homes meet minimum
standards of quality. Nursing homes may participate in those programs only if they are in
substantial compliance with program requirements. This means that any deficiencies
may pose no greater risk to resident health and safety than the “potential for causing
minimal harm.” 42 C.F.R. § 488.301. The federal agency charged with administering
the Medicare and Medicaid programs contracts with the state survey agencies (such as
Petitioner’s) to determine whether facilities are in substantial compliance with program
requirements. See Act § 1864(a); 42 C.F.R. § 488.20.

The state law recognizes the inherent danger in allowing state regulators to accept money
or gifts from those they regulate — even without any suggestion of special favors in
return. A state surveyor accepting money from the facility she is charged with surveying
undermines the integrity of the survey and certification process as well as the state
licensing process. I consider this sufficient to establish the necessary connection between
Petitioner’s conduct and the delivery of items and services under Medicare and state
health care programs.

IV. Conclusion

For these reasons, I conclude that the I.G. properly excluded Petitioner from participation
in Medicare, Medicaid and all federal health care programs, and I sustain the five-year
exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Oceana County Medical Care Facility, ) Date: August 18, 2009
(CCN: 23-5002), )
)
Petitioner, )
)
-Ve- ) Docket No. C-08-685
) Decision No. CR1993
Centers for Medicare & Medicaid )
Services. )
)
DECISION

Petitioner, Oceana County Medical Care Facility (Petitioner or facility), is a long-term
care facility located in Hart, Michigan, that participates in the Medicare program. The
Centers for Medicare & Medicaid Services (CMS) has determined that the facility was
not in substantial compliance with Medicare requirements, and that its deficiencies posed
immediate jeopardy to resident health and safety because, contrary to a resident’s
advance directive, facility staff failed to perform cardio-pulmonary resuscitation (CPR)
on him when he went into cardiac arrest. The resident died.

Petitioner here challenges CMS’s determinations. The parties agree that no material facts
are in dispute, and have filed cross-motions for summary judgment.

For the reasons set forth below, I find that, from June 9 through July 7, 2008, the facility
was not in substantial compliance with Medicare requirements, and that, on June 9, 2008,
its deficiencies posed immediate jeopardy to resident health and safety.

I. Background
The Social Security Act (Act) sets forth requirements for nursing facility participation in

the Medicare program, and authorizes the Secretary of Health and Human Services to
promulgate regulations implementing those statutory provisions. Act § 1819. The
Secretary’s regulations are found at 42 C.F.R. Part 483. To participate in the Medicare
program, a nursing facility must maintain substantial compliance with program
requirements. To be in substantial compliance, a facility’s deficiencies may pose no
greater risk to resident health and safety than “the potential for causing minimal harm.”
42 C.F.R. § 488.301.

The Secretary contracts with state survey agencies to conduct periodic surveys to
determine whether skilled nursing facilities are in substantial compliance. Act §1864(a);
42 C.F.R.§ 488.20. The regulations require that each facility be surveyed once every
twelve months, and more often, if necessary, to ensure that identified deficiencies are
corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a); 488.308.

Here, following a complaint investigation/partial extended survey, completed June 10,
2008, CMS determined that the facility was not in substantial compliance with Medicare
participation requirements, including:

. 42 CFR. § 483.20 (k)(3)(i) (Tag F281 — comprehensive care plans, professional
services);

. 42 C.F.R. § 483.25 (Tag F309 — quality of care);
. 42 CFR. § 483.75 (Tag F490 — administration).

CMS also determined that these deficiencies posed immediate jeopardy to resident health
and safety, and imposed civil money penalties (CMPs) of $10,000 per day for one day of
immediate jeopardy, and $500 per day for the period of substantial noncompliance that
was not immediate jeopardy. CMS Exs. 1, 2, 3.!

Petitioner timely requested a hearing. After submitting pre-hearing briefs (CMS Br.; P.
Br.), the parties agreed that the case could appropriately be decided on summary
judgment without the need for an in-person hearing. Pre-Hearing Conference Order
(March 9, 2009). They have filed cross-motions for summary judgment, with supporting

' Petitioner limits its appeal to these deficiencies cited at the immediate jeopardy
level. P. Br. at 2. Petitioner does not appeal the deficiencies cited under 42 C.F.R. §
483.60(b)(d) and (e) (Tag F431 — pharmacy services) at scope and severity level “E” (a
pattern of noncompliance causing no actual harm, with the potential for more than
minimal harm). CMS Ex. 3. Those un-appealed deficiencies are therefore sustained, and
establish that the facility was not in substantial compliance with program requirements.
42 C.F.R. § 498.20(b).
briefs (CMS MSJ Br.; P. MSJ Br.) and replies (CMS Reply; P. Reply). CMS has
submitted 19 exhibits (CMS Exs. 1-19) and Petitioner has submitted 12 exhibits (P. Exs.
1-12).

IL. Issues
The issues before me are:

1) whether, from June 9 through July 7, 2008, the facility was in substantial compliance
with certain program requirements, specifically, 42 C.F.R.
§§ 483.20(k)(3)(i), 483.25, and 483.75;

and

2) if the facility was not in substantial compliance on June 9, 2008, did its deficiencies
pose immediate jeopardy to resident health and safety?

Except to argue that it was in substantial compliance so no penalty should be imposed,
Petitioner raises no arguments as to the reasonableness of the CMPs. CMS maintains that
Petitioner has therefore waived the issue. CMS Br. at 22; CMS MSJ Br. at 29; CMS
Reply, at 19. Petitioner has not challenged CMS’s repeated assertions of waiver, and I
therefore consider that Petitioner has waived the issue.

HI. Discussion

A, CMS is entitled to summary judgment because the undisputed facts establish
that facility staff failed to honor a resident’s advance directive that he be
administered CPR; the facility therefore failed to meet professional standards of
quality (42 C.F.R. § 483.20(k)(3)(i)), failed to provide necessary care and
services (42 C.F.R. § 483.25), and was not administered in a manner enabling it
to use its resources effectively and efficiently to attain or maintain for each
resident the highest practicable physical, mental, and psychosocial well-being
(42 CFR. § 483.75).

The parties agree that this case presents no genuine issue of material fact, and that
summary judgment is appropriate. Nevertheless, in considering CMS’s motion for
summary judgment, I draw all reasonable factual inferences in the light most favorable to
Petitioner. Brightview Care Center, DAB No. 2132, at 2, 9 (2007); Livingston Care
Center, 388 F.3d at 172 (en Cir. 2004); Guardian Health Care Center, DAB No. 1943, at
8 (2004); but see Brightview, DAB No. 2132, at 10 (entry of summary judgment upheld
where inferences and views of non-moving party are not reasonable). Of course, 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. Cf’ Guardian Health Care
Center, 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.”).

CMS argues that it is entitled to summary judgment because the undisputed facts
establish the facility’s substantial noncompliance with: 1) 42 C.F.R. § 483.20(k)(3)(i)
which requires that the facility provide services that meet professional standards of
quality; 2) 42 C.F.R. § 483.25, which, echoing statutory language, requires that each
resident receive and the facility provide the necessary care and services to allow a
resident to attain or maintain the highest practicable physical, mental, and psychosocial
well-being, in accordance with the resident’s comprehensive assessment and plan of care
(see also Act § 1819(b)); and with 3) 42 C.F.R. § 483.75, which requires that the facility
be administered in a manner that enables it to use its resources effectively and efficiently
to attain or maintain the highest practicable physical, mental, and psychosocial well-
being of each resident.

This case centers around the care (or lack of care) facility staff provided to a resident who
went into cardiac arrest. Resident 101 (R101) was an 88-year-old man. He was admitted
to the facility on March 5, 2008, subsequently hospitalized for several days (March 26-
31), and readmitted on March 31, 2008. CMS Ex. 8, at 20, 119. As Petitioner
emphasizes, R101 was quite ill, suffering from a multitude of ailments, including
congestive heart failure, pneumonia, arteriosclerotic coronary artery disease, peripheral
vascular disease and history of coronary artery bypass graft. CMS Ex. 8, at 20, 43, 45-
46. Although his cognitive status was moderately impaired, he was nevertheless still able
to make his own decisions, his family assisting him as needed. CMS Ex. 8, at 65.7

> Petitioner faults CMS for purportedly minimizing R101’s medical problems.
Citing CMS Ex. 14, at 15, Petitioner claims that R101 suffered from ailments not
mentioned by CMS, including chronic obstructive pulmonary disease, cardiomyopathy,
noninsulin dependent diabetes, and chronic renal failure. P. MSJ Br. at 4. By disputing
the ailments CMS attributes to R101, Petitioner has arguably alleged a dispute of fact.
However, this purported “dispute” does not preclude entry of summary judgment for two
reasons. First, as even a cursory review of the cited document shows, the resident
described in CMS Ex. 14, at 15 is not R101. He has a different birth date; he is in a
different room; and he is still alive the day after R101’s death. Petitioner has therefore
not tendered evidence showing that a factual dispute exists since, on its face, the cited
document does not support Petitioner’s allegations as to R101’s ailments. See Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.11 (1986); Vandalia Park,
DAB No. 1939 (2004); Lebanon Nursing and Rehabilitation Center, DAB No. 1918
(2004). Second, any alleged dispute of fact here is not material. As discussed below, the
facility was bound to administer CPR regardless of the resident’s underlying ailments.
R101 wanted to be resuscitated if he went into cardiac arrest. From the time of his
admission, he indicated that ne wanted CPR administered, and those instructions were
incorporated into his care plan. CMS Ex. 8, at 17, 43. On May 2, 2008, he again signed
an advance directive, instructing the facility that, in the event of a cardio-pulmonary
arrest, he wanted CPR. The form indicates that CPR would be initiated by a nurse, that
an ambulance would be called, and that he would be transferred to the hospital. CMS Ex.
8, at 16, 103.

The facility’s written policy governing the administration of CPR provides that,

if a resident or responsible person has signed a “Code Purple” form
(which instructs staff to resuscitate him), C.P.R. will be initiated upon
determination that resident has no pulse and no breathing and advanced
directives have been noted. C.P.R. must be started on a resident found
with no pulse or respiration and has is [sic] a yes to C.P.R. When a
resident has been determined to have no pulse and no respiration a staff
member is sent immediately to check the chart to see if resident is a yes
to C.P.R. A full code will be called, C.P.R. started and EMS initiated.

CMS Ex. 8, at 7, 13; CMS Ex. 14, at 69.

Notwithstanding R101’s explicit and repeated instructions, staff did not follow the
facility’s policy when he went into cardiac arrest. Instead, through a series of errors,
miscommunications, and bad judgment, staff made no effort to revive him until well after
he was dead.

Specifically, on the morning of May 13, 2008, Certified Nurse Aide (CNA) Letha
Hammerly assisted R101 to the bathroom. While still on the toilet, he slumped forward.
CNA Hammerly called for assistance and CNA Barbara Sherman, who had been caring
for R101’s roommate, left the room at 11:31 a.m. and returned with Registered Nurse
(RN) Susan Lessard. They found R101 still on the toilet, his complexion pale and his
pulse faint. After they put him in his wheelchair, RN Lessard sent CNA Sherman to get
the charge nurse, RN Sarah Gray. CNA Sherman went to the nurses’ station and told
Charge Nurse Gray that she was needed in the room shared by R101 and his roommate,
apparently identifying the room by number without naming the resident. CMS Ex. 14, at
14, 94; P. Ex. 6, at 16 ef seq.; P. Ex. 6, at 33, 78, 96; P. Ex. 12, at 32, 25, 37.

Charge Nurse Gray entered the resident’s room, followed by Licensed Practical Nurse
(LPN) Sue Graham, and the ward clerk, CNA Pat Hoxie. They brought with them a
“crash cart.” R101 was then sitting in his wheelchair, not moving, not breathing, his
skin pale. He had no pulse. Charge Nurse Gray pronounced him dead at 11:35 a.m.
According to Charge Nurse Gray, “[s]ome one then said he was a full code, a yes to
CPR.” CMS Ex. 8, at 4; CMS Ex. 14, at 94. But, again in Charge Nurse Gray’s words:
“T thought the death had not been witnessed so I didn’t think we had to initiate CPR.”
CMS Ex. 8, at 4; CMS Ex. 14, at 94. The ward clerk then wheeled the crash cart out of
the room. P. Ex. 6, at 45-47, 49; P. Ex. 12, at 51.

CNA Hamersley testified at a state administrative hearing that Charge Nurse Gray
checked the resident’s back for lung sounds and announced “if we don’t witness it, we do
not do anything.” Remarkably, CNA Hamersley did not remember whether she then told
Charge Nurse Gray that she had been with the resident and witnessed his arrest. P. Ex. 6,
at 22-23. However, she remembered telling RN Lessard earlier that she was with the
resident when he collapsed. P. Ex. 6, at 23. She could not remember RN Lessard saying
anything to the charge nurse about the incident having been witnessed. P. Ex. 6, at 243

The CNAs returned R101 to his bed and Charge Nurse Gray left the room. She tried to
call his family, did not reach them, and left a message. She paged R101’s doctor. She
called the facility’s Director of Nursing (DON), Renee Sutton, telling her that the resident
had died and that no one had administered CPR “because we didn’t witness his death.”
DON Sutton told her that they were required to administer CPR because R101 had
requested it. So, at 11:43 a.m. ~ at least 12 minutes after R101 went into cardiac arrest —
Charge Nurse Gray and RN Lessard, joined by DON Sutton, took the crash cart back to
R101’s room, instructing the ward clerk to call 911 and to page a Code Blue over the PA
system. When the nurses arrived at R101’s room, the CNAs were performing post
mortem care. DON Sutton told Charge Nurse Gray to call R101’s physician while she
and RN Lessard attempted CPR. But the nurses were not even able to put in place the
backboard necessary for initiating CPR. The DON determined that too much time had
elapsed since the arrest anyway, so she cancelled the code. The paramedics arrived a few
minutes later, at 11:49 am. CMS Ex. 8, at 4; CMS Ex. 14, at 14, 48, 93, 94; P. Ex. 6, at
16-27, 82-91; P. Ex. 12, at 69-70, 83.°

> Of course, even if his arrest had not been witnessed, staff were required to administer
CPR. CMS Ex. 8, at 7, 13; CMS Ex. 14, at 69, 70.

* RN Lessard testified at the state administrative hearing that she eventually returned to
the nurses’ station and challenged Charge Nurse Gray’s understanding of the facility policy for
administering CPR following an unwittnessed event, and that their disagreement precipitated the
call to DON Sutton. P. Ex. 6, at 86.

* A security video camera outside R101’s room door recorded the staff's comings and
goings, making it at least theoretically possible to pinpoint times. CMS Ex. 3, at 12-13; P. Ex.
12, at 17-18, 21. The video was not submitted here, but testimony from a state administrative
hearing describes its contents. Although the testimony is confusing, the video apparently shows
the following timeline:

(continued...)
Several days later, both nurses were disciplined for not performing CPR “during the first
critical minutes of arrest.” CMS Ex. 8, at 6, 9. It appears that the facility fired them.
CMS Ex. 14, at 13.

The record is murky as to how and when staff determined R101’s code status. According
to CMS, when RN Lessard first approached Charge Nurse Gray, Ward Clerk Hoxie heard
the room number, and, by mistake, checked the code status for R101’s roommate. When
she got to the room and saw that R101 was the resident in distress, she went back to the
nurses’ station to check R101’s chart, and then returned to the room. CMS MSJ Br. at 6
(citing P. Ex. 6, at 25; CMS Ex. 3, at 3, 9; CMS Ex. 4, at 7, 12). Petitioner does not
exactly dispute any of this, but characterizes as “speculative” the evidence CMS cites
regarding Ward Clerk Hoxie’s having initially checked the wrong chart, and argues that
the nurses’ station was nearby, so Ward Clerk Hoxie’s purported running back and forth
caused “no undue delay in discovering [R101’s] actual code status.” P. Reply at 3-4.

The state hearing testimony describing the contents of the video shot outside R101’s
room does not mention Ward Clerk Hoxie’s departure and return to the room at times
consistent with CMS’s version of events. On the other hand, the evidence as to what the
video contains is very confusing, and Petitioner does not argue that the video contradicts
CMS’s version. Nor does Petitioner offer any alternative. In fact, Petitioner does not
even identify the name of the staff person who checked the resident’s code status. The
investigative report says nothing about the issue, only mentioning that, after Charge
Nurse Gray pronounced him dead, she “was told” that he was full code. CMS Ex. 14, at
14,

RN Lessard offered a different (and arguably even more disturbing) version of the events.
She testified at the state hearing that she only learned R101’s code status after Charge

5(...continued)

11:31 am. CNA Sherman leaves room and returns with RN Lessard. P. Ex. 6,
at 96; P. Ex. 12, at 26-27.

11:33 am. CNA Sherman leaves room, and returns with Charge Nurse Gray.
Both enter the room. P. Ex. 12, at 32, 35, 37, 44-45.

11:34a.m. LPN Graham and Ward Clerk Hoxie enter room with crash cart.
CNA Sherman leaves room with R101’s roommate. P. Ex. 12, at
45-47, 49,

11:35 a.m. Ward Clerk Hoxie leaves room with crash cart. P. Ex. 12, at 51.

11:38 a.m. Charge Nurse Gray leaves room. P. Ex. 12, at 59.

11:40 a.m. RN Lessard leaves room. P. Ex. 12, at 64.

11:43 am. Charge Nurse Gray, RN Lessard, and DON Sutton enter room with
crash cart. P. Ex. 12, at 69-70.
Nurse Gray had pronounced the resident dead, departed the room and returned to the
nurses’ station to call his family. RN Lessard said that she followed Nurse Gray to the
nurses’ station, where she learned, for the first time, that R101 was full code. Since RN
Lessard was in the resident’s room throughout the incident, her testimony (if believed)
suggests that no one announced R101’s code status. P. Ex. 6, at 80-82, 85-86.°

I see no evidence that the facility’s investigators attempted to resolve these
inconsistencies, or, for that matter, that they tried to determine who, when, and how staff
ascertained R101’s code status. Petitioner’s silence on the issue is particularly troubling
because it shows that the facility did not fully review the effectiveness of its policies for
determining a resident’s code status. Given the facility’s problematic history in this
regard (see CMS Ex.16, and discussion below) and the considerable staff errors in their
treatment of R101, such review was critical to ensuring that the errors would not be
repeated.

Nevertheless, I do not find material these questions regarding how or when staff
determined R101’s code status. Even assuming, for summary judgment purposes, that
the nurses timely determined that R101 was full code, that knowledge was simply
irrelevant to their willingness to provide him with CPR. Even accepting the proposition
that the nurses knew R101’s code status in time to administer CPR, their refusal to honor
the resident’s wishes, by itself, establishes the facility’s substantial noncompliance with
Medicare regulations, 42 C.F.R. §§ 483.20(k)(3)(i), 483.25, and 483.75.

1. The facility did not meet professional standards of quality because it
failed to provide CPR to a resident whose advance directive called for it.

In CMS’s view, by failing to provide CPR to R101, as he had instructed, staff did not
meet professional standards of quality, and the facility thus was not in substantial
compliance with 42 C.F.R. § 483.20(k)(3)(i).

I agree. The staffs actions were unquestionably inconsistent with the standard of care.
For a resident who stops breathing or goes into cardiac arrest, staff must initiate CPR and
call the emergency medical services unless the resident has in place a valid “do not
resuscitate” order. John J. Kane Regional Center —- Glen Hazel, DAB No. 2068, at 16
(2007). According to the Fundamentals of Nursing (Mosby Publishing Company, 6" ed.
2005), which I consider authoritative, CPR “is performed on an appropriate client unless
a DNR [Do Not Resuscitate] order is written in the client’s chart.” CMS Ex. 9, at 2. So,
under the standard of care, any ambiguity about the resident’s wishes must be resolved in
favor of administering CPR.

® Petitioner submits an affidavit from RN Lessard which says nothing about how
or when she learned of R101’s code status.
But, here, Petitioner cannot even argue ambiguity, since R101 explicitly and
affirmatively directed staff to administer CPR. As Judge Kessel noted in Epsom
Healthcare Center:

A resident has an absolute right to decide whether a facility should
attempt resuscitation in the event of cardiopulmonary arrest. The whole
point of having a resident express his or her wishes in advance is to make
certain that the facility is aware of the resident’s intent and does
everything reasonable to carry it out.

DAB CR1749, at 6 (2008).

Petitioner submits an article from the Journal of Hospital Medicine that reflects this
position. It says that when a patient stops breathing “accurate and timely information
about DNR status is critical to respecting the patient’s preferences and avoiding a
potentially devastating error,” i.e., staff must learn the patient’s DNR status so they can
honor the resident’s wishes, and failure to honor those wishes would be a “devastating
error.” P. Ex. 1, at 3.

As noted above, the facility policy states that CPR “must be started on a resident found
with no pulse or respiration” who “is a yes to CPR.” CMS Ex. 8, at 7 (emphasis added).
Just weeks prior to the incident, DON Sutton reminded staff of the policy. In an email to
staff, dated March 28, 2008, she wrote, “We can’t, as nurses, determine who and when
we do CPR ona resident.” CMS Ex. 14, at 70. In her affidavit, Petitioner’s expert
witness, Shari L. Carson, RN, declares that this policy “was appropriate and met the
standard of care for a nursing home in the State of Michigan.” Carson Decl. at 4, § 4a.
CMS may reasonably rely on the provider’s policies as “evidence of the standard of care
the facility expect[s] its staff to provide” as well as evidence of the professional standards
of care. The Laurels at Forest Glen, DAB No. 2182, at 18 (2008), quoting Oxford
Manor, DAB No. 2167, at 5-6 (2008).

Thus, where, as here, a resident’s advance directive explicitly calls for CPR, the
universally accepted standard of care mandates that facilities honor that instruction.
Every authoritative source confirms that facilities must follow a resident’s advance
directive, and Petitioner cites no evidence or opinion to the contrary.

Petitioner nevertheless denies that the standard of care requires staff to perform CPR in
accordance with the resident’s wishes. Petitioner points to language from Fundamentals
of Nursing that refers to performing CPR on “an appropriate client” and argues that staff
may justifiably decline to administer CPR, without regard to the resident’s wishes, if they
determine that the resident is not an “appropriate” candidate for CPR. Petitioner does not
define “appropriate” except to suggest that anyone as ill as R101 would not qualify. I
10

find Petitioner’s argument wholly unreasonable. First, the argument is defeated by the
facility’s written policy, which mandates that a resident’s advance directive be followed,
without regard to the resident’s long-term prospects. Second, immediately before that
cited language, the Fundamentals of Nursing chapter describes the significant legal
hurdles set up to prevent denial of life-sustaining treatment to an incompetent client
(courts require “clear and convincing evidence” of the client’s choice to decline
treatment), a message plainly inconsistent with Petitioner’s suggestion that staff are free
to make ad hoc decisions at a time of crisis without regard to the resident’s wishes. Thus,
in context, the word “appropriate” refers to a client in need of resuscitation, not to
someone meeting some ill-defined standard of health.

The undisputed evidence establishes that staff’s failure to provide CPR violated the
standard of care, and the facility was therefore not in substantial compliance with 42
C.F.R. § 483.20(k)(3)(i). CMS is entitled to summary judgment on that issue.

2. The facility did not provide R101 the care and services he required to
maintain his highest practicable well-being, in accordance with his
comprehensive assessment and plan of care.

Obviously, when R101 went into cardiac arrest, his only hope for survival rested with
staff providing him CPR during the first critical minutes, as his care plan directed. CMS
Ex. 8, at 17. Since they failed to do so and he died, I can only conclude that the facility
failed to provide him the care and services he needed in order to maintain his highest
practicable physical well-being, in accordance with his comprehensive assessment and
plan of care. The facility was therefore not in substantial compliance with 42 C.F.R. §
483.25.

Petitioner, however, argues that the “overwhelming medical information” establishes that
R101 was simply too ill to have survived. P. MSJ Br. at 38.” For summary judgment

7 Although, in considering summary judgment, I do not weigh the evidence, I
note that Petitioner offers virtually no reliable evidence to support this claim. First,
Petitioner points to RN Carson’s opinion that R101 would not have survived because he
was in “significant and steady decline,” was losing weight, and refused a feeding tube.
Carson Decl. at 12, § 4(f). But she also bases this opinion on her determination that R101
suffered all of the ailments set forth in CMS Ex. 14, at 15, which include chronic
obstructive pulmonary disease, noninsulin dependent diabetes, and chronic renal failure.
Carson Decl. at 9-10, § 4(e)(i). The problem is that R101 did not suffer from these
ailments. RN Carson is relying on the records of a different resident. See n.2. R101 was
unquestionably quite ill, but he did not have all of the ailments described by RN Carson.
CMS Ex. 8, at 20, 43. I am not bound to accept an opinion that is not supported by the

(continued...)
purposes, I accept that R101 was seriously ill, and not looking forward to a much longer
life. However, such post-death rationalizations are simply irrelevant. The facility does
not get to decide, after the fact, that the services it promised but failed to provide should
not have been provided at all. If efforts at resuscitation are truly futile, that issue should
be discussed with the resident and resolved before the crisis. The Petitioner in John J.
Kane Regional Center — Glen Hazel made a similar argument, claiming that
administering CPR to a seriously ill resident was not only futile, but cruel. In rejecting
that argument, the Departmental Appeals Board acknowledged that CPR’s goal of
reversing clinical death is “achieved in only a minority of cases.” On the other hand, the
Board also recognized that no clear criteria accurately predict the futility of CPR. Kane,
DAB No. 2068, at 17.

Moreover, the problem here was not limited to a couple of nurses deciding not to
administer CPR to just one resident. Rather, facility staff — including a charge nurse —
considered it within their discretion to disregard any resident’s advance directive.
Accepting Petitioner’s argument would render advance directives meaningless, since they
could be overridden whenever staff determined that the resident in crisis was not an
“appropriate candidate” for resuscitation.

3. Because it did not effectively implement a policy of insuring that its
staff honor advance directives, the facility was not administered in a
manner that enabled it to use its resources effectively and efficiently to
maintain R101’s highest practicable physical, mental, and psychosocial
well-being.

The facility must be administered in a manner that enables it to use its resources
effectively and efficiently to maintain the highest practicable physical, mental and
psychosocial well-being of each resident. 42 C.F.R. § 483.75. A finding of substantial

7(...continued)
underlying facts. See Kenton Healthcare LLC, DAB CR1666, at 23, n.18 (2007), aff'd,
DAB No. 2186, at 16-17 (2008).

Petitioner’s second piece of “medical information” is a short surveyor note of a
conversation with Dr. Paul Wagner, D.O., who was apparently the medical examiner.
See CMS Ex. 8, at 15. The note says “No autopsy — family declined” and “delay in CPR
did not [hJave any effect on the outcome — slow decline. | 20 lbs. wt.” CMS Ex. 4, at 25.
Dr. Wagner submitted no declaration or other statement, and I would hardly consider this
note “overwhelming” evidence of anything.
noncompliance in the facility’s administration may derive from findings of substantial
noncompliance in other areas.

{Where a facility has been shown to be so out of compliance with
program requirements that its residents have been placed in immediate
jeopardy, the facility was not administered in a manner that used its
resources effectively to attain the highest practicable physical, mental,
and psychosocial well-being of each resident.

Asbury Center at Johnson City, DAB No. 1815, at 11 (2002); Odd Fellow and
Rebekah Health Care Facility, DAB No. 1839, at 7 (2002).

I discuss below why I conclvde that the facility’s deficiencies posed immediate jeopardy
to resident health and safety which, itself, justifies the finding that the facility was not in
substantial compliance with 42 C.F.R. § 483.75.

CMS cites additional reasons for finding that the facility was not in substantial
compliance with the regulation governing administration, characterizing as inadequate
the facility’s written procedures for determining an impaired resident’s code status. In
CMS’s view, sending a staff member to check the resident chart causes unnecessary
delays. CMS also faults the facility policy because it did not address the potential
problem of a missing chart. Finally, CMS argues that the policy was not effectively
implemented.

I need not decide the adequacy of the facility’s written procedure for determining code
status because I decide that staff’s failure to comply with and enforce the facility’s
written policy governing advance directives puts the facility out of substantial
compliance with 42 C.F.R. § 483.75. See Sunbridge Care and Rehabilitation for
Pembroke, DAB No. 2170, at 33 (2008), aff'd, Sunbridge Care and Rehabilitation for
Pembroke v. Leavitt, No. 08-1603 (4" Cir. 2009).

Petitioner argues that it should not be held accountable for its staff’s failure to follow the
policy because it provided them adequate training. It is long settled that the facility
“cannot disown the consequences” of inadequate care by the simple expedient of pointing
the finger at staff who are the agents of the facility, “empowered to make and carry out
daily care decisions.” Emerald Oaks, DAB No. 1800, at n.3 (2001); accord, Ridge
Terrace, DAB No. 1834, at 8 (2002).

Moreover, the errors here went beyond one employee’s misunderstanding of facility
policy. Nurse Gray was not simply a staff member; she was the charge nurse, and, in that
capacity, presumably bore at least some supervisory responsibility. RN Lessard also
declined to provide R101 with CPR, and, apparently, neither she nor any of the other 3-4
staff members witnessing the incident disabused Charge Nurse Gray of her erroneous
notions regarding the facility’s resuscitation policy. In fact, no one even told her that
R101’s collapse had been witnessed, which presumably would have induced her to begin
CPR (albeit for the wrong reason).

In any event, a facility’s responsibility is not limited to providing its staff with in-service
training. The facility also must follow-up to determine the effectiveness of the training,
and, must adequately supervise its staff.

This facility had ample cause for concern about its staff’s understanding and respect for
facility policies regarding when to administer CPR. On July 1, 2006, another facility
nurse deliberately misstated a resident’s code status to a nurse practitioner, telling the
nurse practitioner that the resident was “no code” when she knew that the resident was
“full code.” Apparently, because of his very frail condition (he suffered from terminal
lung cancer) she thought the resident was not an “appropriate” candidate for CPR. Two
other nurses, also fully aware of the resident’s code status, witnessed the deceit, but
delayed reporting it. CMS Ex. 16. Given this history, the administration should have
been hyper-vigilant in monitoring its staff’s attitudes and practices regarding code status.

B. CMS’s finding of immediate jeopardy is not clearly erroneous.
I next consider whether CMS’s immediate jeopardy finding was “clearly erroneous.”

Immediate jeopardy exists if the facility’s noncompliance has caused or is likely to cause
“serious injury, harm, impairment, or death to a resident.” 42 C.F.R. § 488.301. CMS’s
determination as to the level of a facility’s noncompliance (which would include an
immediate jeopardy finding) must be upheld unless it is “clearly erroneous.” 42 C.F.R. §
498.60(c). The Board has observed repeatedly that the “clearly erroneous” standard
imposes on facilities a “heavy burden” to show no immediate jeopardy, and has sustained
determinations of immediate jeopardy where CMS presented evidence “from which
‘[o]ne could reasonably conclude’ that immediate jeopardy exists.” Barbourville Nursing
Home, DAB No. 1962, at 11 (2005) (citing Florence Park Care Center, DAB No. 1931,
at 27-28 (2004), citing Koester Pavilion, DAB No. 1750 (2000)); Daughters of Miriam
Center, DAB No. 2067, at 7, 9 (2007).

Petitioner claims that R101’s death was inevitable, so staff errors caused no actual harm.
Relying on the residents’ purported statements that “their choices regarding code and no-
code preferences were being honored,” Petitioner also argues that no other residents were
at risk. P. Br. at 32, citing P. Ex. 12, at 118-19. Petitioner is relying on state hearing
testimony from the state surveyor, Denise Young-Bean, RN, MSN. Surveyor Young-
Bean testified that she interviewed residents to find out if they had been offered a choice
as to code status, and, like R101, they had indicated their preferences. P. Ex. 12, at 118-
19. But, this evidence says nothing about whether their choices would ultimately be
honored or disregarded. Indeed, until someone actually goes into cardiac arrest, and there
I find that as a result of Petitioner's conviction, the LG. was required to exclude him
pursuant to 1128(a)(3) of the Act. for at least five years.

D. The regulations do not permit me to change the effective date of Petitioner's
exclusion,

Petitioner requests a retroactive application of his exclusion, thus setting the
commencement of his exclusion to an earlier date than January 29, 2009 (20 days from
the 1.G.°s December 31, 2008 notice of exclusion). As grounds for his request. Petitioner
reasons that since “exclusion is mandated by law upon conviction.” the exclusion should
be retroactive to the date of his conviction. October 10, 2007. See Request for Hearing.

As a matter of law, an exclusion pursuant to |128(a)(3) of the Act must become effective
20 days from the date of the I.G.s notice of exclusion. 42 C.F.R. § 1001.2002. An ALJ
has no authority to review the timing of the 1.G.°s determination to impose an exclusion
or to alter retroactively the date of the imposition of the exclusion. Lisa Alice Gantt,
DAB No. 2065 (2007): Thomas Edward Musial, DAB No. 1991, at 4-5 (2005), citing
Douglas Schram, R.Ph.. DAB No, 1372, at 11 (1992) (“Neither the ALJ nor this Board
may change the beginning date of Petitioner's exclusion.”), David D. DeFries, DAB
No.1317, at 6 (1992) (“The ALJ cannot... decide when [the exclusion] is to begin.”):
Richard D. Phillips, DAB No. 1279(1991) (An ALJ does not have “discretion . . . to
adjust the effective date of an exclusion. which is set by regulation.”); Samuel W. Chang,
M.D.. DAB No. 1198, at 10 (1990) (*The ALJ has no power to change . . . [an
exclusion’s| beginning date.~). Therefore. | do not have the authority to grant the relief
that Petitioner seeks, and the effective date of his exclusion remains January 20. 2009.

V. Conclusion

For the reasons set out above, [ conclude that the I.G. has the authority to exclude
Petitioner from Medicare, Medicaid, and all other federal health care programs for a
period of five years. [ further conclude that the effective date of Petitioner's exclusion is
20 days from the 1.G.°s December 31, 2008 notice letter. Therefore. | sustain Petitioner's
five-year exclusion pursuant to section 1128(a)(3) of the Act. effective January 20. 2009.

/s/ Alfonso J. Montafio
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Tide Medical Supply, ) Date: August 17, 2009

)
Petitioner, )
)

“Vee ) Docket No. C-09-462

) Decision No. CR1992
Centers for Medicare & )
Medicaid Services. )
)

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS) to
revoke the Medicare billing privileges of Petitioner, Tide Medical Supply.

I. Background

Petitioner was enrolled in the Medicare program as a supplier of durable medical
equipment, prosthetics, and orthotics and supplies (DMEPOS). Its participation in
Medicare as a DMEPOS supplier was governed by section 1834(j) of the Social Security
Act and by implementing regulations at 42 C.F.R. Part 424.

On January 30, 2009, National Medical Clearinghouse, a CMS contractor, sent a notice to
Petitioner advising it that its Medicare billing privileges were being revoked. Petitioner
requested reconsideration and, on reconsideration, the determination to revoke
Petitioner’s participation was upheld. Petitioner then requested a hearing and the case
was assigned to me for a hearing and a decision.

CMS filed a pre-hearing brief, proposed exhibits, and a motion for summary disposition.
CMS filed a total of eight proposed exhibits which it identified as CMS Ex. 1 —- CMS Ex.
8. Petitioner replied to the motion with a brief and four proposed exhibits which it
identified as P. Ex. 1 — P. Ex. 4. In its transmittal letter it asserted that it was submitting a
list of proposed witnesses and exhibits, however, Petitioner did not submit a list of
proposed witnesses and exhibits

On August 5, 2009, I held a telephone pre-hearing conference with the parties at which
they informed me that they did not desire to present evidence in person. Consequently, I
determined that the case was ready for a decision.

I receive into evidence CMS Ex. 1 — CMS Ex. 8 and P. Ex. 1 — P. Ex. 4.
IL. Issue, findings of fact and conclusions of law
A. Issue

The issue in this case is whether CMS was authorized to revoke Petitioner’s Medicare
billing privileges.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this
case. I set forth each finding below as a separate heading.

I. CMS will revoke a DMEPOS supplier’s Medicare billing privileges
where the DMEPOS supplier has failed to comply with standards
governing its participation.

In order to participate in Medicare a DMEPOS supplier must meet all of the application
certification standards that are set forth at 42 C.F.R. § 424.57(c)(1) through (25). CMS
will revoke the supplier’s Medicare billing privileges if the DMEPOS supplier fails to
meet any of these standards. 42 C.F.R. § 424.57(d).

The regulatory language is plain. A DMEPOS supplier must comply with the letter of all
standards or CMS will revoke its billing privileges. And, I must sustain CMS’s
determination where the facts establish noncompliance with one or more of the regulatory
standards. There is nothing in the regulation that establishes a good cause exception to
the requirement that a DMEPOS supplier comply with all certification standards. Nor is
there any language to suggest that I have the authority to waive the compliance
requirement in cases of extenuating circumstances or where a DMEPOS supplier asserts
that, as a matter of equity, I should not hold it strictly accountable for compliance.
2. The undisputed material facts establish that Petitioner failed to
comply with the requirements of 42 C.F.R. § 424.57(c)(8). Therefore,
CMS was authorized to terminate Petitioner’s Medicare billing
privileges.

As a prerequisite to participation in Medicare a DMEPOS supplier must permit:

CMS, or its agents to conduct on-site inspections to ascertain supplier
compliance with the requirements of . . . [42 C.F.R. § 424.57]. The
supplier location must be accessible during reasonable business hours to
beneficiaries and to CMS, and must maintain a visible sign and posted
hours of operation.

42 CFR. § 424.57(c)(8).

The undisputed facts establish unequivocally that Petitioner failed to comply with the
regulatory requirement. CMS was thus authorized to revoke Petitioner’s Medicare billing
privileges. On four separate occasions in December 2008, CMS’s contractor’s agent
attempted to make an on-site visit to Petitioner’s business office in order to ascertain
whether Petitioner was complying with certification standards. Attempts were made on
December 2, 5, 17, and 18, 2008. CMS Ex. 2; CMS Ex. 7, at 2. All four of the attempted
visits were made during normal business hours of between 9:00 a.m. and 5:00 p.m. CMS
Ex. 7, at 2. Although Petitioner had posted a sign stating that it was open, Petitioner’s
office was closed on the occasion of all four of these attempted visits. CMS Ex. 2, at 7;
CMS Ex. 7, at 2. The agent spoke with the manager of the building in which Petitioner
maintained offices and the manager stated he had no information as to Petitioner’s
whereabouts. CMS Ex. 7, at 2. The agent also attempted to call Petitioner after at least
three of the four visits, and each time, the call was routed to voice mail or an answering
machine. /d.

Petitioner argues that there were extenuating circumstances that justify it not being open
for business on the dates at issue. According to Petitioner’s it was not open for business
on December 2 and 5, 2008 because its proprietor was temporarily away delivering
supplies to clients. Petitioner’s Brief at 2. Petitioner asserts that the business had to be
closed because the proprietor’s wife (his assistant) was absent during December 2008 due
to health issues. As for the December 17, and 18, 2008, Petitioner asserts that its
proprietor’s wife had surgery and was in the hospital on those dates. Jd.

As I explain above, at Finding 1, there is no equitable defense for failing to comply with
participation standards. The regulation requires that a DMEPOS supplier be accessible to
CMS during normal business hours and Petitioner plainly was not. Moreover, the
defense presented by Petitioner — assuming the facts on which it is premised to be true —
provides Petitioner with no equitably compelling argument for its failure to be open in
December 2008. If, in fact, the assistant was sidelined by health issues for an extended
period, as Petitioner seems to contend, then Petitioner should have made arrangements to
assure that her duties were covered so that Petitioner complied with CMS’s accessibility
requirements.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Lisa Marie Sanders, D.O., ) Date: August 10, 2009

)
Petitioner, )
)

“Vee ) Docket No. C-09-217

) Decision No. CR1988
The Inspector General. )
)

DECISION

I sustain the determination of the Inspector General (1.G.) to exclude Petitioner,
Lisa Marie Sanders, from participating in Medicare, Medicaid, and all federal
health care programs for a period of five years’. I find the I.G. is authorized to
exclude Petitioner pursuant to section 1128(a)(4) of the Social Security Act (Act)
and that the five-year exclusion imposed by the LG. is the minimum mandatory
period of exclusion under the Act. Act, section 1128(c)(3)(B).

I. Background

By letter dated April 30, 2008, the I.G. notified Petitioner that she was being
excluded from participation in Medicare, Medicaid, and all federal health care
programs for a period of five years, the minimum statutory period. The I.G.
notified Petitioner that she was being excluded under section 1128(a)(4) of the Act
because she had been convicted in the United States District Court, Southern
District of Georgia, Augusta Division, of a criminal felony offense related to the
unlawful manufacture, distribution, prescription, or dispensing of a controlled
substance.

+ This case was docketed under the name of Lisa Marie Sanders. Petitioner
maintains, however, that her name is Lisa Daylida Sanders, which is the name on
the I.G.’s notice letter. I note that the names “Lisa Daylida Sanders aka Lisa
Marie Sanders aka Lisa Marie Daylida” appear on the Grand Jury indictment.
By letter dated January 14, 2009, Petitioner contested the exclusion. I convened a
prehearing conference on April 13, 2009. During the conference, I informed
Petitioner that she had a right to be represented by counsel and I explained the
limits of my authority to Petitioner. Petitioner stated that she would represent
herself. Petitioner stated further that she was not appealing the exclusion itself but
only the effective date of the exclusion. I informed Petitioner that there were only
two issues I had authority to address in this case. The issues are whether the I.G.
had the authority to exclude Petitioner and, if so, whether the period of exclusion
was reasonable. I informed Petitioner that since she had been excluded for a
statutory mandatory period of five years I could not reduce the period of
exclusion. I further informed Petitioner that I did not have the authority to change
or alter in any way the effective date of the exclusion. I asked Petitioner if she
wished to contest the issue as to whether the IG. had the authority to exclude her
and she answered affirmatively. Counsel for the I.G. stated that Petitioner’s
request for hearing was untimely filed and that there exists a basis for the
exclusion. The parties agreed that this case could be decided on written
submissions. With the assistance of the parties I set a briefing schedule.

The I.G. timely submitted a motion for summary affirmance and supporting brief
(LG. Br.), accompanied by I.G. Exhibits (I.G. Exs.) 1-7. Petitioner timely
submitted her brief (P. Br.) accompanied by Petitioner’s Exhibits (P. Exs.) 1-3.
The I.G. timely submitted a reply brief (1.G. Reply Br.). In the absence of
objection, I am accepting I.G. Exs. 1-7 and P. Exs. 1-3 into evidence.

Il. Applicable Law

Section 1128(a)(4) of the Act mandates exclusion of an individual convicted,
under federal or state law, of a criminal offense consisting of a felony relating to
the unlawful manufacture, distribution, prescription, or dispensing of a controlled
substance (which offense occurred after the date of the enactment of the Health
Insurance Portability and Accountability Act (HIPAA)). A “conviction” is
defined under section 1128(i) of the Act to include: (1) when a judgment of
conviction has been entered against an individual by a federal, state, or local court,
regardless of whether there is an appeal pending or whether the judgment of
conviction or other record relating to criminal conduct has been expunged;
(2) when there has been a finding of guilt against the individual by a federal, state
or local court; (3) when a plea of guilty or nolo contendere by the individual has
been accepted by a federal, state, or local court; or (4) when the individual has
entered into participation in a first offender, deferred adjudication, or other
arrangement or program where judgment of conviction has been with-held. The
Act mandates that an exclusion imposed under section 1128(a)(4) be for a
minimum period of five years. Act, section 1128(c)(3)(B).

An individual who is the subject of an adverse determination by the LG. is entitled
to a hearing before an administrative law judge (ALJ), but only if he or she files a
hearing request within 60 days after receiving notice of the I.G.’s determination.
42 C.F.R. § 1005.2(c). The date of receipt of the notice is presumed to be five
days after the date of the notice absent some showing to the contrary by the
individual who is the addressee. Jd.

Til. Issue

The hearing request is on its face untimely. The facts in this case are that the
1.G.’s notice letter is dated April 30, 2008. The notice letter was subsequently
returned as undeliverable. I.G. Br. at 2. By letter dated December 15, 2008,
Petitioner inquired about her exclusion. 1.G. Ex. 2. By letter dated January 6,
2009, the Reviewing Official for Health Care Program Exclusion forwarded a
copy of the April 30, 2008 exclusion notice to Petitioner. 1.G. Ex. 3. Petitioner
subsequently requested a hearing concerning her exclusion by letter dated January
14, 2009. The L.G., in its reply brief, expressly states that it does not object to
Petitioner’s request for hearing based on timeliness because the I.G. recognizes
that the initial notice did not reach Petitioner. IG. Reply Br. at 3. Petitioner was
ultimately provided with reasonable notice of her exclusion and is being provided
with an opportunity for hearing. Therefore, the only remaining issue in this case is
whether the I.G. had a basis upon which to exclude Petitioner. As the I.G.
imposed the minimum mandatory period of exclusion, five years, there is no issue
as to whether the exclusion is unreasonable. Act, section 1128(c)(3)(B).

IV. Findings and Discussion

The findings of fact and conclusions of law noted below, in italics and bold face,
are followed by a discussion of each.

1. The I.G. had a basis upon which to exclude Petitioner because she was
convicted of a criminal offense consisting of felony relating to the
unlawful dispensing of a controlled substance which occurred after the
date of the enactment of HIPAA.

During the relevant period, Petitioner was a physician practicing medicine in the
State of Georgia. On January 19, 2005, a one count criminal information
(Information) was filed against Petitioner in the United States District Court for
the Southern District of Georgia, charging Petitioner with one felony count of
“Acquiring a Controlled Substance by Deception or Subterfuge” in violation of 21
USS.C. § 843(a)(3). 1G. Exs. 5, 6. The Information charges Petitioner with
“knowingly, intentionally, and unlawfully obtain[ing] and acquir[ing] Percocet,
with contains oxycodone, a Schedule II controlled substance, by deception and
subterfuge.” I.G. Ex. 5, at 1. Petitioner had prescribed 40 tablets of Percocet for a
patient, obtained the prescription bottle containing the Percocet, emptied the
Percocet tablets, replaced the Percocet tablets with acetaminophen tablets, and
returned the prescription bottle with the acetaminophen tablets to the patient.
Petitioner kept the Percocet tablets for her own use. Id.

On January 12, 2005, Petitioner entered into a plea agreement. Under the terms of
the plea agreement, Petitioner affirmed that the facts stated in the Information
were true. I.G. Ex. 5, at 9. Petitioner pled guilty to Count I of the Information,
acquiring a controlled substance by deception or subterfuge, and the plea was
accepted by the United States District Court, Southern District of Georgia,
Augusta Division, on May 26, 2005. I.G. Ex. 7. Petitioner was sentenced to
imprisonment for six months, one year of supervised release, and payment of
assessments and fines. Jd.

The elements necessary to support an individual’s exclusion under section
1128(a)(4) are that: 1) the individual must have been convicted of a criminal
offense; 2) the criminal offense must have been a felony; 3) the offense must have
occurred after the enactment of HIPAA; and 4) the felony conviction must have
been for conduct relating to the unlawful manufacture, distribution, prescription,
or dispensing of a controlled substance. I find all four elements to have been met
in this case.

First, Petitioner was convicted of a criminal offense under the Act. The I.G.’s
authority to exclude individuals from participation in federal health care programs
is based on federal, not state law, and the issue of whether an individual has been
convicted of an offense within the meaning of section 1128(i) is governed by
federal law. Roger L. Wadley, DAB CR1074 (2003), citing Travers v. Shalala, 20
F.3d 993, 996-97 (9" Cir. 1994). As an appellate panel of the Departmental
Appeals Board (Board) stated in the case of Carolyn Westin, DAB No. 1381, at 6
(1993), Congress broadly defined the term “conviction” in order “to ensure that
exclusions from federally funded health programs would not hinge on state
criminal justice policies.”

Here, Petitioner's guilty plea to Count I of the Information, and the Court’s
acceptance of that plea, demonstrate that she was, in fact, “convicted” within the
meaning of section 1128(i)(3) of the Act.

Second, the criminal offense for which Petitioner was convicted, Count I of the
Information, is a felony. I.G. Ex. 7.
Third, Petitioner’s criminal offense took place after the effective date of HIPAA
(which was August 21, 1996), as the criminal offense underlying Count I of the
Information to which Petitioner pled guilty took place on or about January 12,

2003. I.G. Ex. 5, at 1.

Finally, fourth, Petitioner’s felony conviction relates to the unlawful dispensing of
a controlled substance. Petitioner’s felony conviction under 21 U.S.C. § 843(a)(3)
was for acquiring a controlled substance by deception or subterfuge. Petitioner, a
physician working at the Fort Gordon Military Reservation, prescribed 40
Percocet tablets for a patient. After the prescription was filled for the patient,
Petitioner got possession of the prescription bottle and replaced the Percocet
tablets with acetaminophen tablets. Petitioner retained possession of the Percocet
tablets and returned the prescription bottle with the acetaminophen tablets to the
patient. Petitioner admitted to these facts when she signed the plea agreement. In
Petitioner’s brief she again admits to these facts but adds that the patient’s
husband had returned with the filled prescriptions and gave the prescriptions to the
patient. Petitioner claims as a defense that she was not convicted of an offense
related to prescribing or distributing a controlled substance. P. Br. at 2.
Specifically, in her response, Petitioner asserts:

The patient looked through the several medications I had appropriately
prescribed and she then told me that Percocet would make her itchy and I
should take them back. The crime started there. I took the bottle as if to
dispose of pills but stole them for my own use. I refilled the bottle with
generic Tylenol and told her to take them and throw them in the toilet at
home.

P. Br. at 2.

Petitioner misapprehends the nature of section 1128(a)(4) of the Act. The section
does not require that an individual be convicted of manufacturing, distributing,
dispensing or prescribing and does not refer to the level or seriousness of the
criminal activity.

Instead, all the statute requires is that a petitioner’s criminal offense be “related” to
those actions in a “useful and common-sense fashion to serve the remedial
purposes of the exclusion remedy.” Deborah Joe Oltman, R.N., DAB No.
CR1254, at 10 (2004). I find convincing the I.G.’s argument that the conduct upon
which Petitioner was convicted relates to the unlawful “dispensing” of controlled
substances within the meaning of section 1128(a)(4) of the Act. Petitioner’s
conviction on its face relates to the dispensing of a controlled substance. By
stealing the pain medication intended for another person for her own use,
Petitioner essentially engaged in the act of dispensing a controlled substance to
herself. See Michael J. O Brien, D.O., DAB CR1150 (2004) (criminal offense for
self-dispensing of pharmaceuticals is related to the unlawful dispensing of
controlled substances within the meaning of section 1128(a)(4) of the Act); Sean
M. Maguire, M.D., DAB CR837 (2001) (exclusion upheld as an unlawful
“dispensing” under section 1128(a)(4) of the Act based on Petitioner’s conviction
of three felony counts of obtaining a controlled substance by fraud where
petitioner diverted the controlled substance for his personal use). Based on the
evidence before me, | find that the I.G. has established that Petitioner’s felony
conviction was “related to” the unlawful dispensing of a controlled substance
within the meaning of section 1128(a)(4) of the Act.

2. Ido not have authority to alter the effective date of an exclusion.

In Petitioner’s January 14, 2009 hearing request she argues that, because of the
interval between her conviction in May 2005 and the I.G.’s April 30, 2008
exclusion notice, the exclusion should be imposed retroactively. She contends that
the exclusion should have started in May 2005, when she pled guilty to the offense
she committed.

I do not have the authority to alter the effective date of the exclusion. The Board
has repeatedly held that the applicable statute and regulations give an ALJ no
authority to adjust the beginning date of an exclusion by applying it retroactively.
Lisa Alice Gantt, DAB No. 2065 (2007); Thomas Edward Musial, DAB No. 1991,
at 4-5 (2005), citing Douglas Schram, R.Ph., DAB No. 1372, at 11 (1992)
(“Neither the ALJ nor this Board may change the beginning date of Petitioner’s
exclusion.”); David D. DeFries, DAB No.1317, at 6 (1992) (“The ALJ cannot...
decide when [the exclusion] is to begin.”); Richard D. Phillips, DAB No.
1279(1991) (An ALJ does not have “discretion . . . to adjust the effective date of
an exclusion, which is set by regulation.”); Samuel W. Chang, M.D., DAB No.
1198, at 10 (1990) (“The ALJ has no power to change . . . [an exclusion’s]
beginning date.”).

3. I cannot consider Petitioner's other arguments in mitigation of the
length of her exclusion, as Petitioner has been excluded for the minimum
mandatory period.

Petitioner asserts in her response that she had not planned her offense, that it was
an instantaneous poor decision. She asserts that she did not hurt anyone but
herself and that her treatment of her patient was above the standard of care.
Further, she asserts that she has experienced the loss of her children while in
prison, bankruptcy, loss of career and license, poverty, drug addiction, domestic
violence, divorce, and multiple surgeries. I cannot consider these assertions,
however, and change the length of Petitioner's period of exclusion. Once an
individual has been convicted of a criminal offense within the meaning of section
1128(a)(4), exclusion from participation in Medicare, Medicaid, and all federal
health care programs for a minimum period of five years is mandatory and cannot
be shortened. Act, section 1128(c)(3)(B).

V. Conclusion

For the foregoing reasons, I sustain Petitioner’s exclusion from participation in
Medicare, Medicaid, and all federal health care programs for a period of five
years.

/s/
Alfonso J. Montano
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
) Date: August 10, 2009
Stephen Klass, M.D., )
)
Petitioner, )
) Docket No. C-09-299
Vv. ) Decision No.CR1986
)
The Inspector General. )
)
DECISION

There is no basis to exclude Petitioner, Stephen Klass, M.D., from participation in
Medicare, Medicaid, and all other federal health care programs pursuant to section
1128(b)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(b)(1)).

I. Background

The Inspector General of the Department of Health and Human Services (I.G.) notified
Petitioner by letter dated February 27, 2009, that he was being excluded from
participation in the Medicare, Medicaid, and all federal health care programs pursuant to
section 1128(b)(1) of the Act. The I.G. advised Petitioner that the basis for his exclusion
was his conviction in the United States District Court for the Southern District of New
York of a misdemeanor offense related to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct in connection with the delivery of any health
care item or service. The I.G. advised Petitioner that his exclusion was for a minimum
period of three years and that the exclusion was effective 20 days from the date of the
notice letter. I.G. Exhibit (I.G. Ex.) 1.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
March 9, 2009. On March 12, 2009, the case was assigned to me for hearing and
decision. On March 30, 2009, I convened a prehearing telephone conference, the
substance of which was memorialized in my Prehearing Conference Order and Schedule
for Filing Briefs and Documentary Evidence issued April 1, 2009. During the
conference, Petitioner waived an oral hearing and the parties agreed that the matter may
be resolved based on the parties’ briefs and documentary evidence.

On April 29, 2009, the LG. filed a brief (I.G. Brief) in support of Petitioner’s exclusion,
accompanied by ten exhibits (I.G. Exs. 1-10). On May 28, 2009, Petitioner filed a brief
(P. Brief) in opposition to exclusion, accompanied by six exhibits (P. Exs. 1-6). On June
25, 2009, the I.G. filed a reply brief (I.G. Reply) in support of exclusion, accompanied by
1G. Ex. 11.

The LG. also filed objections to P. Exs. 4 and 5 on June 25, 2009. P. Ex. 4 consists of
three pages of Petitioner’s sentencing hearing transcript conducted September 19, 2007.
P. Ex. 5 consists of two pages of Petitioner’s change of plea transcript dated May 9, 2007.
The I.G. objected to P. Exs. 4 and 5 on grounds that they are incomplete and unattested.
Alternatively, the 1.G. asked me to compel Petitioner to produce the complete transcripts.
Petitioner responded to the I.G. objection on July 7, 2009 (P. Reply), and submitted
complete transcripts of the sentencing and plea hearings marked as P. Exs. 4A and 5A,
respectively. I do not find it necessary to further delay a decision in order that the copies
of the transcripts be certified by the clerk of the court or the court reporter, as there is no
question as to the authenticity of the transcripts. The I.G.’s objection to P. Exs. 4 and 5 is
rendered moot by Petitioner’s offer of P. Exs. 4A and SA, and the objection is overruled.
Petitioner objected on July 7, 2009, to I.G. Ex. 11 on grounds that it is not relevant, it
contains hearsay, and it deprives Dr. Klass of the right to cross-examine the affiant. I.G.
Ex. 11 is the declaration of James C. Batura, an employee of Pfizer Corporation, attesting
to Pfizer’s policies regarding the distribution of drug samples to physicians. The LG.
responded to Petitioner’s objection on July 16, 2009. Petitioner’s objection to I.G. Ex. 11
is sustained as Mr. Batura’s testimony is not relevant, i.e. it has no “tendency to make the
existence of any fact that is of consequence to the determination of [this case] more
probable or less probable than it would be without the evidence.” See Fed. R. Evid. 401.
As discussed hereafter, Petitioner was not convicted of a crime based on his conduct
toward or relationship with Pfizer and obtaining samples of prescription medication from
Pfizer. I.G. Exs. 1 through 10 are admitted and I.G. Ex. 11 is not admitted. P. Exs. 1
through 4, 4A, 5, 5A, and 6 are admitted.

On July 16, 2009, the I.G. submitted a motion for leave to amend his June 25, 2009 reply
brief to respond to Petitioner’s July 7, 2009 submission. The I.G.’s motion is granted and
the I.G.’s Amended Reply is accepted. On July 23, 2009, Petitioner submitted a letter
stating that he would not seek leave to file a sur-reply.

IL. Discussion
A. Issues

The Secretary of Health and Human Services (the Secretary) has limited the issues that
may be appealed by an individual or entity subject to exclusion to:

Whether there is a basis for the imposition of the sanction of exclusion; and
Whether the period of exclusion is unreasonable.

42 CFR. § 1001.2007(a)(1).
B. Applicable Law

Petitioner’s right to a hearing by an ALJ and judicial review of the final action of the
Secretary is provided by section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)). Petitioner’s
request for a hearing was timely filed and I do have jurisdiction.

Pursuant to section 1128(b) of the Act, the Secretary has the discretion to exclude certain
individuals or entities from participation in Medicare, Medicaid, and other federal health
care programs. Section 1128(b) provides in pertinent part:

(b) PERMISSIVE EXCLUSION. — The Secretary may
exclude the following individuals and entities from
participation in any Federal health care program
(as defined in section 1128B(f)):
(1) CONVICTION RELATING TO FRAUD.- Any
individual or entity that has been convicted for an
offense which occurred after the date of the enactment
of the Health Insurance Portability and Accountability
Act of 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, ... .

Section 1128(c)(3)(D) of the Act provides that an exclusion imposed under section
1128(b)(1) of the Act shall be for a period of three years unless the Secretary determines
in accordance with published regulations that a shorter period is appropriate based on

certain mitigating factors or a longer period is appropriate based on certain aggravating
factors. Aggravating and mitigating factors are found in 42 C.F.R. § 1001.201(b)(2) and
(3).

A “conviction” for purposes of exclusion pursuant to section 1128(b)(1) occurs: (1) when
a judgment of conviction is entered by a federal, state, or local court, whether or not an
appeal is pending or expungement has been ordered; (2) when there is a finding of guilt
by a federal, state, or local court; (3) when a plea of guilty or no contest is accepted by a
federal, state, or local court; or (4) when the offender enters a first offender, deferred
adjudication, or similar program that involves withholding of a judgment of conviction.
Act § 1128(i).

The underlying conviction is not subject to collateral attack or review by me on either
substantive or procedural grounds. 42 C.F.R. § 1001.2007(d). The standard of proof is a
preponderance of the evidence. 42 C.F.R. § 1001.2007(c). Petitioner bears the burden of
proof and persuasion on affirmative defenses or mitigating factors. The I.G. bears the
burden on all other issues. 42 C.F.R. § 1005.15(b) and (c).

C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold followed by my findings of fact and analysis.

1. The I.G. has no basis to exclude Petitioner under section
1128(b)(1)(A) of the Act.

a. Facts

Petitioner is a licensed physician practicing in the State of New York. LG. Ex. 4.
Petitioner was physician for a member of an organized crime family. P. Ex. 4A.
Petitioner saw the patient on May 14, 2003, which was the first time in several years due
to the patient’s incarceration in federal prison. The patient, then 71- years-old, presented
with diagnoses consistent with sexual dysfunction. During the next visit with the patient
on February 13, 2004, the patient requested a sample of Viagra. Petitioner next saw the
patient on July 20, 2004, and noted that the patient was using Viagra. P. Brief at 2-3; P.
Exs. 1-3. Petitioner admits he received Viagra samples from Pfizer, a drug company.
Over a two-year period, 2004 and 2005, Dr. Klass received a total of 1482 Viagra
samples form Pfizer and he admits that he provided 50 to 60 of the samples to the patient
who was a member of the organized crime family. P. Brief at 3-4; P. Ex. 4A, at 16.
Petitioner has admitted that he should have known that his patient was distributing the
samples to others. P. Ex. 5A, at 13. Petitioner alleged at his sentencing that he received
no quid pro quo for providing the Viagra samples and the government agreed to dismiss
Count One of the indictment, which would have required proof of a quid pro quo. P. Ex.
4A, at 9-11; P. Brief at 4-5.
On February 21, 2006, Petitioner was charged in a two-count indictment. Count One
charged that:

From in or about February 2003, up to and including on or
about March 8, 2005, in the Southern District of New York
and elsewhere, STEPHEN KLASS, the defendant, and others
known and unknown, unlawfully, willfully and knowingly
sold, purchased, and traded drugs and drug samples, to wit,
Viagra, and other drugs, knowing that these drugs and drug
samples were not intended to be sold.

(Title 21, United States Code, Sections 331(t), 333(b)(1)(B),
353(c)(1) & Title 18, United States Code, Section 2).

Count Two charged that:

From in or about February 2003, up to and including on or
about March 8, 2005, in the Southern District of New York
and elsewhere, STEPHEN KLASS, the defendant, unlawfully,
willfully and knowingly aided and abetted the distribution of
drug samples, to wit, KLASS improperly provided samples of
Viagra and other drugs to individuals, knowing that these
drug samples were being distributed by these individuals
without proper medical authorization.

(Title 21, United States Code, Sections 331(t), 333(a)(1),
353(d)(1) & Title 18, United States Code, Section 2.)

1.G. Ex. 7. On May 9, 2007, Petitioner pled guilty, pursuant to a plea agreement, to
Count Two of the indictment. On September 19, 2007, Petitioner was sentenced to two
years probation, fined $5000, and assessed $25. 1.G. Ex. 8; P. Exs. 4A and 5A; P. Brief at
5-6. Count One of the indictment was dismissed. P. Ex. 4A, at 22.

b. Analysis
The issue before me is whether Petitioner’s misdemeanor conviction meets the
requirements of section 1128(b)(1) of the Act and may be the basis for Petitioner’s

exclusion from participation in Medicare, Medicaid, and all federal health care programs.

To establish that there is a basis for exclusion pursuant to section 1128(b)(1) of the Act,
the I.G. must prove by a preponderance of the evidence that:
(1) Petitioner was convicted of a misdemeanor criminal offense;

(2) the offense occurred after August 21, 1996, the effective date of the
Health Insurance Portability and Accountability Act of 1996 (HIPAA);

(3) the offense was related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct; and

(4) the offense was in connection with the delivery of a health care item or
service.

Petitioner does not dispute that he was convicted of a misdemeanor offense or that the
offense occurred after August 21, 1996, notwithstanding discussion in his brief about the
nature or form of his plea. P. Brief at 7. Petitioner disputes that his offense was related to
fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial
misconduct. Petitioner also disputes that the offense was committed in connection with
the delivery of a health care item or service. P. Brief at 7.

Petitioner admits that the individual to whom he provided the Viagra samples was a
patient. He further admits and his clinical records prove that he saw the patient and
provided the Viagra for complaints of sexual dysfunction. Petitioner was clearly
providing a health care service to his patient both by his assessment and by providing the
Viagra samples even though Petitioner may not have initially been aware that the Viagra
was being further distributed. It is not subject to dispute that Viagra, which is widely
advertised for sexual dysfunction in men, is a prescription drug provided for the treatment
of sexual dysfunction and it is clearly a health care item. At least as to Petitioner’s
providing Viagra samples to his patient, I have no difficulty concluding that his offense
was in connection with the delivery of a health care item.

However, the I.G. does not prevail in this case due to a failure of proof on the third
element set forth above, i.e. there is an absence of proof that Petitioner was convicted of a
misdemeanor that was related to fraud, theft, embezzlement, breach of fiduciary
responsibility or other financial misconduct.

The L.G. argues that Petitioner’s conviction was related to fraud because he “received
samples of Viagra from the manufacturer [Pfizer] with the understanding that the drugs
would be distributed in a lawful manner and for a medically necessary purpose.
Petitioner, however, obtained the drugs samples (sic) for the benefit of another individual
knowing that the drug samples were unlawfully distributed to third parties.” I.G. Brief at
10. The I.G. further argues that Petitioner perpetrated a fraud upon Pfizer by concealing
that the samples of Viagra were being obtained for the benefit of “an acting capo in the
Mafia who unlawfully distributed the drugs to third parties.” I.G. Brief at 10; LG. Reply
at 6-8. The I.G. argues that if it is necessary for the I.G. to show that there was “financial
fraud,” I should consider that Pfizer suffered a monetary loss because it would not have
provided the drug samples to Petitioner had it “known of his unlawful intent.” I.G. Brief
at 13. The LG. argues that Petitioner also received a benefit, though the I.G. does not
specifically allege what the benefit was. I.G. Brief at 13. The I.G. asserts in its response
to Petitioner’s objection to I.G. Ex. 11 that: “I.G. Exhibit 11 is material and relevant
because it is reliable and probative in determining whether Petitioner perpetrated a fraud
on Pfizer.” The Inspector General’s Response To Petitioner’s Motion Objecting To I.G.
Exhibit 11, at 3. However, the issue is whether or not Petitioner was convicted of a
crime related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other
financial misconduct. The issue is not whether Petitioner perpetrated a fraud on Pfizer.

[he I.G. is required to prove by a preponderance of the evidence that the crime of which
Petitioner was convicted related to fraud, theft, embezzlement, breach of fiduciary
responsibility or other financial misconduct. Act § 1128(b)(1)(A); 42 C.F.R.

§ 1005.15(b) and (c). The language of section 1128(b)(1) is clear that whether or not that
section is a basis for exclusion turns upon whether or not there was a conviction for the
specific type of conduct described in that section. Section 1128(b)(1) does not permit the
1.G. to attempt to prove before me that Petitioner committed fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial misconduct. The I.G. fails to meet its
burden in this case because the evidence does not show that Petitioner was convicted of
any offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or
other financial misconduct. The I.G. implicitly recognizes its failure of proof by
attempting to bootstrap an argument that Petitioner’s conduct relative to Pfizer related to
fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial
misconduct. However, Petitioner simply was not convicted of any crime based upon his
relationship with or conduct toward Pfizer.

Count Two of which Petitioner was convicted alleged that he “unlawfully, willfully and
nowingly aided and abetted the distribution of drug samples” by improperly giving
“samples of Viagra and other drugs to individuals, knowing that these drug samples were
being distributed by these individuals without proper medical authorization.” Petitioner
was convicted based upon the charge of violating 21 U.S.C. §§ 331(t), 333(a)(1),
353(d)(1) and 18 U.S.C. § 2. Section 2 of 18 U.S.C., inter alia, criminalizes aiding and
abetting a principal in the commission of any offense against the United States. Section
331(t) of 21 U.S.C. prohibits the distribution of a drug sample in violation of 21 U.S.C.

§ 353(d)(1). Section 353(d)(1) of 21 U.S.C. provides that no person, with certain
exceptions, may distribute a drug sample but the section specifies that the term
“distribute” does not include a practitioner licensed to prescribe the drug or a health care
professional, a pharmacy of a hospital or other health care entity acting under direction of
a practitioner licensed to prescribe the drug. The exceptions set forth in 21 U.S.C.

§ 353(d)(2) and (3) have no application to this case. Section 333(a)(1) of 21 U.S.C.
criminalizes a violation of 21 U.S.C. § 331. The Assistant U.S. Attorney (AUSA)
explained during the plea inquiry that Petitioner was charged with aiding and abetting the
unlawful distribution of a prescription drug sample by another; a strict liability crime, i.e.
whether Petitioner intended to aid and abet the distribution by his patient, the principal,

was irrelevant. The AUSA explained that the elements required a prescription drug
sample, given by Petitioner to another who was not a medical professional and who then
further distributed the drug sample. P. Ex. 5A, at 12-13. No part or element of the
offense to which Petitioner pled guilty and was convicted of required evidence of or
admission of fraud, theft, embezzlement, breach of fiduciary responsibility or other
financial misconduct by Petitioner. The judge who accepted Petitioner’s plea did not
inquire as to or require any admission of fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct. P. Exs. 4A and 5A. The charge to which
Petitioner pled and of which he was convicted does not make any allegations regarding
how Petitioner came into possession of the drug samples subsequently distributed by his
patient. LG. Ex. 7. The judge that accepted Petitioner’s plea did not require as part of the
allocution that Petitioner admit to obtaining the samples involved by fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct. P. Ex.
5A, at 14. Neither the statutes violated nor the charge required that Petitioner have
received any quid pro quo or have any sort of financial interest in order to be found guilty
of the offense. Accordingly, I conclude that the evidence does not show that Petitioner
was convicted of a crime related to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct and section 1128(b)(1)(A) of the Act is not a
proper basis for his exclusion.

2. No period of exclusion is reasonable.

Petitioner is not subject to exclusion pursuant to section 1128(b)(1)(A) of the Act and no
other basis has been cited or proved by the I.G. Accordingly, no period of exclusion is
reasonable, as there is no basis for Petitioner’s exclusion.

III. Conclusion

For the foregoing reasons, Petitioner is not subject to exclusion from Medicare, Medicaid,
and all other federal health care programs pursuant to section 1128(b)(1)(A) of the Act.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Decision No. CR1985
The Inspector General.

In the Case of: )
)

Alexis Vincent Robinson, X57135 ) Date: August 10, 2009
(OI File Number 4-07-41263-9), )
)
Petitioner, )
)

-V.- ) Docket No. C-09-359

)
)
)

DECISION DISMISSING REQUEST FOR HEARING

I dismiss the hearing request of Petitioner, Alexis Vincent Robinson, because Petitioner
filed his hearing request untimely.

I. Background

The Inspector General (1.G.) determined to exclude Petitioner from participating in
Medicare and other federally funded health care programs. The I.G. sent a notice to
Petitioner on December 31, 2007 advising him that he was excluded. Petitioner did not
request a hearing until March 18, 2009. The case was assigned to me for a hearing and a
decision. The I.G. then moved to dismiss Petitioner’s hearing request on the ground that
it was untimely filed. Petitioner opposed the motion.

The I.G. attached two exhibits to his brief in support of dismissal. I.G. Ex. 1 is the LG’s
two-page December 31, 2007 notice letter. LG. Ex. 2 is the I.G’s two-page December 31,
2007 notice letter with a one-page addendum providing information about the effect of
exclusion. The I.G also submitted attachments to its brief, which the I.G. labeled as
Attachment A — Attachment T. I receive I.G. Exs. | and 2 into the record. As part of his
opposition to the 1.G.’s motion Petitioner submitted the unsigned affidavits of his wife,
Shanel Robinson, and his two sons, Alexis Robinson II and Alexis Robinson III. He also
filed a single page excerpt of what may be a portion of a court record, a document
entitled “Motion to Accept Petitioner’s Objection to the Inspector General’s Motion to
Dismiss Petitioner’s Appeal,” and a copy of an order that I issued on July 7, 2009. None
of these documents were identified as exhibits by Petitioner. I identify the unsigned
affidavit of Shanel Robinson as P. Ex. 1, the affidavit of Alexis Robinson II as P. Ex. 2,
the unsigned affidavit of Alexis Robinson III as P. Ex. 3, and the one-page excerpt of an
apparent court record as P. Ex. 4. I receive P. Ex. 1 — P. Ex. 4 into the record.

IL. Issue, findings of fact and conclusions of law
A. Issue
The issue in this case is whether I must dismiss Petitioner’s hearing request.
B. Findings of fact and conclusions of law
1. I must dismiss a hearing request that is not timely filed.

Regulations governing hearings in cases involving an exclusion determination made by
the I.G. require the administrative law judge to dismiss any hearing request that is not
timely filed. 42 C.F.R. § 1005.2(e)(1). The regulation states:

(e) The . . . [administrative law judge] wil/ dismiss a hearing request
where —
(1) The petitioner’s or the respondent’s hearing request is not
filed in a timely manner.

(emphasis added). I read the word “will” in the regulation as giving me no discretion.
Where a hearing request is untimely I must dismiss it without regard to any showing of
good cause for a late filing made by the party who filed the request.

2. I must dismiss Petitioner’s hearing request because he filed it
untimely.

As I state in the introduction to this decision the I.G. sent Petitioner notice of his
exclusion on December 31, 2007. Petitioner did not request a hearing until March 18,
2009, more than a year and two months after the I.G. sent the exclusion notice to him.

In order to be timely a hearing request in an exclusion case such as this one must be filed
within 60 days from the date of receipt of the .G.’s notice of an adverse determination.
42 C.F.R. § 1005.2(c). The notice is presumed to be received five days after the date of
the notice unless there is a reasonable showing to the contrary. /d. Thus, in order for a
hearing request to be presumed to be timely it must be filed within 65 days of the date
that the notice is mailed to the adversely affected party.

In this case Petitioner filed his hearing request more than a year after the presumed date
of receipt (January 5, 2008) of the I.G.’s notice. I must conclude the request to be
untimely and I must dismiss it absent proof from Petitioner that: rebuts the presumption
that he received the notice within 65 days of its mailing; and establishes he filed his
hearing request within 60 days of the date that he actually received the notice.

Petitioner has provided me with no proof that he failed to receive the notice within five
days of its mailing. Consequently, I have no choice but to dismiss his hearing request.

In his hearing request Petitioner asserts, without explanation, that he “did not receive
notification of this exclusion within the required time to appeal . . . [it].” That assertion,
unsupported by either evidence or explanation, is on its face insufficient to rebut the
presumption of receipt within five days of the mailing date of the notice.

Petitioner has not made any additional personal statement in which he avers that he
received the I.G.’s exclusion notice on a date that was beyond the presumed receipt date.
He filed no affidavit nor did he offer an explanation of when and how he came to see the
notice.

However, in his unsigned affidavit, Alexis Robinson II avers that in January 2008 he
inadvertently packed some of his father’s mail while preparing to move from his parents’
ome. He avers that “part of this mail was the exclusion letter that . . . [Petitioner] stated
e did not receive until February of 2009.” P. Ex. 2.

Alexis Robinson II’s affidavit, assuming its truth, provides no defense to the I.G.’s
motion. Indeed, it is an admission that Petitioner received the I.G.’s notice in January
2008. His receipt of the notice triggered the 60-day period within which he had to file a
earing request. Negligence by a family member does not provide Petitioner with an
excuse for failing to file his hearing request timely because there are no good cause
exceptions to the requirement that the hearing request be filed within 60 days from
receipt. Furthermore, the affidavit does not state when Petitioner actually saw the notice.
It only says that the mail that Alexis Robinson II inadvertently packed included the notice
that Petitioner stated that he did not receive until February 2009. There is nothing to
explain when Alexis Robinson II gave the notice he allegedly inadvertently packed to his
father.

The other two affidavits — the unsigned affidavits of Alexis Robinson III and Shanel
Robinson — offer nothing to show that the notice was delivered to Petitioner later than the
presumed date of delivery. Both Alexis Robinson III and Shanel Robinson aver that the
family’s household failed to receive mail for an extended period of time in 2008 due to an
error by the post office relating to a change of address card that had been filed by Alexis
Robinson II. But, neither individual declares that the I.G.’s notice was one of the items
that were not delivered timely due to this alleged error.
Indeed, in her affidavit Shanel Robinson avers that in February 2009 Alexis Robinson II
handed her the unopened envelope containing the exclusion letter. That assertion merely
confirms that Petitioner received the letter and underscores that it was not opened due to
negligence.

/s/
Steven T. Kessel
Administrative Law Judge