Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products

v.
James S. Zimmerman d/b/a Beverage Mart,
Respondent

Docket No. C-12-754
FDA Docket No. FDA-2012-H-0538

Decision No. CR2573

Date: July 27, 2012

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) began this matter by serving a complaint on
Respondent, James S. Zimmerman, doing business as Beverage Mart, at 1021
Kingshighway Street, Rolla, MO 65401, and by filing a copy of the complaint with the
Food And Drug Administration’s (FDA) Division of Dockets Management. The
complaint alleges that Beverage Mart impermissibly sold tobacco products to a minor and
failed to verify the age of a person purchasing tobacco products, violating the Federal
Food, Drug, and Cosmetic Act (Act) and its implementing regulations, 21 C.F.R. Part
1140, and seeks a $500 civil money penalty.

As provided for in 21 C.F.R. §§ 17.5 and 17.7, on June 6, 2012, CTP served the
complaint on Respondent Beverage Mart by United Parcel Service. In the complaint and
accompanying cover letter, CTP explained that, within 30 days, Respondent Beverage
Mart should pay the penalty, file an answer, or request an extension of time in which to
file an answer. CTP warned Respondent that if it failed to take one of these actions
within 30 days, the Administrative Law Judge could, pursuant to 21 C.F.R. § 17.11, issue
an initial decision ordering it to pay the full amount of the proposed penalty.

Respondent Beverage Mart has not filed an answer within the time prescribed. Pursuant
to 21 C.F.R. § 17.11, L assume that the facts alleged in the complaint (but not its
conclusory statements) are true. Specifically:

e At Beverage Mart on January 28, 2012, an FDA-commissioned inspector observed
the sale of smokeless tobacco to a person younger than 18 years of age;

e At Beverage Mart on January 28, 2012, an FDA-commissioned inspector observed
staff’s failure to verify prior to sale, by means of photo identification containing
the bearer’s birth date, the age of a person purchasing tobacco products;

¢ On May 24, 2011, an FDA-commissioned inspector observed the sale of
smokeless tobacco or cigarettes to a person younger than 18 years of age;

e Ina warning letter dated August 18, 2011, the CTP informed Respondent
Beverage Mart of the inspector’s May 24, 2011 observations, and that such sales
violate federal law, 21 C.F.R. § 1140.14(a). The letter further warned that
Beverage Mart’s failure to correct its violation[s] could result in a civil money
penalty or other regulatory action;

These facts establish Respondent Beverage Mart’s liability under the Act. The Act
prohibits misbranding of a tobacco product. 21 U.S.C. § 331(k). A tobacco product is
misbranded if sold or distributed in violation of regulations issued under section 906(d)
of the Act. 21 U.S.C. § 387f(d). See 21 U.S.C. § 387c(a)(7)(B); 21 C.F.R. §1140.1(b).
Under 21 C.F.R. § 1140.14(a), no retailer may sell cigarettes or smokeless tobacco to any
person younger than 18 years of age. Under 21 C.F.R. § 1140.16(c)(1), a retailer may
sell cigarettes and smokeless tobacco only in a direct, face-to-face exchange between
retailer and consumer. Sales by means of self-service displays are explicitly prohibited.

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

For these reasons, I enter default judgment in the amount of $500.00 against Respondent
Beverage Mart. Pursuant to 21 C.F.R. § 17.11(b), this order becomes final and binding
upon both parties within 30 days of the date of its issuance.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Kevin Joseph Oliver, DDS,
(OI File No. H-11-40826-9),

Petitioner,
v.

The Inspector General
Docket No. C-12-695

Decision No. CR2572

Date: July 24, 2012

DECISION

Petitioner, Kevin Joseph Oliver, DDS, asks review of the Inspector General’s (I.G.’s)
November 30, 2011 determination to exclude him, for a minimum period of five years,
from participation in the Medicare, Medicaid, and all federal health care programs, as
provided for in section 1128(a)(1) of the Social Security Act. The I.G. has moved to
dismiss, arguing that the appeal is untimely. I agree and dismiss Petitioner’s appeal.

Petitioner’s hearing request must be dismissed pursuant to
42 C.F.R. § 1005.2(e)(1) because it was not timely filed. !

In a letter dated November 30, 2011, the I.G. advised Petitioner that, based on his
conviction “of a criminal offense related to the delivery of an item or service under the
Medicare program,” he was excluded from participation in Medicare, Medicaid, and all
federal health care programs for a period of twenty years. With the notice letter, the I.G.
sent Petitioner an explanation of his appeal rights: he was entitled to a hearing before an
administrative law judge if he filed a written request for review within sixty days after
receipt of the notice. CMS Ex. | at 3. By means of the Civil Remedies Division’s

' [make this one finding of fact/conclusion of law.
electronic filing system, Petitioner filed his hearing request almost six months later, on
May 14, 2012.

The LG. filed his motion to dismiss (1.G. Br.), accompanied by five exhibits (IG. Exs. 1-
5), and Petitioner filed a response (P. Br.) with one attachment, which we have marked P.
Ex. 1.

The regulations governing these proceedings grant me virtually no discretion. An
aggrieved party must request a hearing within sixty days after receiving notice of the
exclusion. 42 C.F.R. § 1001.2007(b). The date of receipt is presumed to be five days
after the date of the notice unless there is a reasonable showing to the contrary. 42 C.F.R.
§ 1005.2(c). The regulations do not include a good-cause exception for untimely filing;
they provide that the ALJ will dismiss a hearing request that is not filed in a timely
manner.” 42 C.F.R. § 1005.2(e)(1); John Maiorano, R. Ph., v. Thompson, Civil Action
No. 04-2279 at 6 (D. N.J. 2008), 2008 WL 304899.

Based on the regulatory presumption, we assume that Petitioner received the notice on
December 5, 2011. His hearing request was therefore due on or before February 3, 2012.
42 C.F.R. § 1005.12(a). But he did not file his request until May 14, 2012.

Although Petitioner now complains that the I.G. sent correspondence to the wrong
address, his ex-wife’s address, he has not denied that he timely received the notice of
exclusion, which the I.G. mailed on November 30, 2011. Indeed, in his request for
review, he explicitly conceded that he received the letter: “The original exclusion letter I
received dated 11/30/2011....” See also Order and Schedule for Filing Briefs and
Documentary Evidence (June 4, 2012).

I therefore have no discretion here, and I dismiss Petitioner’s request for a hearing
pursuant to 42 C.F.R. § 1005.2(e)(1).

/s/
Carolyn Cozad Hughes
Administrative Law Judge

> Petitioner argues that I may extend the filing deadline based on a showing of good
cause. However, the cases he cites in support of his argument involve a different set of
governing regulations and do not apply here.


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

John C. Evans, CRNA,
(NPI: 1144320144),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-671
Decision No. CR2571

Date: July 24, 2012

DECISION

This matter is before me on the Motion for Summary Disposition filed by the Centers for
Medicare & Medicaid Services (CMS) on June 18, 2012. For the reason briefly set out
below, I GRANT the CMS Motion and the denial of Petitioner John C. Evans, CNRA’s
Medicare application is affirmed.

Petitioner John C. Evans is a Certified Registered Nurse Anesthetist (CRNA), and the
basic issue to be resolved in this appeal is whether Petitioner’s application to participate
in the Medicare program as a supplier, and to reassign his Medicare payments for those
services to his place of employment at the time, the Clay County Medical Center in Clay
Center, Kansas, was properly denied by CMS’s contractor and fiscal intermediary,
Wisconsin Physicians Service (WPS).

WPS received Petitioner’s application in the form of a document known as a CMS 855R
on or about November 3, 2011. WPS replied to Petitioner on November 16, 2011 with a
request for additional information on his professional credentials, a completed form CMS
855I more appropriate to the situation, and a re-completed CMS 855R. The deadline for
Petitioner’s response — a deadline established by regulation at 42 C.F.R. § 424.530(a)(1)
— and the consequence of Petitioner’s failure to do so, were set out explicitly in the WPS
letter.

Petitioner did nothing in response. On January 3, 2012, WPS denied Petitioner’s
application on the basis that it remained incomplete. Then, on January 13, 2012,
Petitioner sought reconsideration of that denial and proffered some of the documentation
WPS had requested in November. Petitioner’s response still fell short of the required
documentation: his response was incomplete as to at least two material items. WPS
upheld its earlier denial of Petitioner’s application on March 26, 2012. On April 30,
2012, Petitioner filed his Request for Hearing.

My Acknowledgment and Initial Docketing Order of May 17, 2012 required the parties to
file certain categories of dispositive motions within 30 days, and CMS filed its Motion
for Summary Disposition and supporting exhibits on June 18, 2012. My Order reminded
the parties of the terms of 42 C.F.R. § 498.17: dispositive motions must be answered
within 20 days, and a party’s failure to respond leaves any such motion unopposed,
conceded, and subject to granting without further proceedings. Petitioner did nothing in
response to the CMS Motion until July 20, 2012, and then only after being reminded of
its need to do so by this office. Petitioner’s response was submitted by Mr. Jim
Brinkman, the Chief Financial Officer of the Clay County Medical Center.

The problem with Petitioner’s response, which took the form of an email message, is that
it fails utterly to address or attempt to refute any of the factual assertions that appear in
CMS’s pleading and exhibits. It should be noted that the CMS pleadings and exhibits
established at least a prima facie absence of any genuine issues of facts material to this
appeal, and suggested that if those facts remained uncontroverted CMS would be entitled
to judgment in its favor as a matter of law. Because the facts remain uncontradicted, I
have relied on the CMS exhibits in setting out the factual and procedural history of this
case.

Now, had Mr. Brinkman’s response on Petitioner’s behalf challenged any of CMS’s
material factual assertions, or raised a significant legal argument, it might have defeated
the CMS Motion, but it did neither. Instead Mr. Brinkman chose to express
dissatisfaction with the Medicare enrollment process generally — “It has been primarily
the government programs that have been the most difficult to work with on a reasonable
basis” — to disclaim responsibility for the incomplete application — “There is no
responsibility or courtesy to respond to the error that could be noticed per the verbiage in
the letter” — and to concede that with respect to the CMS Motion “I had not responded
within the 20 day notice because I didn’t have the time.” Mr. Brinkman’s final
expression in response to the CMS Motion is this: “If our effort is not sufficient, then go
ahead and accept the summary judgment. We’ll eat the thousands of dollars of services
that have been performed by Mr. Evans to help someone live a little better.”

Those expressions are insufficient to defeat CMS’s Motion, which is at least prima facie
well-supported. Accordingly, CMS’s Motion for Summary Disposition must be, and it is,
GRANTED. The denial of Petitioner John C. Evans, CNRA’s Medicare application is
affirmed.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Mound City Inpatient Services,
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-299
Decision No. CR2569

Date: July 18, 2012

DECISION

Mound City Inpatient Services (Petitioner) appeals a reconsideration decision issued on
November 28, 2011. I grant summary judgment and sustain the determination of the
Centers for Medicare and Medicaid Services (CMS), finding that the undisputed evidence
establishes that CMS properly denied Petitioner’s enrollment in the Medicare program.

I. Background and Procedural History

To obtain direct billing privileges from Medicare for care provided to beneficiaries,
Petitioner submitted a group practice enrollment application, CMS Form 855B, and
several individual and reassignment physician applications, CMS Forms 855] and 855R,
respectively. CMS Exhibits (Exs.) 4 and 5. Petitioner sought to enroll in the Medicare
program as a multi-specialty group clinic that provided physicians’ services. CMS Ex. 4
at 4. Wisconsin Physicians Service Insurance Corporation (WPS), a CMS contractor,
received the enrollment application on July 15, 2011. CMS Exs. 3 and 4.

WPS notified Petitioner, by letter dated July 19, 2011, that it was denying Petitioner’s
enrollment application because Petitioner was not operational and did not meet Medicare
requirements to furnish Medicare covered items or services. CMS Ex. 2 at 1. Petitioner
requested reconsideration of this initial decision. CMS Ex. 3. On November 28, 2011, a
WPS hearing officer issued Petitioner an unfavorable reconsideration decision finding
Petitioner was not operational to furnish Medicare covered items or services or did not
meet Medicare enrollment requirements. CMS Ex. 1.

Petitioner then requested a hearing with the Civil Remedies Division of the Departmental
Appeals Board, and the case was assigned to me for hearing and decision. In accordance
with my Acknowledgment and Pre-hearing Order, CMS filed a Motion for Summary
Disposition and Supporting Brief (CMS Br.), accompanied by six exhibits (CMS Exs. 1-
6). Petitioner filed a response to CMS’s Motion for Summary Disposition and
Supporting Brief (P. Br.) accompanied by thirteen exhibits (P. Exs. 1-13). Thereafter,
CMS filed a Response Brief (CMS Response). In the absence of objection, I admit CMS
Exs. 1-6 and P. Exs. 1-13 into the record.

Il. Background Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. Payment under the program for services rendered to Medicare
beneficiaries may only be made to eligible providers of services and suppliers. Act

§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395u(h)(1)). The Act
requires the Secretary of Health and Human Services to issue regulations that establish a
process for the enrollment of providers and suppliers, including the right to a hearing and
judicial review of certain enrollment determinations. Act § 1866(j) (42 U.S.C.

§ 1395cc(j)).

The Act and regulations establish that a supplier is an individual or entity that furnishes
health care services under Medicare. Act § 1861(d); 42 C.F.R. § 400.202. Medicare
Part B pays for physicians' services, including diagnosis, therapy, surgery, consultations,
and home, office, and institutional calls. See 42 C.F.R. § 410.20. A supplier must be
enrolled in the Medicare program and be issued a billing number to be eligible to receive
direct payment from Medicare. 42 C.F.R. § 424.505.

Medicare pays a supplier directly for covered services if a beneficiary assigns a claim to
the supplier and the supplier accepts assignment. 42 C.F.R. § 424.55(a). Medicare may
pay a supplier’s employer if the supplier is required, as a condition of employment, to
turn over the fees from the supplier’s services. 42 C.F.R. § 424.80(b). Medicare will
also pay an entity billing for a supplier’s services if the entity is enrolled in Medicare and
there is a contractual arrangement between the entity and the supplier. 42 C.F.R. §
424.80(b)(2).
Ill. Analysis
A. Issue

The issue in this case is whether CMS’s contractor and CMS had a legitimate basis for
denying Petitioner’s Medicare enrollment and direct billing privileges.

B. Applicable Standard for Summary Judgment

Board Members of the Appellate Division of the Departmental Appeals Board (the
Board) stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . . . The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of

law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. . . . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

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

The role of an Administrative Law Judge (ALJ) in deciding a summary judgment motion
differs from the ALJ’s role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre
Dame, Inc., DAB No. 2291, at 5 (2009). Here, the material facts are not disputed, and I
draw all reasonable inferences in favor of Petitioner.

C. Finding of Facts and Conclusions of Law

I) CMS had a legitimate basis for denying Petitioner’s Medicare enrollment
because Petitioner was not eligible as an operational supplier.

Petitioner applied for Medicare enrollment as a multi-specialty clinic and defines itself
through a “partnership agreement” submitted with its Medicare enrollment application.
CMS Ex. 4 at 37-41. The agreement states that “[t]he sole purpose of the Partnership is
to provide a ‘pay to’ address when billing third party payors to facilitate the bookkeeping
of the payments received from such payors.” CMS Ex. 4 at 37. The agreement also
indicates that Petitioner does not employ any of the physicians for which Petitioner is
acting as the billing entity. CMS Ex. 4 at 38. The partnership agreement does not
indicate that Petitioner would furnish health care services under Medicare, but instead it
states that Petitioner is an entity formed solely to act as a billing entity. CMS Ex. 4 at 38-
41.

For Medicare purposes, “[s]upplier means a physician or other practitioner, or an entity
other than a provider, that furnishes health care services under Medicare.” 42 C.F.R.

§ 400.202. A supplier must be operational to furnish Medicare covered items or services
before being granted Medicare billing privileges. See 42 C.F.R. § 424.510(d)(6).
“Operational means the provider or supplier has a qualified physical practice location, is
open to the public for the purpose of providing health care related services, is prepared to
submit valid Medicare claims, and is properly staffed, equipped, and stocked (as
applicable, based on the type of facility or organization, provider or supplier specialty, or
the services or items being rendered), to furnish these items or services.” 42 C.F.R.

§ 424.502. In order to enroll in the Medicare program, a supplier must demonstrate that
it has the ability to furnish health care items or services. If CMS determines upon
reliable evidence that an entity is not operational or is not meeting Medicare enrollment
requirements, CMS may deny enrollment. See 42 C.F.R. § 424.530(a)(5).

Petitioner has simply provided no evidence to show it is a supplier that furnishes health
care services or is operational to furnish health care services covered by Medicare as a
multi-specialty group clinic which provides physicians’ services. Nor does Petitioner
dispute that it is not a multi-specialty group clinic or an employer of health care
practitioners. Petitioner, however, contends it is a subsidiary under the control and
ownership of a related entity (Inpatient Services of Missouri, P.C., or “ISM”) that does
provide physicians’ health care services. Petitioner argues it cannot act independently of
this related entity. P. Br. at 5-6. Nonetheless, Petitioner does not dispute it is a separate
legal entity from the entity furnishing the physicians’ health care services:

[Petitioner] is under the ownership and control of ISM, and cannot

act independently of ISM. Under this model, EmCare contracts with

a hospital to arrange for hospitalist services. EmCare contracts with
ISM to provide the necessary physicians to support the contractual
requirements regarding this hospitalist coverage at the Hospital. ISM
employs physicians to support EmCare’s obligations to all of its client
hospitals in Missouri, and ISM forms a general partnership — in which it
is one of two general partners — through which ISM’s employed
physicians will bill for services provided at the specific hospital. Under
this structure, although the billing function is performed by a separate
legal entity from the entity that employs the hospitalist physicians

who render services, as a practical matter they are linked.

P. Br. at 5.

I will assume for purposes of summary judgment, that Petitioner is “linked” to a separate
legal entity that does in fact provide health care services and that would qualify as a
supplier under Medicare requirements.

Yet, I find CMS’s enrollment denial here similar to that in US Ultrasound, DAB No.
2302 (2010). CMS Br. at 9-10. US Ultrasound sought to enroll as an independent
diagnostic testing facility; however, a contract submitted with the enrollment application
indicated that US Ultrasound did not own any ultrasound equipment and was not
responsible for any technical or professional services. /d. at 6. The agreement between
US Ultrasound and another entity that actually furnished services provided that US
Ultrasound pay that entity a professional services fee for billing, scheduling, and patient
records. /d. at 4. The Board found that CMS had the legal authority to deny US
Ultrasound’s enrollment application because it failed to comply with Medicare
enrollment requirements in that it did not furnish services and thus failed to meet the
definition of a Medicare “supplier.”

Here, I find Petitioner does not meet the definition of a Medicare supplier and cannot be
enrolled in the Medicare program. Petitioner is a general partnership established solely to
receive payments for the services of a physician group. Petitioner does not employ
physicians, have a contractual arrangement with physicians, and does not furnish health
care services in any capacity. Thus, Petitioner does not directly provide Medicare
covered physician health care services just as US Ultrasound did not directly provide
Medicare covered testing services.

Further, considering CMS denied Petitioner’s CMS Form 855B because Petitioner did
not meet the Medicare definition of an operational supplier, there would be no basis to
approve any Medicare enrollment reassignments to Petitioner. See 42 C.F.R.

§ 424.80(b).

2. CMS’s determination to deny Petitioner’s enrollment application was
consistent with the regulatory purpose of Medicare enrollment requirements.

Petitioner makes a policy argument in support of its approval for enrollment in the
Medicare program and contends that Medicare revised its enrollment requirements in
order to better safeguard Medicare funds and to limit or eliminate improper payments.
Petitioner argues its enrollment would facilitate the reimbursement process and that no
part of Petitioner’s and its related entities’ corporate structure prejudices the
government’s interest in assuring that Medicare payments are properly made. P. Br. at 5-
6. Petitioner states that its organizational structure falls within the scope of the Medicare
enrollment requirements for a supplier of services and that “[t]he form of the organization
in this context should not eclipse the substance.” P. Br. at 6.

However, lawmakers’ concerns about enrollment in the Medicare program by unqualified
or fraudulent suppliers resulted in CMS establishing the current enrollment requirements
with stringent controls on supplier entry into the Medicare program. 71 Fed. Reg.
20,754, 20,755-6. The Medicare enrollment requirements are designed to ensure that
Medicare only conducts business with legitimate suppliers and enables CMS to verify
that it is paying an entity that actually exists and is providing the services that it
represented it would provide in its Medicare enrollment application. Jd. at 20,754-55.

Therefore, CMS’s enrollment determination must be upheld. Petitioner is an admitted
billing entity which does not provide the intended Medicare services described in
Petitioner’s enrollment application for a multi-specialty group clinic. If CMS granted
Petitioner’s enrollment application and later needed to revoke Petitioner’s Medicare
enrollment for fraudulent activity or for not meeting Medicare requirements, the related
entity providing the actual health care services would not be subject to the revocation or
the related reenrollment bar, actions intended to hold suppliers accountable and to protect
the Medicare Trust Fund.

IV. Conclusion

The undisputed evidence establishes that CMS had a legitimate basis to deny Petitioner’s
Medicare enrollment as a supplier considering that Petitioner, as a separate billing entity,
was not operational and did not otherwise meet the requirements of an eligible supplier.
Accordingly, I grant summary judgment in favor of CMS.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Douglas L. Clore, LMLP,
Petitioner,
v.

Centers for Medicare and Medicaid Services.

CRD Docket No. C-12-560
ALJ Ruling No. 2012-1

July 17, 2012

ORDER REMANDING CASE AND DISMISSING
REQUEST FOR HEARING

Petitioner applied for enrollment in the Medicare program as a psychologist billing

independently (PBI). The Centers for Medicare and Medicaid Services (CMS) denied
Petitioner’s application because he did not meet the requirements to enroll as a clinical
psychologist. Because CMS did not decide whether Petitioner met the requirements to
enroll as a PBI, I remand this case for CMS to issue a new determination on that issue.

In September 2011, Petitioner filed a Form CMS-855I (Medicare Enrollment Application
Physicians and Non-physician Practitioners) with CMS.' See CMS Exhibit (Ex.) 1, at 3.
In section 2(D)(2) of that form, Petitioner indicated that he sought enrollment as a PBI.
CMS Ex. 1, at 1. Petitioner also marked the box next to “Psychologist, clinical,” but then
completely crossed out that selection and initialed this action. CMS Ex. 1, at 1. In
section 2(H) of the Form CMS-855], entitled Clinical Psychologists, Petitioner indicated

' Individuals must file applications for enrollment with a “Medicare fee-for-service
contractor.” See 42 C.F.R. § 424.510(d)(1). In this order, the term “CMS” includes its
Medicare contractors.
that he did not possess a doctoral degree. CMS Ex. 1, at 2. In section 2(I) of the form,
Petitioner answered all four questions posed to PBI applicants. CMS Ex. 1, at 2.

On October 26, 2011, CMS determined that Petitioner did not qualify to enroll as a
clinical psychologist because he did not have a doctorate in psychology. CMS Ex. 2, at
1. Petitioner requested reconsideration. On February 16, 2012, CMS again concluded
that Petitioner did not qualify as a clinical psychologist. CMS Ex. 3, at 1. Neither of
CMS’s determinations addressed whether Petitioner was qualified to enroll as a PBI.

Petitioner filed a timely request for hearing in which he acknowledged that he was not a
clinical psychologist. On April 11, 2012, I issued a pre-hearing order. In response to that
order, the parties timely filed briefs and proposed exhibits. In its brief, CMS requests that
1 affirm its denial of Petitioner’s enrollment application. Although CMS acknowledges
that Petitioner sought enrollment as a PBI, CMS’s argument exclusively focuses on
Petitioner’s failure to qualify as a clinical psychologist because he does not have a
doctorate in psychology. CMS Br. 4-5.

Petitioner argues in his brief (P. Br.) that he is a Licensed Clinical Psychotherapist and
that this is functionally the equivalent of a Licensed Psychologist. P. Br. 1. Petitioner
further asserts that the examination he passed for licensure was at the doctoral degree
level and that he is licensed to independently practice psychology at the master’s degree
level. P. Br. 1. Finally, Petitioner indicates that he serves a rural population that does not
ave access to doctoral level psychologists and that local physicians believe their patients
need access to psychotherapy. P. Br. 2.

CMS is correct that Petitioner is not qualified to enroll in the Medicare program as a
clinical psychologist. Congress defined “qualified psychologist services” as services
performed by a clinical psychologist and authorized the Secretary of Health and Human
Services (Secretary) to define the term “clinical psychologist.” 42 U.S.C. § 1395x(ii);
see also 42 U.S.C. § 1395u(b)(18)(C)(v). The Secretary determined that a clinical
psychologist for Medicare purposes must hold “a doctoral degree in psychology.”

42 C.F.R. § 410.71(d)(1). When promulgating this rule, the Secretary considered and
rejected the enrollment of master’s degree level psychologists. 63 Fed. Reg. 20,110,
20,115 (Apr. 23, 1998). There is no dispute that Petitioner does not have a doctoral
degree, and I do not have the authority to waive this regulatory requirement. See Rosalyn
L. Olian, DAB CR1472 (2006); Kirtis Thomas, DAB CR1452 (2006); see also Sherry K.
Jose, LICSW, DAB CR1750, at 3 (2009); Dorothy Rose Hrynvk, DAB CR1444 (2006).”

Although CMS correctly determined that Petitioner did not qualify to enroll as a clinical
psychologist, Petitioner sought enrollment as a PBI and not a clinical psychologist. CMS

> Departmental Appeals Board decisions are available at
http://www.hhs.gov/dab/decisions/index.html.
Ex. 1, at 1. The regulations state that diagnostic psychological testing services may be
billed to Medicare by “a clinical psychologist or an independent practicing psychologist
as defined in program instructions.” 42 C.F.R. §§ 410.32(b)(2)(iii), 410.33(a)(2)(iii).
Either a clinical psychologist or a PBI, may provide testing without the direct supervision
ofa physician. 62 Fed Reg. 59,048, 59,062 (Oct. 31, 1997).

Petitioner may meet the requirements for enrollment as a PBI. The most basic
qualification for a PBI is to be “licensed or certified to practice psychology in the State or
jurisdiction where he or she is furnishing services or, if the jurisdiction does not issue
licenses, if provided by any practicing psychologist.” 63 Fed. Reg. at 20,114. Petitioner
asserts that he holds a master’s level psychology license. P. Br. 1. Further, Petitioner
does not need to hold a doctoral degree to be a PBI. Medicare Program Integrity Manual
(MPIM), Ch. 10, § 12.4.12. Finally, Petitioner’s responses to the questions in section 2(I)
on the Form CMS-855I (CMS Ex. 1, at 2) are sufficient to avoid immediate rejection of
his application. See MPIM, Ch. 10, § 4.2.7.E.

CMS must determine whether Petitioner may enroll as a PBI under the criteria stated in
Medicare program instructions. See MPIM, Ch. 10, § 12.4.12; Medicare Claims
Processing Manual, Ch. 12, §§ 160, 160.1; Medicare Benefit Policy Manual, Ch. 15,

§ 80.2. Because CMS did not address this issue previously, I remand this case for CMS
to consider it in the first instance. See 42 C.F.R. § 498.56(d) (an administrative law judge
may remand a case to CMS for consideration of a new issue and, if appropriate, a new
determination). Remand is also the most efficient course of action in this case because
CMS controls the documentary record of Petitioner’s application and has expertise in
determining whether an application is acceptable.

Order

This case is remanded to CMS to fully evaluate Petitioner’s application to enroll in
Medicare as a PBI. CMS shall issue a new determination within 40 days of the issuance
of this order. If Petitioner is dissatisfied with CMS’s determination on remand, he may
again request a hearing before an administrative law judge.

Because I am remanding this matter, Petitioner’s request for hearing is hereby dismissed.
A party may file a written request that I vacate this dismissal for good cause within 60
days of the date of this decision. 42 C.F.R. § 498.72.

It is so ordered.

/s/
Scott Anderson
Administrative Law Judge


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

Michelle Slone,
(O.L. File Number H-11-41570-9)

Petitioner
Vv.

The Inspector General,
U.S. Department of Health and Human Services.

Docket No. C-12-366
Decision No. CR2568
Date: July 17, 2012
DECISION

Petitioner, Michelle Slone, is excluded from participating in Medicare, Medicaid, and all
federal health care programs pursuant to section 1128(a)(1) of the Social Security Act
(Act) (42 U.S.C. § 1320a-7(a)(1)) effective January 19, 2012, based upon her conviction
of a criminal offense related to the delivery of an item or service under Medicare or a
state health care program. There is a proper basis for exclusion. Petitioner’s exclusion
for the minimum period' of five years is mandatory pursuant to section 1128(c)(3)(B) of
the Act (42 U.S.C. § 1320a-7(c)(3)(B)).

' Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after
the period of exclusion expires. Reinstatement is not automatic upon completion of the
period of exclusion.
I. Background

The Inspector General (I.G.) for the Department of Health and Human Services (HHS)
notified Petitioner by letter dated December 30, 2011, 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. advised Petitioner that she was being
excluded pursuant to section 1128(a)(1) of the Act based on her conviction in the
Common Pleas Court, Franklin County, Ohio, Criminal Division, of a criminal offense
related to the delivery of an item or service under Medicare or a state health care program.

Petitioner timely requested a hearing by letter dated February 1, 2012 (Hearing Request).
The case was assigned to me for hearing and decision. A prehearing telephone
conference was convened on March 6, 2012, the substance of which is memorialized in
my Prehearing Conference Order and Schedule for Filing Briefs and Documentary
Evidence dated March 8, 2012. During the prehearing conference, Petitioner waived an
oral hearing, and the parties agreed that the matter could be resolved based on the briefs
and documentary evidence. Accordingly, I set a briefing schedule for the parties.

Petitioner filed a number of unmarked documents on March 22, 2012, consisting of an
Ohio Board of Nursing Consent Agreement and various other documents regarding her
competence as a nurse, her character, and her criminal offense.” The L.G. filed a brief
(LG. Br.) on April 5, 2012, with I.G. exhibits (I.G. Exs.) 1 through 52 On May 21, 2012,

> refer to the individuals who executed the documents filed by Petitioner by initials
only. The documents filed by Petitioner include: a consent agreement between Petitioner
and the Ohio Board of Nursing signed by Petitioner on December 20, 2011, and by a
representative of the Ohio Board of Nursing on January 20, 2012; a July 5, 2011 letter
from HM regarding Petitioner’s care of HM’s son; a July 3, 2011 letter from Petitioner to
the Ohio Board of Nursing; a July 7, 2011 letter from Petitioner’s probation officer with
the Franklin County Adult Probation office to the Ohio Board of Nursing; two copies of
an undated letter signed by Petitioner’s father, mother, and sister to the Ohio Board of
Nursing; a December 23, 2010 review of Petitioner’s performance by her former
employer; a June 26, 2011 letter from SM, Petitioner’s co-worker; a July 6, 2011 letter
from VC, the Director of Nursing of Marion Manor, where Petitioner was then employed;
a June 29, 2011 letter from CW, the daughter of two individuals for whom Petitioner
worked as a personal caregiver; and a July 1, 2011 letter from SB, Petitioner’s co-worker.

> The IG. amended his initial filings on April 10, 2012. The DAB file contains both the
1.G’s initial and amended filings. In this decision I refer to the I.G.’s amended exhibits
and brief.
I issued an Order to Show Cause, because Petitioner had not timely filed her brief and
exhibits. I ordered that on or before June 1, 2012, Petitioner show cause why I should not
dismiss the case for abandonment. On May 30, 2012, Petitioner responded (P. Response)
stating that she had filed everything she wished for me to consider on March 22, 2012.
The LG. filed a written waiver of reply on June 6, 2012. No objections have been made
to my consideration of the I.G.’s offered exhibits, or to any of Petitioner’s unmarked
submissions of March 22, 2012. All the documents are admitted as evidence.

IL. Discussion
A. Applicable Law
Petitioner’s rights to an administrative law judge (ALJ) hearing and judicial review of the
final action of the HHS Secretary (Secretary) are provided by section 1128(f) of the Act
(42 U.S.C. § 1320a-7(f)).
The standard of proof is a preponderance of the evidence, and there may be no collateral
attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(c), (d).
Petitioner bears the burden of proof and the burden of persuasion on any affirmative
defenses or mitigating factors, and the I.G. bears the burden on all other issues. 42
C.F.R. § 1005.15(b).
B. Issue
The Secretary has by regulation limited my scope of review to two issues:
Whether there is a basis for the imposition of the exclusion; and
Whether the length of the exclusion is unreasonable.
42 CFR. § 1001.2007(a)(1).

C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold followed by the pertinent findings of fact and
analysis.

1. Petitioner’s request for hearing was timely, and I have jurisdiction.

There is no dispute that Petitioner timely requested a hearing and I have jurisdiction to
hear the case. Pursuant to section 1128(f) of the Act, a person subject to exclusion has a
right to reasonable notice and an opportunity for a hearing. The right to a hearing before
an ALJ is accorded to a sanctioned party by 42 C.F.R. §§ 1001.2007(a) and 1005.2, and
the rights of both the sanctioned party and the LG. to participate in a hearing are specified
by 42 C.F.R. § 1005.3. Either or both parties may choose to waive appearance at an oral
hearing and to submit only documentary evidence and written argument for my
consideration. 42 C.F.R. § 1005.6(b)(5). An oral hearing was waived in this case.

2. There is a basis to exclude Petitioner pursuant to section 1128(a)(1)
of the Act.

Petitioner admits that she was convicted of a misdemeanor criminal offense. Hearing
Request. Petitioner does not dispute the evidence presented by the I.G. On October 19,
2010, a special grand jury in the Common Pleas Court, Franklin County, Ohio, Criminal
Division, returned a one-count indictment against Petitioner. The indictment charged
Petitioner with the crime of Theft by Deception, a fifth degree felony, in violation of
section 2913.02(A)(3) of the Ohio Revised Code. I.G. Exs. 2,3. The charge was based
upon Petitioner having billed and received payment from the Ohio Medicaid program for
ome health aide services that were not delivered by her but by her sister, who was not
authorized to participate in the Medicaid program. I.G. Exs. 2,3. On February 9, 2011,
Petitioner pled guilty to the lesser included offense of Theft by Deception, a first degree
misdemeanor, and she was found guilty pursuant to her plea. I.G. Exs. 2, 4,5. The court
placed Petitioner on probation for five years and ordered her to pay restitution of $3,000
to the Ohio Medicaid program. IG. Ex. 4.

The LG. cites section 1128(a)(1) of the Act as the basis for Petitioner’s mandatory
exclusion. The statute provides:

(a) MANDATORY EXCLUSION. The Secretary shall
exclude the following individuals and entities from
participation in any Federal health care program (as defined
in section 1128B(f)):

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

The statute requires that the Secretary exclude from participation in Medicare or
Medicaid any individual or entity: (1) convicted of a criminal offense, whether a felony
or a misdemeanor; (2) where the offense is related to the delivery of an item or service;
and (3) the delivery of the item or service was under Medicare or a state health care
program.
Pursuant to section 1128(i) of the Act, an individual is “convicted” of a criminal offense
when: (1) a judgment of conviction has been entered by a federal, state, or local court
whether or not an appeal is pending or the record has been expunged; (2) there has been a
finding of guilt in a federal, state, or local court; (3) a plea of guilty or no contest has
been accepted in a federal, state, or local court; or (4) an accused individual enters a first
offender program, deferred adjudication program, or other arrangement where a judgment
of conviction has been withheld. In this case, the evidence shows that Petitioner pled
guilty and a judgment of conviction was entered pursuant to her guilty plea.

Accordingly, I conclude that Petitioner was “convicted” as that term is defined by section
1128(i) of the Act for purposes of exclusion pursuant to section 1128(a)(1) of the Act,
based on the court’s acceptance of her guilty plea.

I also conclude that Petitioner’s conviction is program-related within the meaning of
section 1128(a)(1) of the Act. The indictment states that Petitioner deprived the Ohio
Medicaid program of its property and obtained money from it through deception. I.G.
Ex. 3, at 1. The affidavit of the Assistant Attorney General, who presented the case to the
special grand jury, shows that Petitioner deprived the Ohio Medicaid program of its
property and obtained money from the program by deception when Petitioner billed the
Ohio Medicaid program using her provider number for home health services actually
delivered by her sister. 1.G. Exs. 2, 3; undated letter signed by Petitioner’s father,
mother, and sister. Petitioner was ordered to pay restitution of $3,000 to the Ohio
Medicaid program, which is consistent with that amount being the approximate loss to
Ohio Medicaid. I.G. Exs. 2, 4. I conclude based on the undisputed facts that there is a
clear “nexus or common-sense connection” here between Petitioner’s criminal conduct
and the delivery of an item or service under Medicaid. Timothy Wayne Hensley, DAB
No. 2044 (2006); Lyle Kai, R.Ph., DAB No. 1979 (2005); Tanya Chuoke, R.N., DAB No.
1721 (2000); Berton Siegel, D.O., DAB No. 1467 (1994); Thelma Walley, DAB No. 1367
(1992).

Accordingly, I conclude that the elements of section 1128(a)(1) of the Act are satisfied,
there is a basis for Petitioner’s exclusion, and exclusion is required.

Petitioner does not dispute the evidence presented by the I.G. or the basis for her
conviction. Petitioner admits what she did was wrong and states she has learned a lesson.
Petitioner asserts that she is not a danger to the Medicare and Medicaid programs because
the Ohio Board of Nursing is supervising her activities. Petitioner states that since her
offense she has become a licensed practical nurse, but as a consequence of her exclusion
she cannot take a job in that capacity. Petitioner requests that her exclusion be removed
so that she can support her large family.* Hearing Request; P. Response.

Petitioner’s arguments are unavailing. Congress requires exclusion in this case under
section 1128(a)(1) of the Act. The I.G. and I have no discretion not to exclude Petitioner.

3. Pursuant to section 1128(c)(3)(B) of the Act, five years is the
minimum period of exclusion pursuant to section 1128(a) of the Act.

4. Petitioner’s exclusion for five years is not unreasonable as a matter
of law.

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section
1128(a) of the Act shall be for a minimum period of five years. Pursuant to 42 C.F.R.

§ 1001.102(b), the period of exclusion may be extended based on the presence of
specified aggravating factors. Only if the aggravating factors justify an exclusion of
longer than five years are mitigating factors considered as a basis for reducing the period
of exclusion to no less than five years. 42 C.F.R. § 1001.102(c). The I.G. does not cite
any aggravating factors in this case and does not propose to exclude Petitioner for more
than the minimum period of five years.

I have concluded that Petitioner’s exclusion is required by section 1128(a)(1) of the Act.
Accordingly, the minimum period of exclusion is five years, and that period is not
unreasonable as a matter of law.

II. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all federal health care programs for the minimum statutory period of five
years effective January 19, 2012.

/s/
Keith W. Sickendick
Administrative Law Judge

* Petitioner stated in her request for hearing that her conviction was to be expunged in
March. Petitioner offered no evidence to show that her conviction has been expunged.
However, even if her conviction was expunged, that fact would not impact her exclusion
as it is the fact that she was convicted that controls. Act § 1128(i).


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Bernard Farzin, M.D.,
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-306
Decision No. CR2566

Date: July 13, 2012

DECISION

Bernard Farzin, M.D. (Petitioner), appeals a reconsideration decision issued on
November 30, 2011. I grant summary judgment and sustain the determination of the
Centers for Medicare and Medicaid Services (CMS) finding that the undisputed evidence
establishes that CMS properly enrolled Petitioner in the Medicare program effective
August 10, 2011.

I. Background and Procedural History

Petitioner is a licensed physician employed by Providence Health & Services
(Providence) in Anchorage, Alaska. To obtain direct billing privileges from Medicare for
care provided to beneficiaries while working for Providence, Petitioner submitted a
reassignment enrollment application, CMS Form 855-R dated July 22, 2011. CMS
Exhibit (CMS Ex.) 1. Noridian Administrative Services (Noridian), a CMS contractor,
received Petitioner’s enrollment application on August 10, 2011. CMS Ex. 5, at 1. By
letter dated September 13, 2011, Noridian formally notified Petitioner that his Medicare
enrollment application had been approved effective July 12, 2011.' CMS Ex. 3.
Petitioner timely requested reconsideration of the initial decision and requested that his
effective enrollment date be changed to April 18, 2011. CMS Ex. 4. On November 30,
2011, a contractor hearing officer issued a reconsideration decision denying Petitioner’s
request for an earlier effective date of enrollment. CMS Ex. 5.

Petitioner then filed a hearing request with the Civil Remedies Division of the
Departmental Appeals Board, and the case was assigned to me for hearing and decision.
In accordance with my Acknowledgment and Pre-hearing Order issued on January 26,
2011, CMS filed a Motion for Summary Judgment and supporting memorandum (CMS
Br.), accompanied by five exhibits (CMS Exs. 1-5) on February 29, 2012. Petitioner did
not respond to the CMS Motion for Summary Judgment, and I subsequently issued an
Order to Show Cause on April 23, 2012. On May 7, 2012, Petitioner responded to my
Order to Show Cause by letter (P. Response) and explained that “[the Petitioner does] not
dispute the facts set forth in the CMS Motion and . . . would like for you to decide this
case based upon the written record of all documents previously submitted.” Petitioner
also stated “[p]lease accept my apology for not filing the pre-hearing exchange in
accordance with your .. . order. It was not evident to me that I should file an exchange.”
In the absence of objection, I admit CMS Exs. 1-5 into the record.

Il. Applicable Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. Payment under the program for services rendered to Medicare
beneficiaries may only be made to eligible providers of services and suppliers.” Act

§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395u(h)(1)). The Act
requires the Secretary of Health and Human Services to issue regulations that establish a
process for the enrollment of providers and suppliers, including the right to a hearing and
judicial review of certain enrollment determinations. Act § 1866(j) (42 U.S.C. §
1395ce(j)).

Pg 6

' Noridian erroneously characterized July 12, 2011 as Petitioner’s “effective date” rather
than Petitioner’s “retrospective billing date.” Noridian determined the date the CMS
contractor received his enrollment application was August 10, 2011, which is his actual
effective date. Noridian then authorized Petitioner to retrospectively file claims for
services from July 12, 2011. CMS Br. at 2; CMS Ex. 5.

° A “supplier” furnishes services under Medicare, and the term supplier applies to
physicians and other non-physician practitioners and facilities that are not included
within the definition of the phrase “provider of services.” Act § 1861(d) (42 U.S.C.
§ 1395x(d)).
A supplier must be enrolled in the Medicare program and be issued a billing number to be
eligible to receive direct payment from Medicare for services rendered to its
beneficiaries. 42 C.F.R. § 424.505. The effective date of enrollment for a supplier may
only be the later of two dates: (1) the date when the supplier filed an application for
enrollment that was subsequently approved by a Medicare contractor charged with
reviewing the application on behalf of CMS; or (2) the date when the supplier first began
providing services at a new practice location. 42 C.F.R. § 424.520(d). The date of filing
of the enrollment application is the date when the designated Medicare contractor
receives the complete enrollment application and supporting documentation. 42 C.F.R. §
424.510(d)(1); 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008).

Additionally, an enrolled supplier may bill for services provided to Medicare-eligible
beneficiaries up to 30 days prior to the effective date of enrollment, if circumstances
precluded enrollment before the services were provided. 42 C.F.R. § 424.521(a)(1).
Retrospective billing for up to 90 days prior to the effective date of enrollment is
permitted only in the case of a Presidentially-declared disaster. 42 C.F.R.

§ 424.521(a)(2).

Il. Analysis
A. Issue

The issue in this case is whether CMS’s contractor and CMS had a legitimate basis for
determining Petitioner’s effective Medicare enrollment date and retrospective billing date
for Medicare billing privileges.

B. Applicable Standard For Summary Judgment

Board Members of the Appellate Division of the Departmental Appeals Board (the
Board) stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . . . The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of

law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. .. . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.
Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).

The role of an Administrative Law Judge (ALJ) in deciding a summary judgment motion
differs from the ALJ’s role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre
Dame, Inc., DAB No. 2291, at 5 (2009).

C. Finding of Fact and Conclusion of Law

I) The undisputed evidence shows CMS’s contractor and CMS properly
determined Petitioner’s effective date of Medicare enrollment and
Petitioner’s retrospective billing date for Medicare privileges.

The relevant facts are not disputed, and I draw all reasonable inferences in favor of
Petitioner. Petitioner began providing services to Medicare beneficiaries on behalf of
Providence in April of 2011. CMS Ex. 4. Petitioner subsequently submitted a Medicare
enrollment application to Noridian. CMS Ex. 1. Noridian received Petitioner’s Medicare
enrollment application on August 10, 2011. On September 13, 2011, Noridian approved
Petitioner’s enrollment application with an effective date of August 10, 2011 and
retrospective billing privileges commencing on July 12, 2011. CMS Ex. 3.

Petitioner contends that his effective date of enrollment should be April 18, 2011, the
date he began rendering services to Medicare beneficiaries while employed at
Providence. Petitioner does not deny that CMS received his enrollment application on
August 10, 2011. However, Petitioner argues that his effective date should be earlier
because:

This enrollment was late due to a breakdown in communication between
our clinic and business office. [Petitioner] started his employment in
2010 at another one of our clinics . .. Because he was already employed,
the enrollment and reassignment of Medicare benefits process was
overlooked in error. [Petitioner] actually treated numerous Medicare
Beneficiaries during the months from April until July when the oversight
was discovered and his initial applications were submitted. We are
respectfully asking for a retroactive effective date to bill for services that
were performed in good faith and for the benefit of many Medicare
Beneficiaries.

CMS Ex. 4.

The effective date of Medicare enrollment and billing privileges is dictated by 42 C.F.R.
§ 424.520(d). The regulation provides:
(d) Physicians, nonphysician practitioners, and physician and
nonphysician practitioner organizations. The effective date for
billing privileges for physician, nonphysician practitioners, and
physician and nonphysician practitioner organizations is the later of
the date of filing of a Medicare enrollment application that was
subsequently approved by a Medicare contractor or the date an
enrolled physician or nonphysician practitioner first began
furnishing services at a new practice location.

(Emphasis added).

The effective date for Medicare billing privileges is determined according to the later of
the two dates specified by the regulation. The “date of filing” is the date that the
Medicare contractor receives a signed enrollment application that the Medicare contractor
is able to process to approval. 42 C.F.R. § 424.510(d)(1); 73 Fed. Reg. 69,725, 69,769
(Nov. 19, 2008). Because it is undisputed that the contractor received Petitioner’s
approvable enrollment application on August 10, 2011, which is after the date Petitioner
began providing services, the regulation dictates that this is the effective date of
Petitioner’s enrollment.

2) Tam unauthorized to grant Petitioner’s requests for equitable relief
despite not meeting the legal requirements of Medicare enrollment.

Petitioner made various arguments for equitable relief at the reconsideration level and
during this appeal. Petitioner’s arguments for not meeting the legal requirements of
enrollment pertain to administrative errors made during the enrollment process, a
breakdown in communication between Petitioner’s clinic and business office, and the fact
that Petitioner provided services to Medicare beneficiaries for several months prior to his
enrollment with Providence. CMS Ex. 4. I am not without sympathy for Petitioner’s
predicament. Petitioner did not argue, however, that he filed a complete application on
an earlier date than CMS determined or that the contractor or CMS incorrectly applied
the regulatory criteria.

I am without authority to order either Noridian or CMS to provide an exemption to
Petitioner under the regulations set forth at 42 C.F.R. §§ 424.520(d) and 424.521(a),
which are binding on me. I cannot alter or deviate from the regulations’ explicit
limitation on Petitioner’s ability to bill for services up to 30 days prior to the date
Noridian received Petitioner’s complete application. I also have no authority to extend
the retrospective billing period for Petitioner in this circumstance or ignore the clear
requirements of the regulations governing his enrollment in Medicare. Jd. Even
accepting all of Petitioner’s assertions as true, Petitioner’s equitable arguments give me
no ground to grant Petitioner an earlier effective date of enrollment. See US Ultrasound,

DAB No. 2302, at 8 (2010) (“[nJeither the ALJ nor the Board is authorized to provide
equitable relief by reimbursing or enrolling a supplier who does not meet statutory or
regulatory requirements.”). Moreover, I have no authority to declare statutes or
regulations invalid or ultra vires. 1866/CPayday.com, L.L.C., DAB No. 2289, at 14
(2009) (“[a]n ALJ is bound by applicable laws and regulations and may not invalidate
either a law or regulation on any ground.”).

I conclude that Petitioner’s effective date of Medicare enrollment was August 10, 2011,
the undisputed date on which he submitted a reassignment enrollment application that
could be processed to approval. Petitioner was also properly authorized to bill Medicare
for services provided to Medicare beneficiaries as of July 12, 2011, or 30 days prior to his
effective date of enrollment, which is the maximum amount of retrospective billing
permitted under the relevant regulations. Accordingly, I grant summary judgment in
favor of CMS.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Susan Ortelt, PT,
Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-300
Decision No. CR2565

Date: July 12, 2012

DECISION

Susan Ortelt (Petitioner) appeals the reconsideration determination of the National
Heritage Insurance Company (NHIC), a Medicare contractor, and argues that Petitioner’s
Medicare enrollment date for direct-billing privileges should be effective from the date
she started working at her practice group on May 31, 2011. However, I grant the Centers
for Medicare and Medicaid Services’ (CMS’s) motion for summary judgment. I find the
undisputed evidence supports an effective date of July 11, 2011, the date Petitioner
passed the Rhode Island approved examination for physical therapists and thereafter met
all the Medicare program requirements for enrollment.

I. Background

On May 2, 2011, Petitioner submitted an application to NHIC to enroll as a physical
therapist in Medicare. By letter dated July 19, 2011, NHIC approved Petitioner’s
application with an effective date of July 11, 2011. Petitioner requested reconsideration
on September 6, 2011 and asked that her effective date be May 31, 2011, the date she
started work at her practice group. On December 6, 2011, NHIC informed Petitioner
that the reconsideration review was unfavorable and that NHIC had correctly calculated
Petitioner's enrollment date because she did not met all the requirements to enroll in
Medicare as a physical therapist until July 11, 2011, when she passed a state-approved
examination for physical therapists in Rhode Island.

Petitioner claimed that she met all the Medicare requirements after she graduated from
the University of Rhode Island on May 1, 2011 and when she received her temporary
license to practice physical therapy from April 21, 2011 to July 20, 2011 in Rhode Island.
CMS Ex. 4, at 1-2. On January 23, 2012, Petitioner filed a hearing request with the Civil
Remedies Division. An Acknowledgment and Pre-hearing Order was sent to the parties
on January 24, 2012. On February 24, 2012, CMS filed a Motion for Summary Judgment
and brief (CMS Br.), accompanied by six proposed exhibits (CMS Exs. 1-6). On April
13, 2012, Petitioner filed her response (P. Response) accompanied by nine proposed
exhibits (P. Exs. 1-9). On April 23, 2012, CMS filed a reply (CMS Reply). Absent any
objection, I admit all proposed exhibits into evidence.

II. General Authority

Part B of the Medicare program is a voluntary supplemental insurance program covering
outpatient services. Social Security Act (Act) §§ 1831-1848, 42 U.S.C. §§ 1395j —
1395w-4. The program provides reimbursement for physician services and certain
“medical and other health services” provided by non-physician practitioners, including
physical therapists. See Act § 1861(s), 42 U.S.C. § 1395x(s); Act § 1842(b)(18)(C), 42
U.S.C. § 1395u(b)(18)(C); Act § 1861(bb), 42 U.S.C. § 1395x(bb); Act § 1861 (Il), 42
U.S.C. § 1395x(Il). The entities or individuals furnishing such health care services are
known as “suppliers.” 42 C.F.R. § 400.202.

The Act requires the Secretary to issue regulations establishing a process for the
enrollment of suppliers. Act § 1866(j). To receive payment, a supplier must be enrolled
in the Medicare program. 42 C.F.R. § 424.505. The purpose of the Medicare Part B
enrollment process is to determine a supplier’s eligibility to bill and receive Medicare
payment for health care services. 42 C.F.R. § 424.502 (defining the term “enrollment” to
mean a process for establishing eligibility to submit payment claims to Medicare).

For Medicare purposes, among other requirements, a physical therapist must: (1) be
licensed by the State where practicing, if the State requires licensure; (2) have graduated
after successful completion of an approved physical therapist program; (3) have “passed
an examination for physical therapists approved by the state in which services are
provided.” See 42 C.F.R. §§ 410.60 and 484.4(a). If licensed on or before December
31, 2009, a physical therapist need not pass an examination approved by the state in
which services are provided. 42 C.F.R. § 484.4(b).

Once a physical therapist meets all the requirements to be enrolled in the Medicare
program:

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

42 C.F.R. § 424.520(d).
II. Issue

The issue in this case is whether CMS had a legitimate basis for determining July 11,
2011 as the effective date for Petitioner’s Medicare enrollment and billing privileges.

IV. Discussion
A, This case is appropriate for summary judgment.

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

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . . . The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of

law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. . . . In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
An Administrative Law Judge’s (ALJ’s) role in deciding a summary judgment motion
differs from its role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre
Dame, Inc, DAB No. 2291, at 5 (2009). The Board has further stated, “[i]n addition, it is
appropriate for the tribunal to consider whether a rational trier of fact could regard the
parties’ presentation as sufficient to meet their evidentiary burden under the relevant
substantive law.” Dumas Nursing and Rehab., L.P., DAB No. 2347, at 5 (2010).

CMS has moved for summary judgment arguing that there are no material facts in
dispute. CMS Br. at 2-3. Indeed, Petitioner has not disputed the one critical material fact
in this case, specifically, that until July 11, 2011, Petitioner had not passed an
examination for physical therapists approved by the state in which services are provided.
P. Response at 1. Therefore, summary judgment is appropriate.

B. Petitioner must pass an examination for physical therapists, approved by
the state in which services are provided, to qualify to be enrolled in the
Medicare program.

Petitioner graduated from the University of Rhode Island on May 1, 2011 and received a
temporary license to practice as a physical therapist in Rhode Island, effective from April
21, 2011 through July 20, 2011. The temporary license required that Petitioner take the
next offered Federation of State Boards of Physical Therapy Examination. In the event
that Petitioner failed this examination, her temporary license would be automatically
revoked. CMS Ex. 4, at 1-2. Petitioner began working at her practice group on May 31,
2011 while she had her temporary license. As a physical therapist with a temporary
license, Petitioner was considered a “graduate physical therapist” and was allowed to
“perform as a physical therapist under the supervision of a physical therapist licensed in
this State [Rhode Island].” Rhode Island Department of Health, Rules and Regulations
for Licensing Physical Therapists and Physical Therapist Assistants, part 2, § 3.1(c).
Petitioner took the next offered Federation of State Boards of Physical Therapy
Examination, passed it, and received a permanent license from Rhode Island on July 11,
2011. CMS Ex. 5, at 1.

It is undisputed that when Petitioner began working at her practice group on May 31,
2011, she had not yet taken and passed the Federation of State Boards of Physical
Therapy Examination. Therefore, Petitioner did not meet the requirements to enroll as a
physical therapist in the Medicare program until July 11, 2011 because she had not
“passed an examination for physical therapists approved by the state in which services
are provided.” 42 C.F.R. § 484.4(a). The requirement, for physical therapists licensed
after December 31, 2009, to pass a state approved examination was duly published as a
final rule in the Federal Register after a notice and comment period. See 72 Fed. Reg.
66,328, 66,330-31, 66,406-07 (2007).

Petitioner argues that she did not receive notice of this change in the requirements and
explains that the Medicare Program Integrity Manual (MPIM), CMS Publication 100-08,
erroneously omits the requirement for physical therapists to pass a state approved
examination. She asserts that the MPIM should be controlling on this issue because the
laws are complex, and CMS encourages suppliers to reference its manuals. P. Response
at 3.
Assuming for summary judgment purposes that the CMS manuals were never updated to
reflect the final rule published in the Federal Register on November 27, 2007, I am still
bound by the regulations. Petitioner does not dispute that she became licensed after
December 31, 2009 and that she did not pass the qualifying exam until July 11, 2011.
Although I may be sympathetic to Petitioner’s frustration of referencing an out-of-date
agency manual, I am without authority to require that CMS waive qualifying exam
criteria for physical therapists that are established in the regulations. Further, Medicare
suppliers are presumed to have constructive notice of statutes and regulations that govern
their participation as a matter of law. Manor of Wayne Skilled Nursing & Rehab., DAB
No. 2249, at 10-11 (2009).

Cc. Iam unable to grant Petitioner’s request for an earlier effective date
based on equitable estoppel.

Petitioner maintains that, by relying on guidance that did not require her to pass a state
exam for Medicare eligibility, her effective date imposes an economic hardship on her
practice group and that, with a shortage of physical therapists in Rhode Island, this added
requirement could result in a possible denial of care for Medicare beneficiaries.
Petitioner also suggests her understanding was that other Medicare contractors may have
approved, despite the regulatory requirements, physical therapists’ enrollments in
Medicare without requiring evidence of the passage of a qualifying exam.

Iam unable to grant the relief that Petitioner requests. Petitioner’s arguments amount to
a claim of equitable estoppel. It is well-established by federal case law, and in Board
precedent, that: (1) estoppel cannot be the basis to require payment of funds from the
federal fisc; (2) estoppel cannot lie against the government, if at all, absent a showing of
affirmative misconduct, such as fraud; and (3) I am not authorized to order payment
contrary to law based on equitable grounds. See, e.g., Office of Personnel Mgmt. v.
Richmond, 496 U.S. 414 (1990); Heckler 467 U.S. at 51; Oklahoma Heart Hosp., DAB
No. 2183, at 16 (2008); Wade Pediatrics, DAB No. 2153, at 22 n.9 (2008), aff'd, 567
F.3d 1202 (10th Cir. 2009). Petitioner does not allege any affirmative misconduct here.
V. Conclusion

It is undisputed that Petitioner passed the Rhode Island approved examination for
physical therapists on July 11, 2011. I find it was not until then that she met all the
regulatory Medicare program requirements for enrollment. Therefore, I grant CMS’s
motion for summary judgment and find CMS had a legitimate basis for determining
Petitioner’s effective date for Medicare enrollment and billing privileges.

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Eagle Eye DME, LLC,
(Supplier No. 6286890001),

Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-12-307
Decision No. CR2564

Date: July 10, 2012

DECISION

The Centers for Medicare and Medicaid Services (CMS) revoked Petitioner’s supplier
number. Petitioner, Eagle Eye DME, LLC, appeals, and CMS and Petitioner have filed
cross motions for summary judgment. As discussed below, the uncontroverted facts
compel revocation of Petitioner’s supplier billing number. Therefore, I grant CMS’s
motion for summary judgment and deny Petitioner’s motion for summary judgment.

I. Background

Petitioner was enrolled in the Medicare program as a supplier of durable medical
equipment, prosthetics, orthotics, and supplies (DMEPOS). CMS Ex. 1. A CMS
contractor from the National Supplier Clearinghouse (NSC) attempted to conduct two site
inspections at Petitioner’s location. CMS Ex. 2. At the time of the two inspection
attempts, Petitioner’s posted hours of operation were Monday through Friday, from 9
a.m. to 5 p.m. Jd. The NSC inspector attempted the first site visit on August 12, 2011, at
3:30 p.m. CMS Ex. 2, at 2. He attempted a second site visit on August 17, 2011, at 9:15
a.m. Jd. at 7. The NSC inspector could not complete either site visit because he found
nobody at the site to let him inside. Jd. On September 12, 2011, NSC sent a letter
notifying Petitioner that it was revoking Petitioner’s supplier number effective August 17,
2011, the date CMS determined that Petitioner was not operational. CMS Ex. 1. NSC
barred Petitioner from re-enrolling for two years from this effective date. Id.

The notice letter specifically stated that the basis for the revocation was that Petitioner
was in violation of 42 C.F.R. § 424.535(a)(5)(ii)' because it was closed during posted
hours of operation on August 12 and 17, 2011, when a NSC inspector attempted to
complete site inspections to verify Petitioner’s compliance with supplier standards. Jd. at
2. The notice letter further informed Petitioner of its right to complete a corrective action
plan (CAP) within 30 days, or to request reconsideration of the revocation determination
within 60 days, of the postmark of the notice. Petitioner filed a timely request for
reconsideration, which NSC received on October 31, 2011.2? CMS Ex. 3. On December
16, 2011, the Hearing Officer issued an unfavorable decision and upheld the revocation
of Petitioner’s supplier number because Petitioner was not in compliance with 42 C.F.R.
§ 424.535(a)(5)(ii). CMS Ex. 4.

By submission postmarked January 25, 2012, Petitioner requested a hearing with the
Civil Remedies Division of the Departmental Appeals Board (DAB). With its hearing
request, Petitioner attached several documents.* This case was assigned to me for
decision.

' This subsection states: “(a) Reasons for revocation. CMS may revoke a currently
enrolled provider or supplier’s Medicare billing privileges and any corresponding
provider agreement or supplier agreement for the following reasons: . . . (5) On-site
review. CMS determines, upon on-site review, that the provider or supplier is no longer
operational to furnish Medicare covered items or services, or is not meeting Medicare
enrollment requirements under statute or regulation to supervise treatment of or to
provide Medicare covered items or services for, Medicare patients. Upon on-site review,
CMS determines that -- . . . (ii) A Medicare Part B supplier is no longer operational to
furnish Medicare covered items or services, or the supplier has failed to satisfy any or all
of the Medicare enrollment requirements, or has failed to furnish Medicare covered items
or services as required by the statute or regulations.”

> Petitioner filed a CAP on October 10, 2011. Petitioner however was required to have
the CAP request signed by an authorized official, owner or partner of the business. By
letter dated October 20, 2011, NSC denied the CAP request because the documentation
provided was not signed by an appropriate individual and because the 30 days for
submission of the CAP had passed. ALJ Ex. 2. However, by letter dated November 15,
2011, NSC acknowledged receipt of Petitioner’s request for reconsideration for
revocation of its Medicare supplier number.

* Although Petitioner did not submit these documents as properly marked exhibits when
it filed its motion for summary judgment, I accept them as part of the record and identify
CMS filed its motion for summary judgment accompanied by four exhibits, CMS Exs.
1-4. Pursuant to my Acknowledgment and Pre-hearing Order, Petitioner was directed to
file its pre-hearing exchange by April 4, 2012. When I did not receive a submission from
Petitioner, I issued an Order to Show Cause dated April 24, 2012 indicating that
Petitioner’s failure to file a submission suggests that Petitioner abandoned its hearing
request. I directed that I would consider the hearing request abandoned unless Petitioner,
within ten days of the date of that Order, responded to it with a showing of good cause

for its failure to meet the deadlines and submitted the required briefing if it still desired a
earing. If it did not dispute the facts set forth in CMS’s motion, I directed that Petitioner
should indicate that it would like me to decide the case based upon the written record of
all the documents previously submitted. By postmark dated May 8, 2012, Petitioner’s
owner, Ms. Gurley, filed a response to the Order to Show Cause indicating Petitioner was
also requesting a motion for summary judgment and did not dispute any of the facts CMS
presented.

II. Applicable Law

To receive Medicare payments for items furnished to a Medicare-eligible beneficiary, the
Secretary of the Department of Health and Human Services must issue a supplier number
toa DMEPOS supplier. Social Security Act (Act) § 1834(j)(1)(A). To receive such
direct-billing privileges, a DMEPOS supplier must also meet and maintain each of the 25
supplier enrollments standards set forth in 42 C.F.R. §§ 424.57(c)(1)-(25). Among other
things, a DMEPOS supplier must permit CMS or its agent to conduct on-site inspections
to ascertain supplier compliance with each of these enrollment standards. 42 C.F.R.

§ 424.57(c)(8). A provider or supplier is operational if it “has a qualified physical
practice location, is open to the public for the purpose of providing health care related
services, is prepared to submit valid Medicare claims, and is properly staffed, equipped,
and stocked . . . to furnish these items or services.” 42 C.F.R. § 424.502. In addition, a
DMEPOS supplier “must be accessible during reasonable business hours to beneficiaries
and to CMS, and must maintain a visible sign and posted hours of operation.” 42 C.F.R.
§ 424.57(c)(8). CMS will revoke a currently-enrolled Medicare supplier’s billing

and mark them as follows: Administrative Law Judge (ALJ) Exhibit (Ex.) 1 (Ms.
Gurley’s letter to NSC Hearing Officer Jais); ALJ Ex. 2 (Ms. Gurley’s original unsigned
statement/letter to NSC); ALJ Ex. 3 (November 15, 2011 acknowledgment letter from
Hearing Officer Jais); ALJ Ex. 4 (October 20, 2011 letter from NSC indicating that time
for submitting CAP had passed); ALJ Ex. 5 (September 12, 2011 notice letter from NSC
indicating that Petitioner’s Medicare supplier number is revoked); ALJ Ex. 6 (Telephone
records); ALJ Ex. 7 (Facsimiles received by Petitioner and sent to Petitioner on
September 29, 2011); ALJ Ex. 8 (Petitioner’s DME/Delivery Van Log for August 12 and
August 17, 2011); ALJ Ex. 9 (letters from the community on behalf of Petitioner).
privileges if CMS or its agent determines that the supplier is not in compliance with any
supplier enrollment standard. See 42 C.F.R. § 424.57(d); A to Z DME, LLC, DAB No.
2303, at 3 (2010); see also 1866I1CPayday.com, DAB No. 2289, at 13 (2009) (“[F]ailure
to comply with even one supplier standard is a sufficient basis for revoking a supplier’s
billing privileges.”).

If an on-site visit reveals that a supplier is no longer operational, or otherwise fails to
meet one of the supplier standards, CMS may revoke the supplier’s Medicare billing
privileges. 42 C.F.R. § 424.535(a)(5)(ii). Suppliers who have had their billing privileges
revoked “are barred from participating in the Medicare program from the effective date
of the revocation until the end of the re-enrollment bar,” which is ““a minimum of 1 year,
but not greater than 3 years depending on the severity of the basis for revocation.” 42
CR. § 424.535(c).

III. Issue

The issue is whether CMS is entitled to summary judgment because, when considering
the evidence in the light most favorable to the Petitioner, it is undisputed that CMS had a
legitimate basis to revoke Petitioner’s Medicare billing privileges.

IV. Analysis

My findings of fact and conclusions of law are set forth in italics and bold in the
discussion captions of this decision.

A. This case is appropriate for summary judgment.

CMS filed a Motion for Summary Judgment. Board Members of the Appellate Division
of the DAB (the Board) stated the standard for summary judgment as follows:

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

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an ALJ in deciding a summary judgment motion differs from the ALJ’s role
in resolving a case after a hearing. The ALJ should not assess credibility or evaluate the
weight of conflicting evidence. Holy Cross Vill. at Notre Dame, DAB No. 2291, at 4-5
(2009). The Board has further stated that, “[i]n addition, it is appropriate for the tribunal
to consider whether a rational trier of fact could regard the parties’ presentation as
sufficient to meet their evidentiary burden under the relevant substantive law.” Dumas
Nursing and Rehab., L.P., DAB No. 2347, at 5 (2010). Petitioner has not disputed the
material facts that CMS alleges: no one was present at Petitioner’s location during the
Medicare on-site visits attempted during Petitioner’s posted hours of operation.

B. CMS had a legitimate basis to revoke Petitioner’s supplier number
because Petitioner was not operational.

On August 12, 2011, at 3:30 p.m., the NSC inspector attempted to conduct an
unannounced site inspection on behalf of CMS at Petitioner’s location during its posted
hours of operation. However, he found that he could not enter because the office was
closed. He noted that the door sign indicated that office hours were Monday through
Friday, 9 a.m. through 5 p.m. He also knocked on the door, but there was no response.
There was no note on the door to indicate why the business was not open. He also took
date-stamped photographs. CMS Ex. 2, at 2,9. On August 17, 2011, at 9:15 a.m., the
inspector made a second attempt; however, the door was locked again. He knocked on
the door, but no one appeared to be inside the office. He took date-stamped photographs.
There was no note on the door to explain why the business was not open. He departed at
around 9:21 a.m. CMS Ex. 2, at 7, 9-10. Petitioner clearly did not have any staff at the
store to allow access to the inspector, nor was the store “open” on these two occasions for
business during posted hours of business.

Petitioner’s owner states, that at the time of the two site visits, she was absent from the
office due to a family illness. She explained that she had two full-time employees who
were assisting her as well as a part-time, as-needed, delivery technician. At the time of
the two site visits her two full-time employees were needed to deliver and repair
equipment to patients. CMS Ex. 3, at 39, 42; CMS Ex. 2, at 9-10. I will accept these
facts as true for purposes of summary judgment.

Petitioner also presented certain documents in an effort to show that someone was at the
office on the dates of the two site visits but, perhaps due to making deliveries, was just
not present at the time the inspector came for the site visits. With its hearing request,
Petitioner submitted telephone records showing that someone made telephone calls from
Petitioner’s location on August 17. ALJ Ex. 6. I note, however, that no telephone calls
were made on August 12, 2011, and no calls were made on August 17 prior to 3:47 p.m.
or after 4:01 p.m. Thus, these records do not present a dispute of fact as to whether
anyone was present when the inspector attempted the on-site visits.
For a supplier to be “operational,” it must be “open to the public for the purpose of
providing health care related services . . . and [be] properly staffed . . . to furnish these
services.” 42 C.F.R. § 424.502 (emphasis added). Among other things, a DMEPOS
supplier must permit CMS or its agent to conduct on-site inspections to ascertain supplier
compliance with each of the enrollment standards, and the supplier must be “accessible
during reasonable business hours to beneficiaries and to CMS.” 42 C.F.R. §
424.57(c)(8) (emphasis added). A supplier is neither “open to the public” nor
“accessible,” if the supplier location is closed due to staff making patient deliveries or
sales calls. It is incumbent on Petitioner to make whatever reasonable arrangements are
necessary to keep its business open while allowing for patient deliveries. “A Medicare
supplier differs from a strictly private business in that it is an integral part of a publicly
run program. The requirement that a supplier be open at all times during normal business
hours reflects CMS’s determination that a supplier be available to beneficiaries to meet
their needs and to alleviate their medical conditions.” A to Z DME, LLC, DAB CR1995,
at 6 (2009), aff'd A to Z DME, LLC, DAB No. 2303 (2010).

The Board also has held that the supplier standard “would have no meaning if suppliers
could deviate from their posted hours of operation on a regular basis.” [ta Udeobong,
d/b/a/ Midland Care Med. Supply and Equipment, DAB No. 2324, at 7 (2010). In
Udeobong, the petitioner admitted that it was closed from noon until 1:00 p.m. every day
for lunch, which was outside of its regularly posted hours of 10 a.m. to 5 p.m., Monday
through Friday. The Board further held that “‘[t]his problem would not be cured even if. .
. its employees posted temporary signs when they left, stating when they would return.”
Id. CMS and its contractors have limited resources and cannot be compelled to attempt
multiple on-site inspections during a supplier’s posted business hours to determine if a
supplier is complying with all Medicare requirements.

C. Iam unauthorized to grant Petitioner’s requests for equitable relief
for enrollment because it did not meet the legal requirements for
enrollment.

Petitioner makes various arguments for equitable relief despite acknowledging that
Petitioner did not meet the legal requirements for being open during posted business
hours on the dates and times of the two attempted site visits. Petitioner argued that she
had to care for a sick family member, and she also obtained several written statements
from customers and from the mayor of a neighboring town who support the business.
However, Petitioner never disputed that no one was in fact available at the business
location or claimed that the inspector was at the wrong address.

Even though I may sympathize with Petitioner’s predicaments, I am without authority to
order CMS to provide an exemption to Petitioner under the circumstances because
Petitioner’s equitable arguments give me no grounds to restore her billing privileges. See
US Ultrasound, DAB No. 2302, at 8 (2010) (“[nJeither the ALJ nor the Board is
authorized to provide equitable relief by reimbursing or enrolling a supplier who does not
meet statutory or regulatory requirements.”). Moreover, I have no authority to declare
statutes or regulations invalid or ultra vires. 1866/CPayday.com, L.L.C., DAB No. 2289,
at 14 (2009) (“[a]n ALJ is bound by applicable laws and regulations and may not
invalidate either a law or regulation on any ground.”).

V. Conclusion

I find the undisputed facts establish Petitioner was not operational when it was not open
and accessible on two separate occasions during its posted hours of operation. I grant
CMS’s motion for summary judgment, I deny Petitioner’s motion for summary judgment,
and I sustain the revocation of Petitioner’s supplier number for direct Medicare billing
privileges. Accordingly, Petitioner is barred from re-enrolling for two years from the
effective date of its revocation.

/s/
Joseph Grow
Administrative Law Judge