Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant
v.
Family Diskount Food Stores Inc.,
Respondent.
Docket No. C-15-2662
FDA Docket No. FDA-2015-H-1834
Decision No. CR4641
Date: June 23, 2016
INITIAL DECISION
I sustain the determination of the Center for Tobacco Products (CTP) of the
United States Food and Drug Administration (FDA) to impose a civil money
penalty of $250 against Respondent, Family Diskount Food Stores, Inc.
I. Background
Respondent requested a hearing in order to challenge CTP’s determination to
impose a $250 civil money penalty against it. I held a hearing by telephone on
April 12,2016. At the hearing I received exhibits into evidence from CTP that are
identified as CTP Ex. 1-CTP Ex. 9. I heard the cross-examination testimony of
James Naso, an inspector working on behalf of CTP. I also received into evidence

exhibits offered by Respondent that are identified as R. Ex. 1-R. Ex. 10.

CTP and Respondent filed briefs in support of their positions.
II. Issues, Findings of Fact and Conclusions of Law
A. Issues

The issues are whether Respondent violated regulations governing the sale of
tobacco products to minors and whether a civil money penalty of $250 is
reasonable.

B. Findings of Fact and Conclusions of Law

CTP determined to impose a civil money penalty against Respondent pursuant to
the authority conferred by the Federal Food, Drug, and Cosmetic Act (Act) and
implementing regulations at Part 21 of the Code of Federal Regulations (C.F.R.).
The Act prohibits the misbranding of tobacco products while they are held for sale
after shipment in interstate commerce. 21 U.S.C. § 331(k). FDA and its agency,
CTP, may seek civil money penalties from any person who violates the Act’s
requirements as they relate to the sale of tobacco products. 21 U.S.C. § 331(f)(9).
The sale of tobacco products to an individual who is under the age of 18 and the
failure to verify the photographic identification of an individual who is not over
the age of 26 are violations of implementing regulations. 21 C.F.R.

§§ 1140.14(a), (b)(1).

There is no dispute that Respondent offers tobacco products for sale to the public.
At issue in this case is whether Respondent unlawfully: sold tobacco products to a
minor; and failed to check the identification of a minor purchaser of tobacco
products.

CTP’s case against Respondent rests on Mr. Naso’s testimony as well as
corroborating evidence. CTP Ex. 4. Mr. Naso testified that he visited
Respondent’s establishment on September 16, 2014 and January 27, 2015 in the
company of a minor who was employed for the specific purpose of ascertaining
whether retailers sold tobacco products to minors. He testified that on both
occasions he verified that the minor had no tobacco products on her person before
entering Respondent’s establishment. Id. at 3-4. Mr. Naso averred that, on
September 16, he observed the minor enter the store and return with a package of
Camel Crush Menthol cigarettes. On January 27, he observed the minor enter the
store and return with a package of Marlboro Gold Pack cigarettes. Id. Mr. Naso
labeled the packages of cigarettes and photographed them. The photographs are in
evidence as attachments to CTP Ex. 4. Finally, Mr. Naso testified that, on
September 16, the minor reported to him that Respondent’s employee had not
verified her identification.
I find Mr. Naso’s testimony to be credible and to be corroborated by photographic
proof that the minor purchased cigarettes from Respondent on September 16, 2014
and January 27,2015. Mr. Naso’s testimony establishes that the minor had no
cigarettes on her possession before entering the store on both occasions and had
cigarettes upon leaving that establishment. Mr. Naso continuously observed the
store while the minor was inside, eliminating the possibility that the minor could
have obtained the cigarettes somewhere else while Mr. Naso awaited her return.
Consequently, the only reasonable inference that I can draw from the evidence is
that the minor obtained cigarettes from someone in the store. It is also reasonable
to infer that a store employee failed to check the minor’s identification on
September 16, 2014 because that identification showed the minor to be underage.
l infer that the store’s employee would not have sold cigarettes to someone so
early identified as a minor on that occasion.

fe)

Respondent asserts that it is being victimized by a government conspiracy to
mpose civil money penalties on it and other retailers. In my opening remarks at
the hearing of this case I ruled that Respondent had offered no credible evidence
an alleged conspiracy. Respondent has not revived that argument.

°

Respondent also asserts that Mr. Naso’s testimony is unreliable. At the hearing it
argued that Mr. Naso could not have been certain that the minor was not carrying
cigarettes prior to entering Respondent’s establishment because Mr. Naso did not
physically search the minor. However, Mr. Naso testified that the minor was
wearing jeans that would have crushed any package of cigarettes that she
possessed prior to entering the store and that the cigarettes that she produced upon
exiting the establishment were not crushed. Tr. at 11-12. I find that this testimony
buttresses Mr. Naso’s credibility.

Respondent also asserts that the minor’s recollection of what occurred in its
establishment is unreliable hearsay. I agree that it is hearsay. However, I do not
rely on the minor’s account to find that Respondent sold cigarettes to her and
failed to check her identification. I find that CTP established its case based
entirely on what Mr. Naso observed personally coupled with the corroborating
evidence that I have discussed.

Respondent contends that the initials marking the two packages of cigarettes are
different, suggesting that there was some sort of tampering with the evidence. I
find no basis for that assertion. The credible evidence is that after the purchases
Mr. Naso sealed both packages of cigarettes in plastic containers and that he
personally signed the containers. CTP Ex. 4, attachments.

CTP elected to impose a civil money penalty of $250 against Respondent. That is
the maximum allowed for Respondent’s violations and I find it to be reasonable.
The evidence proves that Respondent’s employees willfully sold a dangerous
product — cigarettes — to a minor on two occasions. The willfulness of
Respondent’s actions is sufficient to justify the penalty amount. Respondent has
not proven that it lacks the wherewithal to pay the civil money penalty.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Reginald Eugene Smith,

(OI File No. 5-12-40194-9),
Petitioner,

v.

The Inspector General.

Docket No. C-16-164
Decision No. CR4640

Date: June 22, 2016

DECISION

Petitioner, Reginald Eugene Smith, was a licensed practical nurse in the State of
Michigan who became embroiled in one of Detroit’s home health agency kickback
schemes. He was convicted on felony counts of conspiracy to commit health care fraud
and conspiracy to offer, pay, solicit, and receive kickbacks. Based on his convictions, the
Inspector General (IG) has excluded him for ten years from participating in the Medicare,
Medicaid, and all federal health care programs, as authorized by section 1128(a)(1) of the
Social Security Act (Act). Petitioner now challenges the exclusion.

For the reasons discussed below, I find that the IG properly excluded Petitioner and that
the ten-year exclusion falls within a reasonable range.

Background
In a letter dated October 30, 2015, the IG notified Petitioner that he was excluded from

participating in Medicare, Medicaid, and all federal health care programs for a period of
ten years because he had been convicted of a criminal offense related to the delivery of an
item or service under Medicare or a state health care program. The letter explained that
section 1128(a)(1) of the Act authorizes the exclusion. IG Ex. 1. Petitioner timely
requested review.

Each party submitted a written argument (IG Br.; P. Br.). The IG submitted four exhibits
(IG Exs. 1- 4) and a reply brief (IG Reply). Petitioner submitted two exhibits (P. Exs. 1-
2). In the absence of any objection, I admit into evidence IG Exs. 1-4 and P. Exs. 1-2.

The parties agree that an in-person hearing is not necessary. IG Br. at 14; P. Br. at 4.
Discussion

1. Petitioner Smith must be excluded from program
participation, because he was convicted of a criminal
offense related to the delivery of an item or service under
Medicare or a state health care program, within the
meaning of section 1128(a)(1) of the Act.!

Under section 1128(a)(1) of the Act, the Secretary of Health and Human Services must
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(a).

Here, Petitioner Smith was a “recruiter” for Angle’s Touch Home Health Agency, a
Medicare-certified home health agency that claimed to provide in-home physical therapy,
occupational therapy, speech pathology, and skilled nursing services to homebound
Medicare beneficiaries. IG Ex. 3 at 4-5 (Indictment §§ 10, 15). In fact, the home health
agency defrauded the Medicare program by billing for services that were not necessary or
were not provided to individuals who, in any event, did not need them. IG Ex. 3 at 7-10
(Indictment §§ 20-32). Petitioner Smith participated in the scheme by recruiting
Medicare beneficiaries as home health agency “patients,” even though those he recruited
were not homebound and did not need home health services, as Petitioner well knew.

IG Ex. 3 at 9 (Indictment § 28). For each “patient” recruited, his co-conspirators paid
him kickbacks and bribes. IG Ex. 3 at 9, 17-19 (Indictment §§ 28, 46-54).

An indictment, filed in federal district court on March 6, 2014, charged Petitioner Smith
and others with various felonies. Petitioner was charged with one count of conspiracy to
commit health care fraud and one count of conspiracy to offer, pay, solicit, and receive

' My findings of fact and conclusions of law are set forth, in italics and bold, in the
discussion captions of this opinion.
kickbacks (18 U.S.C. §§ 371, 1349). IG Ex. 3 at 6-10, 15-19 (Indictment §§ 18-32, 40-
54). On February 25, 2015, a jury convicted him on both counts. IG Ex. 2. The court
subsequently entered judgment against him on those counts, sentenced him to 20 months
in prison, and ordered him to pay the Medicare Trust Fund $224,533.26 in restitution.
IG Ex. 4.

Petitioner concedes, as he must, that he was convicted of a criminal offense, but he
argues that “the conviction has been brought into question,” i.e. he has appealed, so any
sanctions derived from that conviction “must be reviewed as well.” P. Br. Attachment 2-
3 of 8; see P. Ex. 1. But the Act specifically provides that a pending appeal is irrelevant
to whether an individual has been convicted: “[A]n individual . . . is considered to have
been ‘convicted’ of a criminal offense . . . regardless of whether there is an appeal
pending ....” Act § 1128(i); see 42 C.F.R. § 1001.2.

Petitioner also complains that he is being held responsible for the misconduct of others.
P. Br. Attachment 3 of 8; see P. Ex. 1. Petitioner was convicted on two felony counts.
He cannot, in this forum, claim innocence for any reason, including the misconduct of
others. Federal regulations explicitly preclude such a collateral attack:

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

42 CFR. § 1001.2007(d); Joann Fletcher Cash, DAB No. 1725 (2000); Chander
Kachoria, R.Ph., DAB No. 1380 at 8 (1993) (“There is no reason to ‘unnecessarily
encumber the exclusion process’ with efforts to reexamine the fairness of state
convictions.”); Young Moon, M.D., DAB CR1572 (2007).

Inasmuch as he was convicted of conspiracy to commit health care fraud and conspiracy
to offer, pay, solicit, and receive kickbacks — which was part of the scheme to defraud
Medicare — his crimes plainly meet the requirement that they be related to the Medicare
program.

Petitioner was thus convicted of program-related crimes and must be excluded for at least
five years. I now consider whether the length of his exclusion, beyond five years, falls
within a reasonable range.

2. Based on the aggravating factors present in this case, the
ten-year exclusion falls within a reasonable range.
An exclusion under section 1128(a)(1) must be for a minimum period of five years. Act
§ 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2). Federal regulations set
forth criteria for lengthening exclusions beyond the five-year minimum. 42 C.F.R.

§ 1001.102(b). Evidence that does not pertain to one of the aggravating or mitigating
factors listed in the regulations may not be used to decide whether an exclusion of a
particular length is reasonable.

Among the factors that may serve as bases for lengthening the period of exclusion are
three relied on by the IG in determining the length of Petitioner’s exclusion here: 1) the
acts resulting in the conviction, or similar acts, resulted in a financial loss to Medicare or
state health care programs of $5,000 or more; 2) the acts that resulted in the conviction,
or similar acts, were committed over a period of one year or more; and 3) the sentence
imposed by the court included incarceration. 42 C.F.R. § 1001.102(b)(1), (2), (5). The
presence of an aggravating factor or factors not offset by any mitigating factor or factors
justifies lengthening the mandatory period of exclusion.

Program financial loss (42 C.F.R. § 1001.102(b)(1)): Petitioner’s actions resulted in
program financial losses almost 45 times greater than the $5,000 threshold for
aggravation. The sentencing judge ordered him to pay $224,533.26 in restitution. IG Ex.
4 at 5. Restitution has long been considered a reasonable measure of program losses.
Jason Hollady, M.D., DAB No. 1855 (2002). Because the financial losses were
significantly in excess of the threshold amount for aggravation, the IG may justifiably
increase significantly Petitioner’s period of exclusion. See Jeremy Robinson, DAB No.
1905 (2004); Donald A. Burstein, Ph.D., DAB No. 1865 (2003).

Length of criminal conduct (42 C.F.R. § 1001.102(b)(2)). Petitioner was convicted of
offenses that began “in or about” July 2010 and continued through at least February
2012. IG Ex. 3 at 6, 152 Thus, the acts that resulted in Petitioner’s conviction and
similar acts were committed over a period that well exceeded the one year necessary to
constitute an aggravating factor. See Jeremy Robinson, DAB No. 1905 at 7, citing
Donald A. Burstein, Ph.D., DAB No. 1865 at 12 (finding that wrongful acts committed
over “slightly more” than a year justified increasing the period of exclusion).

> Trecognize that the face of the judgment indicates that Petitioner’s criminal conduct
continued until May 2013 (IG Ex. 4 at 1), but I could not find, in the indictment or
judgment, any reference to Petitioner’s individual acts occurring after February 2012. On
the other hand, the conspiracy continued well beyond February 2012 (see IG Ex. 3 at 20;
IG Ex. 4 at 1), and Petitioner, as a co-conspirator, can be held accountable for the illegal
acts of his cohorts in furtherance of the conspiracy. But inasmuch as his part in the
criminal enterprise exceeded the one year necessary to establish aggravation, I need not
address this point.
Incarceration (42 C.F.R. § 1001.102(b)(5)). The criminal court sentenced Petitioner to a
substantial period of incarceration — 20 months — which underscores the seriousness of
his crimes. IG Ex. 4 at 2.

No mitigating factors. The regulations consider mitigating just three factors: 1) a
petitioner was convicted of three or fewer misdemeanor offenses and the resulting
inancial loss to the program was less than $1,500; 2) the record in the criminal
proceedings demonstrates that the court determined that a petitioner had a mental,
physical, or emotional condition that reduced his culpability; and 3) a petitioner’s
cooperation with federal or state officials resulted in others being convicted or excluded,
or additional cases being investigated, or a civil money penalty being imposed. 42 C.F.R.
§ 1001.102(c). Characterizing the mitigating factor as “in the nature of an affirmative
defense,” the Departmental Appeals Board has ruled that a petitioner has the burden of
proving any mitigating factor by a preponderance of the evidence. Barry D. Garfinkel,
M.D., DAB No. 1572 at 8 (1996).

Obviously, because Petitioner was convicted of felonies, the first factor does not apply
here. Nor does this record suggest that Petitioner had a mental, physical, or emotional
condition that reduced his culpability. I see no suggestion that he cooperated with federal
or state officials in any respect.

Thus, no mitigating factor offsets the significant aggravating factors present in this case.
Conclusion

Petitioner must be excluded for at least five years because he was convicted of felonies
related to the delivery of items and services under Medicare.

So long as the period of exclusion is within a reasonable range, based on demonstrated
criteria, I have no authority to change it. Joann Fletcher Cash, DAB No. 1725 at 7,
citing 57 Fed. Reg. 3298, 3321 (1992). In this case, Petitioner’s crime demonstrates that
he presents significant risks to the integrity of health care programs. For an extended
period of time, he engaged in illegal conduct that cost the Medicare program a significant
amount of money. He was sentenced to a lengthy period of time in jail. No mitigating
factors offset these aggravating factors.
For these reasons, I conclude that the IG properly excluded Petitioner from participation
in Medicare, Medicaid and all federal health care programs, and I sustain as reasonable
the ten-year period of exclusion.

/s/

Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Eduardo Miranda, M.D.,

(OI File No. H-14-4-3117-9),
Petitioner,

v.

The Inspector General.

Docket No. C-15-3603

Decision No. CR4639

Date: June 21, 2016

DECISION

Petitioner, Eduardo Miranda, is a physician who practices in the State of Texas. The
parties agree that he was convicted of introducing misbranded drugs into interstate
commerce and, pursuant to section 1128(a)(1) of the Social Security Act (Act), must be
excluded from participating in federal health care programs for a minimum period of five
years. The Inspector General (IG) wishes to exclude him for thirteen years. Petitioner
challenges the length of that exclusion, arguing that thirteen years is excessive and
unreasonable.

For the reasons set forth below, I find that a thirteen-year exclusion is reasonable.
Background

In a letter dated May 29, 2015, the IG advised Petitioner Miranda that he was excluded
from participating in Medicare, Medicaid, and all federal health care programs for a

minimum period of thirteen years because he had been convicted of a criminal offense
related to the delivery of an item or service under Medicare or a state health care
program. The letter explained that section 1128(a)(1) of the Act authorizes the exclusion.
1G. Ex. 1. Petitioner timely requested review.

The IG has submitted his brief (IG Br.) and four exhibits (IG Exs. 1-4). Petitioner
submitted a brief (P. Br.), along with twenty exhibits. (P. Exs. 1-20). The IG filed a
reply brief (IG Reply). In the absence of any objection, I admit into evidence IG Exs. 1-4
and P. Exs. 1-20.

The parties agree that an in-person hearing is not necessary in order to decide this case.
IG Br. at 9; P. Br. at 10. The parties also agree that Petitioner Miranda was convicted of
a crime related to the delivery of an item or service under Medicare or a state health care
program and must be excluded from program participation for at least five years. IG Br.
at 1; P. Br. at 1, 2-3; see Order and Schedule for Filing Briefs and Documentary Evidence
at 2 (December 2, 2015); Act §§ 1128(a)(1), (c)(3)(B). Because the parties agree that the
IG has a basis upon which to exclude Petitioner from program participation, the sole
issue before me is whether the length of the exclusion is reasonable. 42 C.F.R.

§ 1001.2007.

Discussion

Based on the aggravating factors and the absence of any
mitigating factors, a thirteen-year exclusion is
reasonable.

Here, Petitioner Miranda practiced as an oncologist, providing medical services to cancer
patients. P. Ex. 1 at 1. He ordered, prescribed, and administered oncology drugs that
were not Food and Drug Administration (FDA)-approved; they came from a foreign
source. Petitioner Miranda then billed Medicare, Medicaid, and a private insurance
program (Blue Cross/Blue Shield) for the drugs. He billed approximately $3.4 million,
and the various programs reimbursed him more than $1 million. IG Ex. 3 at 1-2; P. Ex. 1
at 1-2; see IG Ex. 2 at 4; IG Ex. 4 at 9.

Petitioner pled guilty in federal district court to one misdemeanor count of introducing
misbranded drugs into interstate commerce, in violation of 21 U.S.C. §§ 331(a), 352(f),
and 18 U.S.C. § 2. IG Ex. 2 at 1. The court entered judgment against him on November
25, 2014, sentenced him to five years probation, and ordered him to pay the health care
programs $1,004,438.50 in restitution. IG Ex. 2 at 1,2, 42

' T make this one finding of fact/conclusion of law.

> The court assessed the program losses as follows: Blue Cross Blue Shield of Texas lost
$403,966.99; the Medicaid program lost $361,959.31; and the Medicare program lost
$238,512.20. IG Ex. 2 at 4.
Under section 1128(a)(1) of the Act, the Secretary of Health and Human Services must
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(a). An exclusion brought under section 1128(a)(1) must
be for a minimum period of five years. Act § 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a);
1001.2007(a)(2). Federal regulations set forth criteria for lengthening exclusions beyond
the five-year minimum. 42 C.F.R. § 1001.102(b). Evidence that does not pertain to one
of the aggravating or mitigating factors listed in the regulations may not be used to decide
whether an exclusion of a particular length is reasonable.

Among the factors that may serve as a basis for lengthening the period of exclusion are
the two that the IG relies on in this case: 1) the acts resulting in the conviction, or similar
acts, caused a government program or another entity financial losses of $5,000 or more;
and 2) the acts that resulted in the conviction, or similar acts, were committed over a
period of one year or more. 42 C.F.R. § 1001.102(b)(1) and (2). The presence of an
aggravating factor or factors, not offset by any mitigating factor or factors, justifies
lengthening the mandatory period of exclusion.

Program financial loss (42 C.F.R. § 1001.102(b)(1)): The sentencing court found that
Petitioner’s crime caused $1 004,438.50 in program losses and ordered him to pay that
amount in restitution to Medicare, Medicaid, and Blue Cross/Blue Shield. IG Ex. 2 at 4.
At a minimum, then, Petitioner’s crimes cost these insurers significant financial losses —
200 times greater than the $5,000 threshold for aggravation — and the IG may justifiably
increase significantly Petitioner’s period of exclusion. See Jeremy Robinson, DAB No.
1905 (2004); Donald A. Burstein, Ph.D., DAB No. 1865 (2003).

Petitioner concedes that he paid the restitution but claims that he did so “pursuant to his
plea agreement” and “in his continued spirit of cooperation ....” P. Br. at 4. Why
Petitioner pled guilty and agreed to pay restitution is irrelevant. Moreover, although
restitution has long been considered a reasonable measure of program losses because one
could infer the loss based on the amount of restitution paid, where, as here, the court’s
judgment explicitly determined the program losses, I need not rely on the restitution
amount to infer the amount of the loss. That amount has been firmly established by the
court, and I will not disturb the court’s finding. See 42 C.F.R. § 1001.2007(d)
(precluding a collateral attack on the court’s judgment “where the facts were adjudicated
and a final decision was made”); see also Juan de Leon, Jr., DAB No. 2533 at 5 (2013);
Jason Hollady, M.D., DAB No. 1855 (2002) (finding the amount of restitution ordered a
reasonable measure of program losses).

Petitioner also asserts that the restitution he paid to the private insurer (Blue Cross/Blue
Shield) is of no significance because it does not represent a financial loss to a government
program. P. Br. at4n.2. The regulation that defines aggravating factors does not limit
itself to financial losses to government programs. It considers aggravating losses of
$5,000 or more “to a [g]overnment program or to one or more entities.” 42 C.F.R.
§1001.102(b)(1) (emphasis added). Losses to a private insurer fall within this broad
definition. See, e.g., Jeremy Robinson, DAB No. 1905 at 8 (determining that a $205,000
loss to private insurance companies supported a fifteen-year exclusion).

Length of criminal conduct (42 C.F.R. § 1001.102(b)(2)). In his guilty plea, Petitioner
conceded that his criminal activity began “[o]n or about October 1, 2007” and continued
“through January 28, 2009.” IG Ex. 3 at 5; P. Ex. 1 at 5; see IG Ex. 4 at 6. Thus, the acts
that resulted in Petitioner’s conviction and similar acts were committed over a period that
exceeded the one year necessary to constitute an aggravating factor. See Jeremy
Robinson, DAB No. 1905 at 12, citing Donald A. Burstein, Ph.D., DAB No. 1865 at 12
(finding that wrongful acts committed over “slightly more” than a year justified
increasing the period of exclusion).

No mitigating factors. The regulations consider mitigating just three factors: 1) a
petitioner was convicted of three or fewer misdemeanor offenses and the resulting
financial loss to the program was less than $1,500; 2) the record in the criminal
proceedings demonstrates that the court determined that a petitioner had a mental,
physical, or emotional condition that reduced his culpability; and 3) a petitioner’s
cooperation with federal or state officials resulted in others being convicted or excluded,
or additional cases being investigated, or a civil money penalty (CMP) being imposed.
42 CFR. § 1001.102(c). Characterizing the mitigating factor as “in the nature of an
affirmative defense,” the Departmental Appeals Board has ruled that a petitioner has the
burden of proving any mitigating factor by a preponderance of the evidence. Barry D.
Garfinkel, M.D., DAB No. 1572 at 8 (1996).

Obviously, because Petitioner’s crime resulted in financial losses far in excess of $1,500,
the first factor does not apply here. Nor does Petitioner claim any mental, physical, or
emotional condition that reduced his culpability.

Petitioner suggests that the third mitigating factor applies because he “immediately”
cooperated with the FDA and with federal prosecutors, answering their questions
“without hesitation” and sparing them from investigating further or going to trial. P. Br.
at 10. Petitioner is entitled to no special consideration simply because he cooperated with
authorities in his own case. The regulation requires that his cooperation result in others
being convicted or excluded, additional cases being investigated, or a CMP being
imposed. Petitioner must show that he provided information that resulted in the
investigation of a new target. Marcia C. Smith, DAB No. 2046 at 9-11 (2006).

Petitioner also attempts to minimize the significance of his crime. He points out that he
was convicted under a strict liability statute and claims that he did not realize that he was
ordering drugs from a foreign distributor. He argues that his actions posed no threat to
his patients because the foreign drugs were exactly the same as medications distributed
by suppliers in the United States, except that they lacked FDA-required language (“Rx
only”); did not include National Drug Code numbers found on FDA-approved versions;
and included package inserts in languages other than English. How he can be so sure that
a non-FDA-approved drug is exactly the same as an FDA-approved drug is a mystery.
Moreover, he concedes that these drugs bore indicia of illegitimacy — lacking FDA-
required language and National Drug Code numbers, and with package inserts written in
a foreign language — which undermines his claims of ignorance. But even accepting that
he was not aware of the drugs’ origins does not mean that he is not a threat to federal
health care programs. His actions were either deliberate or negligent, and a negligent
physician can do much harm.

Petitioner also points out that the IG granted a limited waiver of his exclusion so that he
could continue to provide oncology services in a medically-underserved area. P. Br. at
11. The waiver provision, 42 C.F.R. § 1001.1801(b), authorizes the IG to grant or deny a
state health care program’s request that exclusion be waived “if the individual . . . is the
sole community physician or the sole source of essential specialized services in a
community.” The IG’s waiver under section 1001.1801 does not establish that an
individual is trustworthy or a low risk to federal healthcare programs and is not a relevant
factor in determining whether an exclusion period is reasonable. See Vinod
Chandrashekhar Patwardhan, M.D., DAB No. 2454 at 8 (2012).

Petitioner also cites the decision of the Texas Medical Board to buttress his argument that
he poses no threat to federal healthcare programs. P. Ex. 2. On November 7, 2014, the
medical board imposed a remedial plan requiring Petitioner to participate in remedial
education, take and pass the board’s medical jurisprudence examination, and pay $500
per year to cover the board’s costs in administering the plan. The medical board’s actions
are not a mitigating factor. To the contrary, “any other adverse action” by a federal, state,
or local government agency or board is an aggravating factor, if based on the same set of
circumstances that serve as the basis for imposing the exclusion. 42 C.F.R.

§ 1001.102(b)(9) (emphasis added). That the IG opted not to invoke this factor does not
render it mitigating.

Finally, Petitioner offers letters and other evidence attesting to his good character and
service to the community. Under the regulations, these do not create mitigating factors.

Thus, no mitigating factor offsets the aggravating factors present in this case.
Conclusion
So long as the period of exclusion is within a reasonable range, based on demonstrated

criteria, I have no authority to change it. Joann Fletcher Cash, DAB No. 1725 at 7
(2000), citing 57 Fed. Reg. 3298, 3321 (1992). The record in this case establishes that
Petitioner committed a crime over a long period of time that caused significant financial
losses to healthcare programs. Based on these aggravating factors, and, in the absence of
any mitigating factors, I find that the thirteen-year exclusion falls within a reasonable
range.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


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

Christy Nichols Frugia,
(O.1. File No. H-15-4-2625-9),

Petitioner,
v.
The Inspector General.
Docket No. C-16-300
Decision No. CR4638

Date: June 21, 2016

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner,

Christy Nichols Frugia, from participating in Medicare, State Medicaid, and other
federally funded health care programs for a period that is coterminous with her loss of her
licenses to provide health care as a registered nurse and a vocational nurse in the State of
Texas.

I. Background

Petitioner requested a hearing in order to challenge the I.G.’s exclusion determination.
During the pendency of this case I extended the parties’ deadlines so that Petitioner could
supply the I.G. with additional information concerning her exclusion and the I.G. could
consider it. The I.G. declined to withdraw or modify his determination based on what
Petitioner submitted. The I.G. then filed a brief in support of the exclusion determination
plus three exhibits that are identified as I.G. Ex. 1-I.G. Ex. 3. Petitioner filed a brief in
opposition. Neither party requested an in-person hearing. I receive the I.G.’s exhibits
into the record.
II. Issues, Findings of Fact and Conclusions of Law
A. Issues

The issues are whether section 1128(b)(4)(B) of the Social Security Act (Act) authorizes
the I.G. to exclude Petitioner, and whether the length of the exclusion is reasonable.

B. Findings of Fact and Conclusions of Law

Section 1128(b)(4)(B) of the Act authorizes the I.G. to exclude anyone who surrenders a
license to provide health care to a State licensing authority while a formal disciplinary
proceeding was pending that concerned that individual’s professional competence,
professional performance, or financial integrity.

The facts of this case are unequivocal. On June 3, 2015, Petitioner, who was licensed to
provide nursing care in the State of Texas, voluntarily surrendered her licenses as a
vocational nurse and a registered nurse to that State’s licensing authority, the Texas
Board of Nursing (Board), because she wished to avoid exposure to controlled
substances. I.G. Ex. 3 at 6. Petitioner’s surrender of her licenses culminated a series of
proceedings before the Board concerning her professional competence and performance.
These proceedings extend back to 2007. Then, she entered into an agreement with the
Board in which she promised to abstain from the consumption of alcohol. I.G. Ex. 3 at
25-39. On June 15, 2011, Petitioner voluntarily surrendered her licenses in the face of
proceedings before the Board concerning her alleged “intemperate use of alcohol.” Id. at
20. On May 2, 2012, Petitioner signed a reinstatement order with the Board that
conditioned the reinstatement of her licenses on certain conditions and stipulations. Id. at
7-17. However, in 2015, the Board found that Petitioner had become noncompliant with
two of the conditions of the reinstatement agreement. Id. at 3. That finding precipitated
Petitioner’s June 2015 license surrender.

Petitioner plainly surrendered her nursing licenses while formal disciplinary proceedings
were pending against her and these proceedings involved her inability to comply with
conditions stemming from her history of substance abuse. As Petitioner admitted in her
June 2015 license surrender, she surrendered her licenses because she wished to avoid
exposure to controlled substances. The facts of this case satisfy the requirements of
section 1128(b)(4)(B) of the Act and the I.G. had authority to exclude Petitioner pursuant
to that section.

The I.G. made Petitioner’s exclusion coterminous with her loss of her nursing licenses.
That is consistent with the Act and regulatory requirements governing exclusions
imposed pursuant to section 1128(b)(4)(B), which require that an exclusion under that
section will be for a period that is not less than the period of license revocation or
suspension. Act § 1128(c)(3)(E); 42 C.F.R. § 1001.501(b)(1).
Petitioner does not assert that the I.G. lacked authority to exclude her. Rather, she asserts
that the I.G. abused his discretion in excluding her because he failed to take into account
nonbinding guidelines that the I.G. published in 1997 that ostensibly established criteria
for determining whether to exclude an individual under any of the Act’s permissive
authorities, including section 1128(b)(4)(B). I have no authority to consider this
argument. The I.G.’s determination to exclude Petitioner was an act of discretion. An
administrative law judge does not have the authority to review the I.G.’s exercise of
discretion to exclude an individual under any of the subsections of section 1128(b) or to
determine the scope or effect of any exclusion that the I.G. imposes. 42 C.F.R. §
1005.4(c)(5).

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Mohamed Basel Aswad, M.D.,

(OI File No. H-15-42738-9),
Petitioner,

v.

The Inspector General.

Docket No. C-16-304
Decision No. CR4637

Date: June 21, 2016

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner,
Mohamed Basel Aswad, M.D.., from participating in Medicare, State Medicaid programs,
and all federally funded health care programs for a period of at least 13 years.

I. Background

Petitioner requested a hearing in order to challenge the I.G.’s exclusion determination.
The IG. filed a brief in support of his determination plus 11 exhibits that are identified as
LG. Ex. 1 —1.G. Ex. 11. The I.G. also filed a reply brief. Petitioner filed a brief (P. Br.)
in opposition to the exclusion plus three exhibits. He identified two exhibits as P. Ex. 1
and P. Ex. 2. A third exhibit consists of Petitioner’s written direct testimony made under
affirmation. I identify this exhibit as P. Ex. 3.

I receive into evidence I.G. Ex. | —1.G. Ex. 11 and P. Ex. 1 — P. Ex. 3. The I.G. did not
request to cross-examine Petitioner so I find no need to convene an in-person hearing. I
decide this case based on the written record.
Petitioner filed discovery requests that were opposed by the I.G. In summary, he
requested the production of documents consisting of all documents related to the LG.’s
decision to:

1. exclude Petitioner;

2. establish the length of Petitioner’s exclusion; and

3. exclude or not exclude other individuals convicted of crimes similar to
the crime of which Petitioner was convicted.

The I.G. objected to these requests on several grounds and I sustain the I.G.’s objections.
Specifically, I find Petitioner’s requests to be objectionable because: (1) the I.G. supplied
relevant and non-privileged documents as part of his pre-hearing exchange; (2) the
documents requested by Petitioner plainly include documents that are either attorney
work product or deliberative in nature; and (3) the request calls for the production of
irrelevant material. The discovery requirements at 42 C.F.R. § 1005.7 extend only to the
inspection of non-privileged documents. In calling for all documents “related to” the
1.G.’s decision making, Petitioner plainly seeks privileged materials that include the
1.G.’s internal deliberations and communications that involve counsel. Moreover, and as
I discuss in greater detail below, how the I.G. may have evaluated other cases involving
crimes similar to that of which Petitioner was convicted is irrelevant to deciding this case.
Consequently, discovery of documents that relate to such evaluations would not lead to
the production of relevant evidence.

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

The issues are whether Petitioner was convicted of a crime that mandates exclusion
pursuant to section 1128(a)(1) of the Social Security Act (Act) and whether an exclusion
period of 13 years is unreasonable.

B. Findings of Fact and Conclusions of Law

I find the following facts to be undisputed. On August 4, 2015, Petitioner pled guilty to
violating 21 U.S.C. §§ 331(c) and 333(a)(1). IG. Ex. 10. These sections make it a crime
for an individual to receive in interstate commerce any food, drug, device, tobacco
product or cosmetic that is adulterated or misbranded and to deliver or offer delivery of
such products for pay or otherwise.

Petitioner specifically pled guilty to ordering a drug known as Bevacizumab, under the
trade name Altuzan, introducing that drug into interstate commerce and transferring or
selling the drug to a third party. I.G. Ex. 10. Altuzan is a chemotherapy drug that has not
been listed by the Food and Drug Administration (FDA) as a drug manufactured for
commercial distribution in the United States. As part of Petitioner’s plea he agreed to
pay restitution of $1,277,589 to the Medicare program. Id. Petitioner was sentenced to
pay a money judgment of $750,000 in addition to the restitution. I.G. Ex. 11 at 4.

In sum, Petitioner was convicted of receiving and then distributing a chemotherapy drug
that was not approved by the FDA to be distributed to his patients. The restitution
amount that Petitioner agreed to pay establishes that he obtained reimbursement from
Medicare and State Medicaid programs in very substantial amounts for administering
unapproved chemotherapy drugs.

Section 1128(a)(1) of the Act mandates the exclusion of any individual convicted of a
criminal offense related to the delivery of an item or service under Medicare or a State
Medicaid program. The facts that I find in this case plainly prove that Petitioner was
convicted of such a crime. Indeed, they show that Petitioner’s obtaining and
redistribution of unapproved drugs was intimately related to Medicare and Medicaid
items or services because Petitioner claimed reimbursement — in very substantial amounts
— from these programs for his unlawful distribution of drugs. That is all the nexus that is
required to prove that Petitioner was convicted of a section 1128(a)(1) offense.

The Act mandates the exclusion for at least five years of any individual who is convicted
of a section 1128(a)(1) offense. Act, § 1128(c)(3)(B). The I.G. has discretion to exclude
an individual for a longer period than five years if there is evidence that relates to
aggravating factors that is not offset by evidence relating to mitigating factors. 42 C.F.R.
§ 1001.102(b), (c). These factors function very much like rules of evidence. The
presence of evidence that falls within an aggravating or mitigating factor does not dictate
that an exclusion of a particular length is reasonable. Such evidence is, however,
admissible to be weighed in order to decide whether an exclusion of a particular length is
reasonable. Ultimately, the question becomes one of trustworthiness. What does
evidence pertaining to a particular aggravating or mitigating factor or factors say about an
individual’s trustworthiness to provide care to program beneficiaries and recipients of
program funds?

The IG. asserts, and I find, evidence that relates to two aggravating factors. First, the
1.G. proved that Petitioner’s crimes caused federally funded health care programs to
sustain losses in excess of $5,000. 42 C.F.R. § 1001.102(b)(1). Petitioner was sentenced
to pay restitution to Medicare and to State Medicaid programs in excess of $1.2 million.
Court-ordered restitution is a measure of the financial impact of one’s crimes. Juan de
Leon, Jr., DAB No. 2533 at 5 (2013). Second, Petitioner’s crimes were committed over a
period of more than a year. 42 C.F.R. § 1001.102(b)(2). Petitioner was charged with,
and pled guilty to, distributing unauthorized drugs over a period that extended from July
2010 to April 2012, a period of slightly less than two years. P. Br. at 3; I.G. Ex. 9 at 4;
IG. Ex. 10 at 2.
Petitioner has neither alleged nor proved that there is evidence that falls under any of the
mitigating factors set forth at 42 C.F.R. § 1001.102(c).

The I.G. excluded Petitioner for a period of 13 years and contends that evidence relating
to the two aggravating factors that I have identified proves that the length of the
exclusion is not unreasonable.’ The evidence that the I.G. principally relies on is the
amount of restitution that Petitioner was ordered to pay. I agree with the I.G. that this
restitution of more than $1.2 million is a very substantial sum. I infer from this large
restitution amount that Petitioner did much more than provide an unauthorized drug to a
patient or patients. The amount of restitution proves that Petitioner provided such drugs
on a massive scale, establishing indifference on his part to the requirement that he not
introduce unapproved drugs into interstate commerce. Whether that was something that
Petitioner did willfully or through criminal negligence, it establishes a cavalier disregard
on his part for legal requirements pertaining to the distribution of such drugs. It is not
unreasonable to conclude that Petitioner abused the trust that his patients placed in him as
their physician to provide treatments and care that were bounded by the requirements of
law. I find the exclusion period to be not unreasonable in light of that abuse of trust.

Petitioner makes several arguments in opposition to the exclusion determination. I have
considered all of them and find them to be unavailing. First, Petitioner asserts that his
purchase of misbranded drugs was “clearly inadvertent.” In support of this assertion
Petitioner contends that he was in effect duped into acquiring drugs that were unapproved
for use. P. Br. at 3-4. Iam not persuaded by this argument. It is an attempt by Petitioner
to relitigate the facts that resulted in his conviction. In effect, Petitioner asserts that he is
not really guilty of the crime to which he entered his guilty plea. I have no authority to
consider arguments by Petitioner that are collateral attacks on the basis for his conviction.
42 CFR. § 1001.2007(d).

Next, Petitioner contends that his use of misbranded drugs for patient care was medically
appropriate and did not result in patient harm. He characterizes the restitution that he was
ordered to pay as being only a “technical overpayment” that did not constitute a true
measure of the harm caused by Petitioner. P. Br. at 4-5. I find this argument also to be
an inappropriate effort by Petitioner to relitigate the facts that resulted in his conviction.

' In this case the I.G. modified the exclusion by granting a partial waiver. On February
18, 2016, the I.G. granted a request by the State of New Mexico to waive the exclusion
“with respect to the provision of oncology and oncology-related services within Luna
County, New Mexico, and with respect to any resultant prescriptions or referrals for
services, regardless of the location in which such prescription or referred services are
provided, under the Medicare, Medicaid and all Federal health care programs.” I.G. Ex.
7. [have no authority to review the I.G.’s determination to grant this partial waiver nor
may I consider whether the waiver should be expanded to include other items or services
provided by Petitioner. 42 C.F.R. § 1001.1801(f).
But, more than that, it is belied by Petitioner’s acknowledgement of guilt. Petitioner
characterizes his offense as being at most a technical violation of law. In fact, what
Petitioner did in this case was to administer to patients drugs that bore inadequate
directions, did not indicate they were for prescription only, and came from a foreign
facility not registered with the FDA to manufacture such drugs for the United States. He
committed these acts in obvious disregard of the requirement that he, as a physician, be
certain that what he administered had governmental approval. The amount of restitution
that he was ordered to pay proves that he did so on a massive scale. Petitioner’s
disregard of legal requirements had the potential for causing great harm to patients even
if there is no proof that any individual patients suffered actual harm.

Petitioner also argues that the government has acknowledged “the extraordinary
unlikelihood that Petitioner will ever commit a crime again.” P. Br. at 5. As principal
support for this argument Petitioner relies on the I.G.’s approval of a limited waiver for
Petitioner to provide oncology and oncology-related services. See n.1, supra. As I have
discussed, I have no authority to consider whether the I.G. should have granted a broader
waiver or whether granting any waiver was appropriate. Moreover, the fact that the I.G.
determined to exclude Petitioner for 13 years establishes that the government has not
conceded the “extraordinary unlikelihood” Petitioner will commit a crime again.
Regardless of whether Petitioner will offend again, the issue is his trustworthiness to
participate in Medicare and federal health care programs, not his likelihood of recidivism.
Indeed, the length of the exclusion in this case is more than ample proof that the
government, in the guise of the I.G., takes a jaundiced view of Petitioner’s overall
trustworthiness.

Petitioner also argues that there is a clear community need for his services. P. Br. at 5-6.
That argument is irrelevant because it does not relate to any of the regulatory aggravating
or mitigating factors. Moreover, it again addresses the scope of the I.G.’s waiver
determination.

Finally, Petitioner argues that the I.G.’s exclusion determination is arbitrary and that it is
unreasonable when compared with exclusions that the I.G. imposed in other cases under
similar circumstances. P. Br. at 7-8. This argument is irrelevant to my review in this
matter. My role is not to compare and contrast the I.G.’s action in this case with those
that the I.G. took in other cases. Rather, I must decide whether the exclusion is
unreasonable based on the facts of this case. Eugene Goldman, M.D., a/k/a Yevgeniy
Goldman, M.D., DAB No. 2635 at 11 (2015) (observing that “the assessment of
aggravating factors . . . is first and foremost case-specific” and “the reasonableness
question ultimately turns on an analysis of the circumstances of each case.”). For the
reasons that I have discussed, I find that this exclusion is not unreasonable.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Basil Mangra, M.D.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-327
Decision No. CR4636

Date: June 16, 2016

DECISION

First Coast Service Options, Inc. (First Coast), an administrative contractor for the
Centers for Medicare & Medicaid Services (CMS), denied the Medicare enrollment
application of Basil Mangra, M.D. (Petitioner). First Coast denied the enrollment
application, which had been submitted in response to a revalidation request, based on
Petitioner’s April 2013 felony conviction for conspiracy to commit fraud on financial
institutions, in violation of 18 U.S.C. § 1349. For the reasons explained herein, I
conclude that First Coast had a basis to deny Petitioner’s Medicare enrollment
application.

I. Case Background and Procedural History

Petitioner is a physician who practices in the field of internal medicine. CMS Exhibit
(Ex.) 5 at 1.

On or about January 3, 2013, a federal grand jury in the Southern District of Florida
returned a true bill of indictment charging that Petitioner, along with four other named
co-conspirators, engaged in a conspiracy to commit bank fraud in violation of 18 U.S.C.
§ 1349. CMS Ex. 1 at 1-5. The indictment also charged Petitioner with two counts of
making false statements on a loan application, in violation of 18 U.S.C. § 1014. CMS
Ex. | at 8-11. With respect to the offense of “Conspiracy to Commit Bank Fraud,” which
was listed in count one of the indictment, the count charged that all five of the defendants
“did knowingly and willfully combine, conspire, confederate, and agree with each other .
. .to execute, and cause the execution of, a scheme and artifice to defraud financial
institutions ... and to obtain any of the moneys, funds, assets and other property owned
by and under the custody and control of said financial institutions, by means of materially
false and fraudulent pretenses, representations, and promises, in violation of Title 18,
United States Code, Section 1344.” CMS Ex. | at 2-3. A penalty sheet filed with the
charging documents indicates that the maximum penalty for the offense of conspiracy to
commit bank fraud is up to 30 years of imprisonment and a $250,000 fine or twice the
gross value of the gross loss or gain from the crime, whichever is greater. CMS Ex. | at
19; see 18 U.S.C. § 1349.

On April 16, 2013, Petitioner, who was represented by counsel, entered into a plea
agreement with the United States Attorney for the Southern District of Florida. CMS Ex.
2. Petitioner agreed to enter a guilty plea to the offense of conspiracy to commit fraud on
a financial institution “in relation to conspiring to obtain bank loans and lines of credit,”
which is the offense that was charged in the first count of the indictment. CMS Ex. 2 at
1. The plea agreement stated that the remaining counts of the indictment pertaining to
false statements on a loan application would be dismissed. CMS Ex. 2 at 1. Petitioner
agreed that “the court may impose a statutory maximum term of imprisonment of up to
30 years imprisonment” and that he would “pay restitution to Regions Bank in the
amount of $192,246.00, and Commerce Bank (now known as TD Bank) in the amount of
$194,015.99, which obligation shall be joint and severable with his co-defendants.” CMS
Ex. 2 at 4.

In a stipulated factual proffer in support of Petitioner’s guilty plea that was executed
contemporaneously with the plea agreement, Petitioner agreed to the underlying factual
basis for his plea. CMS Ex. 2 at 8. Petitioner acknowledged that “the Government
would have established beyond a reasonable doubt that [he] . . . did knowingly and
willfully conspire with others to execute and cause the execution of a scheme and artifice
to defraud financial institutions through the submission of fraudulent lines of credit and
loan applications and related financial documents on behalf of unqualified borrowers.”
CMS Ex. 2 at 8. The stipulation provided, in pertinent part:

In order to get approved for a loan, BASIL MANGRA explained to law
enforcement agents that they used his company, [Basil Mangra, MDPA
(BMMDPA)], and added his brother, Michael Mangra, to the company with
the Florida Department of Corporations. The purpose of adding Michael
Mangra to the company was because Michael Mangra had a good credit
score. Shortly after the two (2) loans funded, Michael Mangra was
removed from the company because it was no longer necessary to have
Michael Mangra listed on the company. The only affiliation Michael
Mangra had with BMMDPA was that he (Michael Mangra) occasionally
referred patients and may have provided some marketing services.
However, BASIL MANGRA never paid Michael Mangra for any work for
BMMDPA, as he was not an employee. Furthermore, BASIL MANGRA
confirmed that Michael Mangra was not an 85% shareholder of BMMDPA.

CMS Ex. 2 at 12. Petitioner “acknowledged that lending the appearance to the banks that
Michael Mangra was a partner of BMMDPA was a lie, and he knew that obtaining a loan
in this manner was wrong.” CMS Ex. 2 at 12. Petitioner further acknowledged that “he
paid significant fees to obtain these loans, and used the loan proceeds to do so.” CMS
Ex. 2 at 13. The stipulation additionally explains the following:

BASIL MANGRA admitted that he knew there was “dishonesty” with
respect to these loans, and admitted that Regions Bank and Commerce
Bank were defrauded because the banks relied on financial information that
was not true. For example, BASIL MANGRA admitted that he did not
have a net worth of $5 million, as listed on the financial information that
was submitted to Regions Bank. To date, BASIL MANGRA has not been
able to repay the loans.

BASIL MANGRA admits the allegations enumerated in counts 4 and 6 of
the indictment. BASIL MANGRA admits that he knowingly made false
statements for the purpose of influencing the actions of Regions Bank in
connection with an application for a $400,000 line of credit which was
approved in the amount of $200,000 and the actions of Commerce Bank
(now known as TD Bank) in connection with an application for a $250,000
loan which was approved in the amount of $195,000, that is, the defendant
falsely stated and caused to be stated on a line of credit application
submitted to Regions Bank and a loan application to Commerce Bank, that
BASIL MANGRA, M_D., P.A. was a medical practice of which 85% was
owned by Michael Mangra, that Michael Mangra was a physician, that
Michael Mangra had assets, a net worth and annual income of more than
$500,000 from employment at BASIL MANGRA M_D., P.A., . .. when in
truth and in fact . . . Michael Mangra did not own any portion of BASIL
MANGRA M_D., P.A. and was not a medical doctor. . . did not possess
assets or have a net worth in the amounts stated on the applications, and did
not have an annual income in excess of $500,000 from employment at
BASIL MANGRA M._D., P.A., and the 2006 and 2007 Internal Revenue
Forms 1040 for Michael Mangra and the 2006 and 2007 Internal Revenue
Form 1120S for BASIL MANGRA M_D., P.A. which were attached to the
applications were not filed with the United States Internal Revenue Service
and were not a true reflection of the income and expenses.
CMS Ex. 2 at 14-15. Finally, Petitioner acknowledged that he was pleading guilty to
conspiracy to commit fraud on financial institutions, and that the offense has three
elements, as follows:

First: That two or more persons in some way or manner, came to a mutual
understanding to try to accomplish a common or unlawful plan, as charged
in the indictment;

Second: That the Defendant, knowing the unlawful purpose of the plan,
willfully joined in it; and

Third: That the object of the unlawful plan was to defraud one or more
financial institutions.

CMS Ex. 2 at 15-16.

Petitioner entered his guilty plea to the offense of conspiracy to commit fraud on a
financial institution on April 16, 2013, and the remaining counts of the indictment
were dismissed. CMS Ex. 3 at 1. The judgment of conviction, dated September
17, 2013, documents that Petitioner was ordered to be imprisoned for a period of
18 months and to pay $386,261.99 in restitution to the “victims as listed in the
presentence report.” CMS Ex. 3 at 2, 5.

First Coast sent Petitioner a revalidation request in March 2015, at which time it asked
him to immediately submit an updated provider enrollment application, Form CMS-8551,
or review, update, and recertify his information via the internet-based Provider
Enrollment, Chain, and Ownership System (PECOS).' CMS Ex. 4 at 1,8. Petitioner
initially submitted an updated enrollment application through PECOS on July 28, 2015,
at which time he did not report any final adverse legal actions. CMS Ex. 5. Ina
subsequent enrollment application update submitted through PECOS on November 4,
2015, Petitioner reported four adverse legal actions: his felony conviction in April 2013;
the suspension of his Illinois medical license in November 2014; the surrender of his
New York medical license in October 2015; and a reprimand by the Florida Department
of Health in April 2014. CMS Ex. 9 at 2.

On November 18, 2015, First Coast notified Petitioner that based on its review of his
revalidation enrollment application, it had denied him enrollment pursuant to 42 C.F.R.
§ 424.530(a)(3)(i)(B) due to his felony conviction under 18 U.S.C. § 1349. CMS Ex. 10.
In a separate letter, First Coast notified Petitioner that it had deactivated his Provider
Transaction Access Number (PTAN) based on its denial of Petitioner’s revalidation

' This notice was mailed to two different addresses, and both notices were returned as
undelivered. CMS Ex. 4 at 7, 14.
application. CMS Ex. 11. On December 7, 2015, Petitioner, through his current counsel,
requested reconsideration of the denial of his revalidation application. CMS Ex. 12 at 5-7
and 13-15.

On January 5, 2016, First Coast issued a reconsidered determination that informed
Petitioner that based on his conviction for conspiracy to commit fraud on a financial
institution in violation of 18 U.S.C. § 1349 in the previous ten years, he had failed to
comply with 42 C.F.R. § 424.530(a)(3)(i)(B).

Petitioner timely requested a hearing before an administrative law judge (ALJ) on
February 19, 2016. I issued an Acknowledgment and Pre-Hearing Order (Order) to the
parties on February 24, 2016. In accordance with the terms of my Order, CMS submitted
a motion for summary judgment and pre-hearing brief (CMS Br.), along with supporting
exhibits (CMS Exs. 1-13). Petitioner submitted a response to the motion for summary
judgment and supporting brief (P. Br.). Petitioner did not submit any additional exhibits.
Neither party submitted witness testimony, requested cross-examination of any witness,
or otherwise requested a live hearing. See Order §§ 8,9, 10. Absent any objections, I
admit all proposed exhibits into the record. This matter is now ready for a decision.

II. Discussion
A. Issues
1. Whether summary judgment is appropriate; and

2. Whether CMS had a legal basis to deny Petitioner’s Medicare enrollment
application.

B. Findings of Fact and Conclusions of Law
1. Summary judgment in favor of CMS is appropriate.

Summary judgment is appropriate when there is no genuine dispute as to any issue of
material fact for adjudication and/or the moving party is entitled to judgment as a matter
of law. Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010); see Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party must show that there
are no genuine issues of material fact requiring an evidentiary hearing and that it is
entitled to judgment as a matter of law. Id. If the moving party meets its initial burden,
the non-moving party must “come forward with ‘specific facts showing that there is a
genuine issue for trial... .”” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574,
587 (1986). “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.” Senior Rehab., DAB No. 2300 at 3. In
determining whether there are genuine issues of material fact for hearing, an ALJ must
view the evidence in the light most favorable to the non-moving party, drawing all
reasonable inferences in that party’s favor. Id.

CMS has moved for summary judgment and submitted documentary evidence that
establishes the material facts of the case. CMS Exs. 1-13. CMS proffered documentary
evidence demonstrating Petitioner’s guilty plea and conviction of the offense of
conspiracy to commit fraud on financial institutions. CMS Ex. 1-3.

Petitioner does not contend there are any disputes as to material facts, and “agrees that
there is no genuine dispute as to a material fact.” P. Br. at 2. However, Petitioner argues
that summary judgment is not warranted because the movant, CMS, is not entitled to
judgment as a matter of law. P. Br. at 2-3. Specifically, Petitioner argues that summary
judgment is not warranted because the offense of conspiracy to commit fraud on a
financial institution is not a crime specified in 42 C.F.R. § 424.530(a)(3)(i)(B) for which
CMS may deny his Medicare enrollment. P. Br. at 3.

I find that there is no genuine issue of disputed material fact. The only issue I need to
resolve in this case is a matter of law, which, as discussed below, I decide in CMS’s
favor. Summary judgment is therefore appropriate.

2. The evidence shows that, within the preceding ten years, Petitioner was
convicted of a felony offense for conspiring to commit bank fraud.

Petitioner does not dispute that, on April 16, 2013, he entered a plea of guilty to count
one of an indictment that charged he had committed “Conspiracy to Commit Bank
Fraud” in violation of 18 U.S.C. § 1349. P. Br. at 1; see CMS Ex. | at 2-3; CMS Ex. 3 at
1. Evidence submitted by CMS documents that Petitioner submitted a guilty plea
pursuant to a plea agreement. CMS Exs. 1-3. The stipulated facts underlying Petitioner’s
guilty plea demonstrate that he “did knowingly and willfully conspire with others to
execute and cause the execution of a scheme and artifice to defraud financial institutions
through the submission of fraudulent lines of credit and loan applications and related
financial documents on behalf of unqualified borrowers.” CMS Ex. 2 at 8. Petitioner
admitted that “Regions Bank and Commerce Bank were defrauded because the banks
relied on financial information that was not true.” CMS Ex. 2 at 14. Petitioner further
admitted the allegations enumerated in counts 4 and 6 of the indictment, “False
Statements on a Loan Application to a Financial Institution” in violation of 18 U.S.C.

§ 1014. CMS Ex. 2 at 14; see CMS Ex. | at 19. Petitioner acknowledged that he had
obtained $395,000 in loans from two banks and that he “knowingly made false statements
for the purposes of influencing the actions of Regions Bank” and “falsely stated”
information in connection with a loan application to Commerce Bank. CMS Ex. 2 at 14-
15. The District Court accepted Petitioner’s plea on April 16, 2013, and entered
judgment against him on September 17, 2013. CMS Ex. 3 at 1.

Petitioner does not contest that he was convicted of a felony offense within the preceding
ten years. See 42 C.F.R. § 424.530(a)(3).

3. CMS was authorized to deny Petitioner’s enrollment application pursuant to
42 CFR. § 424.530(a)(3)(i)(B).

CMS may deny a provider or supplier’s enrollment in the Medicare program for several
enumerated reasons, including:

(3) Felonies. The provider, supplier, or any owner or
managing employee of the provider or supplier was, within
the preceding 10 years, convicted (as that term is defined in
42 [C.F R. §] 1001.2) of a Federal or State felony offense that
CMS determines is detrimental to the best interests of the
Medicare program and its beneficiaries.

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

(B) Financial crimes, such as_ extortion,
embezzlement, income tax evasion, insurance
fraud and other similar crimes for which the
individual was convicted, including guilty pleas
and adjudicated pretrial diversions.

42 CFR. § 424.530(a)(3)(i)(B); see also Social Security Act (Act) § 1842(h)(8)

(42 U.S.C. § 1395u(h)(8) (authorizing the Secretary of Health and Human Services to
refuse to enter in an agreement or refuse to renew an enrollment agreement with a
physician or supplier convicted of a federal or state felony offense “which the Secretary
determines is detrimental to the best interests of the program or program beneficiaries”)).

> The evidence indicates that Petitioner first reported his felony conviction to CMS in
November 2015, more than two years after his conviction occurred. See 42 C.F.R.

§ 424.516(d)(1)(ii) (stating that a physician is required to report an adverse legal action
within 30 days of the adverse legal action).
a. Petitioner’s felony conviction was a financial crime within the plain
meaning of 42 C.F R. § 424.530(a)(3)(i)(B).

The undisputed facts surrounding Petitioner’s conviction support CMS’s determination
that Petitioner pleaded guilty to a felony “financial crime” covered by section
424.530(a)(3)(i)(B). In reaching this conclusion, I need to examine the conduct and
circumstances underlying Petitioner’s offense and consider whether his offense is a
financial crime like those listed in section 424.530(a)(3)(i)(B). See Abdul Razzaque
Ahmed, M.D., DAB No. 2261 at 7, 11 (2009), aff'd, Ahmed v. Sebelius, 710 F. Supp. 2d
67 (D. Mass. 2010).

In perpetrating his crime, Petitioner “did knowingly and willfully conspire with others to
execute and cause the execution of a scheme and artifice to defraud financial institutions
through the submission of fraudulent lines of credit and loan applications and related
financial documents on behalf of unqualified borrowers.” CMS Ex. 2 at 8. Furthermore,
Petitioner conceded that “she knew he would not get approved for a loan” and had
previously been denied for a $250,000 or $300,000 loan. CMS Ex. 2 at 11. Petitioner
“admitted that he knew there was ‘dishonesty’ with respect to these loans,” and that the
banks “were ‘defrauded’ because the banks relied on financial information that was not
true” when they issued a loan and line of credit totaling nearly $400,000. CMS Ex. 2 at
14. Petitioner conceded in his plea agreement that the elements of the charged offense
were met and that there was a factual basis for his plea of guilty; he specifically
acknowledged that an element of the offense of conspiracy to commit fraud on a financial
institution is “the object of the unlawful plan was to defraud one or more financial
institutions.” CMS Ex. 2 at 16.

While Petitioner previously conceded, in the criminal proceedings, that his crime
involved a plan to defraud financial institutions, he now disputes that such a crime is
actually a “financial crime.” P. Br. at 2-5. Petitioner argues that “he was convicted of
conspiracy, not a financial crime.” P. Br. at 4. Petitioner further explains, citing to
numerous federal cases, that “[a] person may be convicted of conspiracy even though he
does not participate in the substantive crime.” However, the very nature of the
conspiracy for which Petitioner was convicted, a conspiracy to commit fraud against a
financial institution, is a financial crime: As stated in the elements of the offense listed in
the plea agreement, “the object of the unlawful plan was to defraud one or more financial
institutions.” CMS Ex. 2 at 16; see 18 U.S.C. § 1349. Simply because Petitioner was
convicted of a conspiracy to commit a financial crime does not mean that his crime is not
financial in nature, and Petitioner need not have been convicted of a completed act of
bank fraud in order to have committed a financial crime. Furthermore, the first count of
the indictment, which is the count to which Petitioner pleaded guilty, states that
Petitioner, along with his co-conspirators, “did knowingly and willfully combine,
conspire, confederate, and agree with each other . . . to execute and cause the execution
of, a scheme to defraud financial institutions . . . and to obtain any of the moneys, funds,
assets, and other property owned by and under the custody and control of said financial
institutions, by means of materially false and fraudulent pretenses, representations, and
promises, in violation of Title 18, United States Code, Section 1344.3 CMS Ex. | at 2-3
(emphasis added). Thus, the unambiguous language of the count to which Petitioner
pleaded guilty indicates that he schemed to defraud banks in violation of 18 U.S.C.

§ 1344, “Bank Fraud.” CMS Ex. | at 2-3. While Petitioner contends that a conviction
for conspiracy could merely involve “participating in a conversation to plan the fraud,
even if he takes additional steps in furtherance of the conspiracy,” and that his
participation in a conspiracy “cannot now be re-characterized as a substantive offense,”
he overlooks that the indictment charged, and the evidence supports, that Petitioner, with
his co-conspirators, successfully completed the object of the conspiracy and fraudulently
obtained nearly $400,000 from two banks. P. Br. at 5. Petitioner’s felony offense,
perpetrated to fraudulently obtain nearly $400,000 from both Regions Bank and
Commerce Bank, plainly constitutes a “financial crime” within the meaning of 42 C.F.R.
§ 424.530(a)(3)(i)(B). See Lorrie Laurel, PT, DAB No. 2524 at 4-5 (2013) (finding that
an individual’s guilty plea to felony grand theft constitutes a “financial crime” that can be
used as a basis to revoke enrollment and billing privileges regardless of a direct relation
to the Medicare program).

While Petitioner attempts to distinguish a factually similar case, Stanley Beekman,
D.P.M, DAB No. 2650 (2015) from his own case, he fails in this effort. Petitioner’s
primary basis for distinguishing the Beekman case from his own is that Dr. Beekman had
conceded that he had committed a financial crime, whereas Petitioner has not made such

> T observe that none of the five co-conspirators were charged with committing bank
fraud, even though the indictment clearly indicates that the conspiracy was completed, in
that “the fraudulent loan applications were . . . submitted to the banks” and “resulted in
substantial losses to the banks.” CMS Ex. | at 5. While conspiracy, rather than bank
fraud, was charged, the indictment clearly charged that there was actual loss to the
defrauded banks. Thus, Petitioner is quite mistaken that his offense of conspiracy did not
equate to a “substantive crime.” P. Br. at 5. I further point out that there is little
distinction between the crimes of bank fraud and conspiracy to commit bank fraud. To
be found guilty of committing bank fraud under 18 U.S.C. § 1344, one need only
“attempt to execute” a scheme or artifice to “defraud an institution” or “obtain any of the
moneys, funds, credits, assets, securities, or other property owned by, or under the
custody of control of, a financial institution, by means of false or fraudulent pretenses,
representations, or promises.” 18 U.S.C. § 1344 (emphasis added). The maximum
period of incarceration for bank fraud is 30 years. Id. The offense of conspiracy to
commit bank fraud carries an identical maximum period of incarceration of 30 years. 18
U.S.C. § 1349. Pursuant to 18 U.S.C. § 1349, “[a]ny person who attempts or conspires to
commit any offense under this chapter shall be subject to the same penalties as those
prescribed for the offense, the commission of which was the object of the attempt or
conspiracy.”

10

aconcession. However, whether or not Petitioner has conceded that he committed a
financial crime is wholly irrelevant to whether he actually committed a financial crime.
In the Beekman case, the Departmental Appeals Board (Board) concluded that
“conspiring to commit bank fraud and using false statements to obtain a bank loan are
crimes that are financial at their heart, with elements of seeking money using criminal
devices.” Beekman, DAB No. 2650 at 8. The Board further explained that “[t]he
circumstances of the crimes for which Petitioner pled guilty make clear that all the
charges arose from financial misconduct, in short lying to the bank in order to obtain
loans by criminal means.” Thus, while Petitioner distinguishes the Beekman case
because Dr. Beekman conceded he had committed a financial crime, such a concession is
irrelevant. The Board’s analysis in Beekman is relevant to the instant case, and like Dr.
Beekman, Petitioner was convicted of an offense that was “financial at its heart,” in that
Petitioner entered into a conspiracy which resulted in him fraudulently obtaining nearly
$400,000 from two banks.

While I conclude that conspiracy to commit bank fraud is a financial crime that is clearly
contemplated by 42 C.F.R. § 424.530(a)(3)(i)(B), I also point out that CMS has
determined that “financial crimes, such as extortion, embezzlement, income tax evasion,
insurance fraud and other similar crimes” are detrimental per se to the best interests of
the Medicare program and its beneficiaries. See Dinesh Patel, M.D., DAB No. 2551 at 5-
6 (2013) (emphasis added) (citations omitted). Even though conspiracy to commit bank
fraud is not specifically listed in section 424.530(a)(3)(i)(B), it is, for the reasons
previously stated, a financial crime, and it is certainly a similar crime to the
representative offenses listed in section 424.530(a)(3)(i)(B), which do not constitute an
all-inclusive list. As such, conspiracy to commit bank fraud is appropriately considered
to be a crime that is detrimental to the Medicare program. See also 42 U.S.C.

§ 1395u(h)(8).

III. Conclusion

CMS was authorized under 42 C.F.R. § 424.530(a)(3)(i)(B) to deny Petitioner’s Medicare
enrollment application and I uphold CMS’s determination.

/s/
Leslie C. Rogall
Administrative Law Judge


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

LeKeytra Washington, NP,
(NPI: 1518395268 / PTAN: 450950ZJP8),
Petitioner,

v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-379
Decision No. CR4634
Date: June 17, 2016
DECISION

The effective date of Medicare enrollment and billing privileges of Petitioner, LeKeytra
Washington, NP, is October 29, 2015, with retrospective billing privileges beginning
September 29, 2015.

I. Background and Procedural History

Petitioner submitted two internet-based enrollment applications, Form CMS-855] and
Form CMS-855R, on October 29, 2015. Centers for Medicare & Medicaid Services
(CMS) Exhibits (Exs.) 1,2. Novitas Solutions (Novitas), a Medicare administrative
contractor, notified Petitioner by letter dated November 14, 2015, that it had assigned her
a Provider Transaction Access Number (PTAN) and approved her reassignment of
benefits to Life Line Community Healthcare, with an “effective date” of September 29,
2015. CMS Ex. 3 at 1-2. In a November 16, 2015 letter that was received by Novitas on
November 30, 2015, Petitioner requested reconsideration of the November 14, 2015
determination and requested that the effective date be changed to September 25, 2015,
the date Petitioner first began providing services to Medicare beneficiaries at Life Line
Community Healthcare. CMS Ex. 4. Novitas issued a reconsidered determination on
February 19, 2016, at which time it determined that an effective date of September 29,
2015 was warranted. CMS Ex. 6. In determining that September 29, 2015 was the
correct effective date, Novitas explained that Petitioner had submitted her enrollment
applications on October 29, 2015, and that there was no documentation that Petitioner’s
internet-based applications were received prior to October 29, 2015. CMS Ex. 6 at 2.
Novitas further explained that pursuant to 42 C.F.R. § 424.521(a), a September 29, 2015
effective date was established based on a 30-day retrospective billing period from
October 29, 2015, the date Novitas received Petitioner’s internet-based applications.

Petitioner submitted a request for a hearing by an administrative law judge (ALJ) that
was dated February 26, 2016 and received via FedEx on March 8, 2016. I issued an
Acknowledgment and Pre-Hearing Order (Order) on March 11, 2016, in which I directed
the parties to file their respective pre-hearing exchanges, to include briefs and supporting
exhibits, by specified deadlines. I also gave the notice in Section 4(c.)(i.) of my Order
that a party may file a motion for summary judgment with its pre-hearing exchange.

CMS filed a motion for summary judgment and a pre-hearing brief, along with CMS Exs.
1 through 6, on April 13, 2016. Petitioner failed to file a response to CMS’s pre-hearing
exchange, and I issued an order on June 2, 2016, directing Petitioner to show cause why
this case should not be dismissed. Petitioner submitted a document styled as a pre-
hearing exchange in an apparent response to the show cause order, but Petitioner’s
response did not include any discussion of the merits of her case or a substantive
response to CMS’s motion for summary judgment. Petitioner contemporaneously
submitted three exhibits (a copy of her approved enrollment application, which she
identified as P. Ex. 1; a copy of her November 16, 2015 letter to Novitas, which she
identified as P. Ex. 2 and which is a duplicate of CMS Ex. 4; and, a document showing
that Petitioner provided services on September 25, 2015, which she identified as P. Ex.
3).

In the absence of any objections, I admit CMS Exs. | to 6 and P. Exs. | and 3. P. Ex. 2 is
a duplicate of CMS Ex. 4, and is therefore not admitted into evidence. Neither party has
requested a hearing for the purpose of presenting live testimony. The matter is ready for
a decision.

I. Jurisdiction
Ihave jurisdiction to decide this case. See 42 C.F.R. §§ 498.3(b)(15), 498.5(1)(2).
II. Discussion

A. Issues

The issues in this case are:

Whether summary judgment is appropriate; and
Whether the effective date of Petitioner’s Medicare enrollment and billing
privileges is October 29, 2015, with a retroactive effective date of billing
privileges of September 29, 2015.

B. 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-eligible
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. § 1395(u)(h)(1)). Petitioner is
a “supplier” of services under the Act and the regulations. A “supplier” furnishes
services under Medicare, and the term “supplier” applies to physicians or other
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)). Pursuant to 42 C.F.R.

§ 424.505, a provider or supplier must be enrolled in the Medicare program and be issued
a billing number to have billing privileges and to be eligible to receive payment for
services rendered to a Medicare-eligible beneficiary.

The effective date of enrollment in Medicare of a physician, nonphysician practitioner,
and physician and nonphysician practitioner organizations is governed by 42 C.F.R.

§ 424.520(d). Pursuant to section 424.520(d), the effective date of enrollment for a
physician or nonphysician practitioner may only be the later of two dates: the date when
the practitioner filed an application for enrollment that was subsequently approved by a
Medicare contractor charged with reviewing the application on behalf of CMS; or, the
date when the practitioner first began providing services at a new practice location. As
applicable here, an enrolled physician or nonphysician practitioner may retrospectively
bill Medicare 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).

C. Findings of Fact, Conclusions of Law, and Analysis’
1. Summary judgment is appropriate.
Summary judgment is appropriate when there is no genuine dispute as to any issue of

material fact for adjudication and/or the moving party is entitled to judgment as a matter
of law. Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010); see Anderson

' Findings of fact and conclusions of law are set forth in bold and italics.
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party must show that there
are no genuine issues of material fact requiring an evidentiary hearing and that it is
entitled to judgment as a matter of law. Id. If the moving party meets its initial burden,
the non-moving party must “come forward with ‘specific facts showing that there is a
genuine issue for trial... .”” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574,
587 (1986). “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.” Senior Rehab., DAB No. 2300 at 3. In
determining whether there are genuine issues of material fact for hearing, an ALJ must
view the evidence in the light most favorable to the non-moving party, drawing all
reasonable inferences in that party’s favor. Id.

The standard for deciding a case on summary judgment and an ALJ’s decision-making in
deciding a summary judgment motion differs from resolving a case after a hearing. On
summary judgment, the ALJ does not make credibility determinations, weigh the
evidence, or decide which inferences to draw from the evidence, as would be done when
finding facts after a hearing on the record. Rather, on summary judgment, the ALJ
construes the evidence in a light most favorable to the non-movant and avoids deciding
which version of the facts is more likely true. Holy Cross Vill. at Notre Dame, Inc., DAB
No. 2291 at 5 (2009). The Departmental Appeals Board (Board) also has recognized that
on summary judgment it is appropriate for the ALJ to consider whether a rational trier of
fact could find that the party’s evidence would be sufficient to meet that party’s
evidentiary burden. Dumas Nursing & Rehab., L.P., DAB No. 2347 at 5 (2010). The
Secretary of Health and Human Services has not provided for the allocation of the burden
of persuasion or the quantum of evidence in 42 C.F.R. pt. 498. However, the Board has
provided analysis regarding the allocation of the burden of persuasion in cases subject to
42 CFR. pt. 498. Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d,
Batavia Nursing & Convalescent Ctr. v. Thompson, 129 Fed. App’x 181 (6th Cir. 2005).

The material facts in this case are not disputed and there is no genuine dispute as to any
material fact that requires a hearing. Specifically, Petitioner does not contend in her
request for hearing that she filed an enrollment application prior to October 29, 2015, and
admits that “[t]he responsibility of the delay [in filing her enrollment application] falls
solely on the credentialing department.” The issues in this case that require resolution are
issues of law related to the interpretation and application of the regulations that govern
enrollment and billing privileges in the Medicare program to the undisputed facts of this
case. Accordingly, summary judgment is appropriate.
2. Pursuant to 42 C.F .R. § 424.520(d), Petitioner’s effective date of
Medicare enrollment was October 29, 2015, the date of filing of the
Medicare enrollment applications that Novitas was able to process to
approval.

3. Petitioner was authorized, pursuant to 42 C.F.R. § 424.521(a)(1), to
bill Medicare for services provided to Medicare-eligible beneficiaries up
to 30 days prior to her effective date of enrollment, i.e., beginning on
September 29, 2015.

Petitioner seeks a September 25, 2015 effective date for the reassignment of benefits for
services she provided to Medicare beneficiaries at Life Line Community Healthcare. See
CMS Exs. 4 and 6; Request for Hearing. Petitioner has not presented evidence or
arguments supporting that an effective date of September 25, 2015 is warranted, and she
has acknowledged that the effective date assigned is due to delay by her credentialing
department, rather than any error on the part of CMS or its contractor. CMS Ex. 4;
Request for Hearing.

There is no dispute that Petitioner submitted enrollment and reassignment applications to
Novitas on October 29, 2015, which is more than 30 days after Petitioner began
providing services at Life Line Community Healthcare. Therefore, the earliest possible
effective date for Petitioner’s Medicare enrollment and billing privileges was October 29,
2015, the date the applications were filed. 42 C.F.R. § 424.520(d). The regulation
further provides that it is the later of the date of filing a Medicare enrollment application
that was subsequently approved or the date services were first provided that controls. 42
C.F.R. § 424.520(d). Retrospective billing is permitted for 30 days prior to the effective
date of enrollment and billing privileges, except in a situation not presented in this case.
42 CFR. § 424.521.

Accordingly, I conclude that, pursuant to 42 C.F.R. § 424.520(d), the effective date of
Petitioner’s Medicare enrollment and billing privileges is October 29, 2015. Pursuant to
42 CFR. § 424.521(a)(1), Petitioner may retrospectively bill beginning September 29,
2015.

In her request for hearing, Petitioner urged that “[w]e ask that you reconsider the
effective date as to not punish the provider and her services, for the mistake of the
[credentialing] department.” Petitioner’s plea may be viewed as a request for equitable
relief. However, I do not have the authority to grant equitable relief in the form of an
earlier effective date of enrollment. 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.”).
Petitioner points to no authority by which I may grant her relief from the applicable
regulatory requirements, and I have no authority to declare statutes or regulations invalid
or ultra vires. 18661CPayday.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.”).

IV. Conclusion

For the foregoing reasons, I conclude that the effective date of Petitioner’s Medicare
enrollment and billing privileges is October 29, 2015, with a 30-day period for
retrospective billing beginning on September 29, 2015.

/s/
Leslie C. Rogall
Administrative Law Judge