Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Jeffrey D. Lubell, DPM
(PTAN: 0928430001),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-380
Decision No: CR3192
Date: April 7, 2014
DECISION

The Medicare enrollment and billing privileges of Petitioner, Jeffrey D. Lubell, DPM, are
revoked pursuant to 42 C.F.R. §§ 424.57(d) and 424. 535(a)(1),! effective July 2, 2013,
based on noncompliance with 42 C.F.R. § 424.57(c)(7)(i)(C) (supplier standard 7).

I. Procedural History and Jurisdiction
The Medicare contractor, Palmetto GBA (Palmetto),” notified Petitioner by letter dated

June 17, 2013, that his Medicare billing privileges and provider agreement were revoked
effective March 26, 2013. Centers for Medicare & Medicaid Services (CMS) exhibit

' The 2012 revision of the Code of Federal Regulations (C.F.R.) is cited, unless
otherwise indicated.

? The notice was issued by the National Supplier Clearinghouse Supplier Audit and
Compliance Unit (SACU), which is operated by Palmetto.
(Ex.) 1 at 21. Palmetto cited 42 C.F.R. §§ 405.800, 424.57(e),? 424.535(a)(1),
424.535(a)(5)(ii), and 424.535(g), as the authority for revocation based on Petitioner’s
noncompliance with 42 C.F.R. §§ 424.57(c)(2), (c)(7), (c)(10), and (c)(21).4 CMS Ex. |
at 21-22. Palmetto also notified Petitioner that he was subject to a two-year bar to re-
enrollment pursuant to 42 C.F.R. § 424.535(c). CMS Ex. 1 at 21.

Petitioner submitted a request for reconsideration that Palmetto received on August 20,
2013. CMS Ex. | at 10, 25-27. Palmetto notified Petitioner by letter dated September
24, 2013, that it upheld the revocation of Petitioner’s enrollment and billing privileges
based on violation of supplier standard 7, 42 C.F.R. § 424.57(c)(7). CMS Ex. | at 1-7.
However, Palmetto also found that Petitioner was in compliance with 42 C.F.R.

§ 424.57(c)(2), (c)(10), and (c)(21), contrary to Palmetto’s initial determination. CMS
Ex. | at 4-5.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
November 20, 2013. The case was assigned to me for hearing and decision on December
13, 2013, and an Acknowledgement and Prehearing Order (Prehearing Order) was issued
at my direction. No issue has been raised as to the timeliness of Petitioner’s request for
earing, the parties do not challenge my authority to decide this case, and I conclude that
I have jurisdiction.

On January 10, 2014, CMS filed a combined prehearing brief and motion for summary
judgment (CMS Br.), with CMS Exs. | through 3. On February 18, 2014, Petitioner filed
is opposition to the CMS motion for summary judgment (P. Br.), with Petitioner’s
exhibit (P. Ex.) A.° On February 25, 2014, CMS filed a reply brief (CMS Reply).° The

> The citation to 42 C.F.R. § 424.57(e) was a clerical error as that provision relates to
revalidation of billing privileges every three years, which is not an issue in this case. I
conclude that Palmetto intended to cite 42 C.F.R. § 424.57(c) which includes supplier
standard 7.

* These regulatory requirements are known as durable medical equipment, prosthetics,
orthotics, and supplies (DMEPOS) supplier standards 2, 7, 10, and 21.

> Petitioner’s exhibit was not correctly marked as required by the Prehearing Order.
However, the exhibit was not returned to Petitioner for correction because there was no
potential for confusion based on the incorrect marking.

° In its reply brief, CMS requested that I order Petitioner to show cause why he should
not be sanctioned for the untimely filing of his brief and exhibit. CMS Reply at 6-7. A

request for sanctions should have been by separate motion filed in accordance with Civil
(Footnote continued next page.)
parties have not objected to my consideration of the exhibits and CMS Exs. 1 through 3
and P. Ex. A are admitted as evidence.

IL. Discussion
A. Applicable Law

Section 1831 of the Social Security Act (Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. Administration of the Part B program is through contractors, such as
Palmetto. Act § 1842(a) (42 U.S.C. § 1395u(a)). 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 DMEPOS supplier.

The Act requires the Secretary to issue regulations that establish a process for the
enrollment of providers and suppliers, including the right to a hearing and judicial review
in the event of denial or non-renewal. Act § 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to
42 C.F.R. § 424.505, a 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. To receive direct-billing privileges, a
DMEPOS supplier must meet and maintain the Medicare application certification
standards set forth in 42 C.F.R. § 424.57(c). Among other requirements, a DMEPOS
supplier must maintain a physical facility on an appropriate site. 42 C.F.R.

(Footnote continued from preceding page.)

Remedies Division Procedure (CRDP) § 15, to ensure that Petitioner had an opportunity
to respond. I will not sanction CMS for failure to comply with the CRDP, but I will not
consider the CMS request further. I note that CMS failed to cite any prejudice it suffered
and a sanction against Petitioner is unlikely in any case. I will not delay the decision in
this case to consider whether sanctions are appropriate.

7 A “supplier” furnishes services under Medicare. 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)). A “provider of
services,” commonly shortened to “provider,” includes hospitals, critical access hospitals,
skilled nursing facilities, comprehensive outpatient rehabilitation facilities, home health
agencies, hospice programs, and a fund as described in sections 1814(g) and 1835(e) of
the Act. Act § 1861(u) (42 U.S.C. § 1395x(u)). The distinction between providers and
suppliers is important because they are treated differently under the Act for some
purposes.

§ 424.57(c)(7). An appropriate site for the physical facility must meet certain criteria,
including that the practice location is in a location accessible to the public, Medicare
beneficiaries, and CMS and its agents, and that the practice location must be accessible
and staffed during posted hours of operation. 42 C.F.R. § 424.57(c)(7)(i)(B), (C). A
DMEPOS supplier must provide complete and accurate information in response to
questions on its application for Medicare billing privileges and must report to CMS any
changes in information supplied on the application within 30 days of the change.

42 C.F.R. § 424.57(c)(2). A DMEPOS supplier must permit CMS or its agent to conduct
on-site inspections to ascertain supplier compliance with the Medicare enrollment
standards. 42 C.F.R. § 424.57(c)(8). Finally, a DMEPOS supplier must at all times be
“operational,” which means 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.

The Secretary has delegated the authority to revoke enrollment and billing privileges to
CMS. 42 C.F.R. § 424.535. CMS or its Medicare contractor may revoke an enrolled
supplier’s Medicare enrollment and billing privileges and supplier agreement for any of
the reasons listed in 42 C.F.R. § 424.535. Specifically, CMS may revoke supplier’s
enrollment and billing privileges if the supplier is determined not to be in compliance
with the enrollment requirements. 42 C.F.R. § 424.535(a)(1). CMS may also revoke a
currently enrolled supplier’s Medicare enrollment and billing privileges if CMS
determines, upon on-site review, that the supplier is no longer operational to furnish
Medicare covered items or services, or the supplier fails 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. 42 C.F.R. § 424.535(a)(5)(ii). After a
supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred
from reenrolling in the Medicare program for one to three years. 42 C.F.R. § 424.535(c).

A supplier whose enrollment and billing privileges have been revoked may request
reconsideration and review as provided by 42 C.F.R. pt. 498. A supplier submits a
written request for reconsideration to CMS or its contractor. 42 C.F.R. § 498.22(a).
CMS or its contractor must give notice of its reconsidered determination to the supplier,
giving the reasons for its determination and specifying the conditions or requirements the
supplier failed to meet, and the right to an ALJ hearing. 42 C.F.R. § 498.25. Ifthe
decision on reconsideration is unfavorable to the supplier, the supplier has the right to
request a hearing by an ALJ and further review by the Departmental Appeals Board (the
Board). Act § 1866(j)(8) (42 U.S.C. § 1395ce(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17),
498.5. A hearing on the record, also known as an oral hearing, is required under the Act.
Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-751 (6th Cir. 2004). The
supplier bears the burden to demonstrate that it meets enrollment requirements with
documents and records. 42 C.F.R. § 424.545(c).

B. Issues
Whether summary judgment is appropriate; and

Whether there was a basis for the revocation of Petitioner’s billing
privileges and Medicare enrollment.

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

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

1. Summary judgment is appropriate.

A provider or supplier denied enrollment in Medicare or whose enrollment had been
revoked has a right to a hearing and judicial review pursuant to section 1866(h)(1) and (j)
of the Act and 42 C.F.R. §§ 424.454(a), 498.3(b)(1), (5), (6), (8), (15), (17), 498.5. The
Act requires a hearing on the record, also known as an oral hearing. Act §§ 205(b), 1866
(h)(1) and (j); Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51. A party
may waive appearance at an oral hearing, but must do so affirmatively in writing.

42 C.F.R. § 498.66. In this case, Petitioner has not waived the right to oral hearing or
otherwise consented to decision based only upon the documentary evidence or pleadings.
Accordingly, disposition on the written record alone is not permissible, unless CMS’
motion for summary judgment has merit.

Summary judgment is not automatic upon request. Rather, it is limited to certain specific
conditions. The procedures established by 42 C.F.R. pt. 498 related to ALJ hearings
applicable in this case do not include a summary judgment procedure. However,
appellate panels of the Board have long recognized the availability of summary judgment
in cases subject to 42 C.F.R. pt. 498, and the federal courts have recognized the Board’s
interpretative rule. See, e.g., Crestview, 373 F.3d at 749-750. Furthermore, I adopted a
summary judgment procedure as a matter of judicial economy within my authority to
regulate the course of proceedings and made it available to the parties in the litigation of
this case by my Prehearing Order. Prehearing Order §§ ILD, ILG.

Summary judgment is appropriate when there is no genuine dispute as to any issue of
material fact for adjudication or the moving party is entitled to judgment as a matter of
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. The party requesting summary
judgment bears the burden of showing that there are no genuine issues of material fact for
trial or that it is entitled to judgment as a matter of law. Generally, the non-movant may
not defeat an adequately supported summary judgment motion by relying on the denials
in its pleadings or briefs, but must furnish evidence of a dispute concerning a material
fact, i.e., a fact that would affect the outcome of the case if proven. Mission Hosp. Reg’l
Med. Ctr., DAB No. 2459 at 4 (2012) (and cases cited therein); Experts Are Us, Inc.,
DAB No. 2452 at 4 (2012) (and cases cited therein); Senior Rehab. & Skilled Nursing
Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein); see also, Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).

The standard for deciding a case on summary judgment and an ALJ’s decision-making in
deciding a summary judgment motion differ 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 Board has also 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 has not provided for
the allocation of the burden of persuasion or the quantum of evidence in 42 C.F.R. pt.
498. The Board, however, has provided some persuasive analysis regarding the
allocation of the burden of persuasion in cases subject to 42 C.F.R. 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).

In deciding that summary judgment is appropriate, I note that Petitioner did not challenge
the material facts in this case: Petitioner was a DMEPOS supplier at the time of the
inspections; Petitioner’s hours of operation, as stated in his Medicare Enrollment
Application (CMS Form 8558), dated February 14, 2013, were | p.m. to 4 p.m. on
Mondays and 9 a.m. to 12 p.m. on Tuesday, Thursday, and Saturday; Palmetto’s
inspector attempted to inspect Petitioner’s location on Thursday, March 21, 2013 at or
about 10:40 a.m. and Tuesday, March 26, 2013 at or about 10:55 a.m., when, according
to Petitioner, he should have been open; and, by Petitioner’s own admission, his facility
was not open at the times of the visits.

I conclude, after viewing the evidence before me in the light most favorable to Petitioner
and drawing all inferences in Petitioner’s favor, that there is no dispute as to any material
fact in this case that requires a trial. 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 and application of the law to
the undisputed facts of this case. The issues in this case must be resolved against
Petitioner as a matter of law and the undisputed evidence shows that there is a basis for

the revocation of Petitioner’s Medicare billing privileges effective July 2, 2013.
Accordingly, I conclude summary judgment is appropriate.

2. There was a basis to revoke Petitioner’s Medicare enrollment and
billing privileges pursuant to 42 C.F.R. § 57(d) and 424.535(a)(1) for
violation of 42 C.F.R. § 424.57(c)(7)(i)(C) (supplier standard 7).

3. The effective date of revocation is July 2, 2013.
a. Facts

The facts are not disputed and any inferences are drawn in favor of Petitioner. On March
21, 2013 at or about 10:40 a.m., a SACU investigator attempted to inspect Petitioner’s
facility at the address on file with CMS: 628 E. 222nd Street, Euclid, Ohio 44123. The
investigator found the door locked and the office appeared not to be open. The
investigator returned to Petitioner’s facility on March 26, 2013 at or about 10:55 a.m.,
and again found the door locked and the office appeared not open and accessible. CMS
Ex. | at 2-3, 18-19; CMS Ex. 2; CMS Ex. 3 at 7. Petitioner admits that his office at 628
E. 222nd Street, Euclid, Ohio was not open for business and that the investigator could
not gain access at 10:40 a.m. on March 21, 2013 or at 10:55 a.m. on March 26, 2013. P.
Br. at 4; Petitioner’s More Definite Statement at 1-2. Petitioner does not deny that 10:40
a.m. and 10:55 a.m. are within the range of hours he stated his office was open in the
CMS Form 855S that he signed on February 14, 2013. CMS Ex. 3 at 7. Petitioner does
not deny that March 21, 2013 was Thursday and March 26, 2013 was Tuesday, days of
the week when his CMS Form 855S show that he would be open to the public from 9
a.m. to 12 p.m. CMS Ex. 3 at 7. Petitioner does not deny that he did not check the “By
Appointment Only” block on his CMS Form 855S dated February 14, 2013. CMS Ex. 3
at 7. Petitioner has not offered any evidence that his posted hours stated that he was
available by appointment only or that his office was not opened on holidays or during the
“Holy Days.”

The SACU investigator checked blocks on his “Site Verification Survey Form” which
state that the facility did not appear to have inventory present and that the facility did not
appear to be operational. CMS Ex. | at 18; CMS Ex. 2 at 5. However the investigator’s
pictures show that visibility through the window and door were obscured by binds or
curtains. CMS Ex. | at 19; CMS Ex. 2 at 6. The investigator does not state in his
comments in the report how he could see the interior of the office so that he could
determine that no inventory was present. The investigator also does not explain in his
report how he determined that Petitioner was not prepared to submit valid Medicare
claims or that Petitioner was not properly staffed, equipped, and stocked, when open, to
provide items or services that Petitioner was authorized to provide as a DMEPOS
supplier consistent with his enrollment in Medicare. CMS Ex. 2 at 5. The investigator’s
report supports a conclusion that he inferred based on the fact that the office was not open
and he could not gain access that Petitioner did not have inventory present and that

ours were posted at Petitioner’s facili
door and the lower right and left corne
the poorly framed pictures.* I do not a
judgment but draw inferences in favor

b. Analysis

Palmetto informed Petitioner that revo

open when an inspector attempted to c

based on the facts that Petitioner’s faci
attempted inspections and Petitioner’s

Petitioner was not operational. The SACU investigator also states in his report that no

ity but there are clearly labels or signs on the office
rs of the office window that are unreadable due to
ccess the credibility of witnesses on summary

of Petitioner as the non-movant.

cation was based on his noncompliance with the

following supplier standards: 42 C.F.R. § 424.57(c)(2), because he failed to report
changes in his hours of operation; 42 C.F.R. § 424.57(c)(7), because his business was not

onduct two site visits during Petitioner’s reported

ours of operation and Petitioner’s hours were not posted; and, 42 C.F.R. § 424.57(c)(10)
and (c)(21), because he failed to provide a certificate of liability insurance upon request.
CMS Ex. | at 21-22. Palmetto notified Petitioner by letter dated September 24, 2013,
that the revocation of his enrollment and billing privileges was upheld on reconsideration

lity was not open when the SACU investigator
hours of operation were not posted and, therefore,

the evidence does not show that Petitioner was in compliance with supplier standard 7

(42 C.F.R. § 424.57(c)(7)). CMS Ex.
that Petitioner was in compliance with
reporting changes), (c)(10) (supplier st:

at 3-5. The reconsideration hearing officer found
42 C.F.R. § 424.57(c)(2) (supplier standard 2 —
andard 10 — insurance), and (c)(21) (supplier

standard 21 — responding to requests for information), contrary to Palmetto’s initial

determination. CMS Ex. | at 4-5. Alt!
the definition of operational and states
specifically find or conclude that the P
to revocation of enrollment and billing

Rather, she concluded that revocation w:

compliance with supplier standard 7 (4

that the specific issue before me is whet!
42 C.F.R. § 424.57(c)(7) (supplier stand

ough the reconsideration hearing officer sets forth
that a supplier must be operational, she did not
etitioner was not operational and therefore subject
privileges pursuant to 42 C.F.R. § 424.535(a)(5).
as appropriate because Petitioner failed to show
C.F.R. § 424.57(c)(7)). Accordingly, I conclude
er or not Petitioner was in compliance with
lard 7). Whether or not there was a basis for

2

revocation pursuant to 42 C.F.R. § 424

.535(a)(5) because Petitioner was not operational

is not at issue before me because it was not a basis for revocation upheld on
reconsideration. However, even a single violation of a single supplier standard is an

adequate basis for revocation of billing

DAB No. 2289 at 13 (2009).

privileges and enrollment. /866/CPayday.com,

® The investigator did provide a clear picture of the window for the Divine Beauty

Center, which demonstrates his ability
relevant to the case before me.

with the camera. However, that picture is not
CMS argues before me that Petitioner was not “operational” as defined in 42 C.F.R.

§ 424.502 and the facility was not accessible to the public, Medicare beneficiaries, CMS,
or its agents, as required by supplier standard 7, 42 C.F.R. § 424.57(c)(7), on the dates
the SACU investigator could not gain access to Petitioner’s facility. CMS Br. at 1, 6-8.
CMS argues that a violation of either of these provisions constitutes a sufficient basis to
revoke Petitioner’s billing privileges and participation in Medicare pursuant to 42 C.F.R.
§ 424.535(a)(5)(ii). CMS Br. at 1. The CMS argument shows that CMS conflates
revocation pursuant to 42 C.F.R. § 424.535(a)(1), which authorizes CMS to revoke
enrollment and billing privileges based on noncompliance with enrollment requirements
including the special payment rules for DMEPOS suppliers such as supplier standard 7,
and revocation pursuant to 42 C.F.R. § 424.535(a)(5), which authorizes CMS to revoke
because it has determined that a supplier is no longer operational. The Board recognized
this distinction in Complete Home Care, DAB No. 2525 at 6 (2013), concluding that it
did not need to decide whether or not a supplier was operational where it found a single
violation of 42 C.F.R. § 424.57(c)(7)(i)(C). The evidence that Petitioner was closed to
the public on the dates of the two inspections, during hours when he should otherwise be
open, is some evidence that Petitioner was no longer operational. However, whether a
facility is open to the public during posted hours of operation is only one of the criteria
established by 42 C.F.R. § 424.502 for deciding whether a supplier is operational. An
analysis of whether a facility is “operational” within the meaning of 42 C.F.R. § 424.502
also requires consideration evidence related to the other factors listed in the regulation
such as whether or not Petitioner was prepared to submit valid Medicare claims, whether
the facility was properly staffed, equipped, and stocked to furnish items or services the
supplier was authorized to furnish by its Medicare enrollment. However, whether or not
Petitioner was operational within the meaning of 42 C.F.R. § 424.502 is not at issue in
this case because violation of 42 C.F.R. § 424.535(a)(5) was not the basis for revocation
upheld on reconsideration.

Supplier standard 7, 42 C.F.R. § 424.57(c)(7), requires that Petitioner maintain an
appropriate site that meets specified criteria, including that it be accessible and staffed
during posted hours of operation and which CMS or its agents can inspect to ensure
compliance with participation requirements. Petitioner does not deny the facility was not
accessible and staffed during normal hours of operation when the SACU investigator
attempted to conduct either inspection. Accordingly, Petitioner was noncompliant with
42 C.F.R. § 424.57(c)(7)(i)(C) and there is a basis for the revocation of Petitioner’s
enrollment and billing privileges pursuant to the authority of 42 C.F.R. §§ 424.57(d) and
424.525(a)(1).

In this case, Petitioner was not in compliance with the special enrollment requirement for
DMEPOS suppliers established by 42 C.F.R. § 424.57(c)(7)(i)(C) because Petitioner’s
facility was admittedly unstaffed and inaccessible to the public during his hours of
operation. I accept for summary judgment purposes that Petitioner’s hours were posted
10

as Petitioner asserts and were consistent with the hours he reported in the CMS Form
855S that he signed on February 14, 2013. CMS Ex. 3. Furthermore, while 42 C.F.R.

§ 424.535(a)(1) contemplates that Petitioner would be allowed to file a corrective action
plan, in this case that would be a needless act because Petitioner cannot correct his
admitted violation of supplier standard 7.

Pursuant to 42 C.F.R. § 424.57(d) the effective date of the revocation of Petitioner’s
billing privileges and Medicare enrollment is July 2, 2013, which is 15 days after the
June 17, 2013 notice of the initial determination was issued. The March 26, 2013
effective date listed in the notice of initial determination is incorrect as a retroactive
effective date would be authorized in this case only if revocation was based on a
determination that Petitioner was no longer operational. 42 C.F.R. § 424.535(g).

Petitioner urges me to consider the fact that the dates on which he closed his facility fell
during “the most Holy Days in the Jewish and Christian calendars ....” P. Br. at 1.
Petitioner’s argument is not persuasive. Supplier standard 7 makes no exception for
religious holidays and Petitioner presented no evidence that whatever signage he did have
posted stated that his facility was closed for religious holidays. While I accept, for
purposes of summary judgment, Petitioners assertions that patients “were made aware of
the religious observance/holiday closure” (P. Br. at 4), such notice does not meet the
requirement of supplier standard 7 that Petitioner remain accessible and staffed during
posted hours of operation. Complete Home Care, Inc., DAB No. 2525 at 6. Petitioner
also does not deny that his facility was not open and accessible to the SACU investigator.

To the extent that Petitioner’s arguments may be construed to be that the regulations are
unconstitutional in content or application (P. Br. at 5), I have no authority to find invalid
a regulation or the Act on constitutional grounds and I am limited to applying the
regulations and Act consistent with the Constitution. Golden Living Ctr.—Grand Island
Lakeview, DAB No. 2364 at 3 (2011), citing Northern Montana Care Center, DAB No.
1930 (2004). I also have no authority to fashion any equitable relief for Petitioner by
shortening the period of his two-year bar to reenrollment. Complete Home Care, Inc.
DAB No. 2525 at 7.

HI. Conclusion
For the foregoing reasons, I conclude that Petitioner’s Medicare enrollment and billing

privileges are revoked effective July 2, 2013.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Center for Tobacco Products,
Complainant,
v.
FFJ Inc. d/b/a Dellwood Market,
and
Fuad Ali d/b/a Dellwood Market,
Respondents.

Docket No. C-14-656
FDA Docket No. FDA-2014-H-0185

Decision No. CR3191

Date: April 4, 2014

INITIAL DECISION AND DEFAULT JUDGMENT

The Center for Tobacco Products (CTP) initiated the above-captioned matter when it
filed an Administrative Complaint for Civil Money Penalties (Complaint) dated February
7, 2014, with the Departmental Appeals Board, Civil Remedies Division (CRD) and the
Food and Drug Administration’s (FDA) Division of Dockets Management. CTP alleged
that FFJ Inc. d/b/a Dellwood Market (FFJ Inc.) and Fuad Ali d/b/a Dellwood Market
(Fuad Ali) violated the Federal Food, Drug, and Cosmetic Act (Act) and the Act’s
implementing regulations. CTP previously initiated a civil money penalty action against
FFJ Inc. when it filed a Complaint on May 3, 2013 (CRD Docket Number C-13-719,
FDA-2013-H-0517). That case ended when an administrative law judge issued an Initial
Decision and Default Judgment imposing a civil money penalty in the amount of $500
2
against FFJ Inc. Fuad Ali was not named as a respondent in the May 3, 2013 Complaint
and was not personally subject to the $500 civil money penalty. CTP now seeks to
impose a $5,000 civil money penalty against FFJ Inc. and Fuad Ali. For the reasons
stated below, I impose a $5,000 civil money penalty against Respondent FFJ Inc.;
however, I dismiss, without prejudice, the February 7, 2014 Complaint against Fuad Ali.

I. Background and Factual Allegations set forth in the February 7, 2014 Complaint

On September 6, 2012, “CTP issued a Warning letter to Dellwood Market . . . citing a
violation [of 21 C.F.R. pt. 1140] on June 28, 2012, and stating that failure to correct the
violations may result in a civil money penalty action, or other regulatory action by FDA.”
On May 3, 2013, CTP filed a Complaint alleging that FFJ Inc. committed two additional
violations of 21 C.F.R. pt. 1140 on January 14, 2013. This cause of action concluded
when an administrative law judge entered default judgment against FFJ Inc. and ordered
it to pay a $500 civil money penalty. February 7, 2014 Complaint J 10-11; FFJ Inc.
d/b/a Dellwood Market, DAB CR2832, at 2-3 (2013).!

During a subsequent inspection, FDA-commissioned inspectors documented the
following at Respondents’ establishment:

[A] person younger than 18 years of age was able to purchase a package of
Decade Red Box cigarettes on August 28, 2013, at approximately 7:14 PM;
and . . . the minor’s identification was not verified before the sale, as
detailed above, on August 28, 2013, at approximately 7:14 PM.

February 7, 2014 Complaint § 1.

In compliance with 21 C.F.R. §§ 17.5 and 17.7, CTP served FFJ Inc. with the February 7,
2014 Complaint on February 12, 2014, via United Parcel Service. CTP alleged that both
FFJ Inc. and Fuad Ali owned Dellwood Market and, based on the August 28, 2013
inspection, charged both Respondents with violating 21 C.F.R. § 1140.14(a) (sale of
tobacco products to a minor) and 21 C.F.R. § 1140.14(b)(1) (failure to verify the age of a
person purchasing tobacco products by means of photographic identification containing
the bearer’s date of birth). CTP asked the CRD to impose a $5,000 civil money penalty
based on a total of five alleged violations of the regulations in a 36-month period.
February 7, 2014 Complaint {ff 1, 3, 10, 13.

' Administrative decisions and rulings cited in this decision are accessible on the internet
at: http://www.hhs.gov/dab/decisions/index.html.
3
The February 7, 2014 Complaint provided detailed instructions related to filing an answer
and requesting an extension of time to file an answer, and stated that failure to file an
answer could result in the imposition of a civil money penalty against Respondents.
February 7, 2014 Complaint §§j 14-22. Further, CRD sent FFJ Inc. an Initial Order
informing FFJ Inc. of the requirement to file an answer to avoid a default judgment.
CRD sent a form answer along with the Initial Order that FFJ Inc. could fill out and file
with CRD. Neither Respondent filed an answer or requested an extension of time within
the 30-day time period prescribed in 21 C.F.R. § 17.9.

II. Analysis

In order to initiate a civil money penalty action, CTP must “serv[e] on the respondent(s) a
complaint... .” 21 C.F.R. § 17.5(a). If service of the complaint has been properly
effected under the regulations and if a respondent does not file an answer within 30 days
of service of the complaint, then:

[T]he presiding officer shall assume the facts alleged in the complaint to be
true, and, if such facts establish liability under the relevant statute, the
presiding officer shall issue an initial decision within 30 days of the time
the answer was due, imposing:
(1) The maximum amount of penalties provided for by law for the
violations alleged; or
(2) The amount asked for in the complaint, whichever amount is smaller.

21 C.F.R. § 17.11(a). The regulations require that proof of service include “the name and
address of the person on whom the complaint was served, and the manner and date of
service....” 21 C.F.R. § 17.7(b). A failure to file a timely answer means that “the
respondent waives any right to a hearing and to contest the amount of the penalties and
assessments” imposed in the initial decision. 21 C.F.R. § 17.11(b).

CTP submitted proof that it served the February 7, 2014 Complaint on FFJ Inc. via
United Parcel Service on February 12, 2014. This method of service is permissible. See
21 C.F.R. § 17.7(b)(2). Therefore, it appropriate for me to adjudicate CTP’s charges
against FFJ Inc.

Accepting the facts alleged in the February 7, 2014 Complaint as true, I conclude that
those facts establish that FFJ Inc. is liable under the Act. See 21 U.S.C. §§ 333(f)(9),
387c(a)(7)(B), 387£(d); 21 C.F.R. §§ 1140.1(b), 1140.14. I further conclude that CTP’s
request to impose a $5,000 civil money penalty against FFJ Inc. is permissible based on
the three previously adjudicated violations (see FF J, DAB CR2832 at 2-3), and the two
violations established in this case, which all occurred within 36 months. See 21 C.F.R.
§ 17.2.
4
In regard to Fuad Ali, CTP submitted no proof that it served the February 7, 2014
Complaint on him. CTP only submitted one receipt from the United Parcel Service,
which indicated that CTP addressed the complaint to FFJ Inc. Similarly, CTP’s cover
letter to the February 7, 2014 Complaint was only addressed to FFJ Inc. and not Fuad Ali.
Therefore, the receipt that CTP submitted from the United Parcel Service is insufficient
to prove service on Fuad Ali. 21 C.F.R. § 17.7(b); see also 21 C.F.R. § 17.5(a)
(indicating that CTP must “‘serv[e] on the respondent(s) a complaint . . .”). Because there
is no proof that CTP served Fuad Ali with the February 7, 2014 Complaint, Fuad Ali has
not failed to timely file an answer. See 21 C.F.R. § 17.9(a). Therefore, I cannot issue an
initial decision and default judgment against Fuad Ali. See 21 C.F.R. § 17.11 (a).
Further, because CTP failed to effectuate service on Fuad Ali within a reasonable time, I
will dismiss, without prejudice, the February 7, 2014 Complaint as it relates to Fuad Ali.

Even if service of the February 7, 2014 Complaint had been properly effectuated, I would
have dismissed the Complaint against Fuad Ali because CTP failed to properly warn
Fuad Ali before seeking to impose a civil money penalty against him.

There are two different civil money penalty structures applied to tobacco retailers who
violate the Act. 21 C.F.R. § 17.2. The regulations separate tobacco retailers into two
categories, retailers with approved training programs and retailers without approved
training programs. Jd. However, in the absence of regulations concerning approved
training programs, CTP has adopted the practice of treating every tobacco retailer as if
they have an approved training program. Chambers Drive Inc., d/b/a Dynasty Deli Quick
Stop, ALJ Ruling 2012-3, at 2 n.3 (HHS CRD August 23, 2012); see also Complaint

§ 12. When a tobacco retailer with an approved training program commits its initial
violation of the regulations promulgated at 21 C.F.R. pt. 1140, CTP:

must give the retailer “timely and effective notice” of each
alleged violation before it conducts a follow-up compliance
check; it must also give notice of all previous violations
before it can charge the retailer. TCA § 103(q)(1)(B), (D); 21
U.S.C. § 333 (Guidance); see also CTP Ex. 1 at 6 (Goldman
Dec. § 12). Consistent with these requirements, the FDA
sends the retailer a warning letter the first time it finds a
violation. That letter lists the alleged violations, warns of
future inspections, and explains the consequences of future
violations.

Chambers Drive, ALJ Ruling 2012-3, at 2. Therefore, a civil money penalty can only be
imposed after issuance of the warning and an additional violation of the regulations by
the retailer with an approved training program. See 21 C.F.R. § 17.2.
5
In the present matter, CTP did not allege that it provided Fuad Ali a warning prior to his
alleged August 28, 2013 violation of 21 C.F.R. pt. 1140. See February 7, 2014
Complaint §§ 1-10. Although in the February 7, 2014 Complaint CTP alleged that Fuad
Ali owned Dellwood Market along with FFJ Inc., CTP made no such allegation in the
May 3, 2013 Complaint. February 7, 2014 Complaint {fj 10-11; FF, DAB CR2832, at
2-3. Therefore, I conclude that the record before me does not justify imposing a civil
money penalty against Fuad Ali.

III. Conclusion

Based on the foregoing, I direct FFJ Inc. to pay a civil money penalty in the amount of
$5,000. Further, I dismiss, without prejudice, the February 7, 2014 Complaint as it
relates to Fuad Ali. This initial decision becomes final and binding upon both parties 30
days after the date of its issuance. 21 C.F.R. § 17.11(b).

It is so ordered.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Christina Dziedzic Asig, M.D.,
(NPI: 1750346490)
(PTAN: A300077980)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-571

Decision No. CR3188
Date: April 3, 2014

DECISION

Petitioner, Christina Dziedzic Asig, M.D., appealed the determination establishing the
effective date of her enrollment as a supplier in the Medicare program, and the Centers
for Medicare & Medicaid Services (CMS) moved for summary judgment. For the
reasons explained below, I grant summary judgment in favor of CMS and affirm an
effective date for Petitioner’s enrollment as of September 21, 2012, with retrospective
billing privileges beginning August 23, 2012.

Background

This case involves two enrollment applications. While only Petitioner’s second
application is material to the decision here, it is important to explain the background of
both applications because much of Petitioner’s argument focuses on the circumstances
surrounding her first application.

The facts are not disputed. Petitioner submitted a CMS-855I enrollment application that
National Government Services (NGS), the contractor acting on behalf of CMS, received
on July 16, 2012. By letter dated August 2, 2012, and faxed to Petitioner on August 13,
2012, NGS notified Petitioner that she needed to submit additional information or else
NGS could reject her application. The letter notified Petitioner that she must submit the
information within 30 days, no later than August 31, 2012. CMS Ex. 1, at 1-6. Although
Petitioner contacted an NGS enrollment specialist, she did not provide the requested
documentation by August 31, 2012 because she was still collecting documentation issued
under her new married name. Therefore, on September 8, 2012, NGS rejected
Petitioner’s enrollment application. CMS Ex. 1, at 7-8.

NGS received Petitioner’s second enrollment application on September 21, 2012. CMS
Ex. 2. NGS approved this application and granted her retrospective billing privileges
beginning August 23, 2012.' CMS Ex. 3. Petitioner requested reconsideration to seek an
earlier effective date based on her previously rejected application. CMS Ex. 3, at 3. On
February 25, 2013, NGS issued an unfavorable decision, upholding the effective date and
the commencement of Petitioner’s retrospective billing privileges. CMS Ex. 3, at 3-7.

Petitioner timely filed a request for hearing before an Administrative Law Judge (ALJ). I
issued an acknowledgement and prehearing order on March 26, 2013. CMS filed a
motion for summary judgment and prehearing brief (CMS Br.), accompanied by three
exhibits (CMS Exs. 1-3). Petitioner filed an opposition to the CMS motion for summary
judgment (P. Br.) and submitted six exhibits (P. Exs. 1-6).’ In the absence of objection, I
admit CMS Exs. 1-3 and P. Exs. 1-6 into the record.

Issues
The issues in this case are:
1. Whether summary judgment is appropriate; and
2. Whether the undisputed evidence establishes that CMS and its contractor

properly determined the effective date of Petitioner’s enrollment and
retrospective billing privileges in the Medicare program.

' The contractor refers to August 23 as the “effective date.” CMS Ex. 3, at 1, 6.
However, August 23 is the effective retrospective billing date, and September 21 is the
effective date of Petitioner's enrollment. See 42 C.F.R. § 424.521(a).

> Two duplicative copies of P. Ex. 4 appear in the electronic file (DAB E-File), and page
11 of P. Ex. 2 incorrectly appears as another P. Ex. 3 on DAB E-File document number 9.
Findings of Fact and Conclusions of Law

I. Summary judgment is appropriate.

Summary judgment is appropriate if “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.”
Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
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. Jd. 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. To determine 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.

Here, CMS moved for summary judgment, and the parties do not dispute the facts
material to this case. See CMS Br. at 2; P. Br. at 1-3. The only issue to be resolved in
this case is a matter of law, which as discussed below, must be decided in CMS’s favor.
Accordingly, summary judgment is appropriate.

2. NGS properly determined Petitioner was enrolled as a supplier in the
Medicare program on September 21, 2012, the date that NGS received
Petitioner’s application that it was able to subsequently process to approval.
NGS was authorized to grant Petitioner retrospective billing privileges
beginning August 23, 2012.

The Social Security Act (Act) requires that the Secretary of the U.S. Department of
Health and Human Services promulgate regulations that establish the requirements to
enroll providers and suppliers of services in the Medicare program. See Act § 1866(j) (42
U.S.C. § 1395cc(j)); 42 C.F.R. Part 424, Subpart P. A provider or supplier must be
enrolled in the Medicare program to be reimbursed for services provided to Medicare
beneficiaries. 42 C.F.R. § 424.505. To enroll, a potential provider or supplier must
submit an enrollment application and meet all participation requirements. 42 C.F.R. §
424.510.

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).

he “date of filing” is the date that the Medicare contractor receives a signed enrollment
pplication that the Medicare contractor is able to process to approval. 42 C.F.R.
424.510(d)(1); 73 Fed. Reg. at 69,726, 69,769 (Nov. 19, 2008). Here, NGS received
wo enrollment applications from Petitioner, but it was only able to process one of the
pplications to approval. Petitioner concedes that she did not file the requested
locumentation regarding her first application within the provided time period. Hearing
Request; P. Br. at 2. The parties do not dispute that NGS received Petitioner’s second
application on September 21, 2012, and NGS was able to process that application to
approval. CMS Exs. 2-3. Accordingly, the effective date of Petitioner’s enrollment must
be September 21, 2012, the date that NGS received Petitioner’s enrollment application
that it subsequently approved.

stomp

An enrolled provider or supplier may 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)(1). Retrospective billing for up to 90 days prior to the effective date of
enrollment is permitted only in case of a Presidentially-declared disaster. 42 C.F.R. §
424.521(a)(2). Here, 30 days prior to the effective date of September 21, 2012, is August
23, 2012. Accordingly, Petitioner may bill Medicare retrospectively for reimbursement
of covered services beginning August 23, 2012.

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

On July 16, 2012, NGS received Petitioner’s first application and then later rejected it.
Although Petitioner was working with NGS to provide the requested information, she
concedes that she did not submit all requested information within 30 days of the notice
letter. P. Br. at 2. NGS was permitted to reject Petitioner’s incomplete application
because she failed to timely provide the requested information. 42 C.F.R. § 424.525(a).
An applicant does not have appeal rights to challenge a rejected application. 42 C.F.R.
§ 424.525(d). Rather, the applicant must resubmit a new enrollment application.

42 CFR. § 424.525(c).
CMS may extend the 30-day period provided for the applicant to comply before rejecting
an application if CMS determines that the applicant is actively working with CMS to
resolve any outstanding issues. 42 C.F.R. § 424.525(b). But this determination is purely
a discretionary matter and also is not subject to appeal.

Petitioner raises a number of reasons why I should grant her billing privileges effective
July 1, 2012. Petitioner states that the NGS enrollment specialist assisting her misled her
and did not tell her that further delay in receiving the updated documentation could
impact her enrollment and effective date for billing. P. Br. at 3-4. Petitioner also
concedes, however, that NGS’s “August 13, 2012 facsimile stated that ‘failure to respond
to this request within 30 days of this notice may result in the rejection or denial of your
application.”” P. Br. at 2. Federal case law and Departmental Appeals Board precedent
establish 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. Those who deal with the government are
expected to know the law and may not rely on the conduct of government agents contrary
to law. See, e.g., Office of Personnel Mgmt. v. Richmond, 496 U.S. 414 (1990); Heckler
v. Cmty. Health Servs. of Crawford County, Inc., 467 U.S. 51 (1984); 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). Here, Petitioner does not allege any affirmative
misconduct, and I am unable to grant the relief that Petitioner requests.

Although Petitioner appears to have made a good faith effort to try to complete her July
2012 application within the time provided, and she references a commendable ten-year
history of providing services to Medicare beneficiaries, Petitioner’s arguments are
equitable in nature, and regardless of the accuracy of these statements, I simply do not
have the authority to grant the equitable relief she requests. US Ultrasound, DAB No.
2302, at 8 (2010). I cannot grant an exemption to Petitioner under the regulation set forth
at 42 C.F.R. § 424.520(d), which is binding on me. See 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... .”).

Conclusion
I grant summary judgment in favor of CMS and affirm NGS’s determinations. The

undisputed evidence establishes that NGS received an application from Petitioner on
September 21, 2012, and that was the application it was able to subsequently process to
approval. Petitioner’s enrollment in the Medicare program, therefore, is effective
September 21, 2012, with retrospective billing privileges starting August 23, 2012.

/s/

Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Precision Prosthetic, Inc.
(NPI: 127590001),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-1256
Decision No. CR3187

Date: April 2, 2014

DECISION

The Centers for Medicare & Medicaid Services (CMS) denied the Medicare enrollment
of Petitioner, Precision Prosthetic, Inc., retroactive to April 10, 2006, when the National
Supplier Clearinghouse (NSC), a CMS administrative contractor, received an enrollment
application from Petitioner seeking to re-enroll in the Medicare program. The CMS
contractor originally approved the application on September 5, 2006. CMS stated in its
determination denying Petitioner’s enrollment that Petitioner’s owner, John Karl Lee,
was convicted in 2005 of three felony counts of mail fraud and three felony counts of
making false statements to obtain worker’s compensation benefits, which CMS deems
“financial crimes” under 42 C.F.R. § 424.530(a)(3)(i)(B), as well as felonies described in
section 1128 of the Social Security Act (codified at 42 U.S.C. § 1395a-7). Petitioner
appealed the determination denying its enrollment. For the reasons set forth below, I
affirm CMS’s denial of Petitioner’s 2006 enrollment application.

I. Case Background and Procedural History

Petitioner is a company in El Paso, Texas, that sells durable medical equipment,
prosthetics, orthotics, and supplies (DMEPOS). On April 10, 2006, NSC received from
Petitioner a CMS-855S form (2001 edition), one of several Medicare enrollment
applications, in which Petitioner sought to re-enroll in the Medicare program as a
“DMEPOS supplier.”’ CMS Exhibit (Ex.) 6. Following an on-site inspection and further
development of Petitioner’s 2006 enrollment application, on September 5, 2006, NSC
notified Petitioner that it had been re-enrolled in the Medicare program and its supplier
number was effective retroactive to December 17, 2002. CMS Exs. 9; 10.

On October 10, 2012, NSC notified Petitioner that it was revoking Petitioner’s billing
privileges pursuant to 42 C.F.R. § 424.535(a)(3)(i)(B), (D), retroactive to April 5, 2005.
CMS Ex. 1. NSC cited the April 5, 2005 felony convictions of John K. Lee, Petitioner’s
“sole owner,” for mail fraud and worker’s compensation fraud as the basis for revoking
Petitioner’s billing privileges. CMS Ex. 1, at 2. NSC stated that John K. Lee’s
convictions would result in a “mandatory exclusion from the Medicare program.” CMS
Ex. 1, at 2. NSC also imposed a three-year bar on Petitioner’s re-enrollment pursuant to
42 C.F.R. § 424.535(c). CMS Ex. 1. Petitioner requested reconsideration. On
November 16, 2012, NSC issued a reconsidered determination that was unfavorable to
Petitioner and upheld the revocation of Petitioner’s billing privileges. CMS Ex. 4.

Petitioner then requested a hearing before an administrative law judge. CMS Ex. 5. The
case was docketed in the Civil Remedies Division (CRD) with Docket Number C-13-
135, and was assigned to me for a hearing and decision. Following the parties’
prehearing submissions, I determined that NSC had not considered in its initial or
reconsidered determination whether it could revoke Petitioner’s enrollment retroactively
to April 5, 2005, since the regulation authorizing retroactive revocation, 42 C.F.R.

§ 424.535(g), became effective on January 1, 2009. See 73 Fed. Reg. 69,726, 69,940-41
(Nov. 19, 2008). Therefore, on June 3, 2013, I remanded the case to CMS to consider
that issue or, in the alternative, to consider whether NSC had intended to deny
Petitioner’s enrollment retroactively. I directed CMS to give Petitioner an opportunity to
respond to CMS’s proposed course of action following remand, issue a determination no
later than August 30, 2013, and then return the case to me for further proceedings. See
42 C.F.R. § 498.56(d).” Therefore, I retained jurisdiction over this case during remand.

' A “DMEPOS supplier” is “an entity or individual, including a physician or a Part A
provider, which sells or rents Part B covered items to Medicare beneficiaries and which
meets the standards in [42 C.F.R. § 424.57(c) and (d)].” 42 C.F.R. § 424.57/(a).

2 42 C.E.R. § 498.56(d) states:

At the request of either party, or on his or her own motion, in lieu of a
hearing under paragraph (c) of this section, the ALJ may remand the case
to CMS ... for consideration of the new issue and, if appropriate, a
determination. If necessary, the ALJ may direct CMS or the OIG to return
the case to the ALJ for further proceedings.
On July 31, 2013, CMS’s Center for Program Integrity provided Petitioner with a copy of
a “Proposed Determination” and permitted Petitioner an opportunity to respond. The
Proposed Determination stated that CMS intended to deny Petitioner’s enrollment
retroactive to Petitioner’s enrollment application that NSC received in 2006. Katherine
Lee responded to CMS by e-mail on August 21, 2013, and described the “process of
submitting the April 2006 revalidation application, taking over [Petitioner] from [John K.
Lee] and another past owner due to [John K. Lee’s] military service and federal prison
sentence, and submitting the 2012 revalidation application.” CMS Ex. 11, at 2. On
August 28, 2013, CMS issued its “Determination Pursuant to ALJ Anderson’s June 11,
2013 Amended Order of Remand.” CMS Ex. 11. The determination denied Petitioner’s
2006 Medicare enrollment application. CMS Ex. 11, at 1. CMS filed its determination
with CRD and the case was re-docketed under Docket Number C- 13-1256.

On September 5, 2013, I issued an Acknowledgment and Pre-hearing Order (Pre-hrg.
Order) that directed Petitioner to file a request for hearing by October 7, 2013, if it
disagreed with CMS’s August 28, 2013 determination denying Petitioner’s 2006
enrollment application or, if it agreed with that determination, a notice to that effect.
Petitioner timely filed its hearing request (RFH) on October 7, 2013, which disputed
CMS’s August 28, 2013 determination.

CMS filed a motion for summary judgment and brief (CMS Br.) on December 2, 2013, as
well as 11 proposed exhibits (CMS Exs. 1-11). Petitioner filed a “Motion to Dismiss” (P.
Mot.) on January 2, 2014, as well as eight proposed exhibits (P. Exs. 1-8). Petitioner’s
“Motion to Dismiss” did not seek dismissal of the case as its title suggests, but rather
opposed a decision in favor of CMS and argued, in essence, that the denial of its 2006
enrollment application was wrong. In addition, Petitioner filed its objection to the
admission of CMS Exs. 1-4 and 6-8. On January 21, 2014, Petitioner submitted a letter
dated April 15, 2013, from the American Board for Certification in Orthotics, Prosthetics,
& Pedorthics, Inc., as an additional proposed exhibit. On February 5, 2014, CMS filed an
objection to the admission of the letter submitted January 21, 2014, but did not file a
reply brief or objections to any other of Petitioner’s proposed exhibits. On February 17,
2014, Petitioner filed additional documents, though those documents appear to be copies
of documents already submitted as Petitioner’s proposed exhibits.

II. Evidentiary Rulings

With the exception of CMS Ex. 6, Petitioner’s objections to CMS’s proposed exhibits do
not challenge the relevance or authenticity of the documents, but merely dispute some of
the substantive evidence presented in those documents. For example, Petitioner argues
that CMS’s August 28, 2013 determination (CMS Ex. 1) was addressed to John Karl Lee,
but should have been addressed to Katherine Lee or Lisa Loza. Also, Petitioner’s
objection to a copy of NSC’s original notice of revocation questions whether the
revocation of its billing privileges was appropriate, but does not dispute the authenticity

or relevance of that proposed exhibit. However, admission of that evidence is not
precluded based on substantive arguments or arguments meant to discredit it. Petitioner
has not raised any relevant arguments that would preclude the admission of CMS’s
proposed exhibits. See 42 C.F.R. § 498.61. Petitioner argues that there may be
additional documents that CMS should have presented, but that theory, even if true, does
not prohibit the admission of the documents that CMS has actually produced as proposed
exhibits. Regarding CMS Ex. 6, Petitioner argues that the exhibit may not be complete in
light of the numerous blank pages. Petitioner states that it “believes CMS is withholding
or lost documents.” However, the “blank pages” in the exhibit appear to be the reverse
side of a page with print on only one side. Petitioner’s claim the document has been
altered or that CMS is withholding evidence is speculative and an unreasonable
interpretation of the “blank pages” in that exhibit. Moreover, CMS Ex. 6 is relevant as it
is a copy of Petitioner’s 2006 Medicare enrollment application that CMS has now denied.
Aside from Petitioner’s speculation, there is no basis to deem CMS’s proposed exhibits
as not relevant or not authentic. Therefore, I overrule Petitioner’s objections and admit
CMS Exs. 1-11 into the record.

CMS objects to the letter that Petitioner submitted on January 21, 2014. CMS argues that
the document was untimely submitted because Petitioner’s proposed exhibits were due on
January 2, 2014. Petitioner offers no explanation, let alone good cause, for the untimely
submission of this letter, and I find no basis to admit the letter as an exhibit. Therefore, I
sustain CMS’s objection and exclude the letter from the record. Even if it had been
timely submitted, the letter is from April 15, 2013, while the focus of this case is on
Petitioner’s compliance at the time of its 2006 application for re-enrollment. Therefore,
the relevance of the April 2013 letter is tenuous at best. In the absence of any objections
to Petitioner’s other proposed exhibits, I admit P. Exs. 1-8 into the record.

III. Decision on the Record

I informed the parties that they must submit written direct testimony from any witnesses
that they wanted to testify in this proceeding. Pre-hrg. Order § 8. Further, I informed the
parties that I would only hold an in-person hearing if an opposing party requested to
cross-examine a witness or witnesses for whom written direct testimony had been
submitted. Pre-hrg. Order § 10; Vandalia Park, DAB No. 1940 (2004); Pacific Regency
Arvin, DAB No. 1823, at 8 (2002) (holding that the use of written direct testimony for
witnesses is permissible so long as the opposing party has the opportunity to cross-
examine those witnesses). Neither party offered written direct testimony for any
witnesses. Accordingly, the record is closed and I issue this decision based on the written
record. See Pre-hrg. Order § 11.
IV. Issue

The issue in this case is whether CMS had a legitimate basis to deny Petitioner’s 2006
application for re-enrollment in the Medicare program.

CMS appears to have abandoned its theory that it was authorized to revoke Petitioner’s
billing privileges retroactive to April 5, 2005, the date of John K. Lee’s felony
convictions. My June 11, 2013 Amended Order of Remand (Remand Order) directed
CMS to consider whether it could revoke Petitioner’s billing privileges retroactively or,
in the alternative, whether it intended to deny Petitioner’s enrollment retroactively.
Remand Order at 3-4. CMS’s subsequent determination made it clear that it would deny
Petitioner’s enrollment retroactively rather than argue for retroactive revocation. CMS
Ex. 11, at 1. Also, CMS has not argued in its brief that it was authorized to revoke
Petitioner’s billing privileges, but merely that it was authorized to deny them. CMS Br.
at 7 (unnumbered). Accordingly, whether CMS was authorized to revoke Petitioner’s
billing privileges retroactive to April 5, 2005, is no longer at issue. It is expected that
CMS has taken or will take the steps necessary to reverse the revocation of Petitioner’s
billing privileges retroactive to April 5, 2005, because that determination has been
superseded by CMS’s August 28, 2013 determination to deny Petitioner’s April 2006
enrollment application.

V. Jurisdiction

I have jurisdiction to review CMS’s denial of a supplier’s enrollment in the Medicare
program. 42 C.F.R. §§ 424.545(a), 498.3(b)(17), 498.5(J)(1)-(2); see also 42 U.S.C.

§ 1395cc(j)(8). L also have jurisdiction to conduct further proceedings following remand
of a case to CMS to issue a new determination. 42 C.F.R. § 498.56(d).

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

The Social Security Act authorizes the Secretary of Health and Human Services to refuse
to enter into an agreement or refuse to renew an agreement with a supplier “in the event
that such physician or supplier has been convicted of a felony under Federal or State law
for an offense which the Secretary determines is detrimental to the best interests of the
program or program beneficiaries.” 42 U.S.C. § 1395u(h)(8). By regulation, CMS or its
contractor may deny the enrollment of a prospective provider or supplier if the “provider
or supplier at any time is found not to be in compliance with the Medicare enrollment
requirements described in this section or on the applicable enrollment application to the
type of provider or supplier enrolling ....” 42 C.F.R. § 424.530(a)(1). Among the
“Medicare enrollment requirements described in this section” is the authority for CMS to
deny enrollment if “within the 10 years preceding enrollment or revalidation . . . any
owner of the provider or supplier was convicted of a Federal or State felony offense that
CMS has determined to be detrimental to the best interests of the program and its
beneficiaries.” 42 C.F.R. § 424.530(a)(3). The regulation lists “financial crimes, such as
extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes
for which the individual was convicted . . .” as being offenses that form a basis for CMS
to deny enrollment to a provider or supplier. Jd. § 424.530(a)(3)(i)(B). The offenses
listed in the regulation represent those offenses that CMS has determined are “detrimental
per se” to the Medicare program and its beneficiaries. See Letantia Bussell, M.D., DAB
No. 2196, at 9 (2008).

1. At the time of Petitioner’s 2006 Medicare enrollment application, John Karl
Lee was an owner of Petitioner.

Petitioner admits that John K. Lee first acquired an ownership interest in Petitioner on
August 9, 1999. P. Ex. 8, Part 6, at 5. In 2006, Petitioner submitted an enrollment
application (CMS-855S, 2001 edition) to re-enroll in the Medicare program as a
DMEPOS supplier. CMS Ex. 6. It is undisputed that NSC received that application on
April 10, 2006. In the application Petitioner deleted Kwon Yi as an owner effective
February 2006, added Katherine Lee as a “‘director/officer” and “authorized official”
effective December 2005, and added Lisa Loza as “managing employee.” CMS Ex. 6, at
8-11. Petitioner also listed John Karl Lee as a “5% or greater owner” and an “authorized
official” of the company. CMS Ex. 6, at 12. John K. Lee signed the application and,
where prompted to provide his title or position, he wrote “owner.” CMS Ex. 6, at 16.

In response to the application, NSC conducted an on-site visit of Petitioner’s store. CMS
Ex. 9, at 199-246. As part of the on-site inspection, Petitioner was to supply “a listing of
all management and owners, including name and title.” CMS Ex. 9, at 199. On May 2,
2006, Petitioner provided a “List of Contacts” on its own letterhead. CMS Ex. 9, at 225.
John K. Lee is listed as “Owner.” CMS Ex. 9, at 225. By contrast, Katherine E. Lee is
listed as Petitioner’s “President” and Lisa Loza is listed as Petitioner’s “Office Manager.”
CMS Ex. 9, at 225.

The evidence contemporaneous with Petitioner’s 2006 enrollment application shows that
Petitioner held out John K. Lee as its owner. Petitioner argues that John K. Lee did not
participate in the day-to-day operations of the company, nor could he have done so while
he was incarcerated or deployed in the military. RFH at 1; P. Mot. at 1-3. Petitioner
points out that Katherine Lee and Lisa Loza were added as authorized officials in the
2006 enrollment application and that John K. Lee could not have managed the company
because he had been deployed overseas. RFH at 1. Petitioner even goes so far as to
assert that Katherine Lee was listed as the “owner” in the 2006 application, but nowhere

> Administrative decisions cited in this decision are accessible on the internet at:
http://www.hhs.gov/dab/decisions/index.html.
in that application is she listed as such. See CMS Ex. 6. Even if John K. Lee had a
limited role in Petitioner’s operations, that would not raise a genuine dispute about his
ownership of the company.

Petitioner has never explained why it listed John K. Lee as Petitioner’s “owner” in both
the 2006 enrollment application and in the “List of Contacts” provided to the NSC site
inspector on May 2, 2006, if he was not actually the owner as Petitioner now alleges.
Petitioner has not submitted any documentary evidence to prove John K. Lee divested his
ownership of Petitioner. This lack of explanation and evidence is even more significant
when considering the fact that John K. Lee signed Petitioner’s May 2012 revalidation
enrollment application as Petitioner’s owner. CMS Ex. 7, at 35. It is only in Petitioner’s
December 2012 revised revalidation enrollment application that Petitioner asserts that
John K. Lee ceased to be an owner on May 1, 2004, and Katherine Lee became an owner.
P. Ex. 8, Part 6, at 3,5. These assertions, coming only after CMS’s initial determination
to revoke Petitioner’s enrollment based on John K. Lee’s criminal conviction in 2005,
can only be viewed with extreme incredulity.

Therefore, in light of the fact that Petitioner bears the burden of demonstrating that it
meets all enrollment requirements, 42 C.F.R. § 424.545(c), and there being no other
reasonable inference based on the evidence before me, I find that John K. Lee was
Petitioner’s owner in 2006 during the submission and processing of Petitioner’s
enrollment application.

2. John Karl Lee was convicted of six felonies on April 5, 2005, that are
“financial crimes” pursuant to 42 C.F.R. § 424.530(a)(3)(i)(B).

It is undisputed that John K. Lee was convicted on April 4, 2005, in the United States
District Court for the Western District of Texas, of three counts of mail fraud in violation
of 18 U.S.C. § 1341, and three counts of false statements to obtain Federal employees’
compensation in violation of 18 U.S.C. § 1920. CMS Ex. 8, at 1. The offenses occurred
between July 21, 1999 and November 13, 2001. CMS Ex. 8, at 1. The trial court
sentenced John K. Lee to 24 months of incarceration followed by two years of supervised
release, imposed a $172,000 fine, directed forfeiture of $157,963.25, and ordered him to
pay $229,429.89 in restitution. CMS Ex. 8, at 6-7. It is also undisputed that John K. Lee
was able to return to military service on March 13, 2007, after completing his sentence.

As stated in 18 U.S.C. § 3559(a), the maximum term of imprisonment authorized by the
statute defining an offense determines whether that offense is a felony or misdemeanor,
and, if a felony, the class of felony. A violation of 18 U.S.C. § 1341 is punishable by up
to 20 years of incarceration. An offense that is punishable by less than 25 years but 10 or
more years of incarceration is a “Class C felony.” 18 U.S.C. § 3559(a)(3). A violation of
18 U.S.C. § 1920 is punishable by up to five years of incarceration. An offense that is

punishable by less than 10 years but five or more years is a “Class D felony.” 18 U.S.C.
§ 3559(a)(4). Accordingly, I find that John Lee’s convictions for violating 18 U.S.C.
§§ 1341, 1920 were for felony offenses under Federal law.

The regulations provide that a felony conviction of a supplier’s owner for a “financial
crime” provides a basis for CMS to deny that supplier’s enrollment in the Medicare
program. 42 C.F.R. § 424.530(a)(3)(i)(B). The applicable section provides a non-
exhaustive list of examples of offenses that constitute “financial crimes,” including:
“extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes
....” Id. Here, the felony offenses for which John K. Lee was convicted are not
expressly mentioned in the regulation, but rather are “similar crimes” to those described.
See id.; see also Edgard Cruz Baez, M.D., DAB CR2483, at 2 (2012) (“[T]he regulation
broadly interprets the term ‘financial crime’ to include any offense similar to those
listed.’”’). The offense of “frauds and swindles,” also known as “mail fraud,” 18 U.S.C.
§ 1341, requires the perpetrator to use the U.S. Postal Service or private carrier in
furtherance of a scheme to “defraud, or for obtaining money or property by means of
false or fraudulent pretenses, representations, or promises ....” 18 U.S.C. § 1341. As
outlined by the United States Circuit Court of Appeals for the Fifth Circuit (Case No. 05-
51138) in an opinion affirming John K. Lee’s convictions, by finding him guilty of mail
fraud, the jury necessarily found he had made fraudulent misrepresentation on Office of
Worker’s Compensation Program forms to obtain disability benefits. CMS Ex. 2, at 13.
In addition, the offense of “false statement or fraud to obtain Federal employees’
compensation,” 18 U.S.C. § 1920, requires that the perpetrator “knowingly and willfully
falsifies, conceals, or covers up a material fact, or makes a false, fictitious, or fraudulent
statement or representation, or makes or uses a false statement or report knowing the
same to contain any false, fictitious, or fraudulent statement or entry in connection with
the application for or receipt of compensation or other benefit ....” 18 U.S.C. § 1920.

“Insurance fraud,” which is listed in the regulation as being a “financial crime,” generally
prohibits “any person who, with an intent to defraud an insurance company, presents a
written or oral statement in support of a claim for payment knowing that the statement
contains false, incomplete, or misleading information concerning a fact material to such
claim....” 44A Am. Jur. 2d Insurance § 2060 (2014). The offenses for which John K.
Lee was convicted hinged on his presenting false material information (including through
the mail or other courier) to obtain financial benefit, which is remarkably similar to
“insurance fraud.” Cf Ahmed v. Sebelius, 710 F. Supp. 2d 167, 174 (D. Mass. 2010)
(“The DAB properly concluded that this conduct, as does insurance fraud, ‘involves a
false statement or misrepresentation in connection with a claim or application for
insurance or insurance benefits.’”). Thus, because of their similarity to insurance fraud,
the offenses for which John K. Lee was convicted are “financial crimes” as that phrase is
used in 42 C.F.R. § 424.530(a)(3)(i)(B).
3. CMS had a legitimate basis to deny Petitioner’s 2006 enrollment application
under 42 C.F.R. § 424.530(a)(3)(i)(B).

The regulations authorize CMS to deny a supplier’s enrollment application if, within the
10 years preceding that application, the supplier or “any of its owners” have been
convicted of a felony that is detrimental to the Medicare program or its beneficiaries.

42 C.F.R. § 424.530(a)(3). Among the offenses that CMS has determined are
“detrimental per se” to the Medicare program are “financial crimes.” Jd.

§ 424.530(a)(3)(i)(B). As explained above, John K. Lee was Petitioner’s owner at the
time Petitioner submitted its April 2006 enrollment application, and he had been
convicted on April 5, 2005, of six felony offenses that are “financial crimes” under the
regulation. Accordingly, CMS was authorized to deny Petitioner’s 2006 enrollment
application.

Here, CMS has exercised its authority to deny Petitioner’s enrollment nearly seven years
retroactively. The regulations authorize CMS to deny enrollment if the “provider or
supplier at any time is found not to be in compliance with the Medicare enrollment
requirements described in this section... .” 42 C.F.R. § 424.530(a)(1). The phrase “at
any time” in 42 C.F.R. § 424.530(a)(1) means that CMS has the authority to deny an
enrollment application retroactively, even if that application had been “previously
approved in error.” See US Ultrasound, DAB No. 2302, at 7 (2010). While CMS’s
authority to deny Petitioner’s enrollment in this case is based on 42 C.F.R.

§ 424.530(a)(3)(i)(B), subsection (a)(1) incorporates “the Medicare enrollment
requirements described in this section... .” Therefore, the language authorizing
retroactive denials in 42 C.F.R. § 424.530(a)(1) applies to subsection (a)(3) as well.

It must be noted that Petitioner remarkably went through two revalidation cycles since
being “approved” in 2006. It remains unclear what methods, if any at all, NSC had in
place to ensure that providers or suppliers or their owners did not have prohibited felony
convictions. Apparently, as this case exemplifies, NSC did not check whether DMEPOS
owners were convicted and simply trusted that suppliers who were convicted felons —
i.e., those too untrustworthy to be part of the Medicare program — would report their
own prior misdeeds.’ Nevertheless, whether Petitioner or NSC is to blame for

* CMS claims that it was authorized to deny Petitioner’s April 2006 enrollment
application pursuant to 42 C.F.R. § 424.530(a)(4) because Petitioner provided false or
misleading information by not reporting John K. Lee’s 2005 convictions. CMS Br. at 6.
However, the 2001 edition of the CMS-855S, which is the enrollment application that
Petitioner submitted in April 2006, required that only convictions stated in the application
itself had to be reported. CMS Ex. 6, at 12. The offenses listed in the application were
those committed in connection with or related to the delivery of a health care item or
service or involved the unlawful manufacture or distribution of controlled substances.
CMS Ex. 6, at 3.
10

Petitioner’s mistaken approval as a DMEPOS supplier in September 2006, one must hope
that CMS is concerned about what the facts of this case reveal.

VII. Conclusion

For the foregoing reasons, I affirm CMS’s denial of Petitioner’s 2006 Medicare
enrollment application pursuant to 42 C.F.R. § 424.530(a)(3)(i)(B). John K. Lee, the
listed owner of Petitioner, was convicted on April 5, 2005 of “financial crimes” and thus
detrimental to the best interests of the Medicare program and its beneficiaries.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Steven Reppuhn, Ph.D.,
(PTAN: MI6852),
Petitioner,
v.
Centers for Medicare & Medicaid Services.

Docket No. C-14-356

Decision No. CR3186

Date: April 1, 2014

DECISION

I grant summary judgment in favor of the Centers for Medicare & Medicaid Services
(CMS) sustaining its determination to reactivate the Medicare billing privileges of
Petitioner, Steven Reppuhn, Ph.D., effective May 23, 2013.

I. Background

Petitioner is a clinical psychologist practicing in the State of Wisconsin. He filed a
hearing request challenging the determination of a Medicare contractor, as ratified by
CMS, to reactivate his billing privileges with the effective date that I recited in the
opening paragraph of this decision. In his hearing request Petitioner contends that his
effective date of participation should be July 2012.

CMS moved for summary judgment. With its motion CMS filed 14 exhibits that it
identified as CMS Ex. 1 - CMS Ex. 14. Petitioner opposed the motion and he filed nine
exhibits that he identified as P. Ex. 1 — P. Ex. 9. CMS filed a reply brief.
I receive CMS Ex. 1 —- CMS Ex. 14 into the record. I also receive P. Ex. 1 — P. Ex. 9. It
is unclear whether Petitioner filed any of these exhibits with his reconsideration request.
However, CMS did not object to my receiving them. I note, however, that the contents of
Petitioner’s exhibits are irrelevant to the issue that I address here.

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

The issue is whether CMS correctly established an effective date of May 23, 2013 for
reactivation of Petitioner’s Medicare billing privileges.

B. Findings of Fact and Conclusions of Law

Petitioner’s participation in Medicare is governed by regulations contained in 42 C.F.R.
Part 424. In order to maintain active status as a participant, a Medicare provider or
supplier is obligated to resubmit and recertify his or her enrollment information every
five years.

All providers and suppliers currently billing the Medicare program or
initially enrolling . . . are required to complete the applicable enrollment
application. The provider or supplier then enters a 5-year revalidation
cycle once a completed enrollment application is submitted.

42 C.F.R. § 424.515. Once a provider or supplier receives a notice from CMS or its
contractor to resubmit information pursuant to the five-year cycle, he or she must submit
the required information within 60 days. 42 C.F.R. § 424.515(a)(2). CMS may
deactivate a provider or supplier’s Medicare enrollment if that provider or supplier does
not respond within 90 days to CMS’s request for enrollment information. 42 C.F.R.

§ 424.540(a)(3). Once a provider’s enrollment is deactivated, he or she must submit a
new participation application if he or she wishes to have her participation reactivated. 42
C.F.R. § 424.540(b)(1). A request for reactivation is treated by CMS in the same manner
as any new application for enrollment. Arkady Stern, M.D., DAB No. 2329, at 4 n.5
(2010). The earliest effective participation date that CMS may establish for such an
application is the date that an acceptable application is received by the Medicare
contractor. 42 C.F.R. § 424.520(d).

The following facts are undisputed. On September 26, 2011, the contractor sent to
Petitioner a request that he update his enrollment information. Petitioner did not respond
to this request until May 3, 2012. On review, the contractor determined that the
information Petitioner had submitted was incomplete. On May 31, 2012, the contractor
sent a letter to Petitioner telling him that the information he had supplied was incomplete.
CMS Ex. 2. The contractor specifically told Petitioner that his Medicare billing
privileges would be deactivated if he did not submit a completed enrollment application
and requisite supporting documentation. Jd. at 2.

Petitioner did not reply to this request. On July 9, 2012, the contractor sent a letter to
Petitioner advising him that his Medicare billing privileges had been deactivated due to
is failure to comply with the contractor’s May request for information. CMS Ex. 3.

Petitioner did not provide additional information for more than a year. He filed new
applications to reactivate his Medicare participation beginning on June 22, 2013 (he filed
additional applications on June 24 and August 14, 2013). CMS Ex. 4. These
applications were incomplete and the contractor requested additional information from
Petitioner. Petitioner eventually complied with this request. On September 18, 2013 the
contractor reactivated Petitioner’s Medicare enrollment effective May 23, 2013.

These undisputed facts establish that the earliest date that the contractor could have
granted Petitioner for reactivation of his billing privileges was May 23, 2013.' Petitioner
did not file an application for re-enrollment that the contractor determined was complete
until June 22, 2013 and, consequently, the regulations establish that date as the effective
date of Petitioner’s reactivation of his billing privileges. 42 C.F.R. § 424.520(d).

Petitioner has offered nothing that would challenge the undisputed facts as I recite them.
Instead, he offers a series of equitable arguments which, taken individually and
collectively, are an assertion that he was treated unfairly by the contractor and CMS.

These arguments are unavailing as a matter of law. Equitable arguments cannot prevail
in a case such as this absent evidence that the government willfully misled or defrauded
Petitioner. Heckler v. Cmty. Health Servs. of Crawford County, Inc., 467 U.S. 51, 63
(1984). Petitioner’s assertions establish no such basis for relief.

First, Petitioner asserts that he never received notice that his May 3, 2012 filing was
incomplete or inaccurate. The May 31 and July 9, 2012 letters from the contractor to
Petitioner, however, belie that assertion. CMS Exs. 2-3. The undisputed facts are that
the contractor explicitly asked for more information from Petitioner and that Petitioner
did not respond to the request even after being told the consequences for his failure to
respond. Petitioner does not deny that the contractor’s letters were sent to an address that
he utilized as an office. Petitioner claims that the contractor sent the letters to his

' Technically, the earliest effective date that could be established for Petitioner was June
22, 2013. 42 C.F.R. § 424.520(d). However, CMS may give participants a grace period
of 30 days prior to their effective dates of participation within which CMS will process
claims submitted for Medicare items or services. 42 C.F.R. § 424.521(a)(1). Thus,
Petitioner was authorized to file claims beginning on May 23, 2013 and the contractor

9g 6

erroneously referred to this date as Petitioner’s “effective date” of participation.
“secondary” office, but he does not deny that those letters were received at that office nor
does he explain why he would not have seen or received mail sent to his secondary
office. Petitioner’s implication that he would not have received mail sent to his
secondary office strains credulity and overlooks that he listed an individual at his
secondary office as a contact person that CMS or its contractor was to contact regarding
his enrollment application. CMS Ex. 1, at 19.

Petitioner also argues that the information that the contractor requested already was on
file and need not be updated through an enrollment application because the requested
information is contained in the claims information that Petitioner submits or that
Petitioner had filed previously with the contractor or CMS. But, that is not a credible
assertion that Petitioner complied with regulatory requirements. The whole purpose of
requiring recertification from a provider is to assure that the provider is not filing false or
misleading information with his or her claims. CMS is entitled to request and obtain that
information in a format that it establishes and a provider is obligated by law to provide it
in the required format.

Petitioner also argues, effectively, that if he failed to provide requisite information to the
contractor it was not his fault but the fault of clerical staff that either erred or was
unaware of the need to provide the requisite information. But even if that is true, it does
not excuse Petitioner from complying with his obligations under the regulations. The
regulations impose a compliance obligation on Petitioner. He cannot delegate that
obligation to someone else and then hide behind that person’s failure to fulfill the
obligation that was Petitioner’s to begin with.

/s/
Steven T. Kessel
Administrative Law Judge