Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Nicola I. Riley, M.D.,

(PTAN: 000058035)

Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-16-443
Decision No. CR4664

Date: July 26, 2016

DECISION

Noridian Healthcare Solutions (Noridian), an administrative contractor acting on behalf
of the Centers for Medicare & Medicaid Services (CMS), revoked the Medicare
enrollment and billing privileges of Petitioner, Nicola I. Riley, M.D., because she
provided false or misleading information on a Medicare enrollment application. For the
reasons stated below, I affirm CMS’s determination.

I. Background and Procedural History

On August 20, 2014, Petitioner submitted an enrollment application (Form CMS-855I)

through the internet-based Provider Enrollment Chain and Ownership System (PECOS)
in response to a revalidation request. CMS Exhibits (Exs.) 1, 1A; Petitioner Exhibit (P.
Ex.) 4. In revalidating her enrollment information in PECOS, Petitioner did not report
that any final adverse legal actions had been taken against her.’ CMS Exs. 1, 4; P. Ex. 4.
On September 9, 2014, Noridian approved Petitioner’s revalidation application (CMS Ex.
2), but Noridian subsequently informed Petitioner on October 29, 2015 that it had
revoked her Medicare enrollment and billing privileges. CMS Ex. 3. In its October 2015
revocation letter, Noridian explained that Petitioner’s enrollment had been revoked and
that it had established a re-enrollment bar for a period of two years effective 30 days after
the postmark date of the letter. CMS Ex. 3 at 2. CMS further explained that the
revocation was pursuant to 42 C.F.R. § 424.535(a)(4) based on Petitioner’s report of false
or misleading information on her application. CMS Ex. 3 at 1.

On November 19, 2015, Petitioner submitted a letter that was construed as a request for
reconsideration. CMS Ex. 6. Petitioner stated the following, in pertinent part:

Dr. Riley inadvertently excluded her explanation of license revocation in
her 2014 Individual Medicare revalidation. (8551). The revocation letter
and explanation was included in the revalidation of her group contract
(855B) in 2014. A copy of section 3 and the explanation of license
revocation that was included in the 2014 revalidation is included in this
correspondence.

We ask that Dr. Riley’s Individual Medicare revocation be stayed as this
was an accidental clerical error when completing the revalidation of her
855] rather than an intentional hiding of information.

CMS Ex. 6 at 1. On February 9, 2016, Noridian denied Petitioner’s request for
reconsideration. CMS Ex. 7. Noridian explained the following in support of its
determination:

Revocation, Denial, or Effective date reason: 42 CFR §424.535(a)(4)
False or Misleading Information on Application
On her CMS 855] enrollment application submitted on August
23m [sic], 2014, Nicola Riley answered “no” in section three of
the application indicating that she did not have any previous
adverse legal histor y[.] However, based on information obtained
from the Maryland Board of Medicine, her license was revoked

' By submitting her application through PECOS, Petitioner did not complete a hard copy
of an enrollment application. Rather, Petitioner used an internet-based program to enter
her enrollment information. The document submitted by CMS as CMS Ex. | is an
Application Record Data Report, which is essentially a print-out of the information that
Petitioner entered into PECOS.
effective May 6, 2013. Revocation of a license to provide health
care by any state licensing authority is specifically listed as an
adverse legal even[t] that must be reported in section three.

CMS Ex. 7 at 1. Noridian further explained that Petitioner “did not mark ‘yes’ in section
three of her 8551 enrollment application” and “reportable adverse actions against the
provider must be disclosed in this section in order to be considered for enrollment in the
Medicare program.” CMS Ex. 7 at 1.

Petitioner filed a timely request for a hearing (RFH) on March 29, 2016.” Petitioner
explained that she had reported adverse legal actions in a separate Medicare enrollment
application that she submitted for her practice, SMP Family Medicine, in April 2014.
RFH Ex. 1. Petitioner further contended in her RFH that if she “inadvertently marked the
‘no’ box in Section 3 of her application, this was simply a clerical error.” RFH Ex. | at
1.

Lissued an Acknowledgment and Pre-Hearing Order (Order) on April 8, 2016.
Thereafter, on May 13, 2016, CMS filed a motion for summary judgment (CMS Br.)
together with 13 exhibits (CMS Exs. 1, 1A, 2-12); see Order § 4(c)(i) (authorizing filing
of motion for summary judgment). Following my issuance of an extension of time on
June 10, 2016, Petitioner, through counsel, filed a response to CMS’s motion for
summary judgment (P. Br.) and eight exhibits. (P. Exs. 1-8). In the absence of any
objections, I admit CMS Exs. 1, 1A, 2-11 and P. Exs. 1-8 into the record. I do not admit
CMS Ex. 12 into the record because CMS did not in any way reference the content of that
exhibit in its motion for summary judgment and I am therefore unable to ascertain any
basis for its submission as evidence in support of CMS’s arguments. In addition, I have
admitted the RFH, which was submitted as RFH Ex. 1, along with a supporting exhibit
for the RFH (RFH Ex. 14) that was not re-submitted with Petitioner’s pre-hearing
exchange. While Petitioner did not specifically cite to RFH Ex. 14 in her response to
CMS’s motion for summary judgment, Petitioner’s arguments are largely premised on the
submission of the document found at RFH Ex. 14.5

My April 8, 2016 Order advised the parties that they must submit written direct testimony
for any proposed witness and that an in-person hearing would only be necessary if the
opposing party requested an opportunity to cross-examine a witness. Order §§ 8-10.
Neither party has submitted written direct testimony or asked for the opportunity to cross-

> Petitioner submitted 15 “exhibits” in support of her RFH, many of which were re-
submitted with her pre-hearing exchange.

> Petitioner did not submit a list of proposed exhibits as required by my Order. Order
§ 4(c)(ii). Therefore, it is unclear whether she intended to submit exhibits that had been
submitted prior to the submission of her pre-hearing exchange.
examine a witness. CMS has moved for summary judgment and Petitioner has
responded accordingly; as a hearing for the purpose of cross-examination of any
witnesses has not been requested, it is unnecessary for me to decide this case based on
summary judgment. I will issue a decision on the merits.

II. Issue

The issue is whether CMS had a legitimate basis for revoking Petitioner’s Medicare
enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(4) based on the
submission of false or misleading information in a Medicare enrollment application. I
have jurisdiction to decide this issue. 42 C.F.R. §§ 498.3(b)(17), 498.5(1)(2); see also
42 USC. § 1395ec(j)(8).

III. Findings of Fact, Conclusions of Law, and Analysis*

As a physician, Petitioner was a supplier for purposes of the Medicare program. See

42 USC. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(1). In
order to participate in the Medicare program as a supplier, individuals must meet certain
criteria to enroll and receive billing privileges. 42 C.F.R. §§ 424.505, 424.510. CMS
may revoke enrollment and billing privileges for any reason stated in 42 C.F.R.

§ 424.535.

1. Petitioner has had an adverse legal action taken against her
pursuant to 42 C.F .R. § 424.502.

Pursuant to the definitions provided in 42 C.F.R. § 424.502. a final adverse action
includes a “[s]uspension or revocation of a license to provide health care by any State
licensing authority.” Petitioner admits that the Maryland State Board of Physicians
revoked her medical license.” P. Br. at 9-10; CMS Ex. 6. CMS submitted a Final
Decision and Order of the Maryland State Board of Physicians that ordered that
Petitioner’s medical license would be permanently revoked and that Petitioner “‘shall not
ever apply for licensure or reinstatement of her medical license to the Board or any
successor agency.” CMS Ex. 8 at 23. The Final Decision and Order also reported that,

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

> CMS also contends that Petitioner failed to report actions taken by the Utah Division
Occupational and Professional Licensing. CMS Br. at 6; see CMS Exs. 9, 10. As the
reconsidered determination that is the basis for Petitioner’s RFH was limited to
Petitioner’s failure to report a final adverse legal action taken by the Maryland State
Board of Physicians and did not identify Petitioner’s failure to disclose any other final
adverse legal actions, I will limit the discussion herein to the final adverse legal action
taken by the Maryland State Board of Physicians. CMS Ex. 7.

prior to the decision permanently revoking Petitioner’s medical license, Petitioner’s
Maryland medical license had been summarily suspended since August 31,2010. CMS
Ex. 8 at 1. I conclude that Petitioner has had an adverse legal action taken against her
pursuant to 42 CFR. § 424.502.

2. Petitioner did not notify CMS or Noridian of the revocation of
her medical license by the Maryland State Board of Physicians
at the time she submitted her individual revalidation
application, Form CMS- 855], via PECOS.

Petitioner submitted a revalidation application for her individual Medicare enrollment
through PECOS on August 20, 2014. CMS Exs. 1, 1A; P. Ex. 4. In that application,
Petitioner did not indicate that she had been the subject of any final adverse legal actions.
CMS Ex. | at 2 (Application Record Data Report showing “No Current Records Exist for
Final Adverse Legal Action”); CMS Ex. 6 at 1 (Petitioner’s statement that she
“inadvertently excluded her explanation of license revocation in her 2014 [i]ndividual
Medicare revalidation (855I)”). Petitioner contended that she failed to report the
information due to “an accidental clerical error when completing the revalidation of her
8551.” CMS Ex. 6 at 1.

Petitioner argued in her construed request for reconsideration, and also in her brief, that
she had previously informed Noridian of the final adverse legal action when she
submitted an enrollment application, Form CMS-855B, for her medical practice in April
2014. CMS Ex. 6 at 1; see also RFH Ex. 14 at 9; P. Ex. 1. Petitioner points to an excerpt
from Section 3 of a Form CMS-855B that included her report of actions taken against her
by licensing bodies in Maryland, Wyoming, and Utah, along with a memorandum
authored by Petitioner that explained those actions.° P. Br. at 2-3; see P. Ex. 1. The issue
here is not whether Petitioner has ever notified CMS or its contractor of the final adverse
legal action by the Maryland State Board of Physicians; rather, the issue is whether she
failed to report the final adverse legal action when she submitted a Form CMS-855I in
August 2014. Petitioner has not demonstrated that she notified CMS or its contractor of a
final adverse legal action against her at the time she filed her individual revalidation
application via PECOS on August 20, 2014.

° The copy of Section 3 furnished by Petitioner as P. Ex. 1 does not list the form number
(Form CMS-855B). P.Ex. 1. However, with her RFH, Petitioner submitted a complete
copy of the Form CMS-855B. RFH Ex. 14. Page | of P. Ex. | is identical to page 9 of
RFH Ex. 14, including a unique identifying stamp on the lower left hand corner of the
page.
3. Noridian had a legitimate basis to revoke Petitioner’s Medicare
enrollment and billing privileges pursuant to 42 C.F R.
§ 424.535(a)(4) because Petitioner certified on a revalidation
enrollment application on August 20, 2014, that she had not
been the subject of a final adverse legal action and this
statement was false.

In viewing Petitioner’s arguments in the most favorable light, Petitioner is under the
misunderstanding that because she reported final adverse actions when submitting a Form
CMS-855B for her medical practice, she did not fail to comply with section
424.535(a)(4) when she did not disclose any final adverse legal actions when she
electronically submitted a Form CMS-855I to revalidate her individual billing privileges.
Petitioner is mistaken. Section 3 of the Form CMS-855] asks an applicant if she has
“under any current or former name or business identity, ever had a final adverse legal
action ... imposed against [her]?” Form CMS-8551

(https: //www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/cms855i.pdf, last
visited July 21,2016). In response to this question, Petitioner did not disclose any final
adverse legal actions. Therefore Petitioner, in denying that she had been the subject of
any final adverse legal actions, provided false information pursuant to 42 C.F.R.

§ 424.535(a)(4).

Petitioner contends that her failure to provide the required information in response to this
question was a result of “accidental clerical error” and that it was not due to “an
intentional hiding of information.” CMS Ex. 6 at 1. In order to revoke a supplier’s
Medicare billing privileges, the supplier only needs to “certif[y] as ‘true’ misleading or
false information... .” 42 C.F.R. § 424.535(a)(4). Therefore, even if Petitioner did not
knowingly or intentionally fail to disclose final adverse legal actions in Section 3 of her
August 20, 2014 Medicare revalidation enrollment application, this provides no defense
to revocation. See, e.g., Sandra Johnson, CRNA, DAB No. 2708 at 15 (2016) (stating
that “[b]y signing the certification statements . . . she attested to the truth, accuracy and
completeness of their content as is” and that “Petitioner remained responsible for the
contents of her application.”).

Petitioner electronically signed the certification statement of the application, certifying
that she read the contents of the revalidation application and that the information
contained therein was true, correct, and complete. CMS Exs. 1, 1A. As the information
provided by Petitioner was not true, correct, and complete, the information provided in
Section 3 was false. Therefore, I conclude that CMS had a legal basis to revoke
Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.FR.

§ 424.535(a)(4).
IV. Conclusion

For the reasons explained above, I affirm the determination revoking Petitioner’s
Medicare enrollment and billing privileges.

/s/

Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Great Lakes Healthcare, LLC,
(CCN: 14-8322),

Petitioner,
v.
Centers for Medicare & Medicaid Services
Docket No. C-16-299
ALJ Ruling No. 2016-14

Date: July 25,2016

RULING

Petitioner, Great Lakes Healthcare LLC, is a home health agency (HHA) located in
Chicago, Illinois, that participated in the Medicare program until December 2015.
Following a survey, completed June 19, 2015, the Centers for Medicare & Medicaid
Services (CMS) terminated the HHA’s program participation because it failed to
maintain substantial compliance with Medicare conditions of participation and did not
correct its deficiencies prior to December 19, 2015. Although Petitioner has requested a
hearing, it does not challenge CMS’s finding of substantial noncompliance. Instead
Petitioner complains that neither CMS nor the state survey agency “formally” advised it
that they rejected the plan of corrections it submitted in response to the survey findings.

CMS moves to dismiss Petitioner’s hearing request under 42 C.F.R. § 498.70(c) because
it was not filed timely. In the alternative, CMS argues that Petitioner’s hearing request
must be dismissed under section 498.70(b) because Petitioner does not have the right to a
hearing on the issue it has raised.

I agree that Petitioner does not have the right to a hearing on the issues it raises and
dismiss Petitioner’s hearing request.
Discussion

Petitioner ’s hearing request must be dismissed because
Petitioner is not entitled to a hearing on CMS’s rejection of
its plan of correction nor on CMS’s purported failure to
notify it of the rejection. 42 C.F.R. § 498.70(b) J

An HHA is a public agency or private organization that “is primarily engaged in
providing skilled nursing services and other therapeutic services” to patients in their
homes. Social Security Act (Act) section 1861(0). It may participate in the Medicare
program as a provider of services if it meets that statutory definition and complies with
certain requirements, called conditions of participation. Act §§ 1861(0), 1891; 42 C.F.R.
Part 484; 42 C.F.R. § 488.3. But if the provider fails to comply with the provisions of
section 1861 or the relevant regulations, CMS, acting on behalf of the Secretary of Health
and Human Services, may terminate its provider agreement. Act § 1866(b)(2); 42 C.F.R.
§ 489.53(a)(1).

To monitor compliance, CMS contracts with state agencies that periodically survey the
HHAs. 42 CFR. § 488.10.

Section 1866(h) of the Act authorizes administrative review of determinations that a
provider fails to comply substantially with Medicare program requirements “to the same
extent as is provided in section 205(b) of the [Act].” Under section 205(b), the Secretary
of Health and Human Services must provide reasonable notice and opportunity for a
hearing “upon request by [the affected party] who makes a showing in writing that his or
her rights may be prejudiced” by the Secretary’s decision. The hearing request “must be
filed within sixty days” after receipt of the notice of CMS’s determination. Act § 205(b).
The 60-day time limit is thus a statutory requirement. See Cary Health & Rehab. Ctr.,
DAB No. 1771 at 8-9 (2001); 42 C.F. R. § 498 .40(a) (requiring the affected party to “file
the request in writing within 60 days from receipt of the notice . . . unless that period is
extended... .”).

Under the regulations, a provider dissatisfied with an initial determination — which
includes a finding of noncompliance that results in CMS imposing a remedy — may
request a hearing, and hearings are conducted in accordance with procedures set forth in
42 CFR. Part 498. 42 C.F.R. §§ 498.5, 488.810(g) (providing that the part 498 appeal
provisions apply when the HHA “requests a hearing on a determination of
noncompliance leading to the imposition of a sanction, including termination of the
provider agreement.”). Only initial determinations are appealable. The regulations list
actions that are initial determinations and thus subject to appeal (discussed below).

' T make this one finding of fact/conclusion of law.
On motion of a party, or his/her own motion, the administrative law judge may dismiss a
hearing request where that request was not timely filed and the time for filing was not
extended. 42 C.F.R. § 498.70(c). The administrative law judge may also dismiss if the
requesting party does not have a right to a hearing. 42 C.F.R. § 498.70(b).

Here, the Illinois Department of Public Health (State Agency) completed Petitioner’s
recertification survey on May 8, 2015, and cited six condition-level deficiencies. CMS
Exs. 1, 62 Ina notice letter dated August 6, 2015, CMS advised the HHA that it was not
in substantial compliance and that CMS would therefore terminate its program
participation effective December 19, 2015, and impose a $2,000 per day civil money
penalty (CMP), beginning June 19, 2015. CMS Ex. 6 at 1,2. A section of the notice
letter — prominently captioned “Appeal Rights” — advised the HHA of its right to request
a hearing before an administrative law judge if it believed that the determination was not
correct. The letter then advised: “To do this, you must file your appeal within 60
calendar days after the date of receipt of this decision.” CMS Ex. 6 at 4. The letter then
explained how to file and cited the regulations that govern such appeals (42 C.F.R. Part
498). CMS Ex. 6 at 4-5.

CMS sent the notice letter by overnight mail. CMS Ex. 6 at 1. No one disputes that the
HHA received its notice on August 7, 2015, which means that its hearing request was due
no later than October 6, 2015. Petitioner did not request review of CMS’s findings of
substantial noncompliance, and the deadline (October 6, 2015) passed.

Instead, Petitioner filed an appeal on February 8, 2016, complaining that it submitted a
plan of corrections on August 12, 2015, but “was never told that the [plan] was accepted
and approved” or that the plan “did not meet Conditions of Participation.” Hearing
Request at 1. When, in a letter dated December 7, 2015, CMS advised Petitioner that its
provider status was revoked, Petitioner understood that its plan of correction had not been
accepted. See CMS Ex. 10. In Petitioner’s view, the state agency’s (and CMS’s) failure
to respond formally to its plan of correction “effectively voids the revocation process
....” Hearing Request at 1.

As a threshold matter, CMS is not required to afford a provider the opportunity to correct
a condition-level deficiency before terminating its program participation. 42 C.F.R.
§ 488 .830(a); Blossom South, LLC v. Sebelius, 987 F. Supp. 289, 302 (W.D.N.Y. 2013)

> A “condition of participation” represents a broad category of home health services. If
deficiencies are of such character as to “substantially limit the provider’s . . . capacity to
furnish adequate care or which adversely affect the health and safety of patients,” the
provider is not in compliance with conditions of participation. 42 C.F.R. § 488.24(b).
CMS may terminate program participation if the HHA fails to meet even one condition of
participation. Act §§ 1866(b)(2)(B), 1861(0)(6); 42 C.F.R. § 489.53(a)(3); Cmty. Home
Health, DAB No. 2134 (2007).
(acknowledging that CMS has the authority to order immediate termination, without
giving the provider an opportunity “to rectify matters, once the decision had been
made.”); see Oaks of Mid City Nursing & Rehab. Ctr., DAB No. 2375 at 29-30 (2011);
Cmty. Home Health, DAB No. 2134 at 14 (2007); Excelsior Health Care Srvs., Inc.,
DAB No. 1529 at 6-7 (1995). This is a matter wholly within CMS’s discretion, and I
have no authority to review it.

Nor may I review either the state agency’s/CMS’s determination to reject a provider’s
plan of correction or their failure to act on the provider’s plan of correction. Those
actions (inaction) are not listed as initial determinations and are therefore not reviewable.
42 CFR. §§ 498.3(b); 498.5; HRT Lab., Inc., DAB No. 2118 at 11 (2007); Hermina
Traeye Mem’! Nursing Home, DAB No. 1810 at 13 (2002) (In affirming the termination
of a provider, the “ALJ properly concluded that he lacked authority to adjudicate the
question of whether [CMS] abused its discretion in deciding to reject the [plan of
correction].”).

Conclusion

Because Petitioner has not timely appealed any issue that I have the authority to review, I
dismiss its hearing request pursuant to 42 C.F.R. § 498.70(b).

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
David B. Gomez, O.D.,

(NPI: 1174512453; PTAN: 0763312)
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-16-242
Decision No. CR4663

Date: July 25, 2016

DECISION

The Medicare enrollment and billing privileges of Petitioner, David B. Gomez, O.D., are
revoked pursuant to 42 C.F.R. § 424.535(a)(3), ' effective June 29, 2006.

I. Background

Palmetto GBA (Palmetto), the Medicare contractor for the Centers for Medicare and
Medicaid Services (CMS), notified Petitioner by letter dated September 3, 2015, that his
Medicare billing privileges were revoked effective June 29, 2006. The regulatory
authority cited for the revocation was 42 C.F.R. § 424.535(a)(3) based upon Petitioner’s
June 29, 2006 felony conviction for distribution of cocaine. CMS Exhibit (CMS Ex.) 8.
On November 12, 2015, Petitioner requested reconsideration by a contractor hearing
officer. CMS Ex. 9. On January 11, 2016, the revocation was upheld on reconsideration
under 42 C.F.R. § 424.535(a)(3) based upon Petitioner’s felony conviction. CMS Ex. 10.

Petitioner requested a hearing before an administrative law judge (ALJ) on January 13,
2016. The case was assigned to Judge Joseph Grow on January 28, 2016. Judge Grow
issued a prehearing order on January 28, 2016 (Prehearing Order). The case was

Citations are to the 2014 revision of the Code of Federal Regulations (C.F.R.), unless
otherwise stated.
reassigned to me on April 1, 2016, upon Judge Grow’s departure from the Civil
Remedies Division. On March 2, 2016, CMS filed a motion for summary judgment and
CMS exhibits | through 11. Petitioner filed a response (P. Br.) without any exhibits on
April 5, 2016. Petitioner has not objected to my consideration of the CMS exhibits and
they are admitted.

II. Discussion
A. Applicable Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. 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, a doctor of optometry, is a supplier.

The Act requires the Secretary of Health and Human Services (Secretary) to issue
regulations that establish a process for the enrollment in Medicare of providers and
suppliers, including the right to a hearing and judicial review of certain enrollment
determinations, such as revocation of enrollment and billing privileges. Act § 1866(j)
(42 USC. § 1395cc(j)). Pursuant to 42 C.F.R. § 424.505, a supplier such as Petitioner
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 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. In this case, CMS revoked Petitioner’s
Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(3), which
provides:

(a) Reasons for revocation. CMS may revoke a currently
enrolled provider or supplier’s Medicare billing privileges
and any corresponding provider agreement or supplier
agreement for the following reasons:

(3) Felonies. The provider, supplier, or any owner of the
provider or supplier, within the 10 years preceding enrollment
or revalidation of enrollment, 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.

(i) Offenses include—

(A) Felony crimes against persons, such as murder, rape,
assault, and other similar crimes for which the individual was
convicted, including guilty pleas and adjudicated pretrial
diversions.

(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.

(C) Any felony that placed the Medicare program or its
beneficiaries at immediate risk, such as a malpractice suit that
results in a conviction of criminal neglect or misconduct.

(D) Any felonies that would result in mandatory exclusion
under section 1128(a) of the Act.

(ii) Denials based on felony convictions are for a period to be
determined by the Secretary, but not less than 10 years from
the date of conviction if the individual has been convicted on
one previous occasion for one or more offenses.

42 C.F.R. § 424.535(a)(3) (emphasis added); Act § 1866(b)(2)(D).
Section 1128(a) of the Act provides:

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

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

(2) Conviction relating to patient abuse.—Any individual or
entity that has been convicted, under Federal or State law, of
a criminal offense relating to neglect or abuse of patients in

connection with the delivery of a health care item or service.

(3) Felony conviction relating to health care fraud —Any
individual or entity that has been convicted for an offense
which occurred after the date of the enactment of the Health
Insurance Portability and Accountability Act of 1996[45],
under Federal or State law, in connection with the delivery of
a health care item or service or with respect to any act or
omission in a health care program (other than those
specifically described in paragraph (1)) operated by or
financed in whole or in part by any Federal, State, or local
government agency, of a criminal offense consisting of a
felony relating to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct.

(4) Felony conviction relating to controlled substance —
Any individual or entity that has been convicted for an
offense which occurred after the date of the enactment of
the Health Insurance Portability and Accountability Act
of 1996 [August 21, 1996], under Federal or State law, of a
criminal offense consisting of a felony relating to the
unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance.

128(a) (emphasis added) (42 U.S.C. § 1320a-7(a)).

The effective date of the revocation is controlled by 42 C.F.R. § 424.535(g). The

regulat
date o

A sup,

tion provides that when revocation is based on a felony conviction, the effective
revocation is the date of the conviction. 42 C.F.R. § 424.535(g).

plier whose enrollment and billing privileges have been revoked may request

reconsideration and review as provided by 42 C.F. R. pt. 498. 42 C.F.R. § 424.545(a). 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 su,

pplier, giving the reasons for its determination, specifying the conditions or

requirements the supplier failed to meet, and advising of the right to an ALJ hearing.
42 CFR. § 498.25. If the 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

Depart

tmental Appeals Board (the Board). Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8));

42 CFR. §§ 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, 748-51 (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 revocation of Petitioner’s billing privileges.

C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are in bold text followed by my findings of fact and analysis.
1. Summary judgment is appropriate.

CMS filed a motion for summary judgment. Summary judgment is not automatic upon
request but is limited to certain specific conditions. The Secretary’s regulations at

42 C.F.R. pt. 498 that establish the procedure to be followed in adjudicating Petitioner’s
case do not establish a summary judgment procedure or recognize such a procedure.
However, the Board has long accepted that summary judgment is an acceptable
procedural device in cases adjudicated pursuant to 42 C.F R. pt. 498. See, e.g., Ill.
Knights Templar Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB
No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997). The Board
also has recognized that the Federal Rules of Civil Procedure do not apply in
administrative adjudications such as this, but the Board has accepted that Fed. R. Civ.
Pro. 56 and related cases provide useful guidance for determining whether 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. 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 and/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 upon 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’! 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 that used in 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 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 has not
provided in 42 C.F R. pt. 498 for the allocation of the burden of persuasion or the
quantum of evidence required to satisfy the burden. However, the Board 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).

Viewing the evidence before me in a light most favorable to Petitioner and drawing all
inferences in Petitioner’s favor, I conclude that there are no genuine disputes as to any
material facts pertinent to revocation under 42 C.F.R. § 424.535(a)(3) that require a
hearing in this case. The issues in this case raised by Petitioner related to revocation
under 42 C.F.R. § 424.535(a)(3) must be resolved against him as a matter of law. The
undisputed evidence shows that there is a basis for revocation of Petitioner’s Medicare
enrollment and billing privileges. Accordingly, summary judgment is appropriate.

2. Petitioner was convicted of an offense for which his exclusion is
required by section 1128(a)(4) of the Act (42 U.S.C. § 1320a-7(a)(4)).

3. There is a basis for revocation pursuant to 42 C.F.R.
§ 424.535(a)(3)(i)(D), based on Petitioner’s felony conviction.

4. The issue for hearing and decision is whether there is a basis for
revocation of Petitioner’s billing privileges and my jurisdiction does
not extend to reviewing whether or not CMS properly exercised its
discretion to revoke Petitioner’s Medicare enrollment and billing
privileges if I find there was a basis for such action.

5. Ihave no authority to review the imposition or duration of a bar to
re-enrollment. 42 C.F.R. §§ 424.545, 498.5(1)(1)-(2).
a. Facts
The following facts are undisputed.

On February 2, 2006, a criminal complaint was filed in the United States District Court,
Southern District of West Virginia (district court). Petitioner was charged with
knowingly and intentionally distributing cocaine, a Schedule II controlled substance, on
or about February 1, 2006, in violation of 21 U S.C. § 841(a)(1). CMS Ex. 1. Petitioner
pleaded guilty to the felony count of distribution of a quantity of cocaine. CMS Ex. 2 at
1. The district court entered judgment on June 29, 2006, and sentenced Petitioner to ten
months incarceration; a $100 assessment; a $3,000 fine; and three years of supervised
release after the completion of his prison term. CMS Ex. 2 at 2-6.

Petitioner’s license to practice optometry in West Virginia was suspended in 2006,
reinstated with conditions in 2007, and fully reinstated in 2008. Petitioner voluntarily
permanently surrendered his Pennsylvania license in 2008. CMS Ex. 3; Petitioner’s
Request for Hearing (RFH), CMS Ex. 9.

On March 25, 2013, Petitioner submitted an online version of Form CMS-855I through
CMS’s internet based Medicare Provider Enrollment, Chain, and Ownership System
(PECOS). RFH, CMS Ex. 4. Petitioner does not deny that he did not list his 2006 felony
conviction on the CMS-855I as an adverse action.2, CMS Ex. 4 at 2,5, 6. On May 17
and 21, 2013, Palmetto informed Petitioner by email and by letter that his Medicare
enrollment information had been revalidated. RFH; CMS Ex. 6. The May 21, 2013
Palmetto letter also informed Petitioner that he was required to report any final adverse
legal actions, including a felony conviction. CMS Ex. 6 at 1. By letter dated September
3, 2015, Palmetto notified Petitioner that his Medicare billing privileges were revoked
pursuant to 42 C.F.R. § 424.535(a)(3), effective June 29, 2006, the date of his felony
conviction and that he was subject to a three year re-enrollment bar pursuant to 42 C.F.R.
§ 424.535(c). CMS Ex. 8. Petitioner requested reconsideration on November 12, 2015.
CMS Ex. 9. His reconsideration request was denied on January 11,2016. CMS Ex. 10.

b. Analysis

Revocation of a currently enrolled provider’s or supplier’s billing privileges and any
corresponding provider or supplier agreement based upon conviction of a felony is
authorized by 42 C.F.R. § 424.535(a)(3). The specific provision applicable in this case is
42 CFR. § 424.535(a)(3)(i)(D), which authorizes revocation of the Medicare enrollment
of a provider or supplier subject to mandatory exclusion from federal health care

~ Petitioner’s failure to list his conviction as an adverse action was not cited by Palmetto
as a basis for revocation.
programs pursuant to section 1128(a) of the Act. A conviction that subjects one to
exclusion pursuant to section 1128(a) of the Act is detrimental to the program or its
beneficiaries as a matter of law under 42 C.F.R. § 424.535(a)(3)(i)(D). The specific
provision of section 1128(a) that is applicable is section 1128(a)(4), which requires that
the Secretary exclude an individual or entity that is convicted of a felony offence that
occurred after August 21, 1996, related to the unlawful manufacture, distribution,
prescription, or dispensing of a controlled substance. It is undisputed that Petitioner
pleaded guilty to distribution of a quantity of cocaine, a Schedule II controlled substance,
and that the distribution occurred on about February 1, 2006. Therefore, Petitioner was
subject to mandatory exclusion pursuant to section 1128(a)(4) of the Act due to his
conviction. There is no dispute that Petitioner’s conviction occurred within the ten years
preceding the enrollment application he signed and submitted through PECOS on March
25, 2013. Accordingly, I conclude that there is a basis for revocation of Petitioner’s
Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(3)(i)(D).

Ihave no authority to review the exercise of discretion by CMS or its contractor to deny
or revoke enrollment where there is a basis for such action. Abdul Razzaque Ahmed,
M.D., DAB No. 2261 at 19 (2009), aff'd, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D.
Mass. 2010). The scope of my authority is limited to determining whether there is a legal
basis for the denial of Petitioner’s Medicare enrollment. Id. I have concluded that there
is a basis for CMS to revoke Petitioner’s Medicare enrollment pursuant to 42 C.F.R.

§ 424.535(a)(3)(i)(D).

Palmetto imposed a three-year bar to re-enrollment. Under the regulations, the re-
enrollment bar after a revocation is a minimum of one year and a maximum of three
years. 42 C.F.R. § 424.535(c). There is no statutory or regulatory language establishing
a right to review of the duration of the re-enrollment bar CMS imposes. Act § 1866(j)(8);
42 CFR. §§ 424.535(c); 424.545; 498.3(b); and 498.5. The Board has held that the
duration of a revoked supplier’s re-enrollment bar is not an appealable initial
determination listed in 42 C.F.R. § 498.3(b), and thus, is not subject to ALJ review.
Vijendra Dave, DAB No. 2672 at 11 (2016).

Petitioner argues in his request for hearing that he is aware of the procedures for enrolling
and he believes he correctly followed those procedures. RFH. Petitioner argued in his
request for reconsideration that he treats many patients with Medicare and that he had
practiced several years without problems until Palmetto revoked his enrollment and
billing privileges. CMS Ex. 9. Petitioner states in his response to the CMS motion for
summary judgment that he does not dispute the CMS statement of facts, except the CMS
assertions that: he “did not disclose [his] felony conviction and filed a blank
application.” P. Br. There is no dispute that Petitioner filed an application through
PECOS on March 25, 2013, and no final adverse actions are listed on that application.

CMS Ex. 4 at 2° Petitioner argues that he believed CMS already knew about his felony
conviction. Petitioner argues that he did disclose his felony conviction to CMS in the
application through PECOS. For purposes of summary judgment, I accept the assertion
as true despite the conflict with the application information reflected in CMS Ex. 4.
However, accepting the assertion as true has no effect on summary judgment or the
outcome as Petitioner’s enrollment is revoked not for failure to disclose the conviction in
the application but because he was convicted of an offense that falls within the ambit of
section 424.535(a)(3)(i)(D). Petitioner argues that he thought he was approved in 2013
when he submitted his application for revalidation. He claims that after he was approved
he billed Medicare for services he provided and did not abuse the Medicare program.
Petitioner states that he is trying to pay back overpayments that were for services he
provided that he thought he was approved to provide. P. Br.

Petitioner’s arguments provide no basis for relief. He was convicted of distribution of
cocaine and that conviction is a basis for revocation of his Medicare enrollment and
billing privileges. To the extent Petitioner’s arguments may be construed as a request for
equitable relief, I have no authority to grant equitable relief. 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.”). I am also required to follow the Act and regulations and have no
authority to declare statutes or regulations invalid. 18661CPayday.com, L.L.C., DAB No.
2289 at 14 (2009) (ALJ is bound by applicable laws and regulations).

III. Conclusion

For the foregoing reasons, Petitioner’s Medicare enrollment and billing privileges are
revoked effective June 29, 2006, the date of his felony conviction.

/s/
Keith W. Sickendick
Administrative Law Judge

> CMS placed in evidence a blank paper CMS-855] to make it easier to understand what
the application requires. CMS Ex. 5. CMS does not assert that Petitioner submitted a
blank paper application.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Colorado Department of Human Services,
Colorado State Veterans Home at Fitzsimons
(CCN: 06-5380)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-132
Decision No. CR4662

Date: July 21,2016

DECISION

Petitioner, Colorado State Veterans Home at Fitzsimons, is a long-term care facility
located in Aurora, Colorado, that participates in the Medicare program. Some of its
employees complained to state regulators that serious glitches in the facility’s new
electronic health information system jeopardized their ability to administer medications
as ordered. Responding to these complaints, state surveyors investigated and, on August
8, 2013, completed a complaint survey. Based on the results, the Centers for Medicare
& Medicaid Services (CMS) determined that the facility was not in substantial
compliance with Medicare program requirements governing medication errors and
facility administration and that its deficiencies posed immediate jeopardy to resident
health and safety. CMS imposed an $8,750 per instance civil money penalty (CMP) for
the “medication errors” deficiency. Petitioner appeals, and CMS moves for summary
judgment, which Petitioner opposes.

As discussed below, the undisputed evidence establishes that the facility was not in
substantial compliance with program requirements governing medication errors, and the
modest penalty imposed is reasonable. I therefore grant CMS’s motion.

Background

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

The Secretary contracts with state survey agencies to survey skilled nursing facilities in
order to determine whether they are in substantial compliance. Act § 1864(a); 42 C.F.R.
§ 488.20. Each facility must be surveyed annually, with no more than fifteen months
elapsing between surveys, and must be surveyed more often, if necessary, to ensure that
identified deficiencies are corrected. Act § 1819(g)(2)(A); 42 C.F.R. §§ 488.20(a);
488.308. The state agency must also investigate all complaints. Act § 1819(g)(4).

Here, responding to complaints about the facility’s electronic health information system,
surveyors from the Health Facilities and Emergency Medical Services Division of the
Colorado Department of Public Health and Environment (state agency) completed an
abbreviated and partial extended survey on August 8, 2013. CMS Exs. 1,2. Based on
their findings, CMS determined that the facility was not in substantial compliance with:

e 42C FR. § 483.25(m)(2) (Tag F333 — quality of care: medication errors) at scope
and severity level K (pattern of noncompliance that poses immediate jeopardy to
resident health and safety); and

e 42CFR. § 483.75 (Tag F490 — administration) at scope and severity level K.

CMS imposed against the facility a per instance CMP of $8,750 based solely on the
deficiency cited under section 483.25(m)(2). CMS Ex. 45.

CMS now moves for summary judgment. The parties filed pre-hearing briefs (CMS Br.;
P. Br.) and proposed exhibits. With its brief, CMS submitted 50 proposed exhibits (CMS
Exs. 1-50). Petitioner submitted eight proposed exhibits (P. Exs. 1-8). CMS
subsequently filed a motion for summary judgment (CMS MSJ), and Petitioner filed a
response (P. Response).

Issues

The parties allude to two issues that are not reviewable in this forum:
First, I have no authority to review the deficiency cited under section 483.75
(administration) because CMS did not impose a penalty for it.’ A facility may challenge
a finding of noncompliance for which CMS imposes one of the penalties specified in 42
CFR. § 488.406. 42 C.F.R. § 498.3(b)(13); see 42 C.F.R. § 498.3(a). A facility has no
right to a hearing unless CMS imposes one of the specified remedies. The Lutheran
Home — Caledonia, DAB No. 1753 (2000); Schowalter Villa, DAB No. 1688 (1999);
Arcadia Acres, Inc., DAB No. 1607 (1997); see San Fernando Post Acute Hosp., DAB
No. 2492 at 7-8 (2012). The remedy, not the citation of a deficiency, triggers the right to
a hearing. Schowalter Villa, DAB No. 1688; Arcadia Acres, Inc., DAB No. 1607.
Where CMS does not impose a remedy, Petitioner has no hearing right. See Fountain
Lake Health & Rehab., Inc., DAB No. 1985 (2005).

Nor may I review the immediate jeopardy finding. An administrative law judge may
review CMS’s scope and severity findings (which include a finding of immediate
jeopardy) only if a successful challenge would affect the range of the CMP or if CMS has
made a finding of substandard quality of care that results in the loss of approval of a
facility’s nurse aide training program. 42 C.F.R. §§ 498.3(b)(14); 498.3(d)(10); Cedar
Lake Nursing Home, DAB No. 2344 at 9 (2010); Evergreen Commons, DAB No. 2175
(2008); Aase Haugen Homes, Inc., DAB No. 2013 (2006). For a per-instance penalty, the
regulations provide only one range ($1,000 to $10,000), so the level of noncompliance
here does not affect the range of the CMP. 42 C.F.R. § 488.438(a)(2).

It seems that the facility lost approval of its nurse aide training program, but this does not
make CMS’s scope and severity determination reviewable. P. Br. at 3; CMS Ex. 47 at 1.
By statute and regulation, if, as here, CMS imposes a penalty of $5,000 or more, the state
agency cannot approve the program, so the facility would lose its approval without regard
to the immediate jeopardy finding. Act § 1819(f)(2)(B); 42 C.F.R. § 483.151(b)(2)(iv).
Thus, because the immediate jeopardy finding does not affect the range of the CMP nor
cause the facility to lose approval of its nurse aide training program, the finding is not
reviewable.

With respect to the issues that are properly before me, I first consider whether summary
judgment is appropriate. On the merits, the sole issue is whether the facility was in
substantial compliance with 42 C.F.R. § 483.25(m) 2

' Based on the facility’s substantial noncompliance with both regulations, CMS initially
threatened to deny payments for new admissions (DPNA). CMS Ex. 45. Had CMS
imposed that remedy, both deficiencies would have been reviewable. However, CMS
subsequently rescinded the DPNA. CMS Ex. 46.

Except to argue that it was in substantial compliance so no penalty should be imposed,
Petitioner has not challenged the amount of the penalty ($8,750). The penalty is toward

Cont'd. on next page.
Discussion

Summary judgment. Summary judgment is appropriate if a case presents no genuine
issue of material fact, and the moving party is entitled to judgment as a matter of law.
Bartley Healthcare Nursing & Rehab., DAB No. 2539 at 3 (2013) (citing Celotex Corp.
v. Catrett, 477 U.S. 317, 322-25 (1986)); Ill. Knights Templar Home, DAB No. 2274 at
3-4 (2009), and cases cited therein.

The moving party may show the absence of a genuine factual dispute by presenting
evidence so one-sided that it must prevail as a matter of law, or by showing that the non-
moving party has presented no evidence “sufficient to establish the existence of an
element essential to [that party’s] case, and on which [that party] will bear the burden of
proof at trial.” Livingston Care Ctr. v. Dep’t of Health & Human Servs., 388 F.3d 168,
173 (6th Cir. 2004) (quoting Celotex Corp., 477 U.S. at 323-24). To avoid summary
judgment, the non-moving party must then act affirmatively by tendering evidence of
specific facts showing that a dispute exists. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 n.11 (1986); see also Vandalia Park, DAB No. 1939 (2004);
Lebanon Nursing & Rehab. Ctr., DAB No. 1918 (2004). The non-moving party may not
simply rely on denials, but must furnish admissible evidence of a dispute concerning a
material fact. Ill. Knights Templar Home, DAB No. 2274 at 4; Livingston Care Ctr.,
DAB No. 1871 at 5 (2003).

In examining the evidence for purposes of determining the appropriateness of summary
judgment, I must draw all reasonable inferences in the light most favorable to the non-
moving party. Livingston Care Ctr., 388 F.3d at 172; Brightview Care Ctr., DAB No.
2132 at 2, 9 (2007); Guardian Health Care Ctr., DAB No. 1943 at 8 (2004); but see
Brightview, DAB No. 2132 at 10 (entry of summary judgment upheld where inferences
and views of non-moving party are not reasonable). However, drawing factual inferences
in the light most favorable to the non-moving party does not require that I accept the non-
moving party’s legal conclusions. Cf. Guardian Health Care Ctr., DAB No. 1943 at 11
(“A dispute over the conclusion to be drawn from applying relevant legal criteria to
undisputed facts does not preclude summary judgment if the record is sufficiently
developed and there is only one reasonable conclusion that can be drawn from those
facts.”).

Cont'd. from previous page.

the higher end of the range for a per-instance CMP ($1,000-$10,000), but is modest
considering what CMS might have imposed. 42 C.F.R. § 488.408(e)(1)(iv); see Plum
City Care Ctr., DAB No. 2272 at 18-19 (2009) (observing that even a $10,000 per-
instance CMP can be “a modest penalty when compared to what CMS might have
imposed”).
CMS is entitled to summary judgment because the undisputed evidence
establishes that facility residents were not free of significant medication
errors. Indeed, because the facility did not have in place a reliable medication
administration records system, it could not ensure that any of its residents
would be free of significant medication errors.

Program requirements. Under the statute and the “quality of care” regulation, each
resident must receive, and the facility must provide, the necessary care and services to
allow a resident to attain or maintain the highest practicable physical, mental, and
psychosocial well-being, in accordance with the resident’s comprehensive assessment
and plan of care. Act § 1819(b); 42 C.F.R. § 483.25. To this end, the facility must
(among other requirements) ensure that its residents are free of any significant medication
errors and that medication error rates are no greater than 5%. 42 C.F.R. § 483.25(m).

The State Operations Manual (SOM) provides guidance for determining when a
medication error is “significant.” The SOM recognizes that factors, such as the drug
category and the resident’s condition, can determine whether a medication error is
significant. Certain drugs (including the anti-coagulent drug Coumadin, discussed
below) have a high potential for creating problems for the typical resident of a long-term-
care facility, and specific listed errors involving those drugs are presumed “significant”
within the meaning of the regulation. CMS Ex. 43 at 2-3.

Problems associated with administering the anti-coagulant drug, Coumadin. Anti-
coagulant drugs are “widely recognized” as among the medications most likely to cause
harm to patients. CMS Ex. 32 at 2 (Hunt Decl. § 7). They help prevent blood clots and
are often prescribed to individuals who are at risk for dangerous blood clotting, such as
those who have had heart attacks, strokes, or deep vein thrombosis. Unfortunately,
bleeding — which can be serious and even cause death — is a major complication
associated with anti-coagulants. CMS Ex. 38 at 1; CMS Ex. 39 at 1,3; CMS Ex. 40 at 2;
CMS Ex. 41 at 1, 3.

Among the factors known to increase the risk of complications to individuals taking anti-
coagulant drugs, such as Coumadin, are the individual’s age, medical conditions, and
other medications. Individuals who are 65 years of age or older and those suffering from
conditions such as high blood pressure, heart disease, and kidney problems are at higher
risk. Because it interacts with many drugs in dangerous ways, prescribers must also take
care when administering Coumadin to patients taking other medications, such as non-
steroidal anti-inflammatory drugs (NSAIDS). CMS Ex. 29 at 4 (Ramos Decl. § 15);
CMS Ex. 38 at 1; CMS Ex. 39 at 1; CMS Ex. 41 at 8.

> T make this one finding of fact/conclusion of law.
For these reasons, the product label instructions include the following caveats (among
many others) to those who prescribe and administer the drug to geriatric patients:

Observe caution with administration of COUMADIN to
elderly patients in any situation or with any physical
condition where added risk of hemorrhage is present.
Consider lower initiation and maintenance doses of
COUMADIN in elderly patients.

CMS Ex. 41 at 9; see CMS Ex. 32 at 2 (Hunt Decl. § 6) (“The dosing of Coumadin is
very complex and difficult, particularly in the elderly, or when the patient has multiple
complex medical conditions that necessitate other medications, as Coumadin interacts
with many other drugs in dangerous, even fatal, ways. Small dosage variations or
changes in the patient’s overall medical condition can cause wide variations in his/her
ability to clot with all the attendant sequelae ....”).

Thus, Coumadin dosages must be individualized, carefully monitored, and adjusted
frequently, based on the results of blood tests. CMS Ex. 29 at 4 (Ramos Decl. § 15);
CMS Ex. 31 at 3 (Reed Decl. § 11); CMS Ex. 41 at 3,4. If medication levels are too
high, bleeding complications can occur; if too low, the resident could suffer the effects of
a pathologic clotting condition, e.g., stroke or pulmonary embolism. CMS Ex. 29 at 4
(Ramos Decl. § 15); CMS Ex. 32 at 2 (Hunt Decl. § 5). A physician may change
Coumadin doses after just a few days if the resident’s lab values indicate such a change is
necessary. CMS Ex. 31 at 3 (Reed Decl. § 11).

Because Coumadin has such a high potential for creating problems for the typical
resident of a long-term care facility, errors involving its excessive dosing are presumed
“significant” within the meaning of section 483.25(m)(2). According to the SOM,
administering 4 milligrams or more of Coumadin without a physician’s order would be
considered a significant drug error, regardless of the resident’s condition. CMS Ex. 43 at
2-3.

Resident 4 (R4). R4 was an 89-year-old woman, suffering from atrial fibrillation
(irregular heartbeat), dementia, diabetes, stage 3 kidney disease, and congestive heart
failure. Coumadin was one of her many medications. CMS Ex. 11 at 2-3. Given her
age, multiple medical conditions, and medications (including Percocet, which contains
the NSAID acetaminophen), R4 was at high risk of complications and could not safely
ingest more Coumadin than ordered by her physician. CMS Ex. 38 at 1; CMS Ex. 39;
CMS Ex. 40 at 3.
Surveyor Jody Ramos reviewed R4’s medical record and testified that she found four
instances of irregularities involving R4’s Coumadin.’ R4’s physician prescribed 2.5 mg
of Coumadin per day but, according to the resident’s medication records, staff
administered 2.5 mg plus 5 mg on May 25, May 26, May 30, and June 5, 2013. CMS Ex.
29 at 4 (Ramos Decl. §§ 17, 18, 19).°

Petitioner does not challenge Surveyor Ramos’s observation, but argues that, because the
surveyor’s conclusion concerning three of the four days in question is based solely on a
review of the facility’s faulty electronic Medication Administration Record (CMARs)
(i.e., the facility ’s own record-keeping system) it “is not supported by reliable evidence
and is certainly not conclusive regarding whether there were medication errors related to
the administration of Coumadin to Resident #4.” P. Response at 9-10. I discuss below
why the facility does not get a pass because its wholly unreliable medication
administration system makes it impossible to verify whether medications were
administered as ordered. But even if I excused the facility for the three errors that
Petitioner dismisses as “mere” reporting errors (which I do not), I would still find that,
based on the remaining well-documented medication error, the facility did not ensure that
R4 was free of significant medication errors.

* Citing the SOM, Petitioner criticizes Surveyor Ramos for relying on “paper” (in fact,
electronic) review to determine medication errors. P. Response at 10 n.3; CMS Ex. 43 at
8. That she did so is understandable. She was investigating complaints that the facility’s
electronic medication administration records were seriously flawed — which turned out to
be true. In the process of reviewing the records, she discovered actual errors. The SOM
instructions do not preclude such review, and they acknowledge that it can reveal errors.
They discourage the review based primarily on efficiency; it can be time-consuming
without revealing the errors that are there. In any event, even if there were a problem
with the surveyor’s approach — and there is not — surveyor performance does not
invalidate adequately documented deficiencies. 42 C.F.R. § 488.318(b).

> In one paragraph of her declaration, Surveyor Ramos mistakenly transposed numbers.
In error, she wrote that R4 “received 2.5 mg of Coumadin in addition to her scheduled 5
mg....” She then wrote, correctly, that R4 “received a total of 7.5 mg of Coumadin . . .
as opposed to the 2.5 mg prescribed.” CMS Ex. 29 at 4 (Ramos Decl. § 17). As the
facility’s documents confirm, R4 received 5 mg of Coumadin in addition to her scheduled
2.5 mg. CMS Ex. 11 at 6. R4’s medication orders confirm that her physician ordered 2.5
mg Coumadin on Monday, Tuesday, Wednesday, Thursday, and Friday, and 5 mg on
Saturday and Sunday. CMS Ex. 11 at 7. May 30 was a Thursday.
A Medication Error Report, dated June 25, 2013, confirms that R4’s physician ordered
2.5 mg of Coumadin daily. In error, on May 30, staff administered 2.5 mg plus 5 mg, for
a total of 7.5 mg of Coumadin. The report attributes the error to two factors: staff did
not compare the medication administered with the medication administration record
(MARs); and staff did not check the dosage. CMS Ex. 11 at 5-6; see CMS Ex. 7.
Petitioner has come forward with no evidence suggesting any dispute about the contents
of this report. See P. Ex. 3 at 3 (Daumann Decl. § 7).

Even if R4 were not otherwise at high risk, administering 4 mg (or more) of Coumadin
than ordered is considered a significant medication error. By itself, this 5 mg medication
error puts the facility out of substantial compliance with 42 C.F.R. § 483.25(m). See Life
Care Ctr. of Elizabethton, DAB No. 2367 at 6 (2011) (observing that “compliance with
section 483.25(m)(2) can turn on whether [the facility] made a medication error . . . that
[was] ‘significant,’ not whether there was a pattern of errors”).

Petitioner also maintains that R4 suffered no harm as a result of the error. See P. Ex. 3 at
2 (Daumann Decl. § 6); P. Ex. 4 at 4 (Wallace Decl. § 9). In fact, R4’s Coumadin flow
sheet shows no blood levels taken between May 21 and June 4, 2013. This is surprising —
and troubling — inasmuch as her medication records show three instances of Coumadin
over-dosing during this time. And, on May 21 and June 4, her INR (international
normalized ratio) measured 3.4 and 3.3, respectively. P.Ex.2. According to her
physician, that level should have been between 2 and 3. P. Ex. 4 at 4 (Wallace Decl. § 8).
While the parties may dispute whether these elevated levels undermine Petitioner’s claim
of no harm, that dispute is not material. It is well-settled that CMS need not show actual
harm to conclude that an error is significant. Life Care Ctr. of Elizabethton, DAB No.
2367 at 6, 7, and cases cited therein.

Moreover, in addition to this specific instance of a significant medication error, the
undisputed evidence also establishes that the facility’s medication administration record
system was so unreliable that staff could not ensure that residents would be free of
medication errors.

The facility’s electronic medication administration records. MARs are the official
documents used by medical providers to document the medications administered to a
facility resident or patient. CMS Ex. 27 at 2 (Garramone Decl. § 8); CMS Ex. 32 at 3
(Hunt Decl. § 8).

In March 2013, the facility purchased and installed a new electronic health information
system. CMS MSJ at 1; P. Response at 2, 4; see P. Ex. | at 3 (Bungam Decl. § 7). P. Ex.
6 at 3 (Benjamin Decl. § 6). When the system was up and running, facility staff were
expected to generate and use eMARs rather than the paper records previously used. CMS
MSJ at 4; P. Ex. 6 at 3 (Benjamin Decl. § 7). Indeed, according to the facility’s (then)
acting director of nursing (DON), Portia Benjamin, the facility’s administrator, Brad
Honl, “insisted” that nursing staff stop using the paper system (MARs) altogether, and
use the eMARs exclusively. P. Ex. 6 at 4 (Benjamin Decl. § 10).

Petitioner concedes that, from the beginning, serious problems pervaded the electronic
system:

[Facility] staff recognized immediately that the . . . system
operated with some difficulty. [citation omitted] The issues .
. . included the entire system crashing, medications dropping
off the eMAR, and the eMAR allowing staff to indicate that
medications were dispensed to patients on days or in dosage
amounts other than what was prescribed.

P. Br. at 6, citing P. Exs. 1, 3,5, 6 (Written Declarations of Bungum, Wallace, Benjamin,
and Katta); see P. Response at 5.

Petitioner’s witnesses, all of whom were working in the facility when the eMARs system
was introduced, describe a system that presented a myriad of problems, any one of which
compromised staff’s ability to avoid significant medication errors and created the
potential for more than minimal harm to facility residents:

To put it mildly, the system was not user-friendly. According to Brian Bungam,
the Business Analyst assigned to assist facility staff in implementing eMARs, the
process for logging in was so cumbersome that staff thought the system was not
responding. P. Ex. | at 1-2,4 (Bungam Decl. §§ 2, 10); see P. Ex. 3 at 3
(Daumann Decl. § 6).

Passwords expired unexpectedly. P. Ex. 6 at 3 (Benjamin Decl. § 7).

The system crashed periodically, rendering it “unusable.” P. Ex. 1 at 4 (Bungam
Decl. § 11); P. Ex. 5 at 2-3 (Whitfield Decl. § 5) (“the eMAR went down
repeatedly”); P. Ex. 6 at 3 (Benjamin Decl. § 7); see P. Ex. 4 at 3 (Wallace Decl.
96).

The system did not communicate with the pharmacy’s medication system, which
created a separate set of problems. P. Ex. 3 at 2 (Daumann Decl. § 5); P. Ex. 6 at 3
(Benjamin Decl. § 7). According to DON Benjamin, “there were [unspecified]
issues faxing prescriptions to the pharmacy.” P. Ex. 6 at 3 (Benjamin Decl. § 7).

A June 2013 pharmacy report is blistering in its criticism: “The documentation
associated with medication ordering and accountability is not satisfactory and not
in compliance with regulatory requirements.” CMS Ex. 3 at | (emphasis in
original). Among other problems, no policies and procedures explain how to
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communicate to the pharmacy new orders and order changes; not all staff know
how to enter orders directly, especially those involving “odd dosing” regimens.
“The health record documentation associated with medication and treatment
administration is not satisfactory and does not meet regulatory requirements.”
CMS Ex. 3 at 1 (emphasis in original). Although both paper and electronic
systems are used “at times,” both are not updated with new or changed orders.
CMS Ex. 3 at 1. The report cites seven significant medication errors in June, six
involving the wrong dose administered to the resident (two of the six for
Coumadin). CMS Ex. 3 at 2.

e By design, the system discontinued medications after 30 days. The developers
implemented what Analyst Bungam calls a “work-around,” but their “solution”
still meant that the system discontinued medications after 60 days. P. Ex. | at 4-5
(Bungam Decl. § 12); see P. Ex. 3 at 3 (Daumann Decl. § 6).

eMARs system’s particular problems with Coumadin prescriptions. Everyone agrees that
the system had particular problems with prescriptions for the anticoagulant drug,
Coumadin.

As Janet Daumann, the facility’s (then) Director of Quality Management, explains,
Coumadin prescriptions appeared in an unfamiliar and unwieldy format. P. Ex. 3 at 3
(Daumann Decl. § 6). “[I]t would have been easy for nurses to make mistakes” in
administering Coumadin. P. Ex. 3 at 3 (Daumann Decl. § 7); CMS Ex. 3 at 3 (reporting
errors with “odd dosed” medication, such as Coumadin).

DON Benjamin explains that, under the MARs, nurses could mark with an X the days the
drug was not to be administered. The eMARs system did not give them that option,
which is a particular problem with Coumadin because physician orders often limit the
days it should be given. P. Ex. 5 at 3 (Whitfield Decl. § 8) (“eMAR prompted the
administering nurses to give all prescribed dosages of Coumadin to patients receiving the
medication, every day of the week, instead of only directing them to give certain dosages
on certain days.”); P. Ex. 6 at 4 (Benjamin Decl. § 11).

Under the MARs, Coumadin could also be ordered at different dosages on different days.
But under the eMARs system, both dosage amounts would show up at the same time on
the computer screen, signifying that both doses should be administered. If the nurse
initialed only one of the doses to confirm that she administered it, the other amount
would flash on the screen, indicating that it too should be administered that day. “The
only way the other dosage amount would stop flashing, was for the nurse to initial that it
had been administered.” So the nurse would initial that she had administered drugs that
she did not, in fact, administer. P. Ex. 6 at 4-5 (Benjamin Decl. § 11). Nurses could put a
note in the eMARs indicating that the additional dose had not been administered, but
11

those notes had to be labeled and could not always be pulled up. P. Ex. 6 at 5-6
(Benjamin Decl. § 14).

I accept Petitioner’s representation that its medication administration records show that
drugs were administered when, in fact, they were not. But this does not help Petitioner’s
case. The practice violates accepted professional standards and makes it impossible to
ensure that its residents will be free of significant medication errors. Based on this alone,
I can conclude that the facility was not in substantial compliance with 42 C.F.R.

§ 483.25(m)(2).

Petitioner nevertheless dismisses as insignificant its many “medication error reports,” and
argues that its witness declarations establish a factual dispute as to whether any actual
medication errors were made. P. Response at 9-12. In fact, the declarations do not.
After explaining the eMARs problems with Coumadin prescriptions, Director Daumann
concedes that “one mistake was made” in May (presumably R4’s Coumadin overdose).
P. Ex. 3 at 3 (Daumann Decl. § 7). She also says that the nurses responsible were subject
to progressive discipline and additional training, but that only verbal counseling was
actually performed. P. Ex. 3 at 4 (Daumann Decl. § 9).

DON Benjamin, on the other hand, claims that no errors were made but bases this
conclusion on faulty reasoning: even though they initialed that they administered excess
dosages, the nurses did not report any errors to her.° P. Ex. 6 at 4-5 (Benjamin Decl. 99
11,12). Iam not aware of any support for disregarding a facility’s medication
administration records in favor of an employee’s claim to the contrary. Moreover,
according to DON Benjamin, nurses could indicate an entry error (i.e. that they reported
administering medications they did not administer), but Petitioner has come forward with
no evidence that anyone ever did.

Conclusion

The undisputed evidence establishes that the facility did not have in place a reliable
medication administration records system and could not ensure that any of its residents
would be free of significant medication errors. At least one vulnerable resident was
administered a significantly excessive dose of Coumadin. The facility was therefore not
in substantial compliance with 42 C.F.R. § 483.25(m)(2). CMS is therefore entitled to
summary judgment.

° DON Benjamin also points to the purported absence of elevated INR levels to support
her claim that no errors were made. As noted above, R4’s physician, Dr. Wallace,
testified that INR levels should be between 2 and 3. P. Ex. 4 at 4 (Wallace Decl. § 8).
Yet, R4 had INR levels of 3.4 and 3.3 on May 21 and June 4. P. Ex. 2.
12

/s/

Carolyn Cozad Hughes
Administrative Law Judge