Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Robert S. Baker, ) Date: January 10, 2008

)
Petitioner, )
)

-Vv.- ) Deoket No. C-07-652

) Decision No. CR1724
The Inspector General. )

)
DECISION

Robert S. Baker (Petitioner) appeals the decision of the Inspector General (I.G.), made
pursuant to section 1128(a)(3) of the Social Security Act (Act), to exclude him from
participation in Medicare, Medicaid, and all federal health care programs for a period of
five years. For the reasons discussed below, I find that the LG. is authorized to exclude
Petitioner. The five-year exclusion is the mandatory minimum period as a matter of law.

I. Background

In a letter dated June 29, 2007, the I.G. notified Petitioner that he was excluded from
program participation for five years because of his felony conviction in federal district
court “of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct in connection with the delivery of a health
care item or service.” I.G. Ex. 1.

Petitioner thereafter requested review, and the matter has been assigned to me for
resolution. I held a prehearing conference on September 20, 2007, during which I
directed the parties to advise me in writing whether an in-person hearing was necessary,
and, if so, to explain why. Order and Schedule for Filing Briefs (September 24, 2007),
at 2. The 1G. asserts that the matter may be decided based on written submissions and
documentary evidence, without an in-person hearing. I.G. Brief (Br.) at 2. In his
submission, Petitioner did not say that an in-person hearing was necessary, but said that
he “desires to reserve the right to request an in-person hearing pending any further
2

submissions by the [I.G.] in response to Petitioner’s brief.” P. Br. at 2. However,
following the I.G.’s reply to Petitioner’s brief, Petitioner did not request an in-person
hearing. Petitioner thus did not assert that an in-person hearing is necessary, nor set forth
any reason as to why it would be.

The parties have submitted their briefs. Attached to the L.G.'s brief (I.G. Br.) are I.G.
Exhibits (I.G. Exs.) 1-5. Petitioner submitted a brief in opposition (P. Br.), along with
two exhibits, P. Exs. 1-2. The I.G. submitted a reply brief (I.G. Reply) with one
additional exhibit, I.G. Ex. 6. Petitioner has not requested an additional opportunity to
respond to the I.G.’s most recent submission, which is a copy of the Petitioner’s Proffer
for Plea Agreement, signed by Petitioner and his criminal attorneys, and filed with the
federal district court.

Petitioner objects to the admission of I.G. Ex. 5, which is a copy of the second
superceding indictment in his criminal case. Petitioner argues that the indictment alone
does not establish that his conviction is connected with the delivery of a health care item
or service. While I agree that the indictment is not dispositive of any of the issues,
neither is it irrelevant or immaterial evidence that must be excluded. 42 C.F.R.

§ 1005.17. Indeed, contained within the indictment is the mail fraud charge to which
Petitioner pleaded guilty — Count 11 — which makes the document directly relevant to the
issue before me. I.G. Ex. 2, at 1; 1.G. Ex. 5, at 24.

Petitioner also objects to the admission of I.G. Ex. 4, which is the Arizona Medical
Board’s announcement that Petitioner’s medical license was surrendered, citing his
January 30, 2006 criminal conviction. Again, I do not find this document irrelevant or
immaterial. Considered along with Petitioner’s own exhibit, P. Ex. 1, which is the
Agreed Order of Surrender (of Petitioner’s medical license), the two documents establish
that Petitioner’s license surrender is related to his criminal conviction, which provided the
Medical Board legal grounds for license surrender.

I.G. Exs. 1-6 and P. Ex. 1-2 are therefore admitted into evidence.

II. Issue

The sole issue before me is whether the I.G. had a basis upon which to exclude Petitioner
from participation in Medicare, Medicaid, and all federal health care programs. This
depends on whether the offenses for which he was convicted were “in connection with the

delivery of a health care item or service.”

The length of the period of exclusion is not an issue because the I.G. imposed the
statutory minimum.
III. Discussion

I make findings of fact and conclusions of law to support my decision in this case. I set
forth each finding below, in italics, as a separate numbered or lettered heading.

A, Petitioner was convicted of a felony relating to fraud in connection with the
delivery of a health care item, within the meaning of section 1128(a)(3) of the
Act.

Petitioner was a physician licensed to practice medicine in the Commonwealth of
Kentucky. He was one of multiple defendants charged with participating in a scheme to
market and sell to health care providers a substance called Botulinum Toxin Type A
(“Mimic Botox”). Those health care providers would then provide the toxin to their
patients without telling them that Mimic Botox is not the FDA-approved Botox cosmetic,
and, in fact, does not have FDA approval. I.G. Ex. 5, at 24. For his part in the scheme,
Petitioner pled guilty to one count of mail fraud, admitting that he sent to a practicing
physician (identified as H.D.) approximately $9,400 worth of Mimic Botox for use on
patients without their knowledge that it had not been approved for use on humans. I.G.
Ex. 3; 1.G. Ex. 5, at 24-25; I.G. Ex. 6.

1. Where an individual has been convicted of a felony
relating to fraud in connection with the delivery of a health
care item or service, the statute does not require any
connection between the fraud and a government or any
other health care program.

The I.G. has not claimed that Petitioner’s crime was connected to any particular health
care program, but maintains that the statute does not require that connection. Although
acknowledging that Departmental Appeals Board (Board) decisions hold otherwise,
Petitioner argues that the Board has simply misread section 1128(a)(3). He maintains
that, because his crime bore no relationship to any government-funded or operated health
care program, he should not be excluded.

It is well-settled that the statute does not require a relationship between the fraud and any
health care program. Section 1128(a)(3) of the Act authorizes the Secretary of Health and
Human Services (Secretary) to exclude from participation in any federal health care
program:

[a]ny individual or entity that has been convicted for an offense . . . 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 . . . operated by or
financed in whole or in part by any Federal, State, or local government agency, of
4

a criminal offense consisting of a felony relating to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial misconduct.

I find that the relevant statutory language — “operated by or financed in whole or in part
by any Federal, State, or local government agency,” modifies only the object that directly
precedes it — “health care program.” That language is independent of the preceding
phrase — “in connection with the delivery of a health care item or service.”

As the Board has ruled, section 1128(a)(3) is written in the disjunctive and covers two
different categories of felonies relating to “fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct.”

Thus, section 1128(a)(3) covers as a first category, any
individual convicted of one of the listed felonies “in
connection with the delivery of a health care item or service”
(see 42 C.F.R. § 1001.101(c)(2)), and it covers, as a second
category, any individual convicted ofa listed felony with
respect to any act or omission in the health care program
operated by or financed in whole or in part by any Federal,
State or local government. See 42 C.F.R. § 1001.101(c)(2).

Erik D. DeSimone, R.Ph., DAB No. 1932, at 4 (2004).

Iam also bound by the regulations implementing this statutory provision. Those
regulations leave no doubt that connection to a government program is not required to
sustain exclusion under section 1128(a)(3).

[T]he delivery of a health care item or service includes the
provision of any item or service to an individual to meet his or
her physical, mental, or emotional needs or well-being,
whether or not reimbursed under Medicare, Medicaid or any
Federal health care program.

42 C.F.R. § 1001.101(b) (emphasis added). Moreover, the regulations echo the statutory
language and, by setting forth each category in a separate subparagraph, separated by the

5

conjunction “or,” resolve any ambiguity as to whether or not the two phrases should be
read in the disjunctive:

The OIG will exclude any individual or entity that—

HR KR

(c) Has been convicted under Federal or State law, ofa
felony that occurred after August 21, 1996, relating to fraud,
theft, embezzlement, breach of fiduciary responsibility, or
other financial misconduct—

(1) In connection with the delivery of a health care
item or service, including the performance of management or
administrative services relating to the delivery of such items
or services, or

(2) With respect to any act or omission in a health care
program (other than Medicare and a State health care
program) operated by, or financed in whole or in part, by any
Federal, State or local government agency;

42 C.F.R. § 1001.101(c) (emphasis added). Thus, I need not find any connection to a
government or other health care program in order to sustain an exclusion under section
128(a)(3).

2. Petitioner’s fraud was “in connection with” the delivery
of a health care item.

Petitioner also argues that I should not look beyond the elements of mail fraud, 18 U.S.C.
§ 1341, which do not require the delivery or receipt of any item. According to Petitioner,
a mail fraud conviction, standing alone, “supplies an insufficient record to support a
relationship with the delivery of health care services or items.” P. Br. at 11-12.

t is well-settled that the statute does not require a direct connection between the offense
and the delivery of a health care item or service, but requires a “common sense analysis”
of whether the offense had a connection with the delivery of a health care item or service.
DeSimone at 4. Services that are purely managerial or administrative may be considered
“in connection with” the delivery of a healthcare item or service. 42 C.F.R.

§ 1001.101(c)(1).

6

n this case, I need not look beyond the language of Petitioner’s felony conviction in
order to find that his crime was related to the delivery of a health care item or service.
Count 11 of the indictment, to which Petitioner pled guilty, includes three paragraphs,
| 103, 104, and 105. I.G. Ex. 5, at 24. Petitioner, however, limits his discussion of
Count 11 to one portion of paragraph 105, which says that he (among others) “caused to
e delivered” to H.D. in North Miami, Florida, two vials of Mimic Botox. I.G. Ex. 5, at
25. Petitioner then disingenuously asserts that “H.D. is not identified, thus the inference
may not be made that H.D. is a patient, physician or health care provider.” P. Br. at 14.

Paragraph 104 describes the overall scheme, of which Petitioner was a part:

It was the object of the scheme and artifice for the defendants
to enrich themselves unjustly by marketing and selling to
health care providers for use in human patients TRI’s
Botulinum Toxin Type A that was not approved by the FDA
for use in human beings, as a cheap facial wrinkle treatment
alternative to Allergan’s Botox® Cosmetic, without the
administering health care providers advising their human
patients that TRI’s Mimic Botox was not Allergan’s Botox®
Cosmetic and was not approved by the FDA for use in human
beings.

G. Ex. 5, at 24.

Paragraph 103 also incorporates into Count 11 paragraphs 1-41 of the indictment’s
general allegations, and paragraphs 47-49, 51-58, and 60-62 of Count | of the indictment.
.G. Ex. 5, at 24. Paragraph 54 states that Petitioner (and others) participated in
workshops at which he promoted Mimic Botox for use in treating human facial wrinkles.
.G. Ex. 5, at 11-12. Paragraph 61 says that Petitioner (and others) “aided and abetted”
ealth care providers to breach their fiduciary duties to their patients and defrauded the
patients who believed that they were paying for and receiving FDA-approved treatment
when, in truth, they were receiving potentially dangerous, non-FDA-approved Mimic
Botox. I.G. Ex. 5, at 14. In pleading guilty to Count 11, Petitioner acknowledged the
truth of each of these allegations against him.

Finally, with respect to the identity of H.D., in his Proffer for Guilty Plea, Petitioner
acknowledged that, had the case proceeded to trial, the United States would prove beyond
a reasonable doubt that H.D. is a practicing physician, which she “made known” to
Petitioner at a workshop sponsored by Petitioner’s co-defendants. She confessed to an
FDA agent that Petitioner advised her that Mimic Toxin was safe for use on human

eings, and that Petitioner “had reason to believe” that she would use the product on
paying human patients without telling them that it was not FDA-approved. Invoices and

7

shipping records establish that H.D. subsequently purchased $9,400 worth of Mimic
Toxin. I.G. Ex. 6, at 3-4.

The paragraphs incorporated into Count 11, to which Petitioner pled guilty, and the
Proffer for Guilty Plea, signed by Petitioner and his criminal attorneys individually and
together establish a direct relationship between Petitioner’s mail fraud conviction and the
delivery of a health care item or service.

B. The statute mandates a five-year mandatory minimum exclusion, and
mitigating factors may not be considered to reduce that period of
exclusion.

An exclusion under section 1128(a)(1) of the Act must be for a minimum mandatory
period of five years. As set forth in section 1128(c)(3)(B) of the Act:

Subject to subparagraph (G), in the case of an exclusion under subsection (a), the
minimum period of exclusion shall be not less than five years ....

When the I.G. imposes an exclusion for the mandatory five-year period, the
reasonableness of the length of the exclusion is not an issue. 42 C.F.R.
§ 1001.2007(a)(2).

IV. Conclusion

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

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Daniel M. Stewart, ) Date: January 9, 2008
(CLIA ID #23D0363803) )
)
Petitioner, )
)

-Vv.- ) Docket No. C-07-429

) Decision No. CR1723
Centers for Medicare & Medicaid )
Services. )
a )

DECISION GRANTING SUMMARY DISPOSITION TO
CENTERS FOR MEDICARE & MEDICAID SERVICES

I grant summary disposition to the Centers for Medicare & Medicaid Services (CMS)
thereby sustaining its determination to revoke the CLIA certificate of Petitioner Daniel
M. Stewart. In doing so I find to be without merit Petitioner’s argument that there are
issues of disputed material fact in this case that necessitate an in-person hearing.

I. Background

Petitioner does business in Michigan as a physician’s office laboratory and was certified
to perform laboratory testing pursuant to the requirements of the Clinical Laboratory
Improvement Amendments of 1988 (CLIA), Public Law 100-578 (section 353 of the
Public Health Service Act, 42 U.S.C. § 263a) and implementing regulations at 42 C.F.R.
Part 498. CMS, which has authority pursuant to CLIA and implementing regulations to
make determinations concerning CLIA compliance by laboratories, determined to revoke
Petitioner’s CLIA certification. Petitioner requested a hearing and the case was assigned
to me for a hearing and a decision.
2

l issued a pre-hearing order directing the parties to file pre-hearing exchanges. The
parties complied with this order. CMS submitted a total of 20 proposed exhibits which it
identified as CMS Ex. 1 - CMS Ex. 20. Petitioner submitted 12 proposed exhibits which
it identified as P. Ex. 1 - P. Ex. 12.' I scheduled the case for an in-person hearing. Then,
CMS moved for summary disposition. Petitioner opposed the motion.

II. Issues, findings of fact and conclusions of law
A. Issues
The issues in this case are:
1. Whether summary disposition is appropriate; and
2. Whether the undisputed material facts establish that Petitioner
contravened CLIA requirements thereby justifying CMS’s determination to
revoke Petitioner’s CLIA certification.

B. Findings of fact and conclusions of law

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

1. Summary disposition is appropriate because there are no disputed
issues of material fact.

Petitioner’s hearing rights in this case are governed by regulations at 42 C.F.R. Part 498.
These regulations do not address explicitly the circumstances under which an
administrative law judge may grant summary disposition or judgment. However, the
regulations have been interpreted universally to allow summary disposition in those
circumstances where summary judgment would be appropriate under Rule 56 of the
Federal Rules of Civil Procedure.

' For purposes of the record I receive CMS Ex. 1 - CMS Ex. 20 and P. Ex. 1 - P.
Ex. 12. Although I may cite to some of these exhibits in this decision for the purpose of
describing undisputed material facts I do not make findings as to the exhibits’ evidentiary
weight. In issuing summary disposition I rely only on the undisputed material facts and I
make no evidentiary findings.
3

Rule 56 permits summary judgment in a case where there are no disputes as to material
facts. A “material fact” is a fact which is necessary to deciding a case. Summary
judgment may not be imposed where there is a genuine dispute as to a material fact.
However, a fact must truly be material in order for a dispute concerning that fact to be an
impediment to issuing summary judgment. Calling a fact “material” does not necessarily
make it so.

Furthermore, a fact is not “disputed” simply because a party asserts that there is a dispute.
A genuine dispute exists as to a fact only where the parties offer plausible contradictory
versions of the same fact.

n this decision I discuss in detail the facts on which CMS relies to support its motion for
summary disposition. I explain why these facts, if not disputed, support a conclusion that
Petitioner contravened CLIA requirements and also why Petitioner’s noncompliance
justified revocation of its CLIA certificate. I discuss also the allegedly disputed facts
cited by Petitioner and I explain why these facts either do not cause a legitimate dispute
concerning the facts relied on by CMS or are not material to the outcome of this case.

CMS bases its motion for summary disposition on four specific allegations of
noncompliance. First, it asserts that Petitioner contravened both CLIA and the
requirements of an implementing regulation, 42 C.F.R. § 493.801(b)(4), by intentionally
referring proficiency testing samples to another laboratory for testing. Second, CMS
contends that Petitioner failed to comply with the CLIA condition stated at 42 C.F.R.

§ 493.801 because it failed to test proficiency testing samples in the same manner as it
tested patients’ specimens. Third, it asserts that Petitioner failed to comply with the
CLIA condition stated at 42 C.F.R. § 493.803 in that it failed to participate successfully in
a proficiency testing program. Finally, CMS alleges that Petitioner failed to comply with
the CLIA condition stated at 42 C.F.R. §§ 493.1403 and 493.1407 in that it failed to have
a laboratory director who provides overall management and direction in compliance with
applicable CLIA regulations.

As | explain below, failure by Petitioner to comply with any of these requirements gives
CMS sufficient grounds to impose the remedy that it determined to impose here,
revocation of Petitioner’s CLIA certificate. Consequently, summary disposition in favor
of CMS is appropriate if the undisputed material facts establish a basis for summary
disposition as to any one of the four allegations of noncompliance.
4

I find that it is appropriate to impose summary disposition in favor of CMS as to two of
CMS’s noncompliance allegations: Petitioner’s failure to test proficiency testing samples
in the same manner as patients’ specimens, in contravention of the requirements of 42
C.F.R. § 493.801; and Petitioner’s failure to conduct a successful proficiency testing
program in contravention of the requirements of 42 C.F.R. § 493.803. It is unnecessary
that I address the other two allegations of noncompliance.

The facts that are material to the two CLIA conditions for which I impose summary
disposition are not necessarily congruent with those that relate to the CLIA requirements
that I do not address in this decision. For example, it is not necessary that I find that
Petitioner intentionally referred proficiency testing samples to another facility as an
element of or as a prerequisite to a finding that it failed to conduct testing of proficiency
testing samples in the same manner as it tested patients’ specimens. For that reason,
Petitioner’s assertion that there are disputed issues of material facts relating to the issue of
whether it intentionally referred proficiency testing samples to another facility is not
relevant to deciding whether there are undisputed material facts supporting summary
disposition on the issues of whether Petitioner conducted proficiency testing in the same
manner as it tested patients’ specimens or whether it maintained a successful proficiency
testing program.

2. The undisputed material facts establish that Petitioner contravened
two CLIA conditions of participation because it failed to test proficiency
testing samples in the same manner as patients’ specimens and because it
failed to participate successfully in a proficiency testing program.

CLIA directs the Secretary of Health and Human Services (the Secretary) and, by
implication his delegate CMS, to issue and enforce regulations to implement the statute’s
provisions. 42 U.S.C. § 263a(f)(1). The statute provides the Secretary and CMS with the
authority to impose remedies — including revocation of a laboratory’s CLIA certificate —
where the Secretary finds that the laboratory has not complied with CLIA participation
requirements prescribed by the Secretary. 42 U.S.C. § 263a(i)(1)(C).

The regulations governing CLIA participation include regulations governing proficiency
testing. Proficiency testing is a process by which CLIA-certified laboratories must
periodically test samples that are sent to them by a testing service in order to assure that
the tests that they conduct are accurate. The Secretary’s CLIA regulations make it a
condition for CLIA participation that a laboratory test proficiency testing samples “in the
same manner as patients’ specimens.” 42 C.F.R. § 493.801. Furthermore, participation in
CLIA is conditioned on a laboratory “successfully particip[ating] in a proficiency testing
program approved by CMS....” 42 C.F.R. § 493.803.
5

Regulations define what constitutes testing proficiency testing specimens in the same
manner as patients’ specimens. They require, among other things, that a laboratory’s
proficiency testing samples must:

be examined or tested with the laboratory’s regular patient workload by
personnel who routinely perform the testing in the laboratory, using the
laboratory’s routine methods. The individual testing or examining the
samples and the laboratory director must attest to the routine integration of
the samples into the patient workload using the laboratory’s routine
methods.

42 C.F.R. § 493.801(b)(4).

The essence of proficiency testing is that it measure the actual performance of a
laboratory under conditions that are precisely identical to the way in which the laboratory
tests all of the same type of specimens. Proficiency testing would be meaningless if a
laboratory uses: different protocol for testing proficiency testing samples than it uses for
testing other specimens of the same type; different personnel to conduct proficiency
testing than the personnel who test patients’ specimens; or different equipment for
performing proficiency testing than that which it uses to test patients’ specimens.
Consequently, the requirement that proficiency samples be tested in the same manner as
patients’ specimens consists of at least the following three mandatory elements: (1)
proficiency testing samples must be integrated into a laboratory’s regular workload of
patient specimens; (2) the personnel who routinely perform testing on patient specimens
must test proficiency testing samples; and (3) proficiency testing samples must be tested
using the same methods and equipment as the laboratory uses to test patients’ specimens.

Any failure by a laboratory to test proficiency testing specimens exactly as it tests other
specimens of the same type, and as part of its integrated patient testing process, is a
violation of the proficiency testing condition and also establishes that the laboratory
failed to comply with the condition requiring it to participate successfully in an approved
proficiency testing program.

a. Petitioner failed to comply with the condition stated at 42 C.F.R.
§ 493.801 because it failed to test proficiency testing samples in the
same manner as it tested patients’ specimens.

According to CMS, Petitioner failed to meet any of the requirements governing
proficiency testing in conducting proficiency testing of mycology samples during the
third testing event of 2005 and the first two testing events of 2006. Specifically:
6

+ Petitioner is located in the Michigan Center for Dermatology and Cosmetic
Surgery, a physician’s office in Clinton Township, Michigan, a community about
30 miles from Detroit, Michigan.

+ The tests conducted by Petitioner included specific types of mycology testing.”
Until at least December 2006 these tests included reading fungal cultures at the
genus/species level.

+ CLIA regulations require that a laboratory which conducts tests that isolate or
entify an organism at the genus or species level participate in proficiency testing
f such tests. 42 C.F.R. § 493.15(a).

o-=

For the third proficiency testing event of 2005 and the first two proficiency
testing events of 2006 Petitioner sent its fungal proficiency testing samples to
Dennis Babel, Ph.D., at his home in Holland, Michigan. Holland is a community
that is located several hours’ drive away from Petitioner’s laboratory.

+ Dr. Babel analyzed the proficiency testing samples at his home using his personal
equipment to perform the tests. Petitioner then reported the test results to the
proficiency testing agency, the College of American Pathologists.’

+ Petitioner did not record the fungal testing samples for the third proficiency
testing event of 2005 or the first two proficiency testing events of 2006 on its
patient log sheets, which record tests conducted at Petitioner’s laboratory.

> CMS asserts that the mycology testing performed by Petitioner included fungal

cultures and “KOH preps.” It has not provided me with a definition of the term “KOH

> In reporting the test results, Dr. Babel and Petitioner’s director, Daniel M.

Stewart, M.D., signed the following attestation:

We the undersigned, recognizing that some special handling may be
required due to the nature of proficiency testing materials, have as closely
as is practical, performed the analyses on these specimens in the same
manner as regular patient specimens.

CMS Ex. 8, at 2; CMS Ex. 9, at 2.
7

+ Although Petitioner sent proficiency testing samples to Dr. Babel for the third
proficiency testing event of 2005 and the first two proficiency testing events of
2006, it continued during that same period of time to conduct the same types of
tests on patient specimens at its Clinton Township office.

The facts relied on by CMS, if not disputed, establish a failure by Petitioner to perform
proficiency tests in the same manner as it tests patients’ specimens. The only reasonable
conclusion that I can reach from these facts is that, during the third proficiency testing
event of 2005 and the first two events of 2006, Petitioner had its fungal proficiency
testing performed in a manner that was different from and not integrated with the way it
tested patients’ specimens.

The facts alleged by CMS show that Petitioner sent its proficiency testing samples to an
individual who was located at a considerable distance from Petitioner’s laboratory where
he tested those samples using his own equipment. The facts support the additional
conclusion that, when he conducted these proficiency tests, Dr. Babel was not part of
Petitioner’s regular workforce routinely performing tests at Petitioner’s laboratory.
Finally, the facts show that Petitioner continued, at its Clinton Township office, to
conduct tests on patient specimens of the same type as the proficiency test samples it sent
to Dr. Babel.

There is no significant dispute about these facts. Petitioner does not deny that the
proficiency tests in question were performed by Dr. Babel at his home. Additionally,
Petitioner does not deny, that, at the time Dr. Babel performed these tests he was not part
of Petitioner’s full time work force performing tests at Petitioner’s laboratory. Nor does
Petitioner contend that Dr. Babel conducted the tests as part of Petitioner’s routine testing
of patients’ specimens at its Clinton Township laboratory. In fact, Petitioner admits that
two of the three proficiency test events at issue were not tested as part of its regular
testing workload:

While the .. . [proficiency testing] samples on two isolated occasions were
not tested with... [Petitioner’s] regular patient workload, Dr. Babel’s
examination of the . . . [proficiency testing] samples during his transition to
eventual retirement ensured consistency with the procedures he set up for. .
. [Petitioner] and . . . [Petitioner’s] compliance with the underlying policy
basis for 42 C.F.R. § 493.801 of protecting patient safety. ...

Petitioner’s brief in opposition to CMS’s motion (Petitioner’s brief in opposition) at 12
emphasis added).
n opposing CMS’s motion, Petitioner focuses on CMS’s allegation that it intentionally
referred proficiency testing samples to another facility for testing. And, for that reason,
Petitioner offers facts and arguments to support its contention that it did not intentionally
refer proficiency testing samples to another facility. However, Petitioner’s intent is not
material to the question of whether Petitioner failed to test proficiency samples in the
same manner as it tested patients’ specimens.

For purposes of this decision I am assuming that all of the facts alleged by Petitioner in
opposition to CMS’s motion are true. And, in addition, I have drawn all inferences that
one reasonably could make from Petitioner’s fact allegations. Notwithstanding, Petitioner
as not established any dispute as to the material facts asserted by CMS.

Petitioner recites a series of what it refers to as “questions” about the relationship between
Dr. Babel and Petitioner which, it contends, can only be decided after a full hearing of
this case. Petitioner’s brief in opposition at 5-6. But, raising questions is not the same
thing as averring facts. Petitioner does not say that it has evidence which, if offered at a
earing, would answer any of these questions in ways that dispute the material facts
alleged by CMS.

For example, Petitioner contends that a question which must be answered at a hearing is:
“The nature of Dr. Babel’s relationship with . . . [Petitioner] at the time he tested the. . .
proficiency testing] samples. Petitioner’s brief in opposition at 5. But, Petitioner did not
aver that it possesses facts that raise any dispute with respect to facts offered by CMS
establishing that Dr. Babel performed the proficiency tests at a location outside of
Petitioner’s laboratory and that the tests were not integrated into Petitioner’s regular
patient testing.

Similarly, Petitioner says that there is a question about: “When Dr. Babel ceased
performing routine work for... [Petitioner].” Petitioner’s brief in opposition at 5. But,
as with the previous question, Petitioner doesn’t offer any facts in response to this
question that would call into dispute the facts alleged by CMS. For example, Petitioner
does not aver that Dr. Babel routinely performed testing including the proficiency tests at
issue at Petitioner’s Clinton Township laboratory.

Petitioner also asserts that resolution of this case requires a determination of whether the
proficiency testing samples at issue were tested by routine personnel in a manner
consistent with patient specimens. Petitioner’s brief in opposition at 5. I agree that this is
a fair characterization of the issue of whether Petitioner conducted proficiency testing in
compliance with the requirements of 42 C.F.R. § 493.801. But, Petitioner offers no facts
9

in response to this issue which dispute those alleged by CMS. Most importantly,
Petitioner does not aver that it, in fact, integrated the proficiency tests into its regular
patient sample testing routine at its Clinton Township laboratory.

Other facts alleged by Petitioner are simply not material to the issue of whether Petitioner
performed the proficiency tests in question in the same manner as it tested patients’
specimens. Petitioner asserts that Dr. Babel functioned as part of Petitioner’s laboratory
during the period of time that he performed the proficiency tests at issue here.
Petitioner’s brief in opposition at 6-7. It characterizes Dr. Babel as being semi-retired but
asserts that he was still on Petitioner’s payroll and “functioning as a testing person at...
[Petitioner’s laboratory] when he examined . . . [proficiency testing] samples at his
home.” Petitioner’s brief in opposition at 7. “In fact,” according to Petitioner, “the
transmittal of the .. . [proficiency testing] samples to Dr. Babel in that capacity at his
home was tantamount to sending them to him at a location that essentially functioned as
an extension of... [Petitioner’s laboratory]... .” Jd. Petitioner also characterizes Dr.
Babel’s home as a “temporary testing location” for Petitioner’s laboratory. Jd. at 10.

These alleged facts are not material because they say nothing to rebut facts showing that
the proficiency tests were not integrated into Petitioner’s regular testing workload. For
purposes of this decision I accept as true everything that Petitioner says about Dr. Babel
and his role in Petitioner’s operations. But, none of those allegations rebut the facts
offered by CMS showing that Petitioner did not test proficiency testing samples in exactly
the same way as it tested patients’ specimens.

In fact, Petitioner’s contentions about the relationship it had with Dr. Babel only serve to
reinforce the facts alleged by CMS showing that the proficiency testing samples were not
integrated into Petitioner’s regular testing protocol. The fact that Dr. Babel may have
been a semi-retired employee of Petitioner’s laboratory who served Petitioner as a
consultant or who performed proficiency tests for Petitioner at his home not only is
insufficient to demonstrate that Petitioner integrated the proficiency tests at issue into its
regular testing process, but it supports CMS’s contention that the proficiency tests were
not integrated into the normal testing process.*

* Petitioner also argues that Dr. Babel was not operating a laboratory
independently from Petitioner’s laboratory. Petitioner’s brief in opposition at 7-10. This
argument, as I note above, is intended to address CMS’s allegation that Petitioner
intentionally referred proficiency testing samples to another laboratory. It is irrelevant to
the issue of whether Petitioner performed proficiency tests in the same manner as it tested
patients’ specimens.
10

Petitioner asserts that: “Dr. Babel created and adhered to the routine and regular testing
procedures established for patient and testing specimens utilized by . . . [Petitioner].” Jd.
at 11. According to Petitioner: “The . . . [proficiency testing] samples were tested by him
in the same manner as testing is and has been performed routinely by Dr. Babel and
others for patient specimens.” Jd. It asserts that Dr. Babel was “the regular testing
person” for genus/species fungal tests and that he examined the proficiency testing
samples at issue “in the routine manner that he established for . . . [Petitioner’s
laboratory].” Petitioner’s brief in opposition at 12.

These assertions dodge the allegations raised by CMS concerning Petitioner’s proficiency
testing. That Dr. Babel created and then adhered to Petitioner’s testing procedures does
not plausibly lead to the conclusion that the proficiency tests were done by the same
personnel using the same equipment at the same facilities as were used to test patients’
specimens. Doing a proficiency test following the same procedures as testing of patients’
specimens, but with different personnel, with different equipment, and at a different
location from that where patients specimens are tested is not the same thing as integrating
the proficiency test into a laboratory’s regular process. When a proficiency test is done
by someone other than a laboratory’s full time personnel all that the test records is the
acumen and skill of the person doing the test. That is so even if that person, in
performing the proficiency test, imitates what is done at the laboratory. Under those
circumstances the test results say nothing about what is done on a daily basis at the
laboratory by other personnel using other equipment and facilities than were used by the
person performing the tests.

Finally, Petitioner argues that having Dr. Babel perform the proficiency tests was
consistent with CLIA’s “underlying policy of protecting patient safety.” Petitioner’s brief
in opposition at 12. Apparently, Petitioner asserts that having someone other than the
laboratory’s full time personnel perform proficiency tests at a remote location is
consistent with CLIA’s proficiency testing requirements so long as that person is
affiliated with the laboratory and replicates the procedures used by the laboratory to
conduct patient testing. If that is Petitioner’s argument I reject it. Neither CLIA nor
regulations permit proficiency testing to be done in a manner that deviates from a
laboratory’s routine testing of patient specimens.*

> Petitioner cites as support for its arguments my decision in the case of Edward
Ming-Che Lai, DAB CR848 (2001). My decision in that case has no bearing on what I
decide here. In Edward Ming-Che Lai | found that Petitioner proved, by the
preponderance of the evidence, that he was not a medical director of a clinical laboratory
at a time when the laboratory was out of compliance with CLIA conditions. That
decision was based on the weight of the evidence. Here, Petitioner has offered no
11

b. Petitioner failed to comply with the condition that is stated at 42
C.F.R. § 498.803 because it failed to participate successfully in an
approved proficiency testing program.

CLIA regulations state that failure by a laboratory to achieve an overall satisfactory score
for proficiency testing for two consecutive testing events or for two out of three
consecutive events is unsuccessful performance in proficiency testing. 42 C.F.R.

§ 493.827(e). The undisputed material facts asserted by CMS establish that Petitioner
failed in two ways to comply with this requirement. First, Petitioner’s failure to conduct
proficiency testing in the same manner as it tested patients’ specimens rendered
Petitioner’s entire proficiency testing unsuccessful. Second, the undisputed facts asserted
y CMS establish that Petitioner actually failed to participate in proficiency testing or
obtained zero scores for proficiency testing in three consecutive testing events.

A basis for concluding that Petitioner failed to participate successfully in an approved
proficiency testing program arises from the facts that I describe at subpart a. of this
Finding establishing that Petitioner failed to conduct proficiency tests in the same manner
as it tested patients’ specimens. Petitioner’s noncompliance with that requirement
rendered its proficiency testing invalid and, therefore, constituted unsuccessful
participation in an approved proficiency testing program.

Petitioner asserts that the tests sent to Dr. Babel constituted isolated circumstances that
were occasioned by a unique period of transition due to Dr. Babel’s retirement. But, Dr.
Babel’s transition does not gainsay the fact that the proficiency tests performed by him
outside of Petitioner’s Clinton, Michigan laboratory deviated from Petitioner’s routine
testing process for patient specimens and thereby rendered the testing meaningless.

CMS asserts additional facts which also support a finding that Petitioner failed to
participate successfully in an approved proficiency testing program. Facts alleged by
CMS are that, in 2006, Petitioner had an unreported score for the first proficiency testing
event of that year and scores of zero for the second and third proficiency testing events.
CMS Ex. 10. Consequently, Petitioner was unsuccessful in proficiency testing for three
consecutive proficiency testing events in contravention of the regulation.

material facts that respond to the facts offered by CMS establishing that Petitioner failed
to comply with CLIA conditions.
12

Petitioner does not deny these facts. It argues, essentially, that it was exempt from
conducting genus/species proficiency testing during 2006 because it had determined,
following Dr. Babel’s semi-retirement:

that the needs of. . . [Petitioner’s owner’s medical] practice ultimately
could be met by reading results as either positive or negative instead of at
the genus/species level. .. Therefore, while . . . [Petitioner] was remiss in its
documentation, its decision to transition to reading mycology tests as
positive/negative, meant that . . . [Petitioner] was not required to participate
in the .. . proficiency testing program for the second and third events of
2006.

For purposes of this decision I assume that Petitioner would not have had to perform
genus/species proficiency tests if it was not, in fact, conducting such tests of patients’
specimens. But, Petitioner has not alleged that it ceased all testing at the genus/species
level in 2006. All that Petitioner says is that it had decided to make a “transition” during
2006 from conducting genus/species tests to conducting positive/negative mycology tests.
The facts alleged by Petitioner concerning its transition, therefore, are insufficient on their
face to establish a defense to CMS’s assertions.

Moreover, the undisputed material facts rebut any possible inference that Petitioner would
ave been excused from genus/species proficiency testing in 2006 by virtue of its
transition from genus/species testing to positive/negative testing. The facts alleged by
CMS establish that Petitioner’s “transition” in 2006 did not include complete cessation of
genus/species testing during that period. CMS offered facts to show that, until at least
December 6, 2006, Petitioner’s laboratory procedure for fungal cultures required that they
e read at the genus/species level. P. Ex. 1 at § 20; P. Ex. 10. Petitioner didn’t deny
these facts.

3. CMS is authorized to revoke Petitioner’s CLIA certificate.

Remedies that CMS may impose against a laboratory for noncompliance with CLIA
conditions include principal sanctions consisting of: suspension from participating in
CLIA; limitation of the laboratory’s CLIA certificate; and revocation of the laboratory’s
CLIA certificate. 42 C.F.R. § 493.1806(a), (b). The regulations give CMS discretion to
choose which of these principal sanctions it will impose where condition level
noncompliance exists.
13

There is nothing in the regulations which gives me authority to second-guess CMS’s
exercise of discretion. In other words, I may not substitute my judgment for that of CMS
where condition level noncompliance exists and CMS chooses to impose one or more of
the principal sanctions provided by the regulations. The applicable regulation makes it
clear that the existence of condition level noncompliance establishes a rational basis for
imposing revocation as a remedy.

Here, the undisputed material facts show that Petitioner failed to comply with two CLIA
conditions. Petitioner’s noncompliance with either of those conditions authorized CMS
to impose one or more of the principal sanctions stated at 42 C.F.R. § 493.1806(b). CMS
determined to revoke Petitioner’s CLIA certificate. That is a determination that is within
CMS’s discretion to make and, therefore, I must sustain it.

Petitioner argues that I should conduct a de novo review of CMS’s determination to
revoke Petitioner’s CLIA certificate and make an independent decision as to what remedy
is appropriate based on the entire record of the case. As support for this argument
Petitioner cites an administrative law judge decision in California Medical Associates
Laboratory, DAB CR476 (1997). Petitioner’s reliance on the decision is misplaced. In
California Medical Associates the administrative law judge did not conduct a de novo
review of the evidence in order to decide whether CMS reasonably determined to impose
revocation as a remedy. To the contrary, the administrative law judge held only that there
was no evidence establishing that CMS had abused its discretion in determining to revoke
a laboratory’s CLIA certificate.°

Petitioner also cites the language of 42 C.F.R. § 493.1804(d) as support for its theory that
I should be making a de novo determination of the appropriate remedy. That regulation
recites a non-inclusive list of various factors that CMS may use in determining what
remedy to impose against a noncompliant laboratory. Petitioner argues that I should
consider those factors as well in deciding what, if any, remedy is appropriate in this case
and contends that I cannot make findings of appropriateness without first holding an
evidentiary hearing.

° As I read the applicable regulation there is no abuse of discretion by CMS if it
chooses to impose revocation as a remedy where a laboratory has failed to comply with a
CLIA condition. 42 C.F.R. § 493.1806(b). The regulation makes it plain that the remedy
of revocation is within CMS’s discretionary authority so long as there is condition level
noncompliance. Furthermore, I question whether I have the authority to decide that CMS
abused its discretion in imposing a remedy, notwithstanding the decision in California
Medical Associates. The regulations which authorize me to hear and decide cases
involving CLIA do not state or suggest that I have such authority.
14

Petitioner misreads the regulation. It does not confer authority on me to make de novo
evidentiary findings. Nor does it give me the authority to second guess what CMS has
decided to impose. All that it does is set forth a list of factors that CMS may consider in
exercising its discretion as to what remedy to impose.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Randall Dean Hopp, R.N., ) Date: January 9, 2008
)
Petitioner, )
)
-V.- ) Docket No. C-07-704
) Decision No. CR1722
The Inspector General. )
)
DECISION

| sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Randall
Dean Hopp, R.N., from participating in Medicare and other federally funded health care
programs for a period of at least five years. The exclusion is mandatory because
Petitioner was convicted of a criminal offense that is described at section 1128(a)(2) of
the Social Security Act (Act).

1. Background

On August 31, 2007, the I.G. sent Petitioner a notice advising him of his exclusion.
Petitioner requested a hearing and the case was assigned to me for a hearing and a
decision.

[ held a pre-hearing conference, by telephone, at which I established a schedule for the
parties to file briefs and proposed exhibits addressing the issues in this case.
Additionally, I advised the parties that either of them could request that [ convene a
hearing in person and that I would evaluate such a request based on considerations of
whether the party moving for a hearing proffered testimony that was relevant and which
did not duplicate the contents of an exhibit.
2

The I.G. filed a brief and six proposed exhibits which he designated as I.G. Ex. | - IG.
Ex. 6. Petitioner filed a brief in the form of a letter (letter brief) and offered no proposed
exhibits. Petitioner did not object to my receiving any of the I.G.’s proposed exhibits into
evidence. The I.G. then submitted a reply brief.' Petitioner then submitted an undated
letter, in which he stated that “I am dropping this appeal” in response to language
contained in the I.G.’s reply brief, but then proceeded in other language to refute those
arguments. Consequently, given the ambiguity of Petitioner’s letter, [ am treating the
letter not as a clear intent to withdraw the hearing request, but rather as Petitioner's own
reply brief. Therefore, I am issuing a decision in this case. Neither party requested that I
convene a hearing in person.’ I receive into evidence I.G. Ex. 1 - I.G. Ex. 6, and I close
the record in this case.

Il. Issue, findings of fact and conclusions of law
A. Issue

The issue in this case is whether Petitioner was convicted of a criminal offense that
mandates his exclusion pursuant to section |128(a)(2) of the Act.

B. Findings of fact and conclusions of law
I make findings of fact and conclusions of law (Findings) to support my decision in this

case. | set forth each Finding below as a separate heading. I discuss each Finding in
detail.

' With his reply brief, the I.G. submitted an additional two exhibits, IG. Ex. 7a
I.G. Ex. 8. L exclude these additional exhibits on the ground that they were filed
untimely.

> In his letter brief Petitioner stated that: “[i]f needed, | could make arrangements
to speak with . . . [the administrative law judge] on this matter.” Petitioner’s letter brief at
3. 1 do not interpret this statement as a request to present testimony in person. Rather, it
appears to be a suggestion by Petitioner that he might amplify on his arguments in his
letter brief via a personal appearance if | concluded that his arguments were unclear or
incomplete. There is no need for such an additional appearance inasmuch as Petitioner
stated his arguments quite clearly in his letter brief. Furthermore, Petitioner identified no
possible testimony that would add relevant evidence to the case.
3

1. Petitioner's exclusion is mandated by section 1128(a)(2) of the Act.

Section |128(a)(2) mandates the exclusion of any individual who is convicted of a
criminal offense related to the neglect or abuse of a patient in connection with the
delivery of a health care item or service. The I.G. based his exclusion of Petitioner
pursuant to this section on the following facts.

On March 3, 2003, Petitioner was charged in a criminal complaint issued by the State of
Minnesota with crimes that included: mistreatment of a patient or a facility resident;
criminal neglect of a vulnerable adult; and assault, by intentionally inflicting bodily harm
ona vulnerable adult. [.G. Ex. 3, at 3. These charges were based on allegations that
Petitioner intentionally struck a nursing home resident while in the course of performing
his duties as a care giver at that nursing home. Jd. at | - 2. On February 4, 2004,
Petitioner agreed, as part of a plea bargain arrangement, to plead guilty to the third count
of the indictment, the charge that he had assaulted a vulnerable adult. I.G. Ex. 5.° A final
judgment of conviction was entered against Petitioner on April 15, 2004 and Petitioner
was sentenced to a fine and probation. I.G. Ex. 6.

The evidence offered by the I.G. satisfies all of the prerequisites for exclusion pursuant to
section |128(a)(2). The evidence establishes that: Petitioner was convicted of a criminal
offense; Petitioner’s conviction was for a crime involving physical abuse (assault); and
the conviction was of a crime committed in connection with the delivery of a health care
item or service (providing care while working in a nursing home).

Petitioner has not offered argument or evidence that rebuts the foregoing. His arguments
and assertions consist of the following:

* The allegations against him were based on lies and mis-truths.

+ He entered his plea because, at the time, he could not afford to pay for an
attorney to defend him against the criminal charges.

‘ Petitioner entered into what was characterized as an “Alford plea”. [.G. Ex. 5, at
2. [ take notice that an Alford plea is essentially a plea of nolo contendere or no contest
to a criminal charge. A plea of nolo contendere or no contest is a conviction within the
meaning of section 1128 of the Act and, thus, has the same consequence as a guilty plea.
Act, section 1128(i)(3).
4

+ When he subsequently sought to vacate his conviction, he discovered that the
sole complaining witness had died, thereby making it impossible to convince a
court to award him the relief that he sought.

+ He has worked as a nurse during the approximately five years since the incident
on which the criminal charges were based and has had no problems whatsoever.
Consequently, to now exclude him, many years after the fact, would be unfair.

+ He has petitioned for expungement of his conviction and has reason to believe
that an expungement will eliminate a basis to exclude him.

An exclusion imposed pursuant to section 1128(a)(2) derives from a conviction of a
criminal offense as is defined by that section. An argument by a person who is convicted
of an offense for which an exclusion is mandated by the section that he or she is not really
guilty of the offense of which he or she was convicted is not a basis for finding the I.G. to
be without authority to exclude. The issue of underlying guilt ceases to be a factor once
the excluded individual is convicted of an offense as is defined by section 1128(a)(2)
because the I.G.’s duty to exclude derives from the conviction.

Similarly, it is irrelevant why an excluded individual elected to plead guilty to an offense

falling within the purview of section 1128(a)(2). Once that individual is convicted of the

offense, the mandatory exclusion requirement is triggered, even if that individual chose to
plead guilty as part of a bargain to reduce the cost of defending himself or herself against

a criminal charge.

Expungement of Petitioner's conviction — should it occur — is not a basis for me to find
the I.G. without authority to exclude him. A person who pleads guilty to a crime as
defined by any of the parts of section 1128 of the Act, including section 1128(a)(2), is
“convicted” of a crime, and subject to exclusion, even if he or she subsequently has his or
her conviction expunged. Act, section 1128(i)(1).

Finally, 1 am without authority to consider Petitioner’s equitable argument that it is unfair
to now exclude him given that several years have elapsed since the date of his conviction
and that he has had an exemplary work history of a nurse during the intervening period.
By regulation I am limited in a case such as this — where the I.G. has imposed an
exclusion against Petitioner for a statutory minimum period — to deciding only whether
the LG. is required by the Act to impose the exclusion.*

* Lam not unmindful that a lengthy delay in imposing an exclusion ~ such as
obviously happened here — may in fact be contrary to the intent of the Act. The purpose
5
2. A five-year exclusion is mandated by the Act.

The LG. excluded Petitioner for a period of five years, the minimum period that is
mandated for an exclusion that is imposed pursuant to section 1128(a)(2). Act, section
1 128(c)(3)(B). 1 must sustain the exclusion inasmuch as it is mandatory.

/s/ Steven T. Kessel
Administrative Law Judge

of the Act is to exclude individuals who are untrustworthy to provide care. It is difficult
to see how the statutory purpose is furthered by waiting years to impose an exclusion. In
a recent decision, a United States District Court questioned whether a lengthy delay in
imposing an exclusion violated an excluded individual's right to due process of law.
Connell v. Secretary of Health and Human Services, slip copy, 2007 WL 1266575 (S.C.
Il. Apr. 30, 2007). But, that decision notwithstanding, the regulations preclude me from
deciding whether Petitioner was denied due process as a consequence of the 1.G."s long
and inexplicable delay in excluding him.


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:

Riverwood Nursing Center f/k/a
Southwood Nursing Center,
(CCN: 02509700)

Date: January 8, 2008

Petitioner,

Docket No. C-08-133

Decision No. CR1721

Centers for Medicare & Medicaid
Services.

DECISION DISMISSING
REQUEST FOR HEARING

n this case, the Centers for Medicare & Medicaid Services (CMS) filed a motion to
dismiss the hearing request of Petitioner Riverwood Nursing Center on the grounds that
Petitioner does not have a right to a hearing. Petitioner opposes the motion. It is my
decision to grant CMS’s motion to dismiss pursuant to 42 C.F.R. § 498.70(b).

I. Background

Petitioner is a skilled nursing facility located in Jacksonville, Florida, certified to
participate in the Medicare and Medicaid programs as a provider of services. Southwood
Nursing Center' was sued for damages in the Fourth Judicial District of Duval County,
Florida. Plaintiff prevailed, and obtained a $750,000 jury verdict. Following entry of
final judgment, which Southwood did not appeal, Plaintiff filed a certified copy of the
judgment with Mutual of Omaha, CMS’s fiscal intermediary, requesting assignment of

' The request for hearing in this case was filed by Riverwood Nursing Center
inasmuch as that is the name by which Southwood is officially known.
2

Medicare receivables due Petitioner pursuant to 42 U.S.C. § 1395g (c)(1) and 42 C.F.R.
§ 424.90. On October 3, 2007, Mutual of Omaha notified Petitioner that it was accepting
the judgment as valid and would be redirecting Medicare reimbursements to Plaintiff.

Petitioner filed a request for hearing before the Civil Remedies Division of the
Departmental Appeals Board (DAB) dated November 30, 2007, asking that redirection of
Medicare payments be reversed and vacated.’ CMS filed a Motion to Dismiss dated
December 14, 2007. Petitioner filed a response dated December 21, 2007.

Petitioner’s Contentions (As reflected in the request for hearing)

Petitioner contends that 42 C.F.R. § 424.90(a) does not authorize CMS to redirect
Medicare payments merely upon presentation of judgment and the Plaintiff’s statement
that the judgment is unpaid. Instead, asserts Petitioner, a court order is required in aid of
execution of the judgment providing for assignment or reassignment of the Medicare
enefits to satisfy the judgment.

n the alternative, Petitioner argues that even if 42 C.F.R. § 424.90(a) authorizes CMS to
redirect Medicare payments merely upon presentation of judgment and the Plaintiff’s
statement that the judgment is unpaid, such regulatory provision is unconstitutional.

CMS’s Contentions

CMS contends that redirection of Medicare payments does not create a hearing right.
Specifically, CMS maintains that, in general, a participating long-term care facility will
have a right to a hearing if an initial determination to impose a remedy against a facility is
issued. In the instant case, states CMS, a remedy has not been imposed.

II. Discussion

The hearing rights of a long-term care facility are established by federal regulations at 42
C.F.R. Part 498. A provider dissatisfied with CMS’s initial determinations is entitled to
further review, but administrative actions that are not initial determinations are not
subject to appeal. 42 C.F.R. § 498.3(d). The regulations specify which actions are
“initial determinations” and set forth examples of actions that are not. A finding of
noncompliance that results in the imposition of a remedy specified in 42 C.F.R. § 488.406

> Although Petitioner seeks relief on behalf of Riverwood Nursing Center and
Souhwood Nursing Center, it asserts that Riverwood was formerly known as Southwood.
3

is an initial determination for which a facility may request an administrative law judge
(ALJ) hearing. 42 C.F.R. § 498.3(b)(13). No right to a hearing exists pursuant to 42
C.F.R. § 498.3(b)(13), unless CMS actually imposes one of the specified remedies.
Schowalter Villa, DAB No. 1688 (1999).

As indicated by CMS, no remedies have been imposed against Petitioner. Therefore, it is
not entitled to a hearing.

Petitioner argues that the list of initial determinations set forth in the regulations under
consideration here is non-inclusive, and that redirection of Medicare payments is not
expressly excluded as subject to appellate action before the DAB. Petitioner equivocates
in alleging that the redirection of Medicare payments is appealable because the list of
initial determinations contained in the regulations is non-inclusive. Moreover, Petitioner
as advanced no cogent reason in support of such argument. Additionally, Petitioner
cannot rely on the fact that redirection of Medicare payments is not expressly excluded
from administrative appeal under 42 C.F.R. § 498(3)(d). The burden rests with Petitioner
to show that such action is one of the initial determinations that allow for appeal to the
DAB. Petitioner has failed to do so.

Petitioner has not addressed in its brief the allegations made in the request for hearing,
that redirection of Medicare payments is not authorized upon mere presentation of a
judgment. In view of Petitioner’s silence in its brief as to this issue and the basis for
dismissal of this action, I need not address this point of contention. Additionally, I do not
ave authority to decide Petitioner’s claim that the regulations are unconstitutional if they
allow for redirection of benefits upon mere presentation of a judgment.

None of Petitioner’s ancillary arguments warrants consideration in the absence of a right
to file a request for hearing.

Ill. Conclusion

An ALJ may dismiss a hearing request where a party has no right to a hearing. 42 C.F.R.
§ 498.70(b). I therefore grant CMS’s motion to dismiss and order that this case be
dismissed.

/s/
José A. Anglada
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Oklahoma Heart Hospital, ) Date: January 4, 2008
(CCN: 37-0215), )
)
Petitioner, )
)

-Ve- ) Docket No. C-07-409

) Decision No. CR1719
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I deny Oklahoma Heart Hospital’s (Petitioner) motion for summary judgment, and uphold
the initial determination of the Centers for Medicaid and Medicare Services (CMS). I
find that Petitioner’s effective date of participation in the Medicare program is October
25, 2002.

I. Background

Petitioner is a hospital located in Oklahoma City, Oklahoma, that specializes in cardiac
care. On May 15, 2002, Petitioner submitted an application for certification to participate
in the Medicare program to the Medicare Part A intermediary, Chisholm Administrative
Services (Intermediary). On July 8, 2002, Petitioner was notified by the Intermediary of
its recommendation to CMS for approval of Petitioner’s certification application, pending
a future survey determination of compliance with all federal participation requirements.
Petitioner subsequently executed and submitted a Provider Agreement dated July 9, 2002.

Petitioner filed a request for a certification survey to be conducted by the Joint
Commission on Accreditation of Healthcare Organizations (JCAHO) on July 10, 2002.
JCAHO is an organization approved by CMS to conduct accreditation surveys and
determine a facility’s compliance with federal Medicare participation requirements.
2

On August 13, 2002, Petitioner was inspected by the Oklahoma State Department of
Health (OSDH) for compliance with state licensure standards. The OSDH survey found
Petitioner to be in compliance with state requirements for operating a hospital and issued
a license, effective August 13, 2002. Beginning August 14, 2002, Petitioner commenced
to conduct business as a fully-functioning hospital, and on that date began accepting
Medicare patients.

On October 23 and 24, 2002, JCAHO conducted an on-site survey of Petitioner’s facility
to determine whether Petitioner met federal participation requirements. JCAHO
concluded, based on the survey, that Petitioner met all requirements and recommended
Petitioner for certification to CMS, effective October 25, 2002. By letter dated February
14, 2003, Petitioner was notified by CMS of acceptance of its agreement for participation
in the Medicare program, effective October 25, 2002.

Petitioner filed a request for reconsideration of CMS’s initial determination regarding the
effective date of Petitioner’s provider agreement on April 14, 2002 [sic].' Petitioner
asserted that it had provided care to a substantial number of Medicare patients since the
facility’s opening on August 14, 2002. Petitioner contended that Ms. Sills, a
representative for the Intermediary, indicated that it would be allowable to “back bill” for
services provided to those Medicare patients from the time of the August 14 opening.

On March 2, 2007°, CMS notified Petitioner of the denial of the request for
reconsideration. CMS stated that the regulations do not allow for the change requested by
Petitioner. Specifically, CMS stated that, among other things, if the requirements for
accreditation are met at the time of the survey, then 42 C.F.R. § 489.13(b) determines the
effective date of the provider agreement. CMS further explained that a facility cannot be
deemed to be in compliance until a successful survey has determined that all federal
participation requirements have been met and, in these instances, the earliest effective
date an agreement may have is the date of the successful accreditation survey.

By letter dated April 30, 2007, Petitioner timely filed a request for hearing appealing
CMS’s determination of Petitioner’s certification to participate in the Medicare program
as October 25, 2002. Petitioner asserts that the effective date should be August 14, 2002.

' The date on Petitioner’s request for reconsideration is incorrectly written as
“April 14, 2002.” P. Ex. 2, at 1. The accurate date is “April 14, 2003.”

? The record before me does not illuminate the reason or reasons for the apparent
four-year delay between Petitioner’s request for reconsideration and CMS’s
determination to deny reconsideration. The nature of the reason or reasons does not,
however, appear on this record to be material to the resolution of this litigation.
3

The case was assigned to me for hearing and decision. The parties each submitted a
Notice of Issues for Which Summary Judgement Would Be Sought. A briefing schedule
was established for the submission of motions and supporting briefs. Petitioner filed its
initial brief in support of its Motion for Summary Judgement (P. Br.), and accompanying
exhibits (P. Exs. 1-9) on August 10, 2007. CMS filed its Response to Petitioner’s Motion
for Summary Judgment (CMS Response) on September 13, 2007. Petitioner filed its
reply brief on September 28, 2007, and CMS submitted its sur-reply brief on October 5,
2007. Without objection from CMS, I have admitted into the record P. Exs. 1-9.

If. Applicable law and regulations

In order to participate in the Medicare program, a prospective provider, such as a hospital,
must enter into a provider agreement with CMS. Social Security Act (Act), section 1866.
Before CMS will accept an agreement from a prospective provider, the provider must
meet the conditions of participation relevant to that provider. 42 C.F.R. §§ 488.3(a)(2),
489.10(a).

The requirements for hospitals participating in Medicare are set forth at 42 C.F.R. Part
482. These requirements include both conditions and standards of participation.
Conditions of participation state broad general requirements. Standards of participation
set forth specific requirements related to a condition.

CMS and its agents (such as state survey agencies or a national accreditation
organization) determine whether a provider is complying with applicable federal
requirements pursuant to the survey and certification process set forth at 42 C.F.R. Part
488. 42 C.F.R. §§ 488.11(a), (d); 488.12; 488.26(c)(1).

42 C.F.R. § 489.13(b) establishes the general rule for determining the effective date of a
provider agreement for a provider subject to survey and certification. It provides:

(b) All federal requirements are met on the date of the
survey. The agreement or approval is effective on the date the
survey ... is completed, if on that date the provider or
supplier meets all applicable Federal requirements as set forth
in this chapter.

To qualify as an approved provider of Medicare services, a hospital must have an
approved agreement, and in order for its agreement to be approved, the hospital must be
surveyed on-site by an agency authorized by CMS to conduct such a survey, in order that
its compliance with the requirements of the Medicare program can be assessed and
4

certified. 42 C.F.R. §§ 489.2(b)(1), 489.10(a). Until a hospital has been assessed and
certified, and until its agreement has been approved based on that assessment, its status is
that of a “prospective provider.” 42 C.F.R. § 498.2.

When the agency has completed its on-site survey, it reports the results and its
recommendation to CMS. 42 C.F.R. § 488.11(a). The agency’s report may include
recommendations regarding the effective date of the hospital’s approved status based on
the criteria set forth at 42 C.F.R. § 489.13(b). 42 C.F.R. § 488.11(d). On the basis of the
agency’s report and recommendation, CMS will determine whether the hospital is eligible
to participate in or be covered by the Medicare program. 42 C.F.R. § 488.12(a)(1).

With limited exceptions, none of which are relevant in the matter presently before me, a
prospective provider may not receive reimbursement for services provided to Medicare
beneficiaries prior to the effective date of its provider agreement. Act, section 1814(a).

III. Issues
The issues in this case are:
. whether a decision on summary judgment is appropriate;

. whether Petitioner became eligible to participate in the Medicare program
on a date prior to October 25, 2002; and

. whether I have authority based on the principle of equitable estoppel to
order CMS to certify Petitioner for participation in the Medicare program
on a date prior to October 25, 2002.

IV. Findings of fact and conclusions of law

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

A. Summary judgment is appropriate in this case because there are no disputed
issues of material fact.

Summary judgment is appropriate when there is no genuine issue as to any material fact
and one of the parties is entitled to judgment as a matter of law. FED. R. CIV. P. 56; see
Livingston Care Center, DAB No. 1871 (2003). If the moving party meets this burden,
the onus shifts to the opposing party to establish that a genuine issue as to a material fact
does exist. The opposing party will have shown that genuine issues of material fact are
5

present “if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 249 (1986). To
accomplish this, the opposing party must go beyond mere allegations, and come forward
with factual evidence that creates a genuine issue of material fact. All reasonable
inferences are to be drawn in the opposing party's favor. Pollock v. American Tel. & Tel.
Long Lines, 794 F.2d 860, 864 (3rd Cir. 1986).

Under Rule 56, a “material fact” is a fact which, if it exists, may affect the outcome ofa
case. A “genuinely disputed” material fact exists when opposing parties advance
different versions of an event. The concept of a genuine dispute as to the facts is critical
to understanding how summary judgment works. A fact offered by a party is not in
dispute simply because the opposing party asserts that it is in dispute. In order for there
to be a dispute as to the facts the opposing party must offer a version of events that differs
materially from the version offered by the moving party.

Furthermore, Rule 56 draws a distinction between facts and conclusions that are based on
facts. A disagreement between parties as to the meaning of facts is not an impediment to
summary judgment under Rule 56. The trier of fact always has the authority to draw
conclusions from facts, whether the case is disposed of by summary judgment, or after a
hearing. Thus, arguments about the meaning of facts — as opposed to disputes as to what
facts exist — constitute no impediment to granting summary judgment in a case.

In the case presently before me, there are no disputed issues of material fact. There are
disputes as to how applicable law should be interpreted. But such disputes do not call
into question the truthfulness or existence of any of the facts relied upon by either party. I
conclude, therefore, that summary judgment is appropriate in this case.

B. CMS accurately determined October 25, 2002 as the effective date of
Petitioner’s Medicare certification.

1. Petitioner became eligible to participate in the Medicare program on
October 25, 2002, the date of the completion of the survey conducted by
JCAHO which established that Petitioner met all Medicare participation

requirements.

Petitioner contends that the regulation at 42 C.F.R. § 489.13(b) provides a mechanism by
which a provider may be reimbursed for services rendered prior to formal acceptance into
the Medicare program. P. Br. at 11. The Medicare regulation, Petitioner continues,
“establish[es] an ‘effective date’ of the provider agreement that allows for reimbursement
of medical services furnished to Medicare patients prior to execution of the provider
6

agreement.” /d. at 10. Petitioner states that, typically, state survey agencies conduct the
initial certification survey and forward their findings and recommendations for
participation to CMS for determination. Jd.

Petitioner comments that the licensing standards utilized by OSDH are similar to those
used by Medicare for participation determination. P. Br. at 11. Petitioner states that a
survey was conducted by OSDH on August 12, 2002 and found Petitioner to be in
compliance with the Oklahoma licensing standards. P. Ex. 8, at 2. Petitioner argues that
OSDH’s finding of compliance was also, “in effect,” a determination of compliance with
Medicare conditions of participation. P. Br. at 12.

Petitioner’s interpretation of the regulations is unfounded. The regulations that govern
the instant matter are set forth at 42 C.F.R. Part 489. With exceptions, a provider may not
be found qualified to participate in Medicare any earlier than the date of completion of a
survey finding that a provider has met all federal participation requirements. 42 C.F.R.

§ 489.13(b). A provider must be inspected by an entity granted authority by CMS to
conduct inspections on its behalf for the purpose of certification for Medicare
participation.

The undisputed facts show that:

1. In November 2001 and on December 10, 2001, Petitioner
represented to the Intermediary its intent to be inspected by
JCAHO for Medicare certification purposes. P. Ex. 4; P. Br.
at 6.

2. Petitioner executed and submitted its enrollment
application (CMS Form 855A) to the Intermediary on May
15,2002. P. Ex. 4, at 1.

3. The Intermediary forwarded a letter to CMS
recommending approval of Petitioner’s enrollment application
on July 8, 2002. Jd.

4. Immediately following receipt of the June 8, 2002
recommendation letter to CMS, Petitioner filed a request for
inspection to JCAHO. /d.; P. Br. at 6.
7

5. On August 12-13, 2002, Petitioner was inspected by
OSDH for state licensing purposes, was found in compliance
with state licensing requirements, and was issued a state
license. P. Ex. 4, at 1; P. Ex. 8, at 2.

6. Petitioner began operation and commenced providing
services to Medicare beneficiaries on August 14, 2002. P. Ex.
4, atl.

7. Petitioner was surveyed by JCAHO on October 23-24,
2002 and was found to be in compliance with federal
Medicare participation requirements. P. Ex. 4, at 2.

The regulations at 42 C.F.R. §§ 488.4 and 488.5 provide that CMS may designate an
entity to conduct certification surveys on its behalf. CMS has designated JCAHO as an
entity authorized to conduct Medicare certification surveys on its behalf. A facility
inspected and deemed to meet certification requirements by JCAHO has thus qualified as
having been inspected and approved by a CMS-designated entity, and CMS will consider
the facility as having met the criteria to participate in the Medicare program. 42 C.F.R.

§ 488.5; Puget Sound Behavioral Health, DAB CR1151, at 5 (2004). Petitioner affirms
that JCAHO was the Medicare certification entity acting on behalf of CMS. An
inspection was duly conducted by JCAHO, Petitioner was found compliant with Medicare
requirements, and the JCAHO survey thus determined Petitioner’s effective date of
participation as October 25, 2002. The Board in Community Hospital of Long Beach,
DAB No. 1938, at 9 (2004) concluded that “a provider agreement is effective the day of
the survey if ‘the provider .. . meets all applicable Federal requirements as set forth in
this chapter [42 C.F.R. Chapter IV].’” As a matter of law, CMS cannot amend the
effective date to a time prior to the date of survey completion.

2. A State agency’s survey for state licensing does not equate to a survey to
certify a provider for Medicare participation.

Petitioner asserts that the survey conducted by OSDH, and the survey subsequently
conducted by Blue Cross Blue Shield of Oklahoma (BCBS), in which Petitioner was
found to be fully compliant with state licensing and insurance participation requirements,
should be held to fulfill the requirements for Medicare participation. P. Br. at 12-13.
Petitioner contends that OSDH is an organization that sometimes performs Medicare
certification surveys on behalf of CMS, and that its approval of Petitioner’s facility is
therefore ipso facto demonstrative of Petitioner’s compliance with Medicare
requirements. /d. at 13.
8

It is clear from the facts that the inspection conducted by OSDH was solely for state
licensing certification, and not for certification of Medicare participation requirements.
Petitioner has erred in its assumption that a facility that meets state licensing requirements
instantaneously and ipso jure meets all federal requirements for Medicare participation.
The Board in Arbor Hospital of Greater Indianapolis, DAB No. 1591, at 7-8 (1996),
established that CMS cannot base Medicare certification on a state licensing survey or on
the date of issuance of a state license. The regulations are clear that a provider must be
inspected and found to be in compliance with participation requirements before
certification will be granted. Id.; see also, 42 C.F.R. § 489.13.

3. Petitioner does not qualify for the “Special Rule” exception under 42
C.F.R. §§ 489.13(d)(1)(ii) and (d)(2).

Petitioner asserts that CMS erred in its failure to consider the provisions at section
489.13(d)(1) or (d)(2) in its consideration regarding designation of an effective date prior
to that of October 25, 2002. P. Br. at 15.

Petitioner relies heavily on the language of these particular provisions. The regulation
states:

(d) Accredited provider or supplier request participation in
the Medicare program — (1) General rule. If the provider or
supplier is currently accredited by a national accrediting
organization whose program had CMS approval at the time of
accreditation survey and accreditation decision, and on the
basis of accreditation, CMS has deemed the provider or
supplier to meet Federal requirements, the effective date
depends on whether the provider or supplier is subject to
requirements in addition to those included in the accrediting
organization’s approved program.

ek OK OK

(ii) Provider or supplier not subject to additional
requirements. For a provider or supplier that is not subject to
additional requirements, the effective date is the date of the
provider’s or supplier’s initial request for participation if on
that date the provider or supplier met all Federal
requirements.
ek OK OK

(2) Special rule: Retroactive effective date. If a provider or
supplier meets the requirements of paragraphs (d)(1) and
(d)(1)() or (d)(1)(ii) of this section, the effective date may be
retroactive for up to one year to encompass dates on which
the provider or supplier furnished, to a Medicare beneficiary,
covered services for which it has not been paid.

Specifically, Petitioner contends that the plain language of section 489.13(d)(1) supports
a finding by CMS that the effective date should be August 14, 2002, the date on which it
commenced providing services to Medicare beneficiaries. P. Br. at 15-16.

Further, Petitioner continues, the “Special Rule” at section 489.13(d)(2) gives CMS the
authority to designate retroactively an alternate effective date within one year ofa
facility’s accreditation date, for inclusion of dates for which services were provided to
Medicare beneficiaries by the facility and for which reimbursement was not received. P.
Br. at 16. Petitioner opines that, since the JCAHO survey found it to be in compliance
with participation requirements as of October 25, 2002, a retroactive effective date of
August 14, 2002 falls within the one-year window established by the regulation. Jd.

In each instance, Petitioner’s reliance on these particular provisions to support its position
is ill-founded. I concur with CMS’s interpretation of the law that, in order for retroactive
application to take effect, a provider must have been previously accredited by a CMS-
approved accreditation entity. In spite of Petitioner’s unfounded belief that the survey
conducted by OSDH is applicable for meeting Medicare participation certification, in
actuality, Petitioner was not entitled to be considered as having met participation
requirements until the on-site JCAHO survey conducted by JCAHO itself in October
2002. Therefore, there is no prior certification survey to “relate back” to in order to
calculate the retroactive effective date Petitioner seeks.

Further, as CMS points out, even if section 489.13(d)(2) were applicable in this case, the
tule is clearly discretionary on the part of CMS. The provision states that “/i/f'a provider
... meets the requirements ...” and “the effective date may be retroactive for up to one
year.” (Emphasis added.). There is no regulatory provision that can be understood as
providing a provider or supplier an entitlement to a retroactive certification effective date.
In Puget Sound Behavioral Health, DAB No. 1944 (2004), the Board addressed the issue
of “mandatory” versus “permissive” regulatory language. The Board opined that, in
instances where the bulk of the language reflects mandatory requirements and, in one
instance, the language attains a permissive tone, it is reasonable to conclude that the
change in the tone of the language is deliberate and intended to convey a different
10

meaning. Puget Sound, DAB No. 1944, at 16. The Board concluded that the regulatory
drafters of section 489.13(d)(2) intentionally used the phrase “may be retroactive” to
evidence CMS’s discretion to retroactively apply the “Special Rule” when it deemed
appropriate. Id.; see also, Lakeside Hospital of Bastrop, DAB CR1594 (2007). But more
importantly, Petitioner plainly did not meet the necessary participation requirements until
the October 2002 survey was conducted and such a determination was made by the
JCAHO.

C. Ido not have authority under any equitable theory to require CMS to establish
an effective date prior to October 25, 2002.

My authority in the instant case is limited: The Secretary of Health and Human Services
(Secretary) has delegated authority to me for hearing and decision of issues arising from
the initial determinations described at 42 C.F.R. §§ 498.3 and 498.5. My authority to
hear and decide a case involving CMS does not extend to awarding money damages
based on principles of estoppel, or to applying principles of equity such as estoppel to
decide whether CMS’s interpretation of a regulation is correct or incorrect, or to
otherwise deciding claims against CMS or the Secretary based on equitable estoppel.

Petitioner concedes the existence of a line of cases which support the premise that neither
an Administrative Law Judge (ALJ) nor the Board “has authority to render a decision on
equitable grounds.” P. Br. at 18. However, Petitioner avers to its disagreement with this
particular principle and has determined to make the argument nevertheless, in order to
preserve the argument for a potential appeal. Jd.

Petitioner contends that, based on the erroneous information received from, and the
“egregious conduct” of, the representative of the Intermediary regarding Petitioner’s
ability to “bill-back” for Medicare services provided prior to the JCAHO survey, there are
sufficient grounds for granting equitable relief. P. Br. at 18-22. Petitioner argues that,
had it known of the material inaccuracy of the information received from Ms. Sills, the
Intermediary representative, it would not have provided over $5.6 million in services,
between August 14 and October 24, 2002, that it would be unable to recoup. Jd. at 20.
Moreover, Petitioner continues, after repeated notice regarding the lack of guidance
provided by the Intermediary, CMS neglected to take any action to provide more distinct
guidance regarding the potential for financial harm during the application process. Jd. at
21. Petitioner concludes that CMS’s failure to take any action in this regard amounts to
“affirmative misconduct.” Id.

Assuming, arguendo, the truthfulness of Petitioner’s assertions, they are immaterial to my
resolution of this matter. I do not have authority to grant the relief sought by Petitioner
under any equitable theory. In Danville HealthCare Surgery Center, DAB CR892
11

(2002), ALJ Anne E. Blair was exhaustive and definitive in her treatment of the equitable
estoppel argument in cases such as this one now before me. After insightful
consideration of a long line of cases spanning more than 20 years (Office of Personnel
Management v. Richmond, 496 U.S. 414 (1990); Surgery Center of Southwest Kansas,
DAB CR619 (1999); New Life Plus Center, CMHC, DAB CR700 (2000); Tenet
HealthSystem Philadelphia, Inc., DAB CR773 (2000); Ophthalmology Ltd. Eye Surgery,
DAB CR658 (2000)), the ALJ applied this forum’s established caselaw and concluded
that estoppel “does not lie against the government in these types of cases.” Danville,
DAB CR892, at 7. Specifically, the ALJ in Danville reasoned that “erroneous
information from government employees does not rise to estoppel against the government
or entitle the recipient of the incorrect information to monetary payments not otherwise
permitted by law.” Id., (citing Surgery Center of Southwest Kansas, DAB CR619, at 6).

V. Conclusion

For the reasons discussed above, I deny Petitioner’s motion for summary judgment, and
affirm CMS’s determination to certify Petitioner to participate in the Medicare program
effective October 25, 2002.

/s/
Richard J. Smith
Administrative Law Judge