Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
|
IN THE CASE OF | |
Caroline D. Zohoury, D.O., |
DATE: March 12, 2002 |
- v - |
|
Centers for Medicare & Medicaid
Services
|
Docket No.C-00-832
Decision No. CR879 |
DECISION | |
DECISION I sustain the determination of the Centers for Medicare
& Medicaid Services (CMS) to deny Petitioner, Caroline D. Zahoury's,
application for a Clinical Laboratory Improvement Amendments of 1988 (CLIA)
certificate of waiver. I do so because I find that Petitioner was an "owner"
and/or "operator" of Rochester Road Clinic, P.C. (RRC), whose CLIA certificate
was revoked within the last two years prior to Petitioner's application.
CMS is, therefore, authorized to prohibit Petitioner's ownership or directorship
of any CLIA laboratory for a period of two years from October 14, 1999,
the date of RRC's revocation. I. Procedural Background This case is before me pursuant to a request for hearing
filed by Petitioner on August 23, 2000, in accordance with 42 C.F.R. �
498.40. On March 31, 2000, CMS (formerly, the Health Care Financing Administration or HCFA) sent Petitioner a notice (Notice) that her application for a CLIA certificate of waiver (Waiver) was denied pursuant to 42 U.S.C. � 263a(i)(3). The Notice informed Petitioner that, based on a review of her request for a Waiver, she met the definition of either an owner or operator, or both, in accordance with the definition of those terms in 42 C.F.R. � 493.2, of RRC. Petitioner's Waiver was denied because RRC's CLIA certificate was revoked on October 14, 1999. Petitioner's Waiver was for a physician's office laboratory at the same address and with the same phone numbers as RRC, the laboratory whose CLIA certificate was revoked. CMS moved for summary judgment. Both parties submitted briefs. I refer to the briefs as CMS Br. and P. Br., respectively. Both parties submitted reply briefs which I refer to as CMS R. Br. and P. R. Br., respectively. CMS offered 16 proposed exhibits (CMS Exs. 1 - 16) with its brief and one proposed exhibit (CMS Ex. 17) with its reply brief. Petitioner offered three proposed exhibits (P. Exs. 1 - 3) with her brief. As a result of the prehearing conference of April 25, 2000, Petitioner offered some of her tax records for the fiscal tax-years of 1997, 1998, and 1999, which I refer to as P. Ex. 4, collectively. Following proposed findings of fact based upon the prehearing conference, the parties provided additional written comment on the proposed findings of fact. Additionally, CMS filed a motion to re-open the record and proffered proposed CMS Ex. 18, a CLIA Survey Report Form with surveyor notes for RRC dated February 24, 1999 . Petitioner was given an opportunity to respond to proposed CMS Ex. 18. In response to CMS's motion to admit proposed CMS Ex. 18, Petitioner argued that proposed CMS Ex. 18 was unsubstantiated and therefore an in-person hearing was necessary. Petitioner did not proffer any proof, by affidavit or otherwise, tending to put a relevant and material fact contained within proposed CMS Ex. 18 in dispute. Thereafter the record was closed. Neither party objected to the exhibits of the other (except as to proposed CMS Ex. 18). I admit into evidence CMS Exs. 1 - 18 and P. Exs. 1- 4. I do not rely on CMS Ex. 18 to solely determine the ultimate question of ownership or directorship of RRC. The previously proposed findings of facts are incorporated into this decision. My decision is based upon the arguments of the parties, the exhibits, and applicable law and regulations.II. Background Petitioner is an osteopathic physician having a medical
practice located at 115 North Rochester Road, Clawson, Michigan. This
appeal arises out of her request for a Waiver for a physician office laboratory
which is located at the same address as Petitioner's medical office and
at the same address as RRC, whose CLIA certificate was revoked on October
14, 1999. On February 24, 1999, during the normal hours of business
operation, surveyors of the Michigan Department of Consumer and Industry
Services (MDCIS) made an unannounced on-site survey at RRC concerning
an allegation of an intentional referral of proficiency test (PT) samples
to another laboratory for analysis (a prohibited act). See 42 C.F.R.
� 493.1840(b). Upon reasonable request by MDCIS survey officials to complete
their survey of RRC, Petitioner did not permit the survey to be conducted
on that occasion as was required to do under 42 C.F.R. � 493.1840(a)(5). On May 27, 1999, CMS suspended the CLIA certificate of
compliance for RRC because of an allegation of an improper proficiency
test referral. CMS Ex. 3, at 7. CMS then revoked RRC's CLIA certification
of accreditation. Id., at 11. The revocation was to become effective
on July 11, 1999. Because RRC appealed CMS's revocation, the revocation
of RRC's certificate of accreditation did not become effective until October
14, 1999, when RRC withdrew its appeal. CMS Exs. 9, 10. CMS notified RRC,
specifically Petitioner and her father, Badi Zohoury, that the revocation
of its CLIA certificate of accreditation was for two years. CMS Ex. 11.
Thus, the revocation remained in effect until October 13, 2001. In addition, 42 U.S.C. � 263a(i)(3) and 42 C.F.R. � 493.1840(a)(8)
prohibit Petitioner, as an owner(s) and/or operator(s) (including the
laboratory director) of a lab whose CLIA certificate is revoked, from
owning or operating a laboratory for two years following the revocation
of RRC's CLIA certificate. On or about March 10, 2000, Petitioner filed an "Initial
Application" for a CLIA Waiver pursuant to 42 C.F.R. � 493.15 of the regulations.
In that application, Petitioner listed the name of the new laboratory
as "Caroline Zohoury" in which she was the sole "Owner/Director." CMS
Ex. 12. The listed address and phone number of the new laboratory is the
same address and phone numbers as RRC's. Therefore, on March 31, 2000,
CMS denied Petitioner's application for a CLIA certificate of waiver on
the grounds that Petitioner met the definition of an owner or operator,
or both, of a laboratory, RRC, whose CLIA certificate had been revoked.
CMS Ex. 14. III. Applicable Law and Regulations Congress enacted CLIA (42 U.S.C. � 263a) to ensure that
the results of tests performed in clinical laboratories, including those
tests performed in physicians' office laboratories, are reliable and accurate.
See H.R. Rep. No. 899, 100th Cong., 2d Sess. 8 (1988), reprinted
in 1988 U.S.C.C.A.N. 3828, 3829. The statute provides as follows:
42 U.S.C. � 263a(b). CLIA was intended by Congress to establish one set of
standards which would govern all suppliers of laboratory services, including
those which supply laboratory services to Medicare beneficiaries. See
1988 U.S.C.C.A.N. 3828, 3829, 3843. The statute directed the Secretary to issue regulations
to implement various provisions set out in CLIA, including standards to
assure consistent performance of valid and reliable laboratory examinations
by laboratories which are issued a certificate under the Act. 42 U.S.C.
� 263a(f)(1). The Secretary's regulations implementing CLIA are found
in 42 C.F.R. Part 493. A laboratory which is accredited by a private,
non-profit accreditation program is deemed to meet all CLIA program requirements.
42 C.F.R. � 493.551. The Committee of Laboratory Accreditation (COLA)
is one of those organizations which may qualify a laboratory for CLIA
certification. In order for a laboratory to perform testing under CLIA,
and bill for services provided to Medicare beneficiaries and Medicare
recipients under Titles XVIII (Medicare) and XIX (Medicaid) of the Social
Security Act (Act), it must comply with all CLIA requirements in 42 C.F.R.
Part 493 and have a CLIA certificate. The regulations confer broad enforcement authority to
CMS, in order to assure that laboratories comply with CLIA. 42 C.F.R.
� 493.1800. Where CMS determines that a laboratory is not complying with
one or more CLIA conditions of participation (Conditions) --
A laboratory that is not satisfied with the imposition
of remedies by CMS may request a hearing before an administrative law
judge (ALJ). 42 C.F.R. � 493.1844. IV. Issue The issue in this case is whether Petitioner is precluded
from owning or operating a laboratory for a period of two years from October
1999 because Petitioner was an "owner" or "operator" of RRC, a laboratory
whose CLIA certificate was revoked. V. CMS's Contentions CMS contends that Petitioner satisfied the criteria for
being an owner or operator, or both, of RRC, a CLIA laboratory, within
a two-year period preceding the revocation of RRC's CLIA certificate on
October 14, 1999, and, consequently, she is prohibited from owning or
operating a CLIA laboratory for a period of two years following the date
of revocation. VI. Petitioner's Contentions Petitioner contends that her father, Badi Zohoury, was
the sole owner/operator and Director of RRC at all times, and that CMS
has failed to produce evidence to show that Petitioner meets the definition
of an "owner of any interest" or "director" of RRC within the prohibited
period. She argues that she did not have the responsibilities that pertained
to an operator, nor does she meet the qualifications under 42 C.F.R. �
493.1405 to be a laboratory director.(3)
Petitioner further argues that the State of Michigan corporate filing
and corporate personal property tax returns for
RRC are strong evidence that she is not an "owner of any interest." VII. Findings and Discussion I make the findings of fact and conclusions of law (Findings) to support my decision. Each Finding is noted below, in bold face and italics, followed by a discussion of the finding.
Federal Rule of Civil Procedure 56 empowers a court to
enter summary judgment if there is no genuine issue as to any material
fact and the moving party is entitled to judgment as a matter of law.
See Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1996). Once the moving party has satisfied this initial burden,
the opposing party must establish that a genuine factual issue exists.
See Jersey Central Power & Light Co. v. Township of Lacey,
772 F.2d 1103, 1109 (3d Cir. 1985), cert. denied, 475 U.S.
1013 (1986). Not every issue of fact will be sufficient to defeat a motion
for summary judgment. Issues of fact are genuine "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 (1986). Further,
the opposing party cannot rest upon mere allegations; it must present
actual evidence that creates a genuine issue of material fact. See
id., at 249 (citing First Nat'l Bank of Arizona v. Cities Service
Co., 391 U.S. 253, 290 (1968)). The court must draw all reasonable
inferences in the opposing party's favor, and must accept the party's
evidence when considering the merits of the summary judgment motion. See
Pollock v. American Tel. & Tel. Long Lines,794 F.2d 860, 864
(3d Cir. 1986). In its briefs, CMS presented credible documentary evidence strongly suggesting that Petitioner was either an owner or operator/director, or both. Petitioner submitted only self-serving affidavits by herself and her father, Badi Zohoury, that she was not an owner or operator/director of RRC. P. Exs. 2, 3.
CMS made a determination to exclude Petitioner from owning
or operating a laboratory. The basis for CMS's determination was that
Petitioner was, in fact, an owner or operator, or both, of RRC, a CLIA
laboratory, within a two-year period preceding the date that RRC's CLIA
Certificate was revoked. The period of revocation for Petitioner is for
a period of two-years following the date of revocation of RRC's CLIA certificate
on October 14, 1999. CMS based its determination on 42 U.S.C. � 263a which provides, in pertinent part, that --
42 U.S.C. � 263(a)(i)(3). Regulations authorize CMS to
enforce this section by initiating adverse action to, among other things,
revoke a laboratory's CLIA certificate where that laboratory's owner or
operator has owned or operated another laboratory whose CLIA certificate
was revoked during the preceding two-year period. 42 C.F.R. �
493.1840(a)(8). Thus, if Petitioner is found to be an owner or operator,
or both, of RRC, as those terms are defined in 42 C.F.R � 493.2, then
Petitioner is excluded from owning or operating and/or directing any other
CLIA laboratory for a two-year period following the date
RRC's CLIA Certificate was revoked. The regulations provide in pertinent part --
42 C.F.R. � 493.2. CMS has provided prima facie evidence that Petitioner
was an owner because, (a) Petitioner said she was an
owner, and (b) she held herself out as an owner (or partial owner) by
taking affirmative steps consistent with a person having ownership rights. CMS's evidence that Petitioner was an owner is based, in part, on the following:
HCFA Ex. 16, at 1 - 2. Petitioner argued that her actions, at the time of the unannounced complaint survey by MDCIS on February 24, 1999, were that of a mere employee of RRC. On the day of the unannounced survey, Petitioner unlocked the non-public door to the laboratory at the request of the MDCIS surveyors. Subsequently, she prevented MDCIS from completing their survey. These are more than the actions of a mere employee. Petitioner was ostensibly exercising the rights of a person with authority and/or ownership.
The regulations provide in pertinent part --
42 C.F.R. � 493.2. CMS provided prima facie evidence that Petitioner was
a director because Petitioner said she was a director. CMS's evidence that Petitioner was a director is based
on the following:
In order for Petitioner to be excluded from owning or
operating any CLIA laboratory under 42 C.F.R. � 493.1840(a)(8), CMS must
show that she satisfies the definition of an owner or operator of another
CLIA laboratory for the preceding two-year period before RRC's CLIA Certificate
was revoked. I do not find Petitioner's self-serving affidavit and
Michigan Professional Service Corporation records sufficiently persuasive
as to the issue of CLIA laboratory directorship or ownership, nor do they
satisfy the criteria for rebuttal evidence in a summary judgment action.
P. Ex. 1, at 1 - 11. I take note that at the same time that RRC was filing
Michigan corporate records showing ownership and directorship by Badi
Zohoury, Petitioner was dealing with COLA officials and MDCIS officials
as a person with more than a mere employee's interest. CMS Ex. 4. The evidence contained in CMS Exs. 2 at 2, 4 at 1, and
17 at 4 - 6, 8 - 9, which was created by Petitioner's own hand, is ample
evidence for me to decide that Petitioner had some controlling authority
as a director. The beginning of Petitioner's presumptive directorship
began as early as July 3, 1995. CMS Ex. 17, at 7. Petitioner's status
as director of RRC appears confirmed by both her own actions and passive
acceptance to periodic written contact with MDCIS or COLA officials, or
both, between July 3, 1995 through December 19, 1998. On the latter date,
COLA sent a letter to Petitioner congratulating RRC on its successful
on-site survey. CMS Ex. 8. Petitioner offered no evidence that she sought
to clarify or correct her "mistaken" status of laboratory director upon
having received the December 19, 1998 correspondence from COLA, or during
the on-site visits by COLA during the bi-annual renewals. P. Br., at 5. Petitioner's signature on Form HCFA-1513 on or about February 24, 1999 was directly below clear written warnings of its importance.
CMS Ex. 4, at 2. If Petitioner's signature on the official Form HCFA-1513
was the "mistake" she now alleges, it is not without its consequences. On line I(a) of the same HCFA Form 1513, Petitioner reaffirms
in her own handwriting that she is a person having direct or indirect
ownership in the entity. There is nothing in the "Remarks" section on
page 2, below her signature, where she clearly disavows her directorship
or ownership roles. Id. On line IV(a), she again misses an opportunity to tell
CMS that there has been a change in her relationship with RRC, even if
there had been a past relationship with RRC as an owner or director. Id. The burden of proof in this case is governed by the decision
of an appellate panel of the Departmental Appeals Board in Hillman
Rehabilitation Center, DAB No. 1611 (1997). Under Hillman,
CMS bears the burden of coming forward with evidence sufficient to establish
a prima facie case that: (1) RRC's CLIA Certificate was revoked on October
14, 1999; and (2) the collateral sanction against Petitioner is warranted
and lawful under the statute and regulations. Petitioner has the burden
of proving, by a preponderance of the evidence, that: (1) Petitioner complied
substantially with participation requirements; and (2) the collateral
sanction against her is unwarranted and unlawful under the statute and
regulations. In determining whether CMS has met its burden of establishing
a prima facie case, I may consider rebuttal evidence, if offered by Petitioner,
that CMS's evidence is neither credible or relevant to the issue of Petitioner's
owner/operator/director relationship with RRC. Hillman Rehabilitation
Center, DAB CR500, at 3-8 (1997). I have received no such rebuttal
evidence from Petitioner. VIII. Conclusion I find that the CLIA Certificate for RRC was revoked on
October 14, 1999. Based on the applicable law and
undisputed facts, I conclude that Petitioner's relationship with RRC meets
the definition of owner or operator, or both, under 42 C.F.R. � 493.2. Accordingly, I find that CMS's decision to deny Petitioner's request for a Waiver is justified. |
|
JUDGE | |
José A. Anglada Administrative Law Judge
|
|
FOOTNOTES | |
1. CLIA defines a "laboratory" or a "clinical laboratory" as a facility for the biological, microbiological, serological, chemical, immuno-hematological, hematological, biophysical, cytological, pathological, or other examination of materials derived from the human body for purposes of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of, human beings. See 42 U.S.C. � 263a(a). 2. The Secretary means the Secretary of the United States Department of Health and Human Services. 3. Petitioner made only an allegation without any substantiation that she could not be a director of a moderate complexity laboratory because she did not have the necessary qualifications. 42 C.F.R. � 493.1405. The regulations require that a "laboratory director must . . . be a doctor of medicine [or] doctor of osteopathy. . . licensed to practice medicine in the State in which the laboratory is located . . . and have at least one year directing or supervising non-waived testing." 42 C.F.R. � 493.1405(b)(2). Petitioner presents no evidence of her qualifications or her lack thereof under this regulation. Yet she applied to COLA as the laboratory director and never denied that she was qualified to do so. I find this nothing more than a baseless and unsubstantiated assertion on Petitioner's part. Frankly only Petitioner, and not CMS, can demonstrate her qualifications or lack thereof to be a director. It is unreasonable to presume CMS somehow has a duty to show her qualifications, given that Petitioner held herself out as the laboratory director. | |