CASE | DECISION | JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

Millenium Medical Group,

Petitioner,

DATE: February 25, 2002
                                          
             - v -

 

Centers for Medicare & Medicaid Services

 

Docket No. C-01-207 through
C-01-217
Decision No. CR875
DECISION
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DECISION

This is another in a series of related appeals involving Michigan-based clinical laboratories.(1) Petitioners in these cases are 11 physician office laboratories certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).(2) They appeal Centers for Medicare & Medicaid Services' (CMS') decision to revoke their CLIA certificates. For the reasons discussed below, I uphold CMS' decision.

BACKGROUND

Millennium Medical Group (Millennium) is the owner of a physician office laboratory directed by Dr. Stanley Boykansky. CMS proposed revocation of the Boykansky laboratory's CLIA certificate, and Dr. Boykansky appealed. Following a hearing, Administrative Law Judge (ALJ) Steven Kessel issued a decision, dated July 28, 2000, that upheld CMS' revocation. Stanley Boykansky, M.D., DAB CR690 (2000). In a decision dated December 21, 2000, an appellate panel of the Departmental Appeals Board affirmed the ALJ's decision. Stanley Boykansky, M.D., DAB No. 1756 (2000).(3)

Following its receipt of the ALJ's decision in Boykansky, CMS revoked the Boykansky laboratory's CLIA certificate, and, in a letter dated October 17, 2000, advised Dr. Boykansky of his obligation to provide the names and addresses of any other laboratories he owned or operated. The letter warned that intentional violation of CLIA's provisions could result in criminal penalties, including imprisonment. 42 U.S.C. § 263a(l). CMS Exhibit (Ex.) 2. Dr. Boykansky's counsel subsequently provided CMS with two lists of laboratories owned by the Oakland Medical Group, P.C. and the Millennium Medical Group, P.C. as of February 20, 1998. CMS Ex. 3.(4) He also advised CMS that Millennium was a professional corporation with three shareholders, Drs. Trivax, Panush, and Feldman. Id.

In letters dated November 16, 2000, CMS advised Petitioners here that, because they were also owned by Millennium, it was initiating action to revoke their CLIA certificates as well. By statute, no person who has owned or operated a laboratory whose CLIA certificate has been revoked may, within two years of the revocation, own or operate a lab. 42 U.S.C. § 263a(i)(3). Federal regulations authorize CMS to initiate an adverse action to suspend, limit, or revoke any CLIA certificate if CMS finds that the laboratory's owner or operator has owned or operated a laboratory that had its CLIA certificate revoked. 42 C.F.R. § 493.1840(a)(8)(e).

Petitioners appealed, asserting that the sanctions set forth in 42 C.F.R. § 493.1840(a)(8) do not extend to clinical laboratories owned by a parent corporation, that were not operated by an owner of the parent corporation, and that did not themselves have any cited deficiencies. The matters were assigned to me for resolution.

In a submission dated February 23, 2001, the parties stipulated that the 11 laboratories have a common owner, Millennium Medical Group, P.C.; that their cases present substantially similar questions of law and fact; and asked that the matters be consolidated. I have therefore consolidated these 11 matters. The parties subsequently filed cross-motions for summary affirmance.(5)

In the absence of objection, I admit Petitioners Exs. 1-3 and CMS Exs. 2-3, which were attached to their respective briefs. Petitioners Ex. 1 duplicates CMS Ex. 1, so I decline to admit the same exhibit twice.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. Each Petitioner is owned by Millennium Medical Group, P.C.

Petitioners have not specifically denied Millennium's ownership of these laboratories, and, initially, they appeared to have conceded the ownership issue. However, in their brief they argue that CMS "has presented no evidence that [Millennium] owned or operated any of the clinical laboratories." P Brief at 2. For multiple reasons, I reject Petitioners' inference and conclude that Millennium owns these laboratories.

First, the regulations governing these proceedings do not allow a party to be coy about the issues it means to raise. Part 498 Subpart D governs the conduct of these appeals. 42 C.F.R. § 493.1844(a). Under those regulations, the hearing request must identify the specific issues with which the affected party disagrees. 42 C.F.R. § 498.40(b). Here, Petitioners did not, in their hearing request, challenge CMS' assertion that they were owned by Millennium. They assert only that they (with the possible exception of Petitioner Trivax) "are not owners or operators of the [Boykansky] clinical laboratory." Hearing Request. But CMS has not suggested that they are owners or operators of the Boykansky laboratory. Its sanction is based on Millennium's common ownership of Dr. Boykansky's laboratory and the Petitioners' laboratories.

If anything, the hearing request suggests Millennium's ownership in that it is filed "on behalf of Millennium Medical Group, P.C., its owners, and the above captioned locations (listing Petitioners and their addresses) requesting a hearing before an Administrative Law Judge. . . ."

Second, in their February 23, 2001 submission, the parties stipulated that all eleven laboratories are owned by Millennium. CMS would not be required to present evidence on an issue to which the parties have stipulated.

In any event, evidence in the record demonstrates Millennium's ownership. In a letter dated February 5, 2001, CMS points out that each of the CLIA numbers held by these Petitioners was issued to Millennium. P. Ex. 2 at 1. Petitioners have not challenged this assertion.

In addition, the October 24, 2000(6) letter lists Petitioners as laboratories owned by Millennium. Petitioners complain about CMS' reliance on this letter, suggesting that it was sent only for settlement purposes. These arguments were addressed in Evette Elsenety, M.D.(7) Nothing on the face of the letter suggests that Millennium considered the information proffered as part of any settlement negotiations. On its face, it appears that, faced with the prospect of criminal liability, Millennium provided the requested information promptly. See Elsenety, DAB No. 1796 at 6. In any event, the letter's contents are not less probative simply because it was sent as part of settlement discussions. Petitioners have not claimed that they provided CMS with false information in order to settle these cases, and I have no reason to assume that they would do so. Elsenety, DAB CR 779 at 3, aff'd DAB No. 1796 at 5.

2. Petitioners' CLIA certificates must be revoked.

The plain language of the statute requires revocation of these Petitioners' certificates. CLIA provides that any person whose CLIA certificate has been revoked is prohibited from owning another laboratory within a two-year period from the date of the revocation. 42 U.S.C. § 263(a)(i)(3). Regulations authorize CMS to enforce this section by initiating adverse action to, among other actions, 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).

Millennium owned the Boykansky laboratory and its CLIA certificate was revoked. By law, Millennium is prohibited from owning any CLIA-certified laboratories for two years from that date. CMS was thus plainly authorized to revoke Petitioners' CLIA certificates inasmuch as they are all owned by Millennium. See Elsenety, M.D., et.al., DAB CR779 at 4, aff'd DAB No. 1796.

Petitioners' argument that they are unfairly penalized because of their organizational structure, which is mandated by the Stark Amendment, 42 U.S.C. 1395nn(b)(2), was rejected by ALJ Kessel and by the Board in Elsenety. As ALJ Kessel wrote:

The problem with Petitioners' argument is that it does not deal with the express requirements of CLIA. CLIA strictly prohibits a person whose CLIA certificate has been revoked from owning another laboratory during the two-year period after the date of revocation. It does not contain exceptions or permit a case-by-case analysis as Petitioners suggest is appropriate. Consequently, I may not consider essentially equitable arguments made by Petitioners. Furthermore, Petitioners have not offered anything that would suggest that Congress intended to modify CLIA with the enactment of subsequent legislation.

DAB CR779 at 5, aff'd DAB No. 1796.

Petitioners also raise some constitutional challenges, which, they concede, I have no authority to adjudicate.

CONCLUSION

For these reasons, I uphold CMS' decision to revoke Petitioners' CLIA certificates.

JUDGE
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Carolyn Cozad Hughes

Administrative Law Judge

 

FOOTNOTES
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1. See Oakland Medical Group, P.C., DAB No. 1755 (2000); Stanley Boykansky, M.D., DAB No. 1756 (2000), Boykansky, No. 01-3189, 2001 WL 493421 (6th Cir. May 1, 2001) (dismissed as untimely); Garden City Medical Center, DAB No. 1763 (2001); Evette Elsenety, M.D., et. al., DAB No. 1796 (2001); Mark Gary Hertzberg, M.D., P.C., DAB No. 1805 (2001).

2. Petitioners are: Geoffrey A. Trivax, M.D. (C-01-207), Barry W. Feldman, M.D. (C-01-208), Mark Hertzberg, M.D. (C-01-209), Raad J. Toma, M.D. (C-01-210), Imad M. George, M.D. (C-01-211), Henry Brystowski, M.D. (C-01-212), David L. Benkoff, M.D. (C-01-213), Arthur M. Powell, M.D. (C-01-214), Jeffrey F. Parker, M.D. (C-01-215), Ronald D. Pelavin, M.D. (C-01-216), and Seth M. Mindell, M.D. (C-01-217).

3. Among other findings sustained by the Board, the ALJ found that Petitioner colluded with other clinical laboratories in the performance of proficiency testing; that it did not test its proficiency test samples in the same manner as it tested patient's specimens; and that it engaged in inter-laboratory communications pertaining to the proficiency test results. Id.

4. The Oakland Medical Group was the subject of a separate decision, Evette Elsenety, M.D., et. al., DAB No. 1796 (2001).

5. In the alternative, Petitioners request an in-person hearing. However, summary disposition is appropriate where there are no issues of material fact. A party opposing summary disposition must allege facts which, if true, would refute the facts relied on by the moving party. Elsenety, DAB No. 1796 at 4. As there, Petitioners here have offered no facts that would refute those relied on by CMS in moving for summary disposition.

6. The parties agree that the letter was misdated October 24, 1998 instead of October 24, 2000. P. Brief at 3; CMS Brief at 4; see also Elsenety at 5.

7. It appears to have been the same letter sent in both cases.

CASE | DECISION | JUDGE | FOOTNOTES