Ramesh Kania, M.D., DAB CR5754 (2020)

DECISION

Respondent, the Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, Novitas Solutions (Novitas), denied Petitioner Ramesh Kania’s enrollment application pursuant to 42 C.F.R. § 424.530(a)(3).  Petitioner challenges this denial before me.  For the reasons discussed below, I affirm CMS’s denial of Petitioner’s enrollment application.

I.  Background

Petitioner is a physician who was licensed to practice in New Jersey.  CMS Ex. 1 at 12.  On October 12, 2012, he pleaded guilty to one count of violating the federal healthcare program anti-kickback statute, in violation of 42 U.S.C. § 1320a-7b(b)(1)(A).1   Id. at 1,

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18, 20.  The summary of the plea agreement between Petitioner and the U.S. Attorney’s Office for the District of New Jersey specified that for the period starting in January 2010 through in or around October 2011, Petitioner received remuneration valued between $10,000 and $30,000 from Orange Community MRI in exchange for referring his patients to that entity for the furnishing or arrangement of furnishing items and services for which payments could have been made in whole or in part by a federal health care program.  Id. at 1-2, 18.  Petitioner further stipulated that he abused a position of public or private trust in order to significantly facilitate the commission or concealment of his offense.  Id. at 3, 8.   

On June 26, 2013, the U.S. District Court for the District of New Jersey (district court) entered judgment against Petitioner pursuant to the plea agreement he made with the government.  Id. at 22-28.  The district court sentenced Petitioner to a three‑month term of incarceration and one year of supervised release.  Id. at 23, 24.  The court also ordered Petitioner to pay a $30,000 fine and forfeit $4,880 to the United States.  Id. at 27, 28.

As a result of this conviction, CMS revoked the billing privileges of both Petitioner and his practice, Orange Medical Group, P.C., effective October 12, 2012.  CMS Ex. 2.2   On December 31, 2013, the Inspector General for the U.S. Department of Health & Human Services (IG) notified Petitioner that because of his conviction, the IG would exclude him from participation in all federal health care programs for a period of at least five years, effective January 20, 2014.  CMS Ex. 3.  Petitioner subsequently sought reinstatement by the IG as an eligible provider of services to the Medicare program, which the IG approved as of March 7, 2019.  CMS Ex. 4.  In the notice of reinstatement, the IG advised Petitioner to contact a Medicare carrier to determine his options for participation.  Id. 

Petitioner applied to re-enroll as a supplier in the Medicare program in July 2019.  CMS Ex. 5.  Petitioner properly identified his conviction and subsequent exclusions in his application.3   Id. at 14, 31.  He also attached several documents, including his active license to practice medicine in New Jersey, his then-pending request for reinstatement by the New Jersey Medicaid program, and documentation of his successful completion of the terms of his criminal sentence, including payment of a fine and restitution.  Id. at 32‑47.

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On November 12, 2019, Novitas notified Petitioner that it denied his Medicare enrollment application because it determined pursuant to 42 C.F.R. § 424.530(a)(3) that his felony conviction was detrimental to the best interests of the Medicare program and its beneficiaries.  CMS Ex. 6 at 1.  Petitioner sought reconsideration through counsel in January 2020.  CMS Ex. 7 at 1-4. 

On March 18, 2020, CMS Hearing Officer Minisha Hicks notified Petitioner she had denied his reconsidered request.  CMS Ex. 8.  Hearing Officer Hicks specified that Petitioner’s conviction in the preceding 10 years was per se detrimental to the Medicare program because it resulted in his mandatory exclusion by the IG pursuant to section 1128(a) of the Act.  Id. at 4.  Alternatively, Hearing Officer Hicks concluded denial was appropriate because Petitioner was convicted of a financial crime substantially similar to those deemed per se detrimental.  Id.  Hearing Officer Hicks otherwise found Petitioner’s felony conviction was, in its own particular circumstances, detrimental to the best interests of the Medicare program and its beneficiaries.  Id.    

Petitioner timely sought a hearing before an administrative law judge (ALJ), and I was designated to hear and decide this case.  On May 11, 2020, I issued an Acknowledgment and Pre‑hearing Order (Pre‑hearing Order) that set forth a briefing schedule.  CMS submitted its pre-hearing exchange and motion for summary judgment (CMS Br.) with eight proposed exhibits (CMS Exs. 1-8).  Petitioner subsequently filed a brief in response and nine proposed exhibits (P. Exs. 1-9).4

II.  Admission of Exhibits and Decision on the Record

Neither party objected to the opposing party’s proposed exhibits.  CMS Exhibits 1 through 8 and Petitioner’s Exhibits 1 through 9 are therefore admitted and entered into the record.

Similarly, neither party has identified witnesses to testify in this matter or requested cross‑examination of an opposing party’s witnesses.  Consequently, I will not hold an in‑person hearing in this matter, and I issue this decision based on the written record.5  Civ. R. Div. P. § 19(d).

III.  Issues

Whether CMS had a legitimate basis to deny Petitioner’s enrollment application seeking Medicare billing privileges under 42 C.F.R. § 424.530(a)(3).

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IV.  Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2).

V.  Findings of Fact, Conclusions of Law, and Analysis6

A. Applicable Law

As a physician, Petitioner is a supplier of health care services for purposes of the Medicare program.  See 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202, 410.20(b)(1).  In order to participate in the Medicare program as a supplier, an individual must meet certain criteria to enroll and receive billing privileges.  42 C.F.R §§ 424.505, 424.510.  CMS may deny a supplier’s enrollment application for Medicare billing privileges for any reason stated in 42 C.F.R § 424.530.  This includes the existence of a felony conviction:

(a)  Reasons for denial.  CMS may deny a . . . supplier’s enrollment in the Medicare program for the following reasons: 

* * * *

(3)  Felonies.  The provider, supplier, or any owner or managing employee of the provider or supplier was, within the preceding 10 years, convicted (as that term is defined in 42 CFR 1001.2) of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.

(i)  Offenses include, but are not limited in scope or severity to-

* * * *

(B)  Financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pretrial diversions

* * * *

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

42 C.F.R. § 424.530(a)(3). 

The criterion for mandatory exclusion from all federal health care programs relevant here is set forth in section 1128(a)(1) of the Act, which states:

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

         (1) CONVICTION OF PROGRAM-RELATED CRIMES
Any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII or under any State health care program.

42 U.S.C. § 1320a-7(a)(1).

A felony offense specifically identified in the regulations governing enrollment denial is considered detrimental per se, or as a matter of law.  42 C.F.R. 424.530(a)(3)(i); Letantia Bussell, M.D., DAB No. 2196 at 9 (2008).  I have no discretion to disregard findings that CMS has made via rule-making.  Id. at 13 n.13 (“Once the Secretary . . . has exercised that authority by regulation as to a class of felonies, an ALJ cannot revisit that determination in an individual case where the conviction of an offense in the class is undisputed.”).

A felony offense not specifically listed in the regulations but similar to such an offense can also provide the basis for denial of enrollment; in that case, I must look to the circumstances surrounding the conviction to assess similarity.  Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 11 (2009), aff’d Ahmed v. Sebelius, 710 F.Supp. 2d 167 (D. Mass. 2010) (affirming the ALJ’s consideration of facts and circumstances underlying the offense of conviction to assess its similarity to one of the financial crimes identified as per se detrimental). 

Finally, even if a felony offense is not specifically listed or similar to those listed in the regulations, CMS may determine, on a case-by-case basis, that a felony conviction is detrimental to the best interests of the Medicare program and program beneficiaries.  Brenda Lee Jackson, DAB No. 2903 at 8 (2018); Fady Fayad, M.D., DAB No. 2266 at 16-17 (2009), aff’d, Fayad v. Sebelius, 803 F. Supp. 2d 699, 704 (E.D. Mich. 2011).  In that instance, I must assess whether CMS’ determination that a felony offense is detrimental to the best interests of the program and its beneficiaries is reasonable.  Fayad, DAB No. 2266 at 16-17 (providing the Board would have affirmed an individualized

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determination by CMS that a felony offense was detrimental because CMS drew a reasonable inference from the nature and circumstances of the petitioner’s offense to determine it was detrimental).

B. Analysis

1. Petitioner was convicted of a felony offense within 10 years preceding his application for enrollment.

Denial of enrollment pursuant to 42 C.F.R. § 424.530(a)(3) is premised on the existence of a felony conviction within the 10 years preceding the enrollment application.  Here, Petitioner executed an agreement to plead guilty to one count of violating the federal healthcare program anti-kickback statute on October 12, 2012.  CMS Ex. 1 at 20.7   He submitted the re-enrollment application that CMS denied, giving rise to this case, on July 26, 2019.  CMS Ex. 5.  Petitioner’s felony conviction therefore occurred within the 10 years preceding the date he submitted an enrollment application for Medicare billing privileges.

2.  Petitioner’s felony conviction was per se detrimental to the best interests of the Medicare program or its beneficiaries because it resulted in his mandatory exclusion under section 1128(a) of the Act.

The Act conferred upon the Secretary of the Department of Health & Human Services the authority to determine which offenses were detrimental to Medicare and its beneficiaries.  42 U.S.C. §1395u(h).  The Secretary’s regulations expressly identified felonies that are per se detrimental – making them, as the Board has observed “detrimental to Medicare and its beneficiaries as a matter of law – that is, without regard to the circumstances underlying a particular supplier’s conviction . . . .”  John Hartman, D.O., DAB No. 2564 at 4 (2014).

The felony offenses deemed as a matter of law to be detrimental include “[a]ny felonies that would result in mandatory exclusion under section 1128(a) of the Act.”  42 C.F.R. § 424.530(a)(3)(i)(D).  The record plainly demonstrates – and Petitioner does not dispute – that the IG in fact excluded Petitioner under section 1128(a)(1) of the Act as a result of the same felony conviction that now forms the basis of CMS’s denial of Petitioner’s enrollment application.  CMS Ex. 3.

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I need not assess whether the IG had a valid basis for excluding Petitioner – he is estopped from attacking this long-final determination, and the mere circumstance of his exclusion is sufficient to provide a basis for enrollment denial.  42 C.F.R. § 424.530(a)(3)(i)(D).  But there is no doubt his offense of conviction warranted exclusion.  The Board has consistently held “that a conviction for violating the federal Anti-Kickback statute is a program-related conviction that mandates exclusion from Medicare and [Medicaid] pursuant to section 1128(a)(1) of the Act.”  Patel, DAB No. 2551 at 6, citing Boris Lipovsky, M.D., DAB No. 1363 (1992); Niranjana B. Parikh, M.D., et al., DAB No. 1334 (1992).  

Petitioner does not contest the evidence of his exclusion.  Nor does he address the fact that CMS has, by rule-making, found any conviction resulting in exclusion by the IG to be, a priori,detrimental to the Medicare program.  As should be clear, I cannot simply ignore regulations to exercise my own discretion.  UpturnCare Co., DAB No. 2632 at 19 (2015) (providing neither the Board nor an ALJ may overturn denial of provider enrollment in Medicare on equitable grounds).

Petitioner instead argues that CMS incorrectly found his conviction was detrimental, while the regulation requires CMS to find his conviction is detrimental.  P. Br. at 5, citing CMS Br. at 1-2 (“In July 2019, Petitioner submitted an application to re-enroll in Medicare, and in November 2019, CMS denied this application, citing his felony [anti‑kickback statute] conviction, which CMS determined was detrimental to the best interest of the Medicare program.”) (emphasis added). 

In the first place, the agency did not need to make a finding that Petitioner’s offense represented a present detriment to the program, as Petitioner claims, because Petitioner’s felony offense was deemed per se detrimental.  CMS essentially made that finding by rule‑making beforehand, determining that any felony offense resulting in exclusion by the IG demonstrated a present detriment that provided a basis for enrollment denial, so long as the conviction occurred within the 10 years preceding the enrollment application.  42 C.F.R. § 424.530(a)(3), (a)(3)(i)(D).  The existence of a conviction identified as such in the regulations therefore provides a sufficient basis for CMS to deny an enrollment application.

Petitioner otherwise mischaracterizes CMS’s argument before me.  In its brief, CMS necessarily describes the denial of enrollment in the past tense.  CMS Br. at 2.  CMS does not assert the November 2019 enrollment denial included a finding that Petitioner’s conviction was detrimental at the time of conviction, but not at the time of denial, as Petitioner suggests.  Both the initial and reconsidered determinations make plain that CMS determined Petitioner’s conviction to be a present detriment at the time of his application.  CMS Ex. 6 at 1 (“[Petitioner] was, within the preceding 10 years, convicted (as that term is defined in 42 CFR § 1001.2) of a federal or state felony offense that CMS determines to be detrimental to the best interests of the Medicare program and its

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beneficiaries.”); CMS Ex. 8 at 5 (“CMS has determined that . . . this felony offense is detrimental to the best interests of the Medicare program and its beneficiaries.”) (emphasis added).

Petitioner also argues that CMS failed to make “a case-by-case determination that Petitioner’s felony conviction was detrimental to the best interests of the Medicare program or its beneficiaries.”  P. Hearing. Req. at 2.  This claim is incorrect – Hearing Officer Hicks in fact made an alternative finding that Petitioner’s felony offense was, in its particulars, detrimental.  CMS Ex. 8 at 4.  But more importantly, it is irrelevant.  The Board rejected a similar argument from a petitioner whose felony offense was per se detrimental, noting “no such [case-by-case] determination is required if, as is the case here, the supplier’s offense falls within one of the categories of crimes that CMS has, by rulemaking (in section 424.535(a)(3)), determined to be detrimental to Medicare.”  Cornelius M. Donohue, DPM, DAB No. 2888 at 6 (2018).   

The regulations plainly identify Petitioner’s felony offense as per se detrimental to the best interests of the Medicare program or its beneficiaries.  42 C.F.R. § 424.530(a)(3(i)(D).  CMS therefore had a legal basis to deny Petitioner’s enrollment application.  I therefore need not consider CMS’s alternative findings of detriment based on the financial nature of Petitioner’s crime or its case-by-case assessment of the particular features of his conviction.  CMS Ex. 4 at 8.

3. CMS exercised its discretion to consider whether it should deny Petitioner’s enrollment application.

Petitioner complains that CMS’s decision to deny his enrollment application ran afoul of 42 C.F.R. § 424.530(a)(3),8 which indicates, as clarified in the drafters’ comments, that CMS need not deny enrollment simply because it has a valid basis to do so, and will not do so absent a “very careful consideration of the relative seriousness of the underlying offense and all of the circumstances surrounding the conviction.”  P. Req. for Hearing at 2, quoting 79 Fed. Reg. 72,500, 72,510, 72,511-12 (Dec. 5, 2014); see also P. Br. at 1-2, 6.  Petitioner asserts that both the initial and reconsidered determinations denying his enrollment application inadequately articulated CMS’s reasons for exercising its discretionary power to deny his enrollment.  P. Req. for Hearing at 2.  He claims, for

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example, that CMS failed to consider the seriousness of his crime or any mitigating circumstances when it decided to exercise its discretion to deny enrollment against him.  Id. 

Petitioner’s argument is without merit and misunderstands the regulations.  He appears to conflate the requirements for a case-by-case determination of whether a felony conviction is detrimental with the factors CMS considers in deciding whether to exercise its discretion to deny enrollment.  I have already explained that CMS did not need to engage in an individualized assessment of whether Petitioner’s felony conviction was detrimental because the regulations define it as such as a matter of law.  42 C.F.R. § 424.530(a)(3(i)(D). 

Turning to CMS’s decision to deny enrollment, neither the actual language of 42 C.F.R. § 424.530(a)(3) nor CMS’s rule-making comments for that regulation set forth any specific findings CMS is obliged to articulate in order to exercise its discretion; instead, they require only that CMS in fact do so.  Here, there is sufficient evidence for me to conclude CMS was aware of its discretion not to deny Petitioner’s application.  In her detailed determination, Hearing Officer Hicks discussed the facts and circumstances of Petitioner’s case, including mitigating factors he identified, including letters of support from colleagues, evidence he was unrestricted in his ability to practice medicine, evidence of his reinstatement by both the IG and the New Jersey Medicaid program, and his willingness to utilize a third-party independent biller to minimize risk to the program.  CMS Ex. 8 at 1-3. 

Critically, Petitioner argued before Hearing Officer Hicks that the denial of his enrollment was “arbitrary [and] capricious,” to which she responded:  “As we have detailed above, CMS’ use of our regulatory authority to deny enrollment here is proper and well supported by the facts of this case.”  Id. at 5.  This statement demonstrates CMS was aware of its discretion to enroll Petitioner.  Hearing Officer Hicks’ discussion of the nature of Petitioner’s felony offense and her explicit consideration of evidence that supported Petitioner’s request for enrollment otherwise satisfy me that CMS considered the possibility of enrolling Petitioner, despite his felony conviction, and ultimately decided to exercise its discretion against him.   

Petitioner urges me to substitute my judgment and determine CMS improperly exercised its discretion to deny his enrollment application.  P. Br. at 7.  But as the Board has made plain, my role is to determine whether CMS established a legal basis to take the action it took against Petitioner, not to determine whether it properly exercised its discretion.  John A. Hartman, D.O., DAB No. 2911 at 21 (2018) (“The authority to balance equitable considerations with risks to the program and beneficiaries rests with CMS, while our role is to evaluate if CMS’s action is legally authorized.  Moreover, CMS had no legal obligation to consider equity factors in deciding whether to allow or deny re-enrollment here.”).

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CMS has established it had the authority to deny Petitioner’s enrollment based on his felony conviction for a per se detrimental offense that occurred within the prior 10 years.  CMS has also demonstrated it was aware of its power to exercise discretion in considering Petitioner’s application and exercised that discretion based on its own assessment of the nature of Petitioner’s conviction and mitigating circumstances he identified.  As such, I must affirm CMS’ denial of Petitioner’s enrollment application. 

VI.  Conclusion

I affirm CMS’s determination denying Petitioner’s Medicare enrollment application.

1. The Social Security Act (Act) criminalizes the knowing and willful solicitation or receipt of remuneration in exchange for the referral of “an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program . . . .” 42 U.S.C. § 1320a-7b(b)(1)(A).
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2. CMS explains in its brief that the notice of revocation incorrectly identified the effective date as October 9, 2012, but that subsequent communications from CMS to Petitioner consistently and correctly identified the actual effective date of revocation as October 12, 2012.  CMS Br. at 3 n.1.  I agree this scrivener’s error has no bearing on the outcome of the matter.
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3. Petitioner less properly did not initially identify the adverse action taken against him by the New Jersey Board of Medical Examiners with respect to his medical license, though he does obliquely refer to it in narrative form at the end of his application.  Compare CMS Ex. 5 at 14 with CMS Ex. 5 at 31.
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4. For reasons that elude me, Petitioner filed these nine exhibits as one combined document, rather than nine separate proposed exhibits.  DAB E-file Dkt. C-20-514, Doc. No. 9.  However, the proposed exhibits are separately labeled and paginated within the omnibus document.  I will cite to them accordingly.
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5. As such, CMS’ motion for summary judgment is denied as moot.
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6. My findings of fact and conclusions of law are set forth in italics and bold font.
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7. The district court did not enter judgment against Petitioner until June 26, 2013.  CMS Ex. 1 at 22-28.  But as the Departmental Appeals Board (Board) has observed, under the Act a person is considered convicted when they enter a guilty plea that “has been accepted by a federal, state or local court.”  Dinesh Patel, M.D., DAB No. 2551 at 3 (2013), citing Act § 1128(i)(3);42 C.F.R. 1001.2.  Petitioner indicated on the execution page of his plea agreement that it was “[s]igned by me in open court in the presence of my lawyer [on October 12, 2012].”  CMS Ex. 1 at 20 (emphasis added).  This clearly suggests the district court accepted Petitioner’s guilty plea on that date.  Petitioner does not assert otherwise.
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8. The prefatory language of 42 C.F.R. § 424.530(a) indeed states “CMS may deny a provider’s or supplier’s enrollment in the Medicare program for the following reasons . . . .” (emphasis added).  The Board recognized this prefatory language contemplates CMS will first decide whether to deny enrollment; only then does the regulation constrain the agency with respect to the basis for denial.  Ronald Paul Belin, DPM, DAB No. 2629 at 4 (2015), citing Brian K. Ellefsen, DO, DAB No. 2626 (2015) (“The Board has recently accepted CMS’s position that its determination (and that of its contractors) about whether to deny a particular supplier’s enrollment application under section 424.530(a)(3) is discretionary, not mandatory, even where the underlying conviction is for an offense within one of the categories that CMS has determined to be detrimental to the best interests of the program and its beneficiaries.”).
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