True Medical and Foot Care Group, DAB CR5769 (2020)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through a CMS contractor, National Government Services (NGS), revoked the Medicare enrollment and billing privileges of Petitioner, True Medical and Foot Care Group (True Medical or Petitioner).  As explained more fully below, CMS properly concluded that an owner and managing employee of Petitioner was convicted of a felony offense detrimental to the Medicare program and its beneficiaries.  I therefore find that CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

I.  Background

True Medical is a group practice/podiatry clinic operating in Illinois.  See, e.g., CMS Exhibit (Ex.) 2 at 16; CMS Ex. 7 at 4.  Atiyeh Salem, D.P.M. (Dr. Salem), is the “Manager-Owner” of True Medical.  CMS Ex. 2 at 33; see also CMS Ex. 9 at 175.  On or about August 3, 2007, the United States District Court for the Central District of California (federal court) found Dr. Salem guilty after a jury trial for conspiracy to commit money laundering and sentenced him to 33 months in prison.  CMS Ex. 9 at 9, 175.  On January 23, 2008, the Circuit Court of the Eighteenth Judicial Circuit in the

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State of Illinois, County of Du Page (state court) entered judgment finding Dr. Salem guilty of one count of forgery pursuant to 720 Ill. Comp. Stat. 5/17-3(a).  Id. at 9, 16‑17, 175.  The state court sentenced Dr. Salem to incarceration to run concurrently with his federal sentence for money laundering.  Id. at 16, 175.

On January 10, 2014, NGS received a Medicare Enrollment Application (Form CMS‑855B, for clinics and group practices) from True Medical to enroll as a new Medicare supplier.  CMS Ex. 2 at 1, 8, 12.  The application identified Dr. Salem as True Medical’s “Manager‑Owner” with a 5 percent or greater ownership interest, effective March 20, 2013.  Id. at 33.  In a subsequent section of the application, Petitioner responded that Dr. Salem did not have any final adverse legal actions.  Id. at 34.  By letter dated March 25, 2014, NGS approved True Medical’s application.1   CMS Ex. 3.

In a letter dated January 23, 2018, NGS notified True Medical that its Medicare billing privileges were revoked effective January 23, 2008, because a managing employee, Dr. Salem, had been convicted of a felony within the preceding ten years.  CMS Ex. 8 at 1.  NGS also informed True Medical that it was barred from reenrolling in the Medicare program for three years.  Id. at 2.  Petitioner timely requested reconsideration.  CMS Ex. 9.  In its reconsideration request, Petitioner acknowledged that Dr. Salem was the “managing director” of True Medical and that he was “banned” from participating in the Medicare program, but stated that Dr. Salem was unaware that his criminal conviction meant he could not be a managing employee of a Medicare supplier.  CMS Ex. 9 at 1-2.

By letter dated May 8, 2018, CMS affirmed the revocation of Petitioner’s Medicare billing privileges pursuant to 42 C.F.R. § 424.535(a)(3).  CMS Ex. 1.  CMS explained that the revocation was proper because Dr. Salem, an owner or managing employee of Petitioner, was, within the preceding ten years, convicted of a felony offense and that the

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offense was per se detrimental to the best interests of the Medicare program and its beneficiaries.  Id. at 7-8.

Petitioner timely requested a hearing before an administrative law judge, and the case was assigned to me.  On May 17, 2018, I issued an Acknowledgment and Pre‑Hearing Order (Pre-Hearing Order).  The Pre-Hearing Order directed each party to file a pre‑hearing exchange consisting of a brief and any supporting documents and set deadlines for those filings.  Order ¶ 4.  CMS filed a combined brief and motion for summary judgment (CMS Br.) and twelve proposed exhibits (CMS Exs. 1‑12).  Petitioner filed a brief and reply to CMS’s motion (P. Br.) and twelve proposed exhibits (P. Exs. 1‑12).

Neither party objected to the exhibits offered by the opposing party.  In the absence of objection, I admit CMS Exs. 1‑12 into the record.  Pre-Hearing Order ¶ 7.  I exclude P. Exs. 1-12 because they are duplicates of CMS’s exhibits.  See Civil Remedies Division Procedures (CRDP) § 14(a) (“Parties . . . should not file as an exhibit a document already filed as an exhibit by the opposing party.”).

The Pre-Hearing Order advised the parties that they must submit written direct testimony for any proposed witnesses and that an in‑person hearing would be necessary only if the opposing party requested the opportunity to cross‑examine a witness.  Pre‑Hearing Order ¶¶ 8-10; CRDP §§ 16(b), 19(b); Pac. Regency Arvin, DAB No. 1823 at 7-8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross‑examine those witnesses).  Neither party offered the written direct testimony of any witness.  Consequently, an in‑person hearing is not required, and I issue this decision based on the written record, without regard to whether the standards for summary judgment are met.  Pre-hearing Order ¶¶ 8-11; CRDP § 19(d).  I deny CMS’s motion for summary judgment as moot.

II.  Issue

The issue in this case is whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

III.  Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R §§ 493.3(b)(17), 498.5(l)(2); see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

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IV.  Discussion

A. Statutory and Regulatory Background

Petitioner is considered a “supplier” for purposes of the Medicare program.  See Act § 1861(d) (42 U.S.C. § 1395x(d)); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(3).  To participate in the Medicare program as a supplier, an individual or entity must meet certain criteria to enroll and receive billing privileges.  42 C.F.R. §§ 424.505, 424.510.  CMS may revoke the enrollment and billing privileges of a supplier for any reason stated in 42 C.F.R. § 424.535.  More specifically, CMS may revoke the enrollment of a provider or supplier that is owned by or employs, in a management role, a felon convicted within the preceding ten years of an offense deemed detrimental to the best interests of the Medicare program and its beneficiaries under 42 C.F.R. § 424.535(a)(3).

When CMS revokes a supplier’s Medicare billing privileges, CMS establishes a reenrollment bar for a period ranging from one to three years.  42 C.F.R. § 424.535(c).2   Generally, a revocation becomes effective 30 days after CMS mails the initial determination revoking Medicare billing privileges, but if the revocation is based on a felony conviction, the revocation is effective with the date of the conviction.  42 C.F.R. § 424.535(g).  CMS may reverse a revocation due to a felony conviction by an owner or managing employee if the supplier terminates the managing employee and submits proof that it has done so within 30 days of the revocation notice.  42 C.F.R. § 424.535(e).

B. Findings of Fact, Conclusions of Law, and analysis.

1. CMS had a legal basis to revoke True Medical’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(3) because Dr. Salem, an owner and managing employee of True Medical, was convicted of a felony offense that CMS determined to be detrimental to the best interests of the Medicare program and its beneficiaries.3

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CMS may revoke a supplier’s enrollment in the Medicare program, if, within the preceding ten years, the supplier, or any owner or managing employee of the supplier, was convicted of a felony offense that CMS “determines is detrimental to the best interests of the Medicare program and its beneficiaries.”  42 C.F.R. § 424.535(a)(3)(i).  Offenses for which billing privileges may be revoked include – but are not limited to – felony crimes against persons, such as murder, rape assault, and similar crimes; financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud, and similar crimes; felonies that place the Medicare program or its beneficiaries at immediate risk (such as malpractice that results in a conviction for criminal neglect or misconduct); and felonies that would result in mandatory exclusion under section 1128 of the Act.  42 C.F.R. § 424.535(a)(3)(ii)(A)‑(D).

a. Dr. Salem is an owner and managing employee of True Medical as that term is defined at 42 C.F.R. § 424.502.

The regulations define an “owner” as “any individual or entity that has any partnership interest in, or that has 5 percent or more direct or indirect ownership of the . . . supplier.”  42 C.F.R. § 424.502.True Medical’s initial application for enrollment identified Dr. Salem as its “Manager‑Owner” with a 5 percent or greater ownership interest effective March 20, 2013.  CMS Ex. 2 at 33.  Petitioner’s subsequent applications do not indicate that Dr. Salem divested himself of his ownership interest at any point prior to the revocation.  See, e.g., CMS Ex. 5 at 36; CMS Ex. 6 at 36; CMS Ex. 7 at 6.  

In Petitioner’s brief, True Medical attempts to distance itself from Dr. Salem by arguing that True Medical was not wholly owned by Dr. Salem, but was “establish[ed] and controlled by [a] fully licensed physician [named] Annell Tucker.”  P. Br. at 13.  While it is true that True Medical’s initial enrollment application identified Dr. Tucker as an owner, True Medical deleted her as an owner in an application signed November 17, 2016.  CMS Ex. 2 at 35; CMS Ex. 6 at 29, 36.  Moreover, it appears that Dr. Salem signed the November 2016 change of enrollment application that deleted Dr. Tucker.  CMS Ex. 6 at 36.

In any event, it is irrelevant that Dr. Tucker may have been one of True Medical’s owners with a 5 percent or greater interest, since that does not preclude Dr. Salem from having a similar ownership interest.  Further, CMS is authorized to revoke a supplier if either an owner or a managing employee has been convicted of a qualifying felony offense.  42 C.F.R. § 424.535(a)(3)(i).  True Medical has consistently admitted that Dr. Salem is a managing employee.  P. Br. at 13; CMS Ex. 9 at 1 (“Dr. Atiyeh Salem was the managing director for True Medical and Foot Care Group . . .”); see also CMS Ex. 4 at 38; CMS Ex. 7 at 6.  Accordingly, I find, based on the documents in evidence and Petitioner’s admissions, that Dr. Salem was a managing employee and an owner of True Medical with a 5 percent or greater ownership interest at the time of the revocation.

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b. Dr. Salem was convicted of a felony offense within the 10 years preceding True Medical’s revocation.

Section 424.535(a)(3) defines a conviction for which enrollment may be revoked by cross‑referencing the definition at 42 C.F.R. § 1001.2.  In turn, section 1001.2 provides:

Convicted means that –

(a) A judgment of conviction has been entered against an individual or entity by a Federal, State or local court, regardless of whether:

(1) There is a post-trial motion or an appeal pending, or
(2) The judgment of conviction or other record relating to the criminal conduct has been expunged or otherwise removed;

(b) A Federal, State or local court has made a finding of guilt against an individual or entity;

(c) A Federal, State or local court has accepted a plea of guilty or nolo contendere by an individual or entity; or

(d) An individual or entity has entered into participation in a first offender, deferred adjudication or other program or arrangement where judgment of conviction has been withheld.

On January 23, 2008, Dr. Salem pleaded guilty to forgery, in violation of 720 Ill. Comp. Stat. 5/17-3(a), a class 3 felony.  CMS Ex. 9 at 16.  Based on Dr. Salem’s guilty plea, the Illinois state court “adjudged [him] guilty” and sentenced him to incarceration.  Id. at 9.  I infer from these facts that the state court accepted Dr. Salem’s guilty plea.  Finally, the state court ordered conviction to enter.  Id. at 16; see also id. at 175 (finding by the Illinois Department of Financial and Professional Regulation, Division of Professional Regulation that “on or about January 23, 2008, [Dr. Salem] was convicted of forgery, a felony”).  I therefore find that Dr. Salem was convicted within the meaning of subsections (a), (b), and (c) of the regulatory definition.

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Petitioner argues at some length that Dr. Salem was not in fact guilty of the crimes for which he was convicted.  See, e.g., P. Br. at 4-5.4   For example, Petitioner represents that Dr. Salem bought a computer for $1,100 in cash and never signed a credit card slip to complete the purchase at Wal‑Mart.  Id. at 5.  Such arguments amount to a collateral attack on Dr. Salem’s conviction, which I may not consider in determining whether to sustain the revocation of True Medical’s Medicare billing privileges.  See Gary J. Ordog, M.D., DAB CR4806 at 7 (2017) (and cases there cited).  Rather, my review is limited to whether an owner or managing employee of True Medical was convicted of a felony offense.  As I have explained above, Dr. Salem was an owner and managing employee of True Medical and he was convicted of a felony offense.  Further, the record shows that Dr. Salem was convicted on January 23, 2008.  CMS Ex. 9 at 9, 16‑17, 175.  CMS revoked True Medical’s Medicare billing privileges on January 23, 2018, exactly 10 years after Dr. Salem’s conviction.  Therefore, Dr. Salem was convicted of a felony offense within the 10 years preceding the revocation.

c. Dr. Salem was convicted of forgery, a financial crime similar to those described in 42 C.F.R. § 424.535(a)(3)(ii)(B).

In promulgating 42 C.F.R. § 424.535(a)(3), CMS determined that certain crimes are detrimental per se to Medicare.  See Letantia Bussell, M.D., DAB No. 2196 at 9 (2008).  The enumerated financial crimes listed in the regulation include “extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes.”  42 C.F.R. § 424.535(a)(3)(ii)(B).  CMS argues that Dr. Salem’s forgery conviction is a financial crime similar to those enumerated in the regulations.  CMS Br. at 12-13.

Section 424.535(a)(3)(ii) uses the following introductory language:  “Offenses include, but are not limited in scope or severity to” before listing certain named offenses.  An appellate panel of the DAB has explained that the “words ‘include’ or ‘including’ are not terms of limitation or exhaustion” and, “[w]hen followed by a list of items, those words are reasonably read as signifying that the list contains merely illustrative examples of a general proposition or category that precedes the word and is not intended to preclude unmentioned items from being considered supportive or part of the general proposition or category.”  Fady Fayad, M.D., DAB No. 2266 at 8 (2009), aff’d, Fayad v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011).  This interpretation gains further support from the addition of the phrase “or other similar crimes” following the listed offenses in section 424.535(a)(3)(ii)(B).  Accordingly, if Dr. Salem’s conviction for forgery is similar to the enumerated financial crimes, it is per se detrimental to Medicare and provides a basis for revocation.

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Dr. Salem was convicted of forgery in violation of 720 Ill. Comp. Stat. 5/17-3(a), which provides:

(a) A person commits forgery when, with intent to defraud, he or she knowingly:

(1) makes a false document or alters any document to make it false and that document is apparently capable of defrauding another; or

(2) issues or delivers such document knowing it to have been thus made or altered; or

(3) possesses, with intent to issue or deliver, any such document knowing it to have been thus made or altered; or

(4) unlawfully uses the digital signature, as defined in the Financial Institutions Electronic Documents and Digital Signature Act, of another; or

(5) unlawfully uses the signature device of another to create an electronic signature of that other person, as those terms are defined in the Electronic Commerce Security Act.

Petitioner argues that Dr. Salem should not have been convicted and, even accepting the conviction at face value, the crime is less serious than the other enumerated financial crimes.  P. Br. at 5.  As I have already explained, I do not consider Petitioner’s argument that Dr. Salem was wrongfully convicted.  Further, the applicable regulation does not provide that a felony conviction must be as “serious” as the enumerated crimes.  To the contrary, the regulation states explicitly that offenses are “not limited in scope or severity” to the named offenses.  42 C.F.R. § 424.535(a)(3)(ii) (emphasis added).  Instead, all that is required is that the felony be “similar” to the enumerated crimes.

The indictment states that Dr. Salem knowingly made a document that “was apparently capable of defrauding another, Wal-Mart.”  CMS Ex. 9 at 24.  Specifically, he used a credit card account belonging to another person to pay for goods at the retailer, without authorization from the account holder, to obtain $600 worth of merchandise by fraud.  Id.  Dr. Salem was convicted of the class 3 felony of forgery for this conduct.  CMS Ex. 9 at 9, 16-17.  It is clear from the record that Dr. Salem was convicted of using another person’s credit card, a financial instrument, without authorization to illegally obtain

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goods at Wal‑Mart.  For these reasons, I find that Dr. Salem committed a crime similar to the financial crimes enumerated in the regulations.5   Accordingly, CMS was authorized to revoke True Medical’s Medicare enrollment and billing privileges.

d. Even if Dr. Salem’s forgery conviction is not similar to a financial crime, CMS acted within its discretion under 42 C.F.R. § 424.535(a)(3)(i) to determine that the conviction is detrimental to the best interest of the Medicare program and its beneficiaries.

However, even if Dr. Salem’s felony conviction were not a financial crime that is per sedetrimental to Medicare and its beneficiaries, CMS would be authorized to revoke Petitioner’s Medicare enrollment if it determined that the specific conviction is detrimental to the best interests of the Medicare program and its beneficiaries.  Where a conviction is for a crime not enumerated in 42 C.F.R. § 424.535(a)(3), CMS is authorized to determine, on a case‑by‑case basis, that a particular felony conviction is detrimental to Medicare and its beneficiaries and therefore supports revocation.  Saeed A. Bajwa, M.D., DAB No. 2799 at 10-12 (2017) (42 C.F.R. § 424.535(a)(3)(i) authorizes CMS to determine what felony convictions are a basis for revocation; CMS is not limited to the felonies enumerated as examples).

Here, it is apparent that CMS exercised its discretion to determine that Dr. Salem’s felony conviction justifies revoking True Medical’s Medicare enrollment.  Bajwa, DAB No. 2799 at 8, 10-11.  If I am satisfied that CMS exercised its discretion under 42 C.F.R. § 424.535(a)(3)(i), I may not substitute my own determination as to whether a given felony is detrimental to the Medicare program and its beneficiaries for that of CMS.  See Brian K. Ellefsen, DO, DAB No. 2626 at 7 (2015).

The record before me demonstrates that CMS exercised its discretion.  CMS itself issued the reconsidered determination, which states:

CMS also finds the felony offense to be detrimental to the Medicare program and its beneficiaries based on the specific facts and circumstances underlying the conviction . . . . The Medicare program relies on the trustworthiness and veracity of, among other things, its suppliers in submission of claims, accuracy of patient records, and other participation

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requirements.  Therefore, CMS finds Dr. Salem’s felony conviction for forgery, within the preceding 10 years of the January 23, 2018 revocation of True Medical’s Medicare billing privileges, to be akin to the per se detrimental felony offenses, and finds this conviction to be detrimental to the best interest of the Medicare program and its beneficiaries.

CMS Ex. 1 at 8.  As I have explained, it is not my role to second‑guess CMS’s exercise of discretion to determine that a conviction is detrimental to the best interests of the Medicare program and its beneficiaries.  Even if I were to exercise such oversight, however, I would not find unreasonable CMS’s conclusion that Dr. Salem’s conviction for fraudulently obtaining goods through forgery calls into question his trustworthiness and veracity and, accordingly, that he might pose a risk to the Medicare Trust Fund.  Therefore, I find that CMS properly exercised its discretion to revoke True Medical’s Medicare enrollment because Dr. Salem’s felony conviction for forgery was detrimental to the best interests of the Medicare program and its beneficiaries.

2. Petitioner’s other arguments are not a basis to overturn CMS’s determination to revoke Petitioner’s Medicare enrollment and billing privileges.

Petitioner argues that Dr. Salem was unaware of the requirement to disclose his conviction to CMS and that he did not understand that his guilty pleas might affect True Medical.  P. Br. at 12-13; see also CMS Ex. 9 at 1-2.  Dr. Salem’s misunderstanding or ignorance of Medicare enrollment requirements is not a basis to overturn the revocation of True Medical’s enrollment and billing privileges.  As an appellate panel of the DAB has observed:  “Medicare suppliers are presumed to have constructive notice of the statutes and regulations that govern their participation as a matter of law.”  Pepper Hill Nursing & Rehab. Ctr., LLC, DAB No. 2395 at 8 (2011); see also Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 63, 64 (1984) (participant in the Medicare program had “duty to familiarize itself with the legal requirements” for cost reimbursement).

Petitioner additionally argues that Dr. Salem did not have access to documents due to a variety of circumstances including his incarceration, and that he provided documents to numerous parties over the years, including NGS.  P. Br. at 6.  The argument that True Medical and Dr. Salem provided extensive documentation to NGS appears to be intended to demonstrate that True Medical did not provide false or misleading information to NGS by failing to disclose Dr. Salem’s felony conviction.  However, such contentions are irrelevant, as CMS did not rely on 42 C.F.R. § 424.535(a)(4) as a basis to revoke True Medical’s Medicare enrollment and billing privileges.  See CMS Ex. 1 at 1; CMS Ex. 8 at 1.

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Further, Petitioner argues that Dr. Salem’s conviction did not involve government programs or patient care and that “Dr. Salem did not harm anyone.”  P. Br. at 5, 12.  Petitioner states that there are “mitigating factors” based on Dr. Salem’s contributions to his patients and his community.  Id. at 12.  I construe these arguments as essentially asking for equitable relief.  However, I have no authority to grant such relief to Petitioner.  US Ultrasound, DAB No. 2302 at 8 (2010); cf Abdul Razzaque Ahmed, M.D, DAB No. 2261 at 19 (2009), aff’d, Ahmed v. Sebelius, 710 F. Supp. 2nd 167 (D. Mass. 2010) (if CMS establishes the regulatory elements necessary for revocation, an ALJ may not substitute his or her “discretion for that of CMS in determining whether revocation is appropriate under all the circumstances.”).

V.  Conclusion

For the reasons explained above, I find that CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

1. Distinct from True Medical’s group practice application in January 2014, Dr. Salem submitted a Medicare Enrollment Application (Form CMS-855I, for physicians and non‑physician practitioners) to NGS to enroll in Medicare as a podiatrist and the sole proprietor of True Medical.  CMS Ex. 12 at 3, 8, 17.  NGS received the application on November 17, 2014.  Id. at 3.  By letter dated May 15, 2015, NGS denied the application.  Id. at 1.  NGS cited Dr. Salem’s felony conviction for money laundering as the basis for denial.  Id.  CMS affirmed the denial on reconsideration (see CMS Ex. 11) and Dr. Salem requested administrative law judge review.  The assigned administrative law judge issued a decision dated May 6, 2016.  True Medical and Foot Group, LLC, DAB No. CR4604 (2016).  The decision concluded that CMS properly denied enrollment pursuant to 42 C.F.R. § 424.530(a)(3) based on Dr. Salem’s two felony convictions for financial crimes which are enumerated in the regulations.  Id. at 11-14.  Dr. Salem did not seek review by the Departmental Appeals Board (DAB) and thus the decision became final and binding.  42 C.F.R. § 498.74(b).
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2. The regulations governing revocations underwent significant revisions, which took effect November 4, 2019.  84 Fed. Reg. 47,794, 47,794, 47,854-56 (Sept. 10, 2019).  Pursuant to the revisions, CMS now may establish a re‑enrollment bar for a period ranging from one to ten years for a first‑time revocation, a range that increases to 20 years for a second revocation.  Id. at 47,855 (amending 42 C.F.R. § 424.535(c)).  These revisions took effect well after the initial determination to revoke issued in this case.  I apply the regulations in effect at the time of the initial determination.  Linda Silva, P.A., DAB No. 2966 at 1 n.1 (2019).
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3. My findings of fact and conclusions of law appear as numbered headings in bold italic type
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4. Petitioner did not paginate its brief.  I refer to the PDF page numbers as the document appears in DAB E-File.
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5. Indeed, it could be argued that the question of whether Dr. Salem’s conviction for forgery is similar to the financial crimes enumerated in 42 C.F.R. § 424.535(a)(3)(ii)(B) is res judicata.  See 42 C.F.R. § 498.70(a).  In True Medical and Foot Group, LLC, the administrative law judge held that Dr. Salem’s conviction for forgery was such a financial crime.  DAB CR4604 at 13-14.  As I noted above, that decision has become administratively final.
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