Anthony Del Piano, M.D., DAB CR6158 (2022)

DECISION

This decision affirms the determination by the Centers for Medicare & Medicaid Services (CMS) to place Petitioner, Anthony Del Piano, M.D., on the CMS Preclusion List and to deny Petitioner’s Medicare enrollment application.

I.  Background and Procedural History

On March 25, 2022,  Dr. Anthony Del Piano (Dr. Del Piano or Petitioner), through counsel, timely requested a hearing before an Administrative Law Judge (ALJ) to contest the denial of his Medicare reenrollment and placement on the CMS preclusion list.  In response to Petitioner’s hearing request, the Civil Remedies Division (CRD) issued an acknowledgement letter and standing prehearing order, which set forth a schedule for briefing, submitting supporting evidence, and other requirements.

On May 13, 2022, CMS filed a Motion for Summary Judgment and supporting memorandum and brief (CMS Br.), along with 14 exhibits (CMS Exs. 1-14).

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On July 1, 2022, Petitioner filed a Cross-Motion for Summary Judgment and brief in opposition to CMS’s Motion and in support of Petitioner’s Cross-Motion (P. Br.), along with 10 exhibits (P. Exs. 1-10).¹

II.  Admission of Exhibits and Decision on the Record

Neither party filed objections to the opposing party’s exhibits.  Therefore, CMS Exhibits 1 through 14 and Petitioner’s Exhibits 1 through 10 are admitted into evidence and entered into the record.

Similarly, neither party identified witnesses to testify in this matter or requested cross‑examination of an opposing party’s witnesses.²  Consequently, an in-person hearing is not necessary, and this decision will be issued based on the written record.  Civ. R. Div. P. § 19(d).  CMS’s motion for summary judgment is denied as moot.

III.  Issues

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

Whether CMS has a legal basis to place Petitioner on the CMS Preclusion List, as defined at 42 C.F.R. §§ 422.2 and 423.100.

IV.  Jurisdiction

This tribunal has jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2).

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V.  Legal Authorities

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 [C.F.R. §] 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-

(A) Felony crimes against persons, such as murder, rape, assault, and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pretrial diversions.
(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.
(C) Any felony that placed the Medicare program or its beneficiaries at immediate risk, such as a malpractice suit that results in a conviction of criminal neglect or misconduct.
(D) Any felonies that would result in mandatory exclusion under section 1128(a) of the Act.

(ii)  Denials based on felony convictions are for a period to be determined by the Secretary, but not less than 10 years from the date of conviction if the individual has been convicted on one previous occasion for one or more offenses.

42 C.F.R. § 424.530(a)(3).

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CMS may place on its CMS Preclusion List any “individual or entity, regardless of whether they are or were enrolled in Medicare, [that] has been convicted of a felony under Federal or State law within the previous ten years that CMS deems detrimental to the best interests of the Medicare program.”  42 C.F.R. §§ 422.2, 423.100; 84 Fed. Reg. 15,680, 15,828, 15,840 (Apr. 16, 2019) (definitions of “Preclusion list” effective January 1, 2020).  Medicare Advantage organizations and Medicare Part D plan sponsors may not provide reimbursement for any items or services furnished by an individual or entity on the preclusion list, or for prescriptions the individuals write.  42 C.F.R. §§ 422.2, 422.222, 422.224, 423.100, and 423.120(c)(6).  In determining whether a felony conviction is detrimental to the best interests of the Medicare program, CMS considers: 

(i)  The severity of the offense;
(ii)  When the offense occurred; and
(iii)  Any other information that CMS deems relevant to its determination.

42 C.F.R. §§ 422.2, 423.100; 84 Fed. Reg. at 15,828, 15,840.

If CMS places an individual on the preclusion list based on a felony conviction, the individual will remain on the preclusion list for a ten-year period, beginning on the date of the conviction, unless CMS determines that a shorter length of time is warranted.  In deciding as to whether a shorter term of preclusion is appropriate, CMS considers: 

(i) The severity of the offense;
(ii) When the offense occurred; and
(iii) Any other information that CMS deems relevant to its determination.

42 C.F.R. §§ 422.2, 423.100; 84 Fed. Reg. at 15,832, 15,840-41.

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).  An ALJ does not have discretion to disregard findings that CMS has made via rulemaking.  Bussell, DAB No. 2196 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 which is similar to such an offense, can also provide the basis for denial of enrollment; in that case, an ALJ 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).

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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, it must be determined whether CMS’s 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 Departmental Appeals Board (the Board) would have affirmed an individualized 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).

VI.  Findings of Fact

Petitioner is a medical doctor licensed to practice in the State of New Jersey.  CMS Ex. 3.  On February 4, 2015, as part of a plea agreement, Petitioner pled guilty to commercial bribery, a felony, in the U.S. District Court of New Jersey, in violation of 18 U.S.C. § 1952(a)(3) and (2).  CMS Ex. 4.  From October 2005 through March 2013, Petitioner was paid approximately $189,175.00 in bribes in exchange for referring blood specimens to a specific lab, which in turn submitted claims to Medicare and private payors.  CMS Ex. 2 at 4.  The court sentenced Petitioner to 21 months of incarceration, one year of probation, a criminal forfeiture money judgment totaling $207,500, mental health treatment, and required Petitioner to pay a $10,000 fine.  CMS Exs. 3, 6.  Judgment was entered on July 22, 2015.  CMS Ex. 3.

On July 27, 2015, Novitas, a CMS contractor, notified Petitioner that his Medicare billing privileges were revoked, effective July 22, 2015, based on his felony conviction.  CMS Ex. 7.  Novitas established a three-year reenrollment bar.  CMS Ex. 7.  Petitioner did not request reconsideration, making CMS’s determination administratively final.  42 C.F.R. § 498.20(b)(1).

As a result of the felony conviction, the Office of the Inspector General (IG) excluded Petitioner from participation in Medicare, Medicaid and all other federal health programs for five years, effective February 18, 2016.  CMS Ex. 8; P. Ex. 5.  Based on the IG’s exclusion, the Office of the State Comptroller, Medicaid Fraud Division (Comptroller) disqualified Petitioner from participation in the New Jersey Medical Assistance and Health Services (Medicaid), and other state health care programs, effective March 24, 2016.  CMS Ex. 9.

On March 31, 2016, The Office of Personnel Management (OPM) debarred Petitioner from participating in the Federal Employees Health Benefits Program (FEHBP).  CMS Ex. 10.  Additionally, the New Jersey Board of Medical Examiners terminated

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Petitioner’s medical license and the U.S. Department of Justice, Drug Enforcement Administration (DEA), terminated Petitioner’s Controlled Dangerous Substance registration.  P. Br. at 3.³  On July 22, 2021, Petitioner’s eligibility to participate as a supplier⁴ of services in Medicare, Medicaid and all federal health care programs, including his participation in FEHBP, was reinstated by the IG, the Comptroller, and OPM.  CMS Ex. 11; P. Exs. 7, 8.

Petitioner applied to reactivate his Medicare enrollment and billing privileges on September 8, 2021.  CMS Ex. 12; P. Ex. 9.  In the enrollment application, Petitioner properly identified his 2015 felony conviction and the IG exclusion.  CMS Ex. 12 at 2-3; P. Ex. 9 at 2-3.  On September 21, 2021, CMS, through its Medicare administrative contractor Wisconsin Physicians Service (WPS), notified Petitioner that his Medicare enrollment application was denied, pursuant to 42 C.F.R. § 424.530(a)(3) and that he was being placed on the CMS Preclusion List.  CMS Ex. 13.  Petitioner requested reconsideration on November 22, 2021.  CMS Ex. 14.

On January 25, 2022, CMS notified Petitioner that his request for reconsideration was denied, and the hearing officer affirmed the denial of his enrollment application.  DAB E-File Dkt. C-22-410, Doc. 1(a).  The hearing officer found that Petitioner’s felony conviction in the preceding ten years was per se detrimental to the Medicare program and determined that denial under 42 C.F.R. § 424.530(a)(3) was appropriate.  DAB E-File Dkt. C-22-410, Doc. 1(a). at 8-10.  In addition, the hearing officer upheld Petitioner’s placement on the preclusion list.  DAB E-File Dkt. C-22-410, Doc. 1(a)at 10.

VII.  Analysis and Conclusions of Law⁵

1. CMS exercised its discretion to deny Petitioner’s Medicare enrollment application pursuant to 42 C.F.R. § 424.530(a)(3) due to Petitioner’s felony conviction.

An application for Medicare enrollment may be denied if the applicant has a felony conviction within ten years preceding the enrollment application.  42 C.F.R.

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§ 424.530(a)(3).  It is undisputed that on February 4, 2015, Petitioner pleaded guilty to one felony count of Commercial Bribery, in violation of 18 U.S.C. § 1952(a)(3).  CMS Ex. 4.  Petitioner applied for re-enrollment of his Medicare billing privileges on September 8, 2021, approximately six years after the date of his felony conviction.  CMS Ex. 12; P. Ex. 9.

While Petitioner does not contest the fact that his felony commercial bribery conviction occurred within the ten years preceding his enrollment application, he argues that CMS erred in denying his enrollment application pursuant to 42 C.F.R. § 424.530(a)(3).⁶  P. Br. at 6.  Petitioner argues that by imposing a 10-year re-enrollment bar, CMS is re-opening the July 27, 2015 initial determination, which violates the one-year limitation on re-opening initial determination actions under 42 CFR § 498.30.

Under Part 498, “initial determinations” are determinations that CMS (or the IG) makes “with respect to the matters specified in paragraph (b) of” section 498.3.  Pennsylvania Physicians, P.C., DAB No. 2980 at 12 (2019); 42 C.F.R. § 498.3(a).  Those “matters” include a denial of Medicare enrollment under section 424.530 and a revocation of Medicare enrollment under section 424.535 – but not a decision to approve such enrollment.  Physicians, DAB No. 2980 at 12.  The July 27, 2015 initial determination stated that Petitioner’s Medicare privileges were being revoked due to a felony conviction in the State of New Jersey and imposed a three-year reenrollment bar.  CMS Ex. 7.  On September 8, 2021, Petitioner applied to reactivate his Medicare enrollment.  Petitioner’s application for reenrollment was denied based on the same felony conviction, but CMS provided a different reason than the one provided in the July 27, 2015 initial determination.  In the reconsideration determination, CMS considered the facts and circumstances surrounding Petitioner’s felony conviction; unlike the initial determination that revoked Petitioner’s Medicare billing privileges based on the mere existence of the felony conviction.  CMS Ex. 13; P. Ex. 4.

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Petitioner seemingly argues that because both the revocation and reenrollment determinations were based on the same conviction, the initial determination is the revocation issued on July 15, 2015 and any later action by CMS regarding the same conviction, is an attempt to reopen the initial revocation determination.  However, Petitioner filed an application to “reactivate” his enrollment in the Medicare program on September 8, 2021.  CMS Ex. 12 at 1.  The application was treated as a new enrollment application because Petitioner was not enrolled in the Medicare program due to the previous revocation.  CMS Ex. 12.  As such, Petitioner’s application was subject to denial under section 424.530(a)(3), and not to revocation under section 424.535(a)(3).  The regulations do not prohibit CMS from denying a reenrollment application after an applicant was previously revoked.  The denial of Petitioner’s enrollment in September 2021 is not construed as an extension of, or a “re-opening” of the July 2015 initial determination to revoke Petitioner’s enrollment.  The regulations prohibit CMS from re-opening the July 27, 2015 initial determination revoking Petitioner’s Medicare enrollment.  42 C.F.R. § 498.30.  Instead, CMS  issued a new initial determination on September 21, 2021 and denied Petitioner’s enrollment application under section 424.530(a)(3).  Compare CMS Ex. 13 and P. Ex. 1 with CMS Ex. 7 and P. Ex. 4.

Further, CMS’s authority to revoke a Petitioner’s enrollment in the Medicare program under 42 C.F.R. § 424.535(a) is separate and distinct from CMS’s authority to deny a supplier’s enrollment application into the Medicare program under 42 C.F.R. § 424.530(a).  CMS may revoke a currently enrolled supplier’s Medicare enrollment.  42 C.F.R. § 424.535(a)(emphasis added).  In contrast, 42 C.F.R. § 424.530(a)(3) permits CMS to deny a supplier’s enrollment (including reentry) into the Medicare program when they have no status with the Medicare program.⁷

CMS revoked Petitioner’s enrollment in the Medicare program on July 27, 2015, which became effective July 22, 2015, the day Petitioner received his criminal judgment.  CMS Ex. 7.  As a result, CMS imposed a three-year reenrollment ban.  CMS Ex. 7.  As of July 22, 2021, Petitioner’s three-year reenrollment ban and his five-year exclusion by the IG were concluded.  Accordingly, Petitioner had “no status” with the Medicare program until Petitioner met the requirements to re-enroll under 42 C.F.R. § 424.535(d).

CMS has the authority to revoke providers and suppliers for a minimum of one year up to a maximum of 20 years under section 424.535.  After a provider has had their enrollment revoked, the individual can be barred from participating in the Medicare program:

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1) for a minimum of one year, but not greater than ten years, depending on the severity of the basis for revocation;
2) for revocations based on felony convictions, no less than ten years from the date of conviction, if the individual has been convicted on one previous occasion for one or more offenses;
3) for three additional years past the re-enrollment bar, if CMS determines that the provider is attempting to circumvent the existing re-enrollment bar by enrolling in Medicare under a different name, numerical identifier or business identity;
4) for 20 years, if the provider is being revoked for a second time.

42 C.F.R. § 424.535(a)(3)(iii), (c).

These circumstances did not apply when Petitioner was revoked in 2015.  Consequently, CMS imposed a three-year reenrollment bar, which became effective August 26, 2015, based on the severity of Petitioner’s basis for revocation.  CMS Ex. 7 at 2.  The ten-year enrollment bar from the Medicare program imposed on September 21, 2021 is due to Petitioner’s inclusion on the CMS Preclusion List.  DAB E-File Dkt. C-22-410, Doc. 1(a) at 9.  Although Petitioner’s inclusion on the preclusion list was imposed in 2021, the ten-year enrollment bar began the date Petitioner received his criminal judgment on July 22, 2015.  See 42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(c).

2. A mandatory exclusion imposed by the IG is a separate action that does not prohibit CMS from later denying an application for reactivation/reenrollment in the Medicare program.

Petitioner argues that CMS previously “excluded” him from participation in Federal health care programs for five years and imposed a three-year re-enrollment bar due to his felony conviction.  P. Br. at 7.  However, the mandatory exclusion imposed by the IG and the denial of enrollment are separate actions by distinct agencies.

CMS has the authority to deny or revoke a provider or supplier’s enrollment status in the Medicare program, while the Secretary has given the IG the authority to exclude individuals from participation in Medicare, Medicaid and all other Federal health care programs.  Compare 42 C.F.R. §§ 424.500 (scope); 424.530 (denial of enrollment in the Medicare program); 424.535(revocation of enrollment in the Medicare program) with 42 C.F.R. §§ 1001.1 (scope and purpose); 1001.101 (mandatory exclusions); 1001.201- 1701 (permissive exclusions).

In this case, CMS acted within its regulatory authority to deny Petitioner’s application for

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reenrollment in the Medicare program.

3. CMS exercised its discretion to determine that Petitioner’s felony conviction for commercial bribery was per se detrimental to the best interests of the Medicare program and its beneficiaries.

The Secretary of the United States Department of Health & Human Services (Secretary) has the authority to determine which offenses are detrimental to Medicare and its beneficiaries.  42 U.S.C. § 1395u(h). The regulations provide that some felonies that are considered 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).  Felony offenses deemed to be per se detrimental can include “[a]ny felonies that would result in mandatory exclusion under section 1128(a)⁸ of the Act.”  42 C.F.R. § 424.530(a)(3)(i)(D).

In the reconsidered determination, the CMS hearing officer explained that because Petitioner “was convicted of a felony offense identified in section 1128(a)(1) and (a)(3) of the Act and was subsequently excluded under the same sections of the Act. . . CMS considers [Petitioner’s] felony conviction of commercial bribery to be per se detrimental to the Medicare program and its beneficiaries.”  DAB E-File Dkt. C-22-410, Doc. 1(a) at 6.  The evidence also shows that Petitioner was excluded by the IG under sections 1128(a)(1) and 1128(a)(3) of the Act, due to his felony commercial bribery conviction.  CMS Ex. 8; P. Ex. 5.  Additionally, based on the specific facts and circumstances underlying Petitioner’s conviction, the CMS hearing officer determined that the offense of felony commercial bribery is detrimental to the Medicare program and its beneficiaries.  DAB E-File Dkt. C-22-410, Doc. 1(a) at 7.

Since CMS has proven that there was a legal regulatory basis for denying Petitioner’s Medicare enrollment applications , I may not refuse to apply the regulation.  Robert J. Tomlinson, M.D., DAB No. 2916 at 5 (2018).  The mere existence of a mandatory exclusion for a felony conviction occurring within the ten years preceding an enrollment application is a sufficient basis for denial of enrollment.  42 C.F.R. § 424.530(a)(3)(i)(D).  Moreover, under 42 C.F.R. §§ 422.2, 423.100(2)(ii), Petitioner’s underlying conduct is

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detrimental to the best interests of the Medicare program and its beneficiaries.  Accordingly, I find that CMS has a legal basis to deny Petitioner’s enrollment due to his felony conviction pursuant to 42 C.F.R. § 424.530(a)(3).

Petitioner argues that “fairness and equity would permit [him] to resume his practice, including, serving Medicare and Medicaid patients, pursuant to the initial determination that excluded him for five years and imposed a three-year re-enrollment bar.”  P. Br. at 6.  Petitioner also argues that he is not a detriment to patient care and is not a financial detriment to the Medicare program.  P. Br. at 11-12.  To the extent that Petitioner has raised a plea for equitable relief, I am unable to grant such relief.  See US Ultrasound, DAB No. 2302 at 8 (2010) (“Neither the ALJ nor the [DAB] is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”); Hartman, DAB No. 2911 at 21; Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016) (the ALJ and the Board may not “restore a supplier’s billing privileges on equitable grounds”).  As explained below, CMS has a legal basis to deny Petitioner’s enrollment application due to his felony commercial bribery conviction.  42 C.F.R. § 424.530(a)(3)(i)(D).

Based on the facts underlying Petitioner’s conviction, CMS found that Petitioner’s conduct “call[ed] into question his integrity in treating patients and demonstrates his reckless disregard for the health and safety of Medicare beneficiaries.”  DAB E-File Dkt. C-22-410, Doc. 1(a) at 7.  Moreover, CMS determined that Petitioner’s “felonious behavior not only puts the health and safety of Medicare beneficiaries at risk, but also forms a threat to the integrity of the Medicare Trust funds.”  Id.

CMS has met its burden to show that Petitioner’s conviction is per se detrimental to the best interests of the Medicare program and its beneficiaries.  42 C.F.R. § 424.530(a)(3)(i)(D).  Based on the facts and circumstances surrounding Petitioner’s conviction, I find that  CMS’s determination that Petitioner’s conviction was detrimental to the best interests of the Medicare program and its beneficiaries, is reasonable.

4. CMS exercised its discretion to add Petitioner to the CMS Preclusion List for ten years pursuant to 42 C.F.R. §§ 422.222(a)(5)(iii); 423.120(c)(6)(vii)(c).

Petitioner argues that his inclusion on the CMS Preclusion List “is an impermissible retroactive application of regulations” because his felony conviction occurred prior to the enactment of the preclusion law on January 1, 2019.  P. Br. at 13.  In support of his argument, Petitioner states that CMS’s action constitutes a retroactive application of the regulation that “violates the basic tenets of law. . .prohibit[ing] retroactive rulemaking,” under Bowen v. Georgetown University Hospital, 488 U.S. 204 (1988) and Landgraf v. USI Film Products, 511 U.S. 244, 270 (1994).

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Petitioner argues he is not asking this tribunal to invalidate the preclusion law, but “simply. . .[correct]. . .the legal error made by CMS to apply it retroactively.”  P. Br. at 17.  In order for me to find legal error in CMS’s application of the preclusion law as applied to the facts of Petitioner’s case however, I would have to first find the law invalid.  Courts have declined to give retroactive effect to statutes burdening private rights unless Congress has made clear its intent.  See, e.g., Landgraf v. USI Film Prods., 511 U.S. 244, 270 (1994) (presumption that statutes do not apply retroactively unless Congress made clear its intent); Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (“a statutory grant of legislative rulemaking authority, will not, as a general matter, be understood” to authorize retroactive rulemaking unless provided by Congress).

Congress, through the enactment of the Comprehensive Addiction and Recovery Act of 2016 (CARA), stated its purpose was to “authorize the Attorney General and Secretary of Health and Human Services to award grants to address the prescription opioid abuse and heroin use crisis, and for other purposes.”  Pub. L. No. 114-198, 130 Stat. 695 (2016).  Section 704 of the CARA required the Secretary to establish a program to prevent prescription drug abuse under Medicare Parts C and D.  130 Stat. at 742-52.  Most importantly, section 704(b)(2) of the CARA amended the Act at 42 U.S.C. § 1395w-104(c) to add a provision for a “utilization management tool to prevent drug abuse,” and required that the Secretary conduct a “retrospective utilization review to identify. . .providers of services or suppliers that may facilitate the abuse of diversion of frequently abused drugs by beneficiaries.”  Id. at 748.

CMS proposed rulemaking to implement the CARA on November 28, 2017.  82 Fed. Reg. 56,336.  CMS proposed that a Medicare Advantage organization may not make payment for an item or service that is furnished by an individual or entity on a newly established preclusion list, and, that a Part D plan sponsor must reject pharmacy claims for Part D drugs if the prescriber is on the same preclusion list.  Id. at 56,340.  CMS further explained that individuals, entities, and prescribers would be placed on the preclusion list if certain requirements were all met, to include having engaged in conduct that is detrimental to the best interests of the Medicare program and its beneficiaries.  Id.  CMS determined that “. . .this approach would allow us to concentrate our efforts on preventing MA payment for items and services furnished by providers and suppliers that could pose an elevated risk to Medicare beneficiaries and the Trust Funds.”  Id. at 56,448.  In its final rule, CMS established a January 1, 2019, effective date for its CMS Preclusion List, which is consistent with the CARA’s mandate.  83 Fed. Reg. 16,440 (Apr. 16, 2018).

An ALJ “is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground . . . .”.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009).  Therefore, as an ALJ, I cannot reverse Petitioner’s placement on the preclusion list by declaring the regulation invalid.  Accordingly, I have the authority to review

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whether the three requirements for inclusion on CMS’s Preclusion List are met pursuant to 42 C.F.R. §§ 422.2 and 423.100.

In the reconsidered determination, the hearing officer explained that Petitioner’s felony conviction satisfied the regulatory requirements for placement on the preclusion list.  DAB E-File Dkt. C-22-410, Doc. 1(a) at 6-8; 42 C.F.R. §§ 422.2 and 423.100.  In making the determination, the hearing officer considered the three factors as required by the regulations; the severity of the offense; when the offense occurred; and any other information that CMS deemed relevant to its determination.  42 C.F.R. §§ 422.2 and 423.100; DAB E-File Dkt. C-22-410, Doc. 1(a) at 8.  The hearing officer found that Petitioner was convicted of a felony within the preceding ten years and determined that the conviction was detrimental to the best interests of the Medicare program.

First, CMS found that Petitioner’s felony offense was “severe in nature, and. . .is a health care related offense.”  42 C.F.R. §§ 422.2 and 423.100; DAB E-File Dkt. C-22-410, Doc. 1(a).  The CMS hearing officer explained: 

[Petitioner’s] felonious conduct displays dishonest behavior, a lack of good judgment, and a disregard for State and Federal laws.  This criminal conduct reflects negatively on [Petitioner’s] ethics and professionalism as a provider of medical services.  [Petitioner] exercised poor judgment when he committed commercial bribery at the cost of his patient’s health.  As a result, CMS finds that [Petitioner’s] felony conviction, which led to the denial of his Medicare enrollment application, is severe.

42 C.F.R. §§ 422.2 and 423.100; DAB E-File Dkt. C-22-410, Doc. 1(a) at 8.
In reference to the second factor, the hearing officer concluded Petitioner was “engaged in. . .criminal activity for a considerably long period of time.”  DAB E-File Dkt. C-22-410, Doc. 1(a) at 9.  Despite the offense concluding several years prior, the hearing officer found “the severity of the offense, the fact that it implicates [Petitioner’s] lack of sound judgment, and his disregard for the safety of his patients and Federal laws [as] indications that his placement on the CMS Preclusion List is appropriate.”  Id.

Regarding the third factor, CMS found it relevant that the IG, DEA, and the State of New Jersey took adverse actions against Petitioner.  DAB E-File Dkt. C-22-410, Doc. 1(a) at 9.  The hearing officer considered the actions of these agencies to be “extremely relevant” to CMS’s determination that Petitioner’s conduct is detrimental to the best interests of the Medicare program and found they further demonstrate the severity of Petitioner’s offense.  DAB E-File Dkt. C-22-410, Doc. 1(a) at 9.  .  Petitioner argued that his reinstatement by the IG evidences his ability to participate in the Medicare program.  The hearing officer disagreed with Petitioner’s position and found that “payment under

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the Medicare program is made for claims submitted in a manner that relies upon the trustworthiness and best judgment of our Medicare partners. . .[Petitioner’s] felonious behavior indicates to CMS that the Medicare Trust Funds may be at risk if [Petitioner] is allowed to participate in the Medicare program.”  DAB E-File Dkt. C-22-410, Doc. 1(a) at 9.

The hearing officer found it relevant that “a determination of detriment to the best interests of the Medicare program is inherent in the implementation of a Medicare enrollment application denial under § 424.530(a)(3).”  DAB E-File Dkt. C-22-410, Doc. 1(a) at 9.   Based on the analysis, the CMS hearing officer determined that Petitioner’s felony offense was severe, and that Petitioner’s criminal acts represented a lack of sound judgment and disregard for the safety of his patients and State and Federal laws.  The hearing officer also determined that Petitioner’s actions posed a risk to patient safety and showed that he posed a threat to the Medicare Trust Funds if he were enrolled in the program.  In addition to Petitioner being convicted of an offense specifically enumerated under 42 C.F.R. § 424.530(a)(3)(i), the hearing officer concluded that Petitioner’s inclusion on the CMS Preclusion List is “necessary to ensure the safety of its beneficiaries and the integrity of the program, especially given that his conviction is related to accepting bribes in return for patient blood specimen tests.”  DAB E-File Dkt. C-22-410, Doc. 1(a) at 9.

CMS did not err in its analysis.  The record establishes that, within the ten years preceding his Medicare enrollment application, Petitioner was convicted of a felony offense which CMS determined to be detrimental to the best interests of the Medicare program and its beneficiaries.  The CMS hearing officer considered the appropriate regulatory factors and justifiably determined that Petitioner’s placement on the preclusion list should be upheld effective January 25, 2022, the date of the reconsidered determination.  DAB E-File Dkt. C-22-410, Doc. 1(a) at 8-10; 42 C.F.R. §§ 422.222(a)(3)(i)(B), 423.120(c)(6)(v)(C)(1)(ii).  Although CMS did not indicate how long Petitioner would remain on the preclusion list, the regulations provide that Petitioner will be on the list for a ten-year period, beginning on the date of his felony conviction, unless CMS determines that a shorter length of time is warranted.  42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).  Neither party offered any arguments or evidence to show that CMS determined the duration to be less than ten years; accordingly, Petitioner will be on the preclusion list until July 22, 2025, ten years from the date of his felony conviction.

Petitioner argues that CMS should have exercised its discretion and not placed him on the preclusion list because there “was never any evidence of harm to patients or financial harm to the Medicare program.”  P. Br. at 10-11.  However, the language set forth in 42 C.F.R. §§ 422.2 and 423.100 states that one who has a felony conviction “within the previous 10 years that CMS deems detrimental to the best interests of the Medicare

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program” is subject to placement on the preclusion list.⁹  Petitioner’s felony offense of commercial bribery is identified in the regulations as an offense that results in mandatory exclusion under section 1128(a) of the Act, and is therefore treated by CMS to be per se detrimental to the Medicare program.  42 C.F.R. § 424.530(a)(3)(i).  CMS alone is authorized to weigh equitable concerns against the risks to the Medicare program.  If CMS’s action is legally authorized, as found here, then it must be upheld.  Hartman, DAB No. 2911 at 21; Wendell Foo, M.D., DAB No. 2904 at 25 (2018) (The Board “has repeatedly confirmed that neither it nor the ALJs have authority to overturn a legally valid agency action on equitable grounds or otherwise grant equitable relief.”).

Petitioner also argues that he is not an active threat to the Medicare program and that he should not be barred from Medicare for ten years because his 2015 felony conviction is the only conviction on his criminal record.  P. Br. at 10-11.  Petitioner maintains that if CMS wanted to impose an exclusion longer than 5 years, CMS “could have excluded him for ten years (as [it] now seek[s] to do).”  Id.  I construe Petitioner’s argument as suggesting that if CMS wanted to bar him from participating in the Medicare program for ten years, CMS should have previously done so when CMS revoked his enrollment in 2015.

While I understand Petitioner’s frustrations, I do not have authority to substitute my opinion as to whether Petitioner remains a threat to the Medicare program and its beneficiaries based on Petitioner’s felony conviction.  Tomlinson, DAB No. 2916 at 8; see e.g., Brian K. Ellefsen, D.O., DAB No. 2626 at 7 (2015) (“. . .where CMS is legally authorized to deny an enrollment application, an ALJ cannot substitute his or her discretion for that of CMS’s (or CMS’s contractor) in determining whether, under the circumstances, denial is appropriate.”); Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2008).

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VII.  Conclusion

CMS has established a legal basis to deny Petitioner’s Medicare enrollment application and to include Petitioner on its preclusion list.  Therefore, the denial of Petitioner’s Medicare enrollment application under 42 C.F.R. § 424.530(a)(3) and the inclusion of Petitioner on the CMS Preclusion List, effective January 25, 2022, are affirmed.

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Endnotes

¹ Pursuant to ¶ 8 of my Standing Order, Petitioner’s exchange included 10 exhibits that were improperly labeled as Petitioner’s exhibits A-J.  Departmental Appeals Board Electronic File (DAB E-File) Dkt. C-22-410, Docs. 16-25.  On July 21, 2022, Petitioner refiled an exhibit list and 10 exhibits properly labeled Petitioner’s Exhibits 1 through 10.  DAB E-File Dkt. C-22-410, Docs. 26-36.

² Petitioner proposed himself as a witness.  DAB E-File Dkt. C-22-410, Doc. 14 at 2.  Petitioner did not submit sworn written direct testimony, as ¶ 10 of my Standing Order requires the parties to do if proposing witnesses during the exchange process.  Subsequently, CMS did not request cross-examination of Petitioner.

³ The record is silent as to the exact date when these terminations went into effect.  However, Petitioner submits P. Ex. 5, photocopies of active his medical license and Controlled Dangerous Substance registration, with his exchange.

⁴ The OIG reinstatement notice identified Petitioner as a “provider” but Petitioner as a medical doctor is a supplier for the purposes of the Medicare program.  See 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202, 410.20(b)(1).

⁵ My findings of fact and conclusions of law are set forth in italics and bold font.

⁶ 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.”).

⁷ As discussed in the next section, CMS also has the authority to add an individual to its preclusion list “regardless of whether they are or were enrolled in Medicare,” when an individual has been convicted of a felony within the previous ten years that CMS deems detrimental to the Medicare program and its beneficiaries.  42 C.F.R. §§ 422.2; 422.222; 423.100; 423.120(c)(6).

⁸ Section 1128(a)(1) of the Social Security Act (Act) mandates that the Secretary exclude an individual or entity that has been convicted of a criminal offense related to the delivery or item of service under title XVIII or under any state health care program.  Act § 1128(a)(1).  Section 1128(a)(3) of the Act mandates that the Secretary exclude an individual from participation in any federal health care program if the individual has been convicted, after August 21, 1996, of a felony “in connection with the delivery of a health care item or service.”  Act § 1128(a)(3).

⁹ Under 42 C.F.R. § 422.222(a)(6), CMS has the discretion not to include an individual or entity on the preclusion list if it determines that “exceptional circumstances exist regarding beneficiary access to [Medicare Advantage] items, services, or drugs.”  In making the determination, “CMS takes into account:  (i) The degree to which beneficiary access to Medicare Advantage items, services, or drugs would be impaired; and (ii) Any other evidence that CMS deems relevant to its determination.”  42 C.F.R. § 422.222(a)(6).  In this case, Petitioner has not argued that CMS should have exercised its discretion under 42 C.F.R. § 422.222(a)(6) nor has he argued that any of the circumstances described in 42 C.F.R. § 422.222(a)(6) exist.  Therefore, it is not necessary for me to examine this regulation in the context of this case.