Kamal A Patel, M.D., DAB CR6180 (2022)

DECISION

The Centers for Medicare & Medicaid Services (CMS) denied Petitioner’s application for enrollment in the Medicare program pursuant to 42 C.F.R. § 424.530(a)(3) and (a)(4).  CMS properly concluded that Petitioner’s application could be denied because he had been convicted, within the previous ten years, of a felony offense detrimental to the Medicare program and its beneficiaries.  I therefore find that CMS had a legal basis to deny Petitioner’s Medicare enrollment application and affirm the determination by CMS to deny Petitioner’s enrollment in the Medicare program as a supplier.  Because CMS had a legal basis to deny Petitioner’s enrollment in the Medicare program as a supplier under 42 C.F.R. § 424.530(a)(3), I do not reach whether CMS also had a basis to deny Petitioner’s enrollment under 42 C.F.R. § 424.530(a)(4).  

I.   Background and Procedural History

Petitioner is a physician in Illinois.  CMS Ex. 2.  Petitioner was indicted in 2012 for

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violating the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)(1)(A)) and conspiring to defraud the United States in violation of 18 U.S.C. § 371.  CMS Ex. 2 at 104, 165-69.  Petitioner was found guilty on seven counts in the indictment for soliciting and receiving kickbacks for the referral of patients for the furnishing of home health care services to Medicare patients and the conspiring thereof.  CMS Ex. 2 at 106-07, 112, 114, 126, 146, 149-50 (Counts 1, 3, 5, 17, 37, 40, 41); United States v. Patel, 17 F. Supp. 3d 814 (N.D. Ill. 2014), aff’d United States v. Patel, 778 F.3d 607 (7th Cir. 2015).  On July 6, 2015, Illinois suspended Petitioner’s medical license after Petitioner “was found guilty of felony charges related to Medicare fraud.”  CMS Ex. 2 at 81-82, 238-39.  Illinois lifted the suspension almost six years later, on March 15, 2021, and subsequently placed Petitioner into “indefinite probation” status.  CMS Ex. 2 at 82, 239. 

On June 1, 2021, Petitioner filed an application to reenroll in the Medicare program.  CMS Exs. 8, 9.  Section 3 of that application asks about “final adverse legal actions.”  CMS Ex. 8 at 3; CMS Ex. 9 at 12.  The corresponding instructions explain this section “captures information regarding final adverse legal actions,” including “convictions, exclusions, license revocations and license suspensions.”  CMS Ex. 9 at 12.  In this section of the application, Petitioner references his conviction and “OIG” as an apparent reference to his OIG exclusion resulting from his conviction, but not his Illinois medical license suspension.  CMS Ex. 8 at 3; see CMS Ex. 3 at 10. 

On June 14, 2021, a CMS contractor issued an initial determination denying Petitioner’s enrollment under 42 C.F.R. § 424.530(a)(4), reasoning that Petitioner “submitted false or misleading information on the enrollment application to gain enrollment in the Medicare program,” when he “failed to disclose the IL license suspension.”  CMS Ex. 7 at 1.  Petitioner requested reconsideration on July 13, 2021, providing evidence and argument as to why CMS ought to enroll him in the Medicare program.  CMS Ex. 6.  Specifically, Petitioner argued that CMS had notice of his Illinois license suspension even though he did not include it on section 3 of the application, because Petitioner listed an “OIG” action in section 3 and had disclosed on his reinstatement application to the OIG in November 2019 that his Illinois license had been suspended.  CMS Ex. 6 at 2-3. 

Then, on September 13, 2021, one of CMS’s contractors notified Petitioner that it was reopening and revising the initial determination to deny enrollment.  CMS Ex. 5 at 1.  The revised initial determination included an additional ground for denial:  42 C.F.R. § 424.530(a)(3), based on Petitioner’s 2014 felony conviction, which CMS determined was detrimental to the best interests of the Medicare program and its beneficiaries.  Id.  Subsequently, Petitioner requested reconsideration of CMS’s revised initial determination denying his enrollment application.  CMS Ex. 3.  Petitioner restated his argument that CMS “had knowledge and notice” of the suspension via his disclosure to the OIG on a 2019 reinstatement application.  Id. at 2.  Petitioner further argued in response to the additional ground for denial in the revised initial determination that his 2014 felony conviction did not warrant denial of his enrollment application, because it presented “an

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issue of first impression in the Seventh Circuit” and is not detrimental to the best interests of the Medicare program.  Id. at 3-5. 

On March 3, 2022, CMS issued a reconsideration determination upholding the denial of enrollment based on 42 C.F.R. § 424.530(a)(3) and (a)(4).  Hearing Req. Attach.; CMS Ex. 1 at 1, 8. 

Petitioner filed a detailed hearing request with 8 exhibits (P. Exs. A-H) to dispute the denial of enrollment.  On May 2, 2022, the Civil Remedies Division acknowledged receipt of the hearing request and issued my Standing Prehearing Order.  In accordance with the Standing Prehearing Order, CMS filed its prehearing exchange, which included a motion for summary judgment/prehearing brief (CMS Br.) and 9 exhibits (CMS Exs. 1-9).  On July 5, 2022, Petitioner filed his prehearing exchange opposing CMS’s motion for summary judgment without additional exhibits.  CMS filed its reply brief on July 15, 2022. 

II.   Jurisdiction

Petitioner timely requested a hearing.  I have jurisdiction to hear and decide this case.  42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a); 498.3(b)(17); 498.5(l)(2). 

III.   Issues

Whether CMS had a legitimate basis to deny Petitioner’s Medicare enrollment application. 

IV.   Exhibits and Decision on the Record

Because Petitioner did not object to any of CMS’s proposed exhibits, I admit CMS’s proposed exhibits 1-9 into the record.  See Standing Prehearing Order ¶ 5(e)(vii); Civil Remedies Division Procedures (CRDP) § 14(e).  Because all of Petitioner’s proposed exhibits were provided during the reconsideration stage of the appeal and CMS does not otherwise object, I admit Petitioner’s exhibits A-H into the record.  CMS Br. at n4; compare CMS Ex. 2 with P. Exs. A-H; see 42 C.F.R. §§ 405.803(e) and 498.56(e).  

Neither CMS, nor Petitioner proposed any witnesses.  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.  Standing Prehearing Order ¶ 5(e)(iv); CRDP § 19(d).  I deny CMS’s motion for summary judgment as moot. 

V.   Applicable Law

The Social Security Act (Act) authorizes the Secretary of Health and Human Services

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(Secretary) to create regulations governing the enrollment of suppliers in the Medicare program and to refuse to enter into a supplier agreement with any physician who “has been convicted of a felony under Federal or State law for an offense which the Secretary determines is detrimental to the best interests of the [Medicare] program or program beneficiaries.”  42 U.S.C. §§ 1395u(h)(8), 1395cc(b)(2)(D).  For Medicare program purposes, a physician is a supplier.  42 U.S.C. § 1395x(d).  

Under the Secretary’s regulations, CMS may deny enrollment in the Medicare program to any supplier who has been convicted within the last ten years of a federal or state felony offense that CMS determines is detrimental to the best interests of the Medicare program or its beneficiaries.  42 C.F.R. § 424.530(a)(3)(i).  Further, the regulations provide a non-exhaustive list of the types of felony offenses that CMS considers detrimental to the best interests of the program and its beneficiaries.  42 C.F.R. § 424.530(a)(3)(i).  That list of felonies includes all felonies, the conviction of which would result in a mandatory exclusion from participation in federal health care programs under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)).  42 C.F.R. § 424.535(a)(3)(i)(D).  The Act mandates exclusion when an individual is convicted, after August 21, 1996, of an offense “in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program . . . operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.”  42 U.S.C. § 1320a-7(a)(3). 

When a supplier is convicted of a felony specifically listed in the regulations, such felonies are considered per se detrimental to the best interests of the Medicare program and its beneficiaries.  Letantia Bussell, M.D., DAB No. 2196 at 9 (2008). 

VI.   Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold and followed by pertinent findings of fact and analysis. 

A.  CMS had a legitimate basis under 42 C.F.R. § 424.530(a)(3) to deny Petitioner’s Medicare enrollment and billing privileges, because Petitioner was convicted of a felony within the last ten years related to health care fraud.  Petitioner’s felony offense was per se detrimental to the best interests of the Medicare program and its beneficiaries because Petitioner’s conviction would, and did, subject him to mandatory exclusion under 42 U.S.C. § 1320a-7(a)(3).  42 C.F.R. § 424.530(a)(3)(i)(D).

In the present case, the record establishes that Petitioner was convicted of a felony within the last ten years.  In 2014, the District Court ruled in a bench trial that Petitioner was

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guilty of six counts of violating the “Anti-Kickback Statute,” 42 U.S.C. § 1320a-7b(b)(1)(A), and one count of conspiracy to violate the Anti-Kickback Statute, 18 U.S.C. § 371, in connection with his acceptance of payments from a home health care company as charged in the indictment.  CMS Ex. 2 at 177-78; United States v. Patel, 17 F. Supp. 3d 814 at 817 (N.D. Ill. 2014), aff’d United States v. Patel, 778 F.3d 607 at 608 (7th Cir. 2015).  In so ruling, the District Court found that the government “established beyond a reasonable doubt that Defendant knowingly and willfully ‘referred’ patients to a home health care provider in exchange for remuneration and conspired with others to do so.”  CMS Ex. 2 at 178; United States v. Patel, 17 F. Supp. 3d 814 at 816-17.  Violation of 42 U.S.C. § 1320a-7b(b)(1)(A) is a felony offense.  See 42 U.S.C. § 1320a-7b(b)(1)(B). 

Further, the record supports the conclusion that Petitioner was convicted of an offense that is per se detrimental to the interests of the Medicare program and its beneficiaries.  Specifically, Petitioner was convicted of a criminal offense for which mandatory exclusion would result, because Petitioner’s criminal offense is a health care fraud felony subject to mandatory exclusion:  

The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1320a-7b(f) of this title): 

****

(3) Felony conviction relating to health care fraud
Any individual or entity that has been convicted for an offense . . . in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program . . . operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct. 

42 U.S.C. § 1320a-7(a)(3). 

The District Court ruled that Petitioner received kickbacks in exchange for referring Medicare-eligible patients for home health services and conspired thereto in violation of the Anti-Kickback Statute.  United States v. Patel, 17 F. Supp. 3d 814 (N.D. Ill. 2014).  Convictions of Anti-Kickback Statute violations fall squarely within the scope of the mandatory exclusion provision at Section 1128(a)(3).  The Anti-Kickback Statute was enacted to “strengthen the capability of the Government to detect, prosecute, and punish fraudulent activities under the [M]edicare and [M]edicaid programs,” H.R. Rep. No. 393(II), 95th Cong., 1st Sess. 53 (1977), reprinted in 1979 U.S.C.C.A.N. 3039, 3040.  And the IG did, in fact, exclude Petitioner based on his conviction.  See P. Ex. C; P. Br.

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at 5.¹  As such, I find that Petitioner’s conviction is per se detrimental to the interests of the Medicare program and its beneficiaries. 

Petitioner argues that the facts and circumstances pertaining to his conviction do not support 42 C.F.R. § 424.530(a)(3) as a legitimate basis for CMS to deny his enrollment application, because he contends that his particular conviction does not require mandatory exclusion under section 1128(a)(3) of the Act: 

Though on its face Petitioner’s conviction for kickbacks in violation of § 1320a-7b is related to health care fraud, the circumstances surrounding his conviction are exceptional, thereby removing his conviction from the kinds of convictions that require mandatory exclusion under Subsection three (3) of the Act. 

Hearing Req. Br. at 4-5.  Petitioner further argues that Petitioner’s case was one of first impression in the Seventh Circuit, and the Court ultimately adopted a “novel/unusual” and more expansive interpretation of “referral” under § 1320a-7b than was contemplated when Congress legislated section 1128(a)(3) of the Act.  Id. at 5 citing United States v. Patel, 778 F.3d 607 (7th Cir. 2015).  Petitioner contends that the IG’s reinstatement of Petitioner’s eligibility to participate in Federal Healthcare programs some five years or more after his conviction “further corroborat[es] the unique circumstances surrounding Petitioner’s conviction.”  Id. at 5.  As such, Petitioner argues CMS’s denial of his application was arbitrary and capricious and should be reversed.  Id. at 5-6. 

Contrary to Petitioner’s contentions, even if the Seventh Circuit’s interpretation of “referral” under § 1320a-7b was a novel interpretation – which the Seventh Circuit explicitly rejected – or broader than as determined in other cases,² it does not

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legally follow that Petitioner’s conviction is outside the scope of mandatory exclusion under Section 1128(a)(3) of the Act.  Section 1128(a)(3) of the Act is not confined only to felony convictions of health care fraud statutes enacted prior to its own enactment or to interpretations of such statutes pre-existing the mandatory exclusion provision’s enactment.  Moreover, Petitioner had the opportunity to request a hearing challenging the basis for the IG’s exclusion if Petitioner believed that the IG lacked a proper basis for his exclusion.  Petitioner has offered no such evidence. 

CMS has the authority to deny enrollment for any of the reasons stated in 42 C.F.R. § 424.530, including for a felony conviction in the last ten years that is detrimental to the best interests of the Medicare program or its beneficiaries.  42 C.F.R. § 424.530(a)(3).  In the present case, a CMS contractor denied Petitioner’s enrollment application based on his felony conviction, because, in part, the conviction is less than ten years old.  CMS Ex. 1.  Further, on reconsideration, the CMS hearing officer provided a factual analysis as to why Petitioner’s conviction was detrimental to the best interests of the Medicare program and its beneficiaries.  Id. at 5-7.  As stated above, I conclude that the conviction is per se detrimental.  Therefore, I need not review the hearing officer’s factual analysis.  However, it is clear that the hearing officer believed denial of the enrollment application was in the best interests of the Medicare program.  

Additionally, although CMS revoked and denied Petitioner’s enrollment, in part, because his conviction meets the requirements for exclusion under section 1128(a)(3), it does not

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follow that Petitioner’s reinstatement by the IG following his exclusion contravenes CMS’s authority to deny Petitioner’s enrollment application.  CMS’s authority to deny or revoke is distinct from the IG’s authority to exclude.  See Ahmed v. Sebelius, 710 F. Supp. 2d 167, 175-76 (D. Mass. 2010); Dr. Robert Kanowitz, DAB No. 2942 at 6-7 (2019).  Therefore, the IG’s length of exclusion does not control the length of time CMS may deny Petitioner’s enrollment in the Medicare program based on his conviction. 

Petitioner also asserts that he accepts responsibility for his conduct in the face of the unique circumstances surrounding his conviction and states that he has undergone “exhaustive rehabilitation.”  Hearing Req. Br. at 5-6.  In particular, Petitioner notes that he volunteers with the IAMA and FIA (P. Ex. D), has worked with the AAPI Origin’s Committee on Convalescent Plasma, and has also regularly volunteered with the American Red Cross Center (P. Ex. E).  Hearing Req. Br. at 1-2, n1, 5-6, n2.  In addition, Petitioner states that he has an active probationary medical license, a current controlled substance license, and a DEA license.  Hearing Req. Br. at 2-3; P. Ex. F. 

Petitioner’s volunteer efforts are admirable and substantial though it is unclear how much were performed in furtherance of the community service hours ordered as part of his sentence from the District Court.  Regardless, my authority is limited to determining if CMS had a legitimate basis to deny Petitioner’s enrollment application.  CMS has discretion allow enrollment or to deny enrollment even if Petitioner has an active probationary medical license.  In this case, CMS did not believe Petitioner ought to be reenrolled.  I must uphold that determination so long as there is a legal and factual basis to do so.  See Bussell, DAB No. 2196 at 13.  As explained above, there is such a legal and factual basis. 

B.  Because I find that CMS had a legitimate basis under 42 C.F.R. § 424.530(a)(3) to deny Petitioner’s Medicare enrollment and billing privileges, I need not reach whether CMS had an additional legitimate basis for denying Petitioner’s Medicare enrollment and billing privileges.

CMS needs only one legal basis to a deny a supplier’s Medicare enrollment and billing privileges.  42 C.F.R. § 424.530(a).  As I have already found that CMS had a legal basis to deny Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.530(a)(3), I do not reach whether denial under 42 C.F.R. § 424.530(a)(4) would also be a legitimate basis. 

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VII.   Conclusion

I affirm the denial of Petitioner’s Medicare enrollment and billing privileges.

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Endnotes

¹ It is not in dispute that the IG excluded Petitioner based on his conviction for violating the Anti-Kickback Statute. P. Br. at 5; CMS Br. at 9-10, 17-18.  However, neither party has provided as an exhibit the IG’s notice of exclusion or otherwise indicated the specific statutory basis for which the IG excluded Petitioner.  Petitioner does not argue that the IG’s exclusion was based on a permissive statutory basis as opposed to a mandatory basis under section 1128(a) of the Act. 

² Patel, 778 F.3d at 616 (holding that “in passing the Anti-Kickback Statute, Congress intended to criminalize the receipt of kickbacks in return for a physician's certification or recertification, through a signed Form 485, that a patient requires Medicare-reimbursed care.  The word “referral” is commonly used—including by Congress in the Stark Act—in a way that extends to such authorizations. Moreover, a narrow definition of the term would defeat the central purposes of the Anti-Kickback Statute.”); id. at 618 (“[t]he definition of “referral” put forth by the government is in common usage, including by Congress itself. Most importantly, we think that Congress intended for the Statute to apply to certifications and recertifications for Medicare-reimbursed care.  To hold otherwise would defeat Congress’s purpose in passing the statute.”); but see United States v. Polin,194 F.3d 863, 865-67 (7th Cir. 1999) (referring patients to a specific provider violated the Anti-Kickback Statute (AKS)); United States v. Miles, 360 F.3d 472, 479-80 (5th Cir. 2004) (defendants did not compensate individuals who “select[ed] the particular home health care provider”); United States ex rel. Perales v. St. Margaret’s Hosp., 243 F. Supp. 2d 843, 854 (C.D. Ill. 2003) (situation where physician “played no role in determining which facility a patient would go to” would not contravene AKS).  Additionally, the Seventh Circuit specifically commented that “Patel’s nervous behavior suggests he knew that these actions were illegal.”  Id.  And that other doctors should know that this behavior is illegal as well – owing at the very least to a 1995 Special Fraud Alert to the health care provider community that stated “[p]ayment of a fee to a physician for each plan of care certified by the physician on behalf of the home health agency” is a form of illegal kickback. Id. (quoting Home Health Fraud, and Fraud and Abuse in the Provision of Medical Supplies to Nursing Facilities, 60 Fed. Reg. 40,847, 40,848 (Aug. 10, 1995)).