Stuart Lewis, DAB CR6216 (2023)

DECISION

Petitioner, Stuart Lewis, is an osteopath, practicing in Florida, who participated in the Medicare program as a supplier of services.  On November 24, 2020, he was convicted of conspiracy to commit wire fraud and bank fraud.  He did not report the conviction to the Medicare contractor.  Based on his felony conviction and his failure to report the adverse legal action, the Medicare contractor, First Coast Services Options, Inc., acting on behalf of CMS, revoked his Medicare billing privileges, imposed a ten-year reenrollment bar, and added his name to the Medicare preclusion list.

Petitioner now appeals.

I affirm CMS’s determination.  I find that CMS is authorized to revoke Petitioner’s Medicare privileges and to add his name to the Medicare preclusion list because:  1)  within the ten years preceding this action, Petitioner Lewis was convicted of a felony that CMS reasonably determined is detrimental to the best interests of the Medicare program and its beneficiaries; 2) Petitioner was convicted of a felony that would – and, in fact, did – result in his mandatory exclusion under section 1128(a) of the Social Security Act (Act); and 3) Petitioner failed to report the conviction to the Medicare contractor.

I have no authority to review the length of the reenrollment bar.

Page 2

Statutory and Regulatory Background

The Medicare Program.  The Medicare program, Title XVIII of the Social Security Act (Act), is a federally-subsidized insurance program that provides health care benefits to the elderly, disabled, and those suffering from end stage renal disease.  Medicare is divided into four parts: 

• Part A is the hospital insurance program.  It covers hospital services, post-hospital extended care, post-hospitalization home health services, and hospice care.  Act § 1811 (42 U.S.C. § 1395c);
• Part B, which is voluntary, is the supplementary medical insurance program, covering physician, outpatient, home health, and other services.  Act § 1832 (42 U.S.C. § 1395k);
• Part C is the Medicare Advantage program, which allows its participants to enroll in “Medicare + Choice” plans, managed by organizations, such as health maintenance organizations, that receive a fixed payment for each enrollee.  Act § 1851 (42 U.S.C. § 1395w-21); and
• Part D is the voluntary prescription drug benefit program.  Act § 1860D (42 U.S.C. § 1395w-101). 

The Medicare program is administered by CMS, acting on behalf of the Secretary of Health and Human Services.  CMS contracts with Medicare administrative contractors, who process and pay reimbursement claims and perform other duties necessary to carry out program purposes.  Act § 1842 (42 U.S.C. § 1395u).  Contractors pay claims to “providers” (Part A) and “suppliers” (Part B).  Physicians and other practitioners who furnish healthcare services may participate in the program as “suppliers” of services; however, they must enroll in the program in order to receive Medicare payments.  Act § 1861(d), (q), (r) (42 U.S.C. § 1395x(d), (q), (r)); 42 C.F.R. §§ 400.202; 424.505.

Section 424.535(a) authorizes CMS to revoke a supplier’s Medicare enrollment and billing privileges on one or more of the grounds set forth under that subsection.  So long as CMS shows that one of the regulatory bases exists, I must uphold the revocation.  Wassim Younes, M.D. and Wassim Younes, M.D., P.L.C., DAB No. 2861 at 8 (2018), (citing Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016)).

Procedural Background

The contractor’s determination.  Here, by letter dated November 5, 2021, the Medicare contractor, First Coast Service Options, Inc., advised Petitioner that his Medicare

Page 3

privileges were revoked, effective November 24, 2020.  The letter explained that the contractor revoked Petitioner’s Medicare privileges for two reasons:

1)  pursuant to 42 C.F.R. § 424.535(a)(3), because Petitioner Lewis was convicted of a felony, as defined in 42 C.F.R. § 1001.2 – (conspiracy to commit wire fraud and bank fraud, in violation of 18 U.S.C. § 1349); and

2)  pursuant to 42 C.F.R. § 424.535(a)(9), because Petitioner did not notify CMS of the adverse legal action within 30 days, as required by 42 C.F.R. § 424.516.

CMS Ex. 3 at 1.  The contractor imposed a ten-year reenrollment bar (until November 25, 2030), pursuant to 42 C.F.R. § 424.535(c).  CMS Ex. 3 at 3.

The letter also advised Petitioner that the contractor added him to CMS’s preclusion list, as authorized by 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  It explained that, if Petitioner requested reconsideration, this action would become effective on the date the reconsidered determination was issued.  CMS Ex. 3 at 1-2.

The reconsideration.  Petitioner requested reconsideration.  In a reconsidered determination, dated February 4, 2022, a CMS hearing officer upheld the revocation under sections 424.535(a)(3) and 424.535(a)(9).  Specifically, she found that: 

• Petitioner was an active participant in a scheme to defraud a financial institution, which is per se detrimental to the best interests of the Medicare program and its beneficiaries under section 424.535(a)(3)(ii)(D);
• Based on the facts and circumstances of the offense, Petitioner’s felony offense is detrimental to the best interests of the Medicare program;
• Petitioner’s felony offense is one of the enumerated offenses that would result in mandatory exclusion under section 1128(a) of the Act; and
• Petitioner did not report his felony conviction to the Medicare contractor within 30 days; in fact, Petitioner did not report his conviction at all.

CMS Ex. 1 at 4, 5.

The hearing officer also upheld the determination to include Petitioner’s name on CMS’s preclusion list.  CMS Ex. 1 at 6-8.

Summary judgment/decision based on the written record.  Petitioner timely appealed, and the parties have filed cross-motions for summary judgment.

Page 4

Although the parties have filed cross-motions for summary judgment, this matter may be decided based on the written record, without considering whether the standards for summary judgment have been met.  In my pre-hearing order, I directed the parties to list all proposed witnesses and to submit, as a proposed exhibit, the complete, written direct testimony of any proposed witness.  Acknowledgment and Pre-hearing Order at 3, 5 (¶¶ 4(c)(iv), 8) (April 8, 2022).  Neither party proposed any witnesses.  Because there are no witnesses to be examined or cross-examined, an in-person hearing would serve no purpose, and I may decide this case based on the written record.¹

Exhibits.  CMS submits its motion for summary judgment and brief (CMS Br.) with ten exhibits (CMS Exs. 1-10).  Petitioner submits his cross-motion for summary judgment and brief (P. Br.) with no exhibits.

In the absence of any objections, I admit into evidence CMS Exs. 1-10.

Discussion

1. Because Petitioner Lewis was, within ten years preceding the revocation, convicted of a felony that CMS reasonably finds detrimental to the best interests of the Medicare program; because he was convicted of a felony that resulted in his mandatory exclusion under section 1128(a) of the Act; and because he failed to report his conviction to the Medicare contractor, CMS properly revoked his Medicare enrollment.  42 C.F.R. §§ 424.535(a)(3) and 424.535(a)(9).²

Revocation of enrollment.  CMS may revoke a supplier’s Medicare enrollment and billing privileges if, within the preceding ten years, the supplier or any owner or managing employee 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); see also Social Security Act (Act) §§ 1842(h)(8) and 1866(b)(2)(D).  Offenses for which billing privileges may be terminated include – but are not limited to – financial crimes such as extortion, embezzlement, income tax evasion,

Page 5

insurance fraud, and similar crimes.  42 C.F.R. § 424.535(a)(3)(ii)(B).  They include felonies that would result in mandatory exclusion under section 1128(a) of the Act.  42 C.F.R. § 424.535(a)(3)(D).

CMS may also revoke Medicare privileges if a supplier does not comply with the reporting requirements specified in section 424.516(d).  42 C.F.R. § 424.535(a)(9).  Under section 424.516(d), physicians must report to their Medicare contractor, within 30 days, “any adverse legal action.”

Petitioner Lewis’s conviction.  In an information, filed August 31, 2020, the United States Attorney for the Southern District of Florida charged Petitioner Lewis with conspiracy to commit wire fraud and bank fraud, in violation of 18 U.S. Code § 1349.  CMS Ex. 7.  Under section 1349, anyone who conspires to commit bank fraud (18 U.S.C. § 1344) or wire fraud (18 U.S.C. § 1343) is subject to the same penalties as prescribed for those offenses.

Petitioner Lewis pleaded guilty to the charge.  As part of his plea, he explained that Synchrony Bank, a financial institution, had offered to consumers a credit network for financing health care expenses.  Health care providers, such as physicians, could enroll in the program and establish a “merchant account.”  Consumers of health care services could apply for a CareCredit credit card, which could be used to pay for out-of-pocket medical expenses not covered by medical insurance and provided by a pre-approved network of healthcare providers who were enrolled with CareCredit.

Petitioner Lewis admitted that he and his co-conspirator, Chiropractor Dennis Nobbe (who was not eligible to participate), opened an account under Petitioner Lewis’s name, intentionally disguising the fact that Dennis Nobbe, not Petitioner, would be treating the patients enrolled in CareCredit.  Petitioner Lewis allowed Nobbe to use the account and kept, as a kick-back, a percentage of the funds deposited into it.  Dennis Nobbe routinely charged patients $2,000 to $6,000 for services that were not rendered.  When patients complained, Petitioner Lewis submitted the responses, including false invoices, that Nobbe had drafted.  Between November 2018 and September 2019, approximately $713,876 was deposited into Petitioner Lewis’s account, and Petitioner Lewis personally received approximately $22,480 in kick-backs.  CMS Ex. 9; see CMS Ex. 8.

On November 24, 2020, the U.S. District Court for the Southern District of Florida accepted Petitioner’s guilty plea and, on June 14, 2021, entered judgment against him.  CMS Ex. 6 at 4; CMS Ex. 10 at 1.  The court sentenced Petitioner Lewis to the time served in jail plus three years of supervised release.  As conditions of his supervision, the court ordered him to perform 200 hours of community service and to participate in a home detention program for six months.  The court also ordered him to pay $608,781 in restitution.  CMS Ex. 10.

Page 6

Legal basis for revocation.  The Departmental Appeals Board has consistently held that an administrative law judge’s review of CMS’s determination to revoke a supplier’s Medicare enrollment is limited to deciding whether CMS has established one or more of the grounds specified in section 424.535(a).  William Garner, MD, DAB No. 3026 at 16 (2020); Norman Johnson, M.D., DAB No. 2779 at 11 (2017), and cases cited therein.  Although CMS itself has the discretion to consider “unique or mitigating circumstances in deciding whether, or how, to exercise its revocation authority,” I do not.  I may not substitute my discretion for that of CMS in determining whether the revocation is appropriate.  Norman Johnson at 11, citing Care Pro Home Health, Inc., DAB No. 2723 at 9 n.8 (2016); Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2009), aff’d., Ahmed v. Sebelius, 710 F.Supp.2d 167 (D. Mass. 2010).

Here, CMS plainly had the authority to revoke Petitioner’s Medicare enrollment under section 424.535(a)(3).  Petitioner was convicted of a financial crime that was a felony and involved fraud.  I consider this crime similar to those, such as insurance fraud, that are specifically identified in the regulation as “detrimental to the best interests of the Medicare program and its beneficiaries.”

In his hearing request, Petitioner argued that, because his crime was “in no way connected to the delivery of health care or defrauding or improperly billing a federal health care program,” but was limited to defrauding the bank itself, his Medicare enrollment should not be revoked.  Hearing Request at 3-4.  He cites no authority for this claim and has not repeated it in his motion for summary judgment and brief.³

I do not agree that Petitioner’s crime was unrelated to the delivery of a healthcare item or service.  He established a fraudulent account that was supposed to receive payment for healthcare services.  An account ostensibly designed to pay for healthcare services is unmistakably related to the delivery of healthcare services.  See Stuart Todd Lewis, DAB CR6121 at 11 (2022).  Moreover, nothing in the regulation suggests that CMS’s revocation authority is limited to program-related crimes or to the delivery of a healthcare item or service.  As the Board has observed, in promulgating section 424.535(a)(3), “CMS has ‘deem[ed] all financial crimes to be detrimental to Medicare.’”  Cornelius M. Donohue, DPM, DAB No. 2888 at 4-5 (2018), quoting Stanley Beekman, D.P.M., DAB No. 2650 at 7 (2015) (emphasis added).  Thus, the Board has upheld revocations in cases involving a wide variety of financial felonies that were not related to any health care

Page 7

program.  See, e.g., Daniel Wiltz, M.D., DAB No. 2864 (2018) (making false statements to investigators in an insurance fraud probe); Francis J. Cinelli Sr., D.O., DAB No. 2834 (2017) (aiding and abetting the filing of a false tax return); Donna Maneice, M.D., DAB No. 2826 (2017) (attempted income tax evasion and filing a false tax return); Stanley Beekman, DAB No. 2650 (2015) (making false statements on a bank loan application).

And, even if Petitioner were not subject to revocation based on section 424.535(a)(3)(i), CMS properly revoked his enrollment because he was convicted of a felony that would result in a mandatory exclusion under section 1128(a) of the Act.  Not only would it result in an exclusion, his conviction has resulted in an exclusion under section 1128(a)(3).  Effective January 19, 2022, the Inspector General (IG) excluded Petitioner from participating in Medicare, Medicaid, and all federal health care programs for a minimum of eight years because he was convicted of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service.  CMS Ex. 4.  Petitioner appealed, and, in a decision dated July 22, 2022, an administrative law judge upheld the exclusion.  Petitioner did not further appeal, so that decision is final and binding.  Lewis, DAB CR6121; see 42 C.F.R. § 1005.20(d).

In his hearing request, Petitioner argues – again without authority – that CMS may not rely on the IG’s exclusion and that doing so “deprives [Petitioner] of the impartial review to which he is entitled.”  Hearing Request at 6.  Again, Petitioner did not repeat these arguments in his summary judgment motion and seems to have abandoned them.  See Acknowledgment and Pre-hearing Order at 3.  In any event, his arguments fail for three reasons:  

• First, CMS need not rely on the IG’s determination to impose an exclusion; under section 424.535(a)(3)(D), if the felony “would result in mandatory exclusion,” CMS may revoke.  Independent of the IG’s actions, I find (as did the CMS hearing officer) that Petitioner’s felony conviction would result in his exclusion from program participation under section 1128(a).
• Second, nothing precludes an agency from basing an action on a final determination made by a court or another government agency.  In fact, such derivative actions are common.  See, e.g., 42 C.F.R. § 1001.2007(d).
• Third, Petitioner can hardly complain that he was denied an impartial review.  In addition to these proceedings, he was granted an independent review of the IG exclusion.  Lewis, DAB CR6121.

Failing to report the conviction.  As noted above, I must uphold the revocation so long as one regulatory basis supports it.  In addition to revoking under section 424.535(a)(3), CMS may revoke Petitioner’s Medicare enrollment under section 424.535(a)(9) because

Page 8

he admittedly did not report his felony conviction to the Medicare contractor.  In his hearing request, Petitioner characterizes his failing to report as an “unintentional misstep” and blames his counsel, who was “not as prepared or experienced in the intricacies of the Medicare regulations and appeals.”  Hearing Request at 7.  It is well-established that participants in the Medicare program have a duty to familiarize themselves with Medicare requirements.  Francis J. Cinelli, Sr., DAB No. 2834 at 10 (2017); Gulf South Medical, DAB No. 2400 at 9 (2011); John Hartman, D.O., DAB No. 2564 at 3 (quoting Heckler v. Cmty. Health Servs. of Crawford County, Inc., 467 U.S. 51, 63 (1984) (“those who deal with the government are expected to know the law[.]”)).  A supplier cannot escape his obligation to report by shifting the responsibility to someone else.  Angela R. Styles, DAB No. 2882 at 9-10 (2018).

2.  I have no authority to review CMS’s determination to impose a ten-year reenrollment bar.

When a supplier’s billing privileges are revoked, he may not participate in the Medicare program until the end of his reenrollment bar, which must be for a minimum of one year but no more than ten years (except under circumstance that don’t apply here), depending on the severity of the underlying offense.  42 C.F.R. § 424.535(c)(1).  Here, CMS imposed a ten-year reenrollment bar.

Petitioner complains about the length of the reenrollment bar, arguing that CMS has not explained “how it applied the facts of this case to a particular number of years, let alone a decade-long bar.”  P. Br. at 4.  According to Petitioner, CMS’s determination is “arbitrary and capricious, an abuse of discretion, and not in accordance with law.”  P. Br. at 5.

Because the length of a reenrollment bar is not listed as an appealable determination, I have no authority to review it.  42 C.F.R. § 498.3(b); Linda Silva, P.A., DAB No. 2966 at 11 (2019); Vijendra Dave, M.D., DAB No. 2672 at 9-12 (2016); accord, William Garner, MD, DAB No. 3026 at 16 (2020), Lilia Gorovits, MD, DAB No. 2985 at 15-16 (2020).

3. CMS acted within its authority when it added Petitioner to its preclusion list because his Medicare privileges were revoked for conduct detrimental to the best interests of the Medicare program, and he is under a reenrollment bar.  I have no authority to review CMS’s determination as to the length of time he remains on the preclusion list.

The preclusion list.  Effective January 1, 2019, CMS implemented a “preclusion list” as part of its effort to “prevent fraud, waste, and abuse, and to protect Medicare enrollees,” particularly with respect to prescription drug abuse.⁴  Pursuant to 42 C.F.R. § 422.2 (Part

Page 9

C) and 42 C.F.R. § 423.100 (Part D) CMS’s “preclusion list” includes individuals and entities that: 

• are currently revoked from Medicare enrollment, are under an active reenrollment bar, and CMS determines that the underlying conduct leading to the revocation is detrimental to the best interests of the Medicare program; or
• have engaged in behavior for which CMS could have revoked the prescriber, individual, or entity had it been enrolled in the Medicare program, and CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program.

Review of Petitioner’s inclusion on the preclusion list.  My review here is limited to whether CMS had the authority to include Petitioner on the preclusion list.  42 C.F.R. § 498.3(b)(20); see 83 Fed. Reg. 16,642-16,643 (Apr. 16, 2018) (explaining that appeals are limited to the individual’s inclusion on the preclusion list).

I have discussed in some detail the elements of Petitioner Lewis’s crime.  He was convicted of a crime that is detrimental to the best interests of the Medicare program and its beneficiaries.  CMS was therefore authorized to revoke his Medicare enrollment and billing privileges and to impose a reenrollment bar.  42 C.F.R. §§ 424.535(a)(3)(B); 424.535(c).  Because his enrollment was revoked for a felony conviction deemed detrimental to the best interests of the Medicare program and its beneficiaries and because he is under a reenrollment bar, CMS is authorized to add him to the Medicare preclusion list.  42 C.F.R. §§ 422.2; 423.100.

Because CMS has established a basis for placing Petitioner on the preclusion list, I must  uphold its determination to do so.  See Wendell Foo, M.D., DAB No. 2904 at 3 (2018); Wassim Younes, M.D., P.L.C., DAB No. 2861 at 8 (2018), citing Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016).

Petitioner, however, complains about the length of time he will be on the preclusion list, asserting that CMS “provides no reasonable explanation” for imposing ten years.  P. Br. at 5.  In fact, ten years is the standard.  Unless CMS finds that a shorter period is warranted, the supplier remains on the preclusion list for ten years, beginning on the date of the felony conviction.  42 C.F.R. § 422.222(a)(5)(iii).

Page 10

Having determined that CMS properly added Petitioner to the preclusion list, I have no authority to review CMS’s determination as to how long he remains there.  See 42 C.F.R. § 498.3(b); Vijendra Dave, M.D., DAB No. 2672 at 9-12 (2016) (limiting ALJ review to the determinations in section 498.3(b)).

Conclusion

CMS justifiably determined that Petitioner Lewis was convicted of a felony detrimental to the best interests of the Medicare program and its beneficiaries; it may therefore revoke his Medicare enrollment and billing privileges and impose a reenrollment bar.  In addition, CMS may revoke Petitioner’s Medicare enrollment because he did not report his conviction to the Medicare contractor.

CMS was also authorized to include Petitioner on the preclusion list because his Medicare enrollment was revoked for conduct detrimental to the best interests of the Medicare program, and because he is under a reenrollment bar.  I have no authority to review the lengths of the reenrollment bar nor his time on the preclusion list.

For these reasons, I affirm CMS’s determinations.

---

Endnotes:

¹  That I decide this case based on the written record does not mean that Petitioner has not had a hearing.  Courts recognize that, although a case may be decided on summary judgment or based on the written record, the administrative law judge, by considering the evidence and applying the law, has granted the petitioner a hearing.  See CNG Transmission Corp. v. FERC, 40 F. 3d 289, 293 (D.C. Cir. 1994) (holding that a “paper hearing” satisfies statutory requirements for “notice and opportunity for hearing”).

²  My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.

³  In fact, Petitioner appears to have waived virtually all of the arguments he made in his hearing request.  See Acknowledgment and Pre-hearing Order at 3 (requiring that a brief address “all issues of law and fact, including any Motion to Dismiss or Motion for Summary Judgment.”).  In his motion for summary judgment and brief in support, he no longer argues that CMS lacks the authority to revoke his Medicare enrollment, limiting his arguments to the length of the enrollment bar and his time on the preclusion list (discussed below).

⁴  Apparently, CMS considered requiring Medicare enrollment for all providers and suppliers of Medicare Advantage services and subscribers of Part D drugs but, ultimately, opted for a preclusion list instead.  CMS concluded that the burden of requiring Medicare enrollment for hundreds of thousands of additional providers, suppliers, and prescribers would be too great and would threaten beneficiary access to prescriptions and services.  See 82 Fed. Reg. at 56,442, 56,448 (November 28, 2017); 83 Fed. Reg. 16,646 (April 16, 2018).