Eric Schmidt, MD, DAB CR6249 (2023)

DECISION

The Medicare enrollment and billing privileges of Petitioner, Eric Schmidt, MD, are revoked pursuant to 42 C.F.R. § 424.535(a)(12)(i), effective November 19, 2020.¹  There is a basis for listing Petitioner on the Centers for Medicare & Medicaid Services (CMS) preclusion list for the duration of his three-year re-enrollment bar. 

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I.    Background

Noridian Healthcare Solutions, a CMS Medicare administrative contractor (MAC), notified Petitioner by letter dated October 20, 2020, that his Medicare enrollment and billing privileges were revoked effective November 19, 2020.  The MAC revoked Petitioner’s enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(12), because Petitioner’s participation in California Medicaid (Medi-Cal) was terminated.  The MAC also advised Petitioner that:

He was subject to a three-year bar to re-enrollment pursuant to 42 C.F.R. § 424.535(c); and

He was to be included on the CMS preclusion list pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).

CMS Exhibit (Ex.) 1 at 29-31.

Petitioner requested reconsideration by a letter dated November 12, 2020.  CMS Ex. 1 at 11-27.  On March 12, 2021, a CMS hearing officer issued a reconsidered determination upholding the revocation of Petitioner’s Medicare enrollment and billing privileges effective November 19, 2020.  The hearing officer also upheld adding Petitioner’s name to the CMS preclusion list effective March 12, 2021.  CMS Ex. 1 at 1-10.

Petitioner requested a hearing before an administrative law judge (ALJ) on May 11, 2021 (RFH).  On May 12, 2021, the case was assigned to me for hearing and decision and an Acknowledgment Letter and my Standing Order (Standing Order) were issued.

On June 8, 2021, CMS filed a motion for summary judgment (CMS Br.) and CMS Exs. 1 through 3.²  On June 16, 2022, Petitioner filed his prehearing brief and opposition to CMS’s motion for summary judgment (P. Br.), Petitioner’s exhibits (P. Exs.) 1 through 3, and a motion for remand to CMS.  On July 1, 2022, CMS filed a reply brief.

Petitioner did not object to my consideration of CMS Exs. 1 through 3, and they are admitted as evidence.  CMS objected to P. Exs. 1 through 3 on the grounds that the three documents post-date the March 12, 2021 reconsidered determination by “15 months or

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more” and they are irrelevant to the issues before me, i.e., whether CMS had a basis to revoke Petitioner’s Medicare enrollment and billing privileges and place Petitioner on the preclusion list.  P. Ex. 1 is a screenshot of part of the Medi-Cal Suspended and Ineligible Provider List, in which Petitioner no longer appears to be included.  P. Ex. 2 is a February 2, 2022 letter from the Inspector General of the United States Department of Health and Human Services (IG) informing Petitioner that his request for reinstatement of his eligibility to participate as a provider of services under the Medicare and other federal health care programs was approved.  P. Ex. 3 is a February 16, 2022 letter from the California Department of Health informing Petitioner that his request for reinstatement as a provider in the Medi-Cal program and to have his name removed from the department’s suspended and ineligible provider list was granted.  Petitioner’s exhibits are relevant to his defense theory.  42 C.F.R. § 498.61; Fed. R. Evid. 401.  CMS did not specifically cite 42 C.F.R. § 498.56(e) as a basis for excluding Petitioner’s exhibits.  Nevertheless, the regulation must be considered.  Under 42 C.F.R. § 498.56(e), any evidence presented for the first time before an ALJ must be examined by the ALJ for a determination of whether there is good cause to admit the new documentary evidence.  If there is good cause the evidence may be admitted and considered.  If there is not good cause the evidence may not be considered.  Petitioner discussed 42 C.F.R. § 498.56 in his brief.  P. Br. at 6-7.  Petitioner also filed a motion on June 16, 2022, to add the new evidence to the record arguing the evidence did not exist at the time of the reconsidered determination.  I conclude that there is good cause to admit P. Exs. 1 through 3.  Furthermore, it is undisputed and for purposes of summary judgment, I accept as true that Petitioner was reinstated to Medi-Cal, he was removed from the California list of suspended and ineligible providers, and the IG ended his exclusion and reinstated his eligibility to participate in Medicare as reflected by the three exhibits.  Therefore, CMS objections to P. Exs. 1 through 3 are overruled and the exhibits are admitted as evidence.

II.    Discussion

A.  Applicable Law

Section 1831 of the Social Security Act (Act) (42 U.S.C. § 1395j) establishes the supplementary medical insurance benefits program for the aged and disabled known as Medicare Part B.  Administration of the Part B program is through the MACs.  Act § 1842(a) (42 U.S.C. § 1395u(a)).  Payment under the program for services rendered to Medicare-eligible beneficiaries may only be made to eligible providers of services and

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suppliers.³ Act §§ 1835(a) (42 U.S.C. §§ 1395n(a)), 1842(h)(1) (42 U.S.C. § 1395u(h)(1)).  Petitioner, a physician, is a supplier.

The Act requires the Secretary of Health and Human Services (Secretary) to issue regulations that establish a process for the enrollment in Medicare of providers and suppliers, including the right to a hearing and judicial review of certain enrollment determinations, such as revocation of enrollment and billing privileges.  Act § 1866(j) (42 U.S.C. § 1395cc(j)).  Pursuant to 42 C.F.R. § 424.505, a supplier such as Petitioner must be enrolled in the Medicare program and be issued a billing number to have billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary. 

The Secretary has delegated the authority to revoke enrollment and billing privileges to CMS.  42 C.F.R. § 424.535.  CMS or a MAC may revoke an enrolled supplier’s Medicare enrollment and billing privileges and supplier agreement for any of the reasons listed in 42 C.F.R. § 424.535.  The effective date of the revocation is controlled by 42 C.F.R. § 424.535(g).  After a supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred from re-enrolling in the Medicare program for a minimum of one year, but no more than ten years except in limited circumstances that do not exist in this case.  42 C.F.R. § 424.535(c). 

Effective June 15, 2018, CMS was required to establish a preclusion list as defined by 42 C.F.R. §§ 422.2 and 423.100.  There is only one preclusion list.  83 Fed. Reg. 16,440, 16,641-67 (Apr. 16, 2018).  CMS adds to the preclusion list individuals and entities as provided by the definition of the preclusion list: 

Preclusion list means a CMS compiled list of individuals and entities that—

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(1) Meet all of the following requirements:

(i) The individual or entity is currently revoked from Medicare for a reason other than that stated in § 424.535(a)(3) of this chapter. 

(ii) The individual or entity is currently under a reenrollment bar under § 424.535(c). 

(iii) CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination under this paragraph (1)(iii), CMS considers the following factors: 

(A) The seriousness of the conduct underlying the individual's or entity's revocation. 

(B) The degree to which the individual's or entity's conduct could affect the integrity of the Medicare program. 

(C) Any other evidence that CMS deems relevant to its determination; or

(2) Meet both of the following requirements:

(i)      The individual or entity has engaged in behavior, other than that described in § 424.535(a)(3) of this chapter, for which CMS could have revoked the individual or entity to the extent applicable had they been enrolled in Medicare.

(ii)      CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination under this paragraph (2)(ii), CMS considers the following factors:

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(A)     The seriousness of the conduct involved. 

(B)     The degree to which the individual's or entity's conduct could affect the integrity of the Medicare program; and

(C)     Any other evidence that CMS deems relevant to its determination; or

(3)  The individual or entity, regardless of whether they are or were enrolled in Medicare, has been convicted of a felony under Federal or State law within the previous 10 years that CMS deems detrimental to the best interests of the Medicare program.  Factors that CMS considers in making such a determination under this paragraph (3) are—

(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.  This definition of the preclusion list is from the regulations applicable to the Medicare Part C (Medicare Advantage) program.  A similar definition applicable to the Medicare Part D program is found in 42 C.F.R. § 423.100.  No payment under Medicare Parts C and D may be made to anyone on the preclusion list.  42 C.F.R. §§ 422.222-.224, 422.504(i)(2)(v), 423.120(c)(6).  CMS must notify a supplier in writing that the supplier is being added to the preclusion list, the basis for the action, and inform the supplier of the right to ALJ review and appeal pursuant to 42 C.F.R. pt. 498.  42 C.F.R. §§ 422.222(a)(2); 423.120(c)(6)(v).

A supplier whose enrollment and billing privileges have been revoked and who has been placed on the preclusion list may request reconsideration and review as provided by 42 C.F.R. pt. 498.  42 C.F.R. §§ 424.545(a); 422.222(a)(2); 423.120(c)(6)(v).  A supplier submits a written request for reconsideration to CMS or its contractor.  42 C.F.R. § 498.22(a).  CMS or its contractor must give notice of its reconsidered determination to the supplier, giving the reasons for its determination and specifying the conditions or requirements the supplier failed to meet, and advising of the right to an ALJ hearing.

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42 C.F.R. § 498.25.  If the decision on reconsideration is unfavorable to the supplier, the supplier has the right to request a hearing by an ALJ and further review by the Board.  Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), 498.3(b)(20), 498.5.  A hearing on the record, also known as an oral hearing, is required under the Act, unless waived.  Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004).  The supplier bears the burden to demonstrate that the supplier meets enrollment requirements with documents and records.  42 C.F.R. § 424.545(c).

Revocation and preclusion list review is strictly limited to whether there is a basis for the revocation and for adding the supplier to the CMS preclusion list.  Douglas Bradley, MD, DAB No. 2663 at 13 (2015); 83 Fed. Reg. at 16,642.  The Board has consistently held that ALJ review of the CMS revocation determination is limited to whether CMS had a legal basis for revocation.  Letantia Bussell, MD, DAB No. 2196 at 10 (2008).  If CMS establishes the elements necessary for revocation, “revocation must be sustained, and neither the [ALJ] nor the Board may ‘substitute its discretion for that of CMS in determining whether revocation was appropriate.’”  Abdul Razzaque Ahmed, MD, DAB No. 2261 at 19 (2008), aff’d, Ahmed v. Sebelius, 710 F. Supp.2d 167 (D. Mass. 2010). 

B.  Issues

Whether there was a basis for the revocation of Petitioner’s Medicare enrollment and billing privileges; and

Whether there was a basis to include Petitioner on the CMS preclusion list.

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

My conclusions of law are set forth in bold followed by the undisputed facts and analysis.

1.  Summary judgment is appropriate.

CMS filed a motion for summary judgment.  Petitioner opposes the CMS motion.  A supplier whose enrollment has been revoked and/or who has been placed on the preclusion list has a right to a hearing and judicial review, and a hearing on the record is required under the Act.  Act §§ 205(b) (42 U.S.C. § 405(b)), 1866(h)(1), (j) (42 U.S.C. §§ 1395cc(h)(1), (j)); 42 C.F.R. §§ 498.3(b)(17), 498.5; Crestview, 373 F.3d at 748-51.  A party may waive appearance at an oral hearing, but the party must do so affirmatively in writing.  42 C.F.R. § 498.66(a).  In this case, Petitioner has not waived the right to oral hearing or otherwise consented to a decision based only upon the documentary evidence or pleadings.  Accordingly, disposition on the written record alone is not permissible, unless summary judgment is appropriate as I conclude it is in this case.

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Summary judgment is not automatic upon request but is limited to certain specific conditions.  The Secretary’s regulations at 42 C.F.R. pt. 498 that establish the procedures to be followed in adjudicating Petitioner’s case do not establish a summary judgment procedure or recognize such a procedure.  However, the Board has long accepted that summary judgment is an acceptable procedural device in cases adjudicated pursuant to 42 C.F.R. pt. 498.  The Federal Rules of Civil Procedure (Fed. R. Civ. P.) do not apply in administrative adjudications such as this, but the Board has accepted that Fed. R. Civ. P. 56 and related cases provide useful guidance for determining whether summary judgment is appropriate.  See, e.g., Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997).  The Standing Order advised the parties that I adopted a summary judgment procedure as a matter of judicial economy within my authority to regulate the course of proceedings and that court decisions related to Rule 56 may be applied.  Standing Order ¶¶ D, G.

Summary judgment is appropriate when there is no genuine dispute as to any issue of material fact for adjudication and/or the moving party is entitled to judgment as a matter of law.  In determining whether there are genuine issues of material fact for trial, the ALJ must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party’s favor.  The party requesting summary judgment bears the burden of showing that there are no genuine issues of material fact for trial and/or that it is entitled to judgment as a matter of law.  Generally, the non-movant may not defeat an adequately supported summary judgment motion by relying upon the denials in its pleadings or briefs but must furnish evidence of a dispute concerning a material fact, i.e., a fact that would affect the outcome of the case if proven.  Mission Hosp. Reg’l Med. Ctr., DAB No. 2459 at 4-5 (2012) (and cases cited therein); Experts Are Us, Inc., DAB No. 2452 at 5-6 (2012) (and cases cited therein); Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

The standard for deciding a case on summary judgment, and an ALJ’s decision-making in deciding a summary judgment motion, differ from that used in resolving a case after a hearing or when a hearing is waived.  On summary judgment, the ALJ does not make credibility determinations, weigh the evidence, or decide which inferences to draw from the evidence, as would be done when finding facts after a hearing on the record or when a hearing is waived.  Rather, on summary judgment, the ALJ construes the evidence in a light most favorable to the non-movant and avoids deciding which version of the facts is more likely true.  Holy Cross Vill. at Notre Dame, Inc., DAB No. 2291 at 5 (2009).  The Board also has recognized that, on summary judgment, it is appropriate for the ALJ to consider whether a rational trier of fact could find that the party’s evidence would be sufficient to meet that party’s evidentiary burden.  Dumas Nursing & Rehab., L.P., DAB No. 2347 at 5 (2010).  The Secretary has not provided in 42 C.F.R. pt. 498 for the

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allocation of the burden of persuasion or the quantum of evidence required to satisfy the burden of persuasion.  However, the Board has provided some persuasive analysis regarding the allocation of the burden of persuasion in cases subject to 42 C.F.R. pt. 498.  Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 F. App'x 181 (6th Cir. 2005).

There is no dispute that the California Department of Health notified Petitioner by letter dated May 15, 2020, that he was indefinitely suspended from Medi-Cal (the state Medicaid program) effective June 4, 2020, based on his misdemeanor conviction in the Orange County Superior Court (state court) of receiving rebates for patient referrals.  CMS Ex. 1 at 11, 33.  There is no dispute that Petitioner had no right to appeal the suspension because suspension was mandatory pursuant to state law.  CMS Br. at 3-4; P. Br. at 3-4.  Under 42 C.F.R. § 424.535(a)(12), CMS is granted discretion to revoke Medicare enrollment when a supplier is terminated, revoked, or otherwise barred from participation in a state Medicaid program.  Therefore, the issue of whether there was a basis for revocation must be resolved against Petitioner as a matter of law.  The issues raised by Petitioner do not show that there is any genuine dispute of fact.  All inferences are drawn in favor of Petitioner on summary judgment.  Petitioner’s arguments must all be resolved against him as matters of law.  Because I have determined that there is a basis for revocation, the issue of whether there is a basis for adding Petitioner to the CMS preclusion list must also be resolved against Petitioner as a matter of law. 

Viewing the evidence before me in a light most favorable to Petitioner and drawing all inferences in Petitioner’s favor, I conclude that there are no genuine disputes as to any material facts pertinent to revocation under 42 C.F.R. § 424.535(a)(12) or the addition of Petitioner’s name to the CMS preclusion list that require a hearing in this case.  CMS is entitled to judgment as a matter of law.  Accordingly, summary judgment is appropriate. 

2.  Petitioner’s motion for remand must be denied. 

On June 16, 2022, along with his brief, Petitioner filed a motion to remand this case to CMS for further action.  Petitioner argues that remand is warranted because new issues arose after CMS decided to revoke Petitioner’s Medicare enrollment and billing privileges.  Petitioner argues that fairness, equity, and efficiency warrant consideration of new issues and new evidence.  P. Br. at 7-9. 

Petitioner’s motion to remand is denied.  CMS has limited authority to reopen an initial or reconsidered determination and may only reopen within 12 months of the date of the notice of the initial determination.  42 C.F.R. § 498.30.  The notice of the initial determination was issued October 20, 2020.  Therefore, CMS no longer had authority to reopen its initial or reconsidered determination as of October 20, 2021.  Remand to CMS

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as Petitioner requests would, therefore, be pointless as CMS has no authority to reopen and revise its initial or reconsidered determination.

3.  CMS had a basis for revoking Petitioner’s enrollment and billing privileges under 42 C.F.R. § 424.535(a)(12)(i) because Petitioner was suspended from participating in Medi-Cal and had no appeal rights at the time of revocation as required by 42 C.F.R. § 424.535(a)(12)(ii). 

(a) Undisputed Facts

The parties were advised by the Standing Order that, for purposes of ruling on a motion for summary judgment, a fact alleged and not specifically denied would be accepted as true and offered evidence would be considered admissible and true absent a specific objection.  Standing Order ¶ G.  The following findings of fact are based upon the undisputed or conceded facts.  I do not make credibility determinations, weigh the evidence, or decide which inferences to draw from the evidence in deciding a summary judgment motion.  The evidence is viewed in the light most favorable to Petitioner—the non-movant—with all inferences drawn in Petitioner’s favor. 

It is undisputed that the California Department of Health notified Petitioner by letter dated May 15, 2020, that effective 20 days from the date of the letter, Petitioner was indefinitely suspended from participation in the Medi-Cal program.  CMS Ex. 1 at 33; P. Br. at 3-4; CMS Br. at 3-4.⁴  The letter explained that consequences of the suspension were that Petitioner would be “prohibited from billing for or receiving payment from the Medi-Cal program for an indefinite period of time” and his name would be included on the “Medi-Cal Suspended and Ineligible Provider List.”  CMS Ex. 1 at 33.  The suspension notice did not describe any appeal rights because Petitioner was not entitled to an appeal of the suspension under California law.  CMS Ex. 1 at 33-34; P. Br. at 3; Cal. Welf. & Inst. Code § 14123(a)(3).

The MAC notified Petitioner by letter dated October 20, 2020, that it revoked Petitioner’s Medicare enrollment and billing privileges effective November 19, 2020, because Petitioner was terminated from Medi-Cal and any appeal rights were exhausted.  The MAC also informed Petitioner that his name was added to the CMS preclusion list,

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effective the date of any reconsidered determination or 65 days after October 20, 2020, if reconsideration was not requested.  Petitioner was informed that due to his name being added to the preclusion list, any claim for a health care item or service he furnished under Medicare Part C (Medicare Advantage) could be denied and any pharmacy claim (Medicare Part D) based on a prescription he issued could be denied or rejected.  CMS Ex. 1 at 29.

On November 12, 2020, Petitioner requested reconsideration of the MAC’s initial determination.  CMS Ex. 1 at 11-27.  On March 12, 2021, a CMS hearing officer issued a reconsidered determination upholding the revocation of Petitioner’s Medicare enrollment and billing privileges and listing Petitioner on the CMS preclusion list.  CMS Ex. 1 at 1-10.  According to the Board, the reconsidered determination is the only determination subject to my review.  Neb Grp., DAB No. 2573 at 7.

It is undisputed that on February 2, 2022, the IG who had previously excluded Petitioner from participating in Medicare, reinstated his eligibility to participate in Medicare.⁵  P. Ex. 2.

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It is also undisputed that on February 16, 2022, the California Department of Health ended Petitioner’s indefinite suspension from Medi-Cal, reinstated Petitioner in the Medi-Cal program, and removed Petitioner’s name from the Medi-Cal suspended and ineligible provider list.  P. Ex. 3.

(b) Analysis

I conclude based on the undisputed facts that CMS has made a prima facie showing of a basis for revocation of Petitioner’s enrollment and billing privileges.

CMS is delegated authority by the Secretary to terminate a provider’s or supplier’s Medicare enrollment and billing privileges for any of the reasons listed in 42 C.F.R. § 424.535(a).  In this case, CMS revoked pursuant to 42 C.F.R. § 424.535(a)(12), which provides:

(12) Other program termination.

(i) The provider or supplier is terminated, revoked or otherwise barred from participation in a State Medicaid program or any other federal health care program.  In determining whether a revocation under this paragraph (a)(12) is appropriate, CMS considers the following factors:

(A) The reason(s) for the termination or revocation.

(B) Whether the provider or supplier is currently terminated, revoked or otherwise barred from more than one program (for example, more than one State’s Medicaid program) or has been subject to any other sanctions during its participation in other programs. 

(C) Any other information that CMS deems relevant to its determination.

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(ii) Medicare [CMS] may not revoke unless and until a provider or supplier has exhausted all applicable appeal rights.

(iii) CMS may apply paragraph (a)(12)(i) of this section to the provider or supplier under any of its current or former names, numerical identifiers or business identities.

42 C.F.R. § 424.535(a)(12).  Under 42 C.F.R. § 424.535(a)(12), CMS may revoke if two elements are satisfied:

(1)  The provider or supplier is terminated, revoked, or otherwise barred from participation in a state or federal health care program; and

(2)  The provider or supplier has exhausted all appeal rights applicable to the termination, revocation, or bar from participation in the state or federal health care program.

The first element is satisfied by the undisputed facts.  The California Department of Health indefinitely suspended Petitioner from Medi-Cal effective June 4, 2020, i.e., 20 days after the date of its May 15, 2020 notice of the decision to suspend Petitioner.  There is no question that the indefinite suspension meant that Petitioner was “otherwise barred” from participating in Medi-Cal because Petitioner could not bill or receive payment from Medi-Cal.  CMS Ex. 1 at 33-34; P. Br. at 3-4; CMS Br. at 3-4.

The Board has concluded that it is appropriate for an ALJ to look beyond the label the state agency gave its action and consider the effect of the action, i.e., whether there was a denial of “the opportunity to participate in, and be paid by, Medicaid for reasons of fraud, abuse, or other misconduct that poses a risk to that program.”  Douglas Bradley, MD, DAB No. 2663 at 7.  The May 15, 2020 decision of the California Department of Health shows that Petitioner was, due to his indefinite suspension, prohibited from billing or receiving payment from Medi-Cal.  The decision also shows it was based on Petitioner’s conviction of receiving rebates for patient referrals, which the California Department of Health characterizes as “related to the qualifications, functions, and duties of a provider of service.”  CMS Ex. 1 at 33.  Furthermore, the decision states that if Petitioner was “a currently enrolled provider in the Medi-Cal program, that enrollment will be

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terminated.”⁶  CMS Ex. 1 at 33.  Though not specifically stated in the decision, I conclude based on the language of the decision, that the suspension was to protect the Medi-Cal program and beneficiaries.  Indeed, Cal. Welf. & Inst. Code § 14123, the authority cited by the California Department of Health in indefinitely suspending Petitioner, states that protection of the health of Medi-Cal recipients and the funds appropriated for Medi-Cal is the reason suspension from Medi-Cal is required. 

The second element is satisfied by the undisputed fact that Petitioner had no right to appeal the California Department of Health’s action indefinitely suspending Petitioner from Medi-Cal.  CMS Ex. 1 at 33-34; P. Br. at 3; Cal. Welf. & Inst. Code § 14123(a)(3).

Accordingly, I conclude that when the MAC issued its initial determination on October 20, 2020, revoking Petitioner’s Medicare enrollment and billing privileges, there was a basis to do so pursuant to 42 C.F.R. § 424.535(a)(12)(i).  The basis for revocation under 42 C.F.R. § 424.535(a)(12)(i), continued to exist when the reconsidered determination was issued on March 12, 2021.  The regulation required that CMS consider certain factors when determining to revoke enrollment and billing privileges.  The reconsidered determination shows that the CMS hearing officer considered the factors required by 42 C.F.R. § 424.535(a)(12)(i).  CMS Ex. 1 at 5-6.

The Board has narrowly construed the scope of review of the ALJ and the Board in cases involving provider and supplier enrollment, denial of enrollment, and revocation of enrollment cases.  The regulation, 42 C.F.R. § 424.535(a), specifies the reasons for which CMS may legally revoke a provider or supplier’s Medicare enrollment.  The Board has concluded that so long as an ALJ finds that CMS had a regulatory basis for revocation under 42 C.F.R. § 424.535(a), the ALJ (and the Board on appeal) may not refuse to apply the regulation and must sustain the revocation.  Stanley Beekman, D.P.M., DAB No. 2650 at 10 (2015) (an ALJ and the Board must sustain a revocation “[i]f the record establishes that the regulatory elements are satisfied”); Douglas Bradley, MD, DAB No. 2663 at 13 (CMS’s revocation authority is discretionary but an ALJ and the Board are limited to deciding whether CMS had a legal basis for revocation and may not substitute their discretion for that of CMS in determining whether revocation is appropriate under all the circumstances); Letantia Bussell, MD, DAB No. 2196 at 13 (the only issue before an ALJ

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and the Board in enrollment cases is whether CMS has “established a legal basis for its actions”).  Thus, the Board’s view is that it is not my prerogative to review the CMS exercise of discretion to revoke once I have concluded that there is a basis for revocation.

Petitioner raises several theories in his request for hearing and pleadings that do not challenge whether CMS had a basis to revoke his enrollment.  Rather, Petitioner focuses upon the exercise of discretion by CMS to revoke in light of the circumstances emphasized by Petitioner.  Due to the limited scope of my review as defined by the Board, Petitioner’s theories attacking the exercise of discretion by CMS are without merit.  However, brief discussion of Petitioner’s various theories is warranted.

Petitioner does not dispute that CMS had authority under 42 C.F.R. § 424.535(a)(12) to revoke his Medicare enrollment and billing privileges due to his suspension from Medi-Cal by the California Department of Health.  P. Br. at 7.  However, in his request for hearing, Petitioner argues that:  (1) the hearing officer was informed of but failed to address the dismissal of the criminal charge against him; (2) the indefinite suspension of Petitioner’s participation in Medi-Cal was based only on the conviction dismissed by the state court; (3) the hearing officer failed to consider that the dismissal by the state court was evidence of Petitioner’s rehabilitation; (4) the Medical Board of California suspended revocation of Petitioner’s medical license; (5) the hearing officer failed to sufficiently weigh the hardship on patients due to losing Petitioner’s services as the sole source of specialized services in the region; and (6) the evidence does not show Petitioner knowingly participated in a fraud scheme.  RFH at 1-2.

Petitioner urges me to remand this case to CMS so that CMS may consider that the IG and the California Department of Health have reinstated Petitioner.  Petitioner also argues in his brief that:  (1) “CMS had an obligation to consider several factors, when it considered the length of time, including the status of [Petitioner’s] bars on enrollment on other programs;” (2) Petitioner’s suspension from Medi-Cal for a minimum of 12 months was required but when that period elapsed Petitioner was reinstated in Medi-Cal; (3) the fact that Petitioner has been reinstated to Medi-Cal should be considered when determining the length of the re-enrollment bar; and (4) fairness, equity, and efficiency support permitting Petitioner to re-enroll in Medicare, because continuing Petitioner on the Medicare preclusion list after he has been reinstated by the IG and the California Department of Health is inefficient and contrary to public policy, deprives beneficiaries of his specialized services in the region and causes them hardship, and his professional colleagues attest to Petitioner’s professionalism, character, integrity, and the need for his services.  P. Br. at 7-9.

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Petitioner’s request for remand to CMS for CMS to consider that the IG reinstated Petitioner in Medicare and federal health care programs and that the California Department of Health reinstated Petitioner in Medi-Cal, is denied.  P. Br. at 1-2, 6-9.  Remand is pointless because as of October 20, 2021, CMS no longer had authority to reopen and revise its initial or reconsidered determinations under 42 C.F.R. § 498.30.  Petitioner argues that if remand is not granted, he should be granted a hearing to present the new evidence of his reinstatement by the IG and the California Department of Health.  P. Br. at 2.  However, there is no dispute that Petitioner was reinstated by the IG and the California Department of Health, and the documents admitted as evidence prove both, eliminating any need to convene a hearing to receive testimonial evidence as to either.⁷  P. Exs. 2 and 3.  There is also no dispute, the documentary evidence establishes, and there is no need for testimony, that on September 23, 2020, the Medical Board of California determined to suspend the revocation of Petitioner’s medical license subject to five years of probation.  CMS Ex. 1 at 38, 42.

Petitioner’s reliance on the state court action granting post-probation relief by dismissal of his criminal charge is misplaced.  Petitioner applied for post-probation relief under Cal. Penal Code § 1203.4, which permitted Petitioner to withdraw his guilty plea and enter a no contest plea to the criminal charge of which he was convicted after he fulfilled the conditions of probation.  On December 4, 2020, the state court dismissed the charge of which Petitioner was convict and ordered that Petitioner be relieved “from all penalties and disabilities resulting from the offense of which [he had] been convicted.”  CMS Br. at 5; P. Br. at 4-5; DAB E-File # 1_c at 6.  The February 15, 2022 decision of the California Department of Health to reinstate Petitioner to Medi-Cal does not reflect that that decision was based on or otherwise affected by the state court dismissal.  Indeed, there is no mention of the state court dismissal in the decision to reinstate Petitioner.  P. Ex. 3.  Similarly, the state court action has no impact upon the revocation in this case.  The revocation of Petitioner’s Medicare enrollment and billing privileges was due to his indefinite suspension from Medi-Cal, and not his conviction.  Petitioner has presented no evidence or cited any legal authority to support an argument that the indefinite suspension by the California Department of Health was invalid or had to be lifted due to the state court granting Petitioner post-probation relief.  Furthermore, Petitioner fails to mention the California regulation that provides that the California Department of Health “may suspend a provider from [Medi-Cal] based upon a judgment of conviction

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regardless of whether the provider obtains a subsequent order under the provisions of section 1203.4 of the Penal Code allowing him to withdraw his plea of guilty, and to enter a plea of not guilty, or setting aside the verdict of guilty, or dismissing the information or indictment.”  Cal. Code Regs. tit. 22, § 51458(b).

Petitioner’s arguments regarding how the hearing officer should have weighed factors, including the fact that the state court dismissed the charge against Petitioner as post-probation relief; the fact that the indefinite suspension from Medi-Cal was based on only the conviction of the charge that was dismissed; whether the hearing officer weighed the state court dismissal as evidence of rehabilitation; how the hearing officer weighed the fact that the Medical Board of California suspended revocation of Petitioner’s medical license; how the hearing officer weighed the hardship on patients due to losing Petitioner’s services as the sole source of specialized services in the region; how the hearing officer weighed the fact that the evidence does not show Petitioner knowingly participated in a fraud scheme; and how the hearing officer weighed evidence of support from Petitioner’s peers are all matters solely within the discretion of CMS to consider in determining whether to revoke if there is a basis and the duration of the bar to re-enrollment.  My scope of review is limited to whether there is a basis for revocation, which in this case was the undisputed indefinite suspension of Petitioner from Medi-Cal by the California Department of Health.

Petitioner has presented no legal authority to support an argument that the fact that Petitioner was reinstated in Medi-Cal by the California Department of Health is grounds to overturn the revocation by CMS and the MAC.  The Board has stated that CMS is not required to find that state agency action was substantively or procedurally correct to revoke pursuant to 42 C.F.R. § 424.535(a)(12)(i).  The Board has further stated that an ALJ is only authorized to decide whether a supplier’s participation in the state Medicaid program has been terminated or revoked and that the state action has become unappealable and final under state law.  The regulations at 42 C.F.R. pt. 498 that control in this proceeding do not provide a forum to collaterally attack decisions by a federal court, a state court, or a non-federal regulatory body.  Douglas Bradley, MD, DAB No. 2663 at 15-16.  Therefore, under the Board’s interpretation neither the decision of the California Department of Health nor the state court or their procedures are subject to any review in this forum.

To the extent Petitioner argues that his bar to re-enrollment should be shortened, I have no authority to grant such relief.  When a supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred from re-enrolling in the Medicare program, generally for one to ten years “depending on the severity of the basis for revocation.”  42 C.F.R. § 424.535(c)(1)(i).  In this case, the MAC determined that a three-year

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re-enrollment bar was appropriate, and the CMS hearing officer agreed on reconsideration.  There is no statutory or regulatory language establishing a right to review of the duration of the re-enrollment bar the MAC or CMS imposes, or when it commenced or ended.  Act § 1866(j)(8); 42 C.F.R. §§ 424.535(c), 424.545, 498.3(b), 498.5.  The Board has held that the duration of a revoked supplier’s re-enrollment bar is not an appealable initial determination listed in 42 C.F.R. § 498.3(b) and is not subject to ALJ review.  Vijendra Dave, MD, DAB No. 2672 at 11 (2016).

4.  There is a basis for adding Petitioner to the CMS preclusion list until the end of Petitioner’s re-enrollment bar.

The CMS hearing officer reviewed the determination to place Petitioner on the CMS preclusion list.  The hearing officer concluded that Petitioner’s Medicare enrollment was currently revoked and not pursuant to 42 C.F.R. § 424.535(a)(3) and concluded that Petitioner was subject to a bar to re-enrollment under 42 C.F.R. § 424.535(c).  The hearing officer determined that Petitioner’s conduct that caused the revocation is detrimental to the best interests of the Medicare program.  CMS Ex. 1 at 6-7.  Accordingly, I conclude that there is a prima facie showing of a basis for placing Petitioner’s name on the CMS preclusion list.

I find no authority that permits my review of CMS’s exercise of discretion in determining that Petitioner’s underlying conduct was detrimental to Medicare and in adding Petitioner to the preclusion list.  42 C.F.R. §§ 422.2, 423.100 (2018) (definition of preclusion list); 83 Fed. Reg. 16,440, 16,641-67.

I conclude that CMS has a basis for adding Petitioner to the CMS preclusion list for the duration of his re-enrollment bar.

5.  I have no authority to grant equitable relief.

To the extent that Petitioner seeks equitable relief, I cannot grant such relief.  Neb Grp., LLC, DAB No. 2573 at 6.  When I determine, as I have here, that CMS has a basis for revocation and a basis to include Petitioner on the CMS preclusion list, I have no authority to substitute my judgment and void the revocation and inclusion on the preclusion list based on equitable considerations.  US Ultrasound, DAB No. 2302 at 8 (2010).  I am required to follow the Act and regulations and have no authority to declare statutes or regulations invalid.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009). 

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III.     Conclusion

For the foregoing reasons, the Medicare enrollment and billing privileges of Petitioner are revoked pursuant to 42 C.F.R. § 424.535(a)(12)(i), effective November 19, 2020.  There is a basis for listing Petitioner on the CMS preclusion list for the duration of his three‑year bar to re-enrollment. 

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Endnotes

¹  Citations are to the October 2020 revision of the Code of Federal Regulations (C.F.R.), which was in effect at the time of the initial determination, unless otherwise stated.  An appellate panel of the Departmental Appeals Board (Board) concluded in Mark A. Kabat, D.O., DAB No. 2875 at 9-11 (2018) that the applicable regulations are those in effect at the time of the initial determination.  The Board as also concluded that the only determination subject to my review in a provider and supplier enrollment case such as this is the reconsidered determination.  Neb Grp. of Ariz. LLC, DAB No. 2573 at 7 (2014). 

²  Proceedings were stayed from June 24, 2021 through April 14, 2022, at Petitioner’s request pending action by the California Department of Health Care Services (California Department of Health) on his application for reinstatement in Medi-Cal. 

³  A “supplier” furnishes services under Medicare and includes physicians or other practitioners and facilities that are not included within the definition of the phrase “provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)).  A “provider of services,” commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities, home health agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C. § 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act.  Act § 1861(u) (42 U.S.C. § 1395x(u)).  The distinction between providers and suppliers is important because they are treated differently under the Act for some purposes. 

⁴  Petitioner does not dispute that the indefinite suspension from Medi-Cal was based on his February 6, 2019 conviction of a misdemeanor violation of California law for receiving a rebate for patient referrals.  P. Br. at 3. 

⁵  Reinstatement of eligibility by the IG does not mean that a provider or supplier is re-enrolled and has billing privileges in Medicare, which are actions subject to the authority of CMS.  The IG determination to reinstate eligibility to enroll has no effect on the determinations of CMS to revoke enrollment and billing privileges or whether a provider or supplier may re-enroll.  42 C.F.R. § 1001.303(b).  The Board has previously addressed that revocation by CMS and exclusion by the IG are two distinct administrative remedies that are not mutually exclusive.  

The two distinct actions moreover impose different remedies; the revocation impacted only Petitioner’s ability to bill the Medicare program for physician services, whereas the exclusion totally bars his participation in all federal health care programs.  See 73 Fed. Reg. 36,448, 36,454 (June 27, 2008) (final rule establishing the process for appealing the revocation of billing privileges) (“[u]nlike OIG exclusions which apply government-wide and which generally last for 5 years or longer, the re-enrollment bar only applies to those billing the Medicare program.”). 

Gregory J. Salko, MD, DAB No. 2437 at 7 (2012).  The Board has stated:  “revocation under [42 C.F.R. § 424.535] and exclusion under section 1128 are distinct remedial tools, each with its own set of prerequisites and consequences for the provider or supplier.”  Abdul Razzaque Ahmed, MD, DAB No. 2261 at 13. 

⁶  Neither the May 15, 2020 decision to indefinitely suspend Petitioner from Medi-Cal (CMS Ex. 1 at 33-34) nor the February 15, 2022 decision to reinstate Petitioner in Medi-Cal, specifically mentions that Petitioner’s enrollment in Medi-Cal was terminated.  However, that lack of clarity does not negate the fact that Petitioner’s indefinite suspension effectively barred his participation in Medi-Cal during the period of the suspension. 

⁷  Arguably, due to the limited scope of review of an ALJ and the Board in cases such as this, the reinstatements by the IG and California Department of Health are not material as those facts do not affect my decision in any respect.  If the facts are not material any dispute as to those facts would not defeat a motion for summary judgment.