Kamal A. Patel, M.D., CR6299 (2023)

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its Provider Enrollment and Oversight Group,¹ placed Kamal A. Patel, M.D. (Petitioner) on CMS’s preclusion list pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  CMS did so because, within the preceding 10 years, Petitioner was convicted of a felony that CMS determined was detrimental to the interests of the Medicare program and its beneficiaries.  Petitioner challenges his placement on the preclusion list.  For the reasons set forth below, I conclude CMS had a legal basis to place Petitioner on its preclusion list.

   I. Background and Procedural History

Petitioner is a physician licensed to practice medicine in Illinois.  See CMS Exhibit (Ex.) 2 at 82.  On February 19, 2014, following a bench trial, the United States District Court for the Northern District of Illinois (federal district court) found Petitioner guilty on six counts of violating the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and one count of

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conspiracy to violate the statute.²  Id. at 2, 154-82; see also id. at 132.  On or about July 2, 2014,³ the federal district court entered judgment finding Petitioner guilty and sentencing him to eight months of incarceration and one year of supervised release.  Id. at 132-34.  The court further ordered Petitioner to forfeit $31,900, which the court found was the amount traceable to the kickback payments Petitioner received.  Id. at 138‑41.  Petitioner appealed his conviction, and the United States Court of Appeals for the Seventh Circuit affirmed the conviction.⁴  Id. at 183-206.

In a letter dated May 26, 2021, CMS notified Petitioner that it would place him on the CMS preclusion list pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  CMS Ex. 7.  Petitioner represents that he did not receive the May 26, 2021 letter.  RFH at 4 n.2;⁵ Petitioner’s Response Brief (P. Br.) at 3.  However, Petitioner acknowledges receiving copies of a correction letter dated September 15, 2021 from his credentialing company.  See, e.g., CMS Ex. 5 at 9; see also P. Br. at 3.  After receiving actual notice of the determination to place him on the preclusion list, Petitioner, through counsel, requested reconsideration in letters dated September 17, 2021, and October 15, 2021.  CMS Ex. 3 at 2-6; CMS Ex. 5 at 9.  By letter dated December 9, 2021, a CMS hearing officer issued an unfavorable reconsidered determination upholding Petitioner’s placement on the preclusion list.  CMS Ex. 1.  The hearing officer found good cause to accept Petitioner’s reconsideration request although it was not filed within 65 days after May 26, 2021.  Id. at 1; see also CMS Ex. 7 at 2. 

Petitioner timely requested a hearing to challenge the reconsidered determination.  See Docket Entries # 1-1c in DAB E‑File.  The case was assigned to me, and, on February 9, 2022, my office acknowledged Petitioner’s hearing request and provided a copy of my Standing Prehearing Order (Prehearing Order).  The Prehearing Order directed each party to file a prehearing exchange consisting of a brief and any supporting documents,

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including the written direct testimony of any proposed witnesses, and set forth the deadlines for those filings.  Prehearing Order ¶¶ 4-5.  In response to the Prehearing Order, CMS filed a combined brief and motion for summary judgment (CMS Br.) and nine proposed exhibits (CMS Exs. 1‑9).  Petitioner did not object to CMS’s proposed exhibits.  In the absence of objection, I admit CMS Exs. 1-9 into the record.  Petitioner filed a brief and did not offer any additional exhibits.  Petitioner did, however, list himself as a proposed witness.  See Docket Entry # 8 in DAB E-File.  CMS objected to Petitioner being called as a witness because Petitioner failed to file his written direct testimony as a proposed exhibit as required by my Prehearing Order.  Docket Entry # 9 in DAB E-File; see also Prehearing Order ¶ 8.  I sustain CMS’s objection.  Petitioner may not offer his own testimony in this proceeding. 

In addition to requiring the parties to submit written direct testimony for any proposed witnesses, the Prehearing Order notified them that an in‑person hearing would be necessary only if the opposing party requested the opportunity to cross‑examine a witness.  Prehearing Order ¶¶ 8-10; CRDP §§ 16(b), 19(b); Pac. Regency Arvin, DAB No. 1823 at 7-8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party may cross‑examine those witnesses).  Because I have excluded Petitioner’s testimony, there is no need to convene a hearing to permit CMS to cross-examine Petitioner.  I therefore decide this case on the written record without considering whether the standard for summary judgment is met.  Prehearing Order ¶¶ 8-10.  I deny CMS’s motion for summary judgment as moot.

   II. Issue

The issue in this case is whether CMS had a legal basis to place Petitioner on its preclusion list, as defined at 42 C.F.R. §§ 422.2 and 423.100.

   III. Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(17) and (20), 498.5(l)(2) and (n)(2);⁶ see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)). 

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   IV. Discussions

        A. Statutory and Regulatory Background

CMS may place on the 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 10 years that CMS deems detrimental to the best interests of the Medicare program.” 42 C.F.R. §§ 422.2, 423.100 (definitions of preclusion list).  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 CMS’s preclusion list, or for prescriptions the individuals write.  42 C.F.R. §§ 422.2, 422.222, 422.224, 423.100, 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 (definitions of preclusion list at subsection (3)). 

If CMS places an individual on the preclusion list based on a felony conviction, the individual will remain on the preclusion list for a 10-year period, beginning on the date of the conviction, unless CMS determines that a shorter length of time is warranted.  In making a determination as to whether a shorter term of preclusion is appropriate, CMS takes into account:

(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. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).

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

1. CMS had a legal basis to add Petitioner to the preclusion list effective December 9, 2021, the date of the reconsidered determination, until February 19, 2024, 10 years from the date of Petitioner’s felony conviction.

Petitioner’s conviction meets the regulatory requirements to include Petitioner on CMS’s preclusion list.  42 C.F.R. §§ 422.2, 423.100.  Petitioner concedes, and the record

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establishes, that he was convicted of a felony offense within the previous 10 years.  RFH at 2; see also CMS Ex. 2 at 132.  However, Petitioner contends that CMS’s decision was arbitrary and capricious because “CMS wholly failed to consider any of Petitioner’s conduct prior to and following his conviction. . . . If CMS had truly considered all relevant evidence, including all of Petitioner’s conduct (and misconduct) throughout his medical career, then Petitioner would not have filed this appeal.  However, it is evident from CMS’ decision letter that it solely focused on Petitioner’s conviction.”  P. Br. at 5.  I find no support in the record for Petitioner’s argument that CMS did not consider all relevant evidence. 

First, I may presume that CMS conducted the analysis required by regulation.  See, e.g., Brian K. Ellefsen, DO, DAB No. 2626 at 7 (2015) (citing U.S. Postal Serv. v. Gregory, 534 U.S. 1, 10 (2001) (“a presumption of regularity attaches to the actions of Government agencies”)); see also U.S. v. Chem. Found., Inc., 272 U.S. 1, 1415 (1926) (a “presumption of regularity supports the official acts of public officers,” so “in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties”).  But, even absent a presumption of regularity, the reconsidered determination itself demonstrates that CMS considered Petitioner’s evidence and evaluated it consistent with the factors outlined in 42 C.F.R. §§ 422.2 and 423.100.  In its reconsidered determination, CMS explained:

Regarding factor (i), CMS finds [Petitioner’s] offense to be severe in nature and [Petitioner] admits his felony offense is serious.  Beginning in or about 2004 and continuing through or about March 15, 2011, [Petitioner] and his co-defendants conspired to knowingly and willfully solicit and receive kickbacks, directly and indirectly, overtly and covertly, from [the owners] of Grand Home Health Care, Inc. (Grand) . . . to [Petitioner] and co-defendants, in return for the referral of patients to Grand for the furnishing of home health care services for which payment may be made in whole and in part under Medicare (see Exhibit 13).  It was further part of the conspiracy, from about May 2006 through February 2011, the owners of Grand paid [Petitioner] approximately $28,500 in cash kickbacks in exchange for the referral of Medicare-eligible patients to Grand (see Exhibit 13).  As part of the conspiracy, the owners of Grand submitted Medicare claims for reimbursement for providing services to patients referred to Grand by [Petitioner] and co-defendants in exchange for cash kickbacks. . . . [Petitioner’s] criminal conduct indicates to CMS that the Medicare Trust Funds may seriously be at risk if he is allowed to participate in the Medicare program, given that he has demonstrated a willingness and ability to violate federal law.  It necessarily follows that risk to the Trust Funds is a detriment to the Medicare program. As a result, CMS finds that [Petitioner’s]

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felony offenses are extremely serious and pose a severe risk to the Medicare program. 

Regarding factor (ii), [Petitioner’s] offenses occurred beginning in or about 2004 and continued through or about March 15, 2011 (see Exhibits 13).  Although [Petitioner’s] felony offenses occurred over 10 years ago, CMS finds that the severity of this felony offenses, the length of time over which the felonious conduct occurred, and the fact that it implicates his trustworthiness to be an indication to CMS that his placement on the CMS Preclusion List is appropriate. 

Regarding factor (iii), . . . CMS finds it relevant that [Petitioner’s] felonious actions continued for about eight years.  During those relevant years, [Petitioner] demonstrated a serious lack of integrity, sound judgment, and trustworthiness.  Additionally, [Petitioner’s] conduct negatively affects the integrity of the Medicare program because his actions reflect poorly on the medical profession as a whole and jeopardizes public confidence in Medicare providers and suppliers.  CMS is committed to maintaining quality and safe service to beneficiaries enrolled in the Medicare program.  Medicare is a program for the public and public confidence in the program is vital to its success.  [Petitioner] has shown that he is capable and willing to defraud the Medicare program for his own personal enrichment. Therefore, CMS has a legitimate concern that [Petitioner] will repeat his felonious behavior and ultimately harm the Medicare program and its beneficiaries again.  Thus, CMS finds that [Petitioner’s] felony offenses are detrimental to the best interests of the Medicare program.  As a result, [Petitioner’s] inclusion on the CMS Preclusion List is appropriate.

CMS Ex. 1 at 5-6. 

Moreover, contrary to Petitioner’s suggestion that CMS did not consider that he has rehabilitated himself and has not reoffended since his conviction (P. Br. at 4), CMS expressly considered these efforts, but found they did not outweigh the seriousness of Petitioner’s conviction: 

[Petitioner] asserts that he has taken several rehabilitative steps since his February 19, 2014 felony conviction.  [Petitioner] further asserts that, due to his efforts and the amount of time elapsed, various medical licensing agencies have reinstated his medical privileges, including the IDFPR, DEA, and the OIG (see Exhibit 9).  However, other agencies’ authority to suspend or reinstate an individual’s

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license to practice is separate and distinct from CMS’ authority to include an individual on the CMS Preclusion List.  Additionally, [Petitioner] argues that he has already paid substantial penalties and consequences related to his felony conviction, such as serving eight months of jail time, doing 200 hours of community service, and making payments towards his court ordered penalties.  However, CMS finds that the substantial penalties and consequences that [Petitioner] has faced serve to further demonstrate the severity of his offenses.  [Petitioner] contends that his felony offense did not physically harm Medicare beneficiaries.  [Petitioner] further contends that he has routinely been recognized for his services within his community and would not be a detriment to the best interest of the Medicare program.  However, CMS rejects [Petitioner’s] contention. . . .  [Petitioner’s] actions may not have caused direct physical harm to Medicare beneficiaries in this case.  However, abuse of the Medicare Trust Funds is a detriment to the Medicare program.  [Petitioner’s] criminal actions that resulted in his felony convictions clearly show[] that he does not prioritize patient health and safety and has a propensity to violate federal laws, rules, and regulations.  CMS deems [Petitioner’s] February 19, 2014 felony convictions detrimental to the best interests of the Medicare program.  Therefore, CMS upholds [Petitioner’s] inclusion on the CMS Preclusion List. 

Id. at 6-7. 

As this discussion demonstrates, CMS considered the seriousness of Petitioner’s conduct and the degree to which Petitioner’s conduct could negatively impact the integrity of the Medicare program.  42 C.F.R. § 422.2; see also 42 C.F.R. § 423.100.  In particular, CMS considered the severity of Petitioner’s felony offense, the duration of the offense, and other factors, including that Petitioner’s offense suggested that he cannot be trusted to prioritize protecting beneficiaries and the Medicare trust fund over his own desire for personal gain.  42 C.F.R. §§ 422.2, 423.100.  Petitioner acknowledges that CMS considered some of the relevant factors but complains that the reconsidered determination does not explicitly discuss “all of Petitioner’s conduct.”  P. Br. at 4 (citing as examples Petitioner’s contributions to the community through volunteer work with various nonprofit organizations and that he has “abstained from misconduct” during the nearly 11 years since his conviction). 

As an initial matter, it is not clear to me whether, in reviewing CMS’s decision to place a provider or supplier on the preclusion list, I am authorized to evaluate how CMS applied the factors enumerated in 42 C.F.R. §§ 422.2 and 423.100.  Appellate decisions of the DAB have concluded that administrative law judges may not substitute their judgment for

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that of CMS in reviewing whether to deny a supplier’s Medicare enrollment application because the conduct underlying a conviction is detrimental to Medicare.  See Robert J. Tomlinson, M.D., DAB No. 2916 at 8 (2018); see also Ellefsen, DAB No. 2626 at 7.  Similar reasoning applies in cases involving enrollment revocations.  See, e.g., Pa. Physicians, P.C., DAB No. 2980 at 13 (2019); see also Letantia Bussell, M.D., DAB No. 2196 at 13 (2008).  Thus, it is possible to read the preclusion regulations as delegating to CMS unreviewable discretion to determine if a conviction is detrimental to the best interests of the Medicare program. 

I need not decide the scope of CMS’s discretion in preclusion cases to resolve this case, however.  That is because even if I were authorized to review CMS’s determination that Petitioner’s conviction is detrimental to the best interests of the Medicare program, I would not find any error by CMS.  Petitioner’s arguments to the contrary do not persuade me otherwise. 

In reaching this conclusion, I accept that Petitioner has not reoffended since his conviction, has engaged in laudable volunteer efforts, and provided “valuable medical services prior to his conviction.” P. Br. at 4.  Nevertheless, I agree with CMS that Petitioner’s contributions to his community before and since his conviction do not ensure that the risks he may pose to Medicare and its beneficiaries have been completely extinguished. 

The federal district court found Petitioner guilty of knowingly and willfully referring patients to a home health care provider in exchange for illegal kickbacks and of conspiring with others to engage in that conduct.  CMS Ex. 2 at 155, 178-81.  The district court found that Petitioner accepted cash payments of $300-$400 per patient for certifying or recertifying the patient’s eligibility for home health services reimbursed by Medicare.  Id. at 157-60.  A supplier who accepts payment in exchange for referrals threatens the integrity of the Medicare program in several ways, as the Seventh Circuit described in its opinion affirming Petitioner’s conviction:

At the certification stage, a physician could refuse to certify a patient to a patient-chosen provider unless the provider paid the physician a kickback.  This behavior could increase the cost of care. [Accepting payment for referrals] could also contravene the second purpose of the Anti-Kickback Statute ‒protection of patient choice ‒ by interfering with the patient’s choice if the selected provider refused to pay.

Id. at 197.  The offenses for which Petitioner was convicted directly undermine the integrity of the Medicare program and demonstrate a high level of untrustworthiness on Petitioner’s part.  This conclusion is further reinforced by the fact that, as Petitioner concedes, his illegal conduct persisted for over seven years.  RFH at 7.  This can hardly

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be viewed as a brief lapse in judgment.  For these reasons, among others specified in the reconsidered determination, CMS reasonably concluded that Petitioner’s conviction is detrimental to Medicare and its beneficiaries.  Accordingly, for the reasons explained above, CMS was legally authorized to add Petitioner to the preclusion list.

2. Petitioner’s claim of inadequate notice is moot; and, in any event, I lack authority to grant any relief based on that claim.

Petitioner argues that CMS did not personally serve him with notice of its initial determination placing him on the preclusion list.  P. Br. at 2-3.  As a result, Petitioner complains that CMS placed him on the preclusion list before he could request review of the determination.  Id. at 2.  Petitioner asks me to fashion a remedy for this alleged lack of notice by awarding him “credit for the time in which he was improperly placed on the CMS Preclusion List.” Id. at 3.  However, Petitioner points to no authority that would permit me to do so, and I am aware of none.  Moreover, CMS contends that the notice issue is moot because Petitioner had actual notice of his placement on the preclusion list and had the opportunity to challenge the determination before CMS and before me.  CMS Br. at 11-12.  I agree with CMS that the notice issue is moot. 

First, even if Petitioner did not receive CMS’s initial determination placing him on the preclusion list, it is apparent that Petitioner received actual notice, albeit at a later date.  Petitioner concedes he learned of his placement on the preclusion list at least as of September 15, 2021, when Petitioner’s credentialing company forwarded the CMS correction letters to him.  See CMS Ex. 5 at 9.  Because Petitioner admits that he received the letters, I find it unnecessary to decide whether the letters were properly addressed to Petitioner.  Further, CMS found good cause to accept Petitioner’s reconsideration request and issued a reconsidered determination.  CMS Ex. 1.  As such, any delay in notifying Petitioner was ultimately without prejudice to his appeal rights. 

Second, in the reconsidered determination, CMS stated that it had “retroactively removed [Petitioner] from the CMS Preclusion List.”  CMS Ex. 1 at 3 n.2.  The reconsidered determination went on to state that CMS placed Petitioner on the preclusion list “effective the date of this decision.” Id. at 7.  The regulations provide that an individual will be added to the preclusion list on the date CMS denies the individual’s reconsideration request.  42 C.F.R. §§ 422.222(a)(3)(i)(B), 423.120(c)(6)(v)(C)(1)(ii).  Thus, consistent with the regulations, CMS did not place Petitioner on the preclusion list until December 9, 2021.  I therefore conclude that Petitioner’s argument concerning defective notice is moot because CMS has already granted Petitioner the remedy for which he petitioned me.

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3. To the extent Petitioner’s arguments sound in equity, they are not a basis to reverse CMS’s decision to place him on the preclusion list.

Petitioner insists that his arguments concerning his “exemplary conduct following his conviction” do not invoke equity, but rather are intended to demonstrate that CMS failed to consider his proffered evidence.  P. Br. at 5.  I have rejected Petitioner’s contention that CMS failed to consider mitigating evidence in section IV.B.1. above.  Nevertheless, despite Petitioner’s arguments to the contrary, his contention that following his conviction, “nearly eleven (11) years [have] passed in which, not only has Petitioner abstained from further criminal conduct, but he has maintained his persistent efforts in widely disseminating medical resources and treatment through volunteering and working with several nonprofit organizations,” (RFH at 6) strikes me as an appeal to equity.  Put another way, it seems Petitioner is arguing that placing him on the preclusion list is unfair and unwarranted because he is rehabilitated and is unlikely to offend again.  See RFH at 7 (“Petitioner’s conduct does not rise to the level of seriousness required for his placement on the CMS Preclusion List given his misconduct occurred for a brief moment in his long medical career, in which he has provided valuable medical services to patients.”). 

However, many appellate decisions of the DAB hold that an administrative law judge may not overturn CMS’s denial or revocation of Medicare enrollment based on equitable grounds.  See, e.g., Dr. Robert Kanowitz, DAB No. 2942 at 7 (2019) (and cases there cited); see also U.S. Ultrasound, DAB No. 2302 at 8 (2010); Bussell, DAB No. 2196 at 13.  I am aware of no authority that would support applying a different rule when CMS has exercised its discretion to place an individual on the preclusion list.

   V. Conclusion

For the foregoing reasons, I find that CMS had a legal basis to include Petitioner on its preclusion list, effective December 9, 2021, the date of the reconsidered determination, until February 19, 2024, 10 years from the date of Petitioner’s felony conviction. 

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Endnotes

¹ The Provider Enrollment and Oversight Group is a component of CMS itself, not an administrative contractor. 

² The federal district court’s opinion is reported at 17 F. Supp. 3d 814 (N.D. Ill. 2014). 

³ It appears that Petitioner’s sentencing hearing occurred on July 2, 2014; however, the judgment was filed on July 11, 2014.  CMS Ex. 2 at 132. 

⁴ The Seventh Circuit’s opinion is reported at 778 F.3d 607 (7th Cir. 2015). 

⁵ The document styled “Petitioner’s Request for Hearing” (Docket Entry # 1 in the Departmental Appeals Board (DAB) Electronic Filing System (E‑File)) did not identify the specific issues, findings of fact, and conclusions of law with which Petitioner disagrees, nor the reasons for his disagreement as required by 42 C.F.R. § 498.40(b).  Instead, Petitioner articulated his arguments in a document he styled “Petitioner’s Pre-Hearing Brief” (Docket Entry # 1b in DAB E-File), which he filed with the hearing request.  In this decision, I refer to Docket Entry # 1b as Petitioner’s Request for Hearing (RFH).

⁶ Effective June 15, 2018, CMS amended 42 C.F.R. part 498 to add subsections 498.3(b)(20) and 498.5(n) (specifying that inclusion on the preclusion list is an initial determination and authorizing appeal rights for such determinations).  83 Fed. Reg. 16,440, 16,757 (Apr. 16, 2018).