Hossain Sahlolbei, M.D., DAB CR6365 (2023)

DECISION

I sustain the determination of a Medicare contractor, as affirmed on reconsideration, to deny Medicare enrollment to Petitioner, Hossain Sahlolbei, M.D.

I. Background

The Centers for Medicare & Medicaid Services (CMS) filed a brief and a motion for summary judgment, along with 12 exhibits, identified as CMS Ex. 1-CMS Ex. 12.  Petitioner filed a brief on the merits and in opposition to CMS’s motion.  He filed three exhibits, consisting of his CV (P. Ex. 1) and two declarations:  the declaration of Sandra Anaya, and Petitioner’s own declaration.  Petitioner did not identify these declarations with exhibit numbers.  For purposes of the record, I identify Ms. Anaya’s declaration as P. Ex. 2 and Petitioner’s declaration as P. Ex. 3.

Although CMS moved for summary judgment it is unnecessary that I consider whether the grounds for summary judgment are present.  I decide this case based on the parties’

Page 2

written exchanges.  CMS did not file witness declarations or affidavits.  As for the two declarations filed by Petitioner, I find them to be irrelevant, for reasons that I explain below.  Consequently, it is appropriate that I decide this case based on what the parties have filed without convening an in-person hearing.  I receive the parties’ exhibits into the record.

II. Issue, Findings of Fact and Conclusions of Law

 A. Issue 

The issue is whether a Medicare contractor, acting on behalf of CMS, acted within its authority to deny Petitioner’s Medicare enrollment application.

B. Findings of Fact and Conclusions of Law

Petitioner is a physician.  On October 16, 2016, Petitioner was convicted in a California state court of the felony of Grand Theft.  CMS Ex. 5; CMS Ex. 6.

Petitioner’s crime was a scheme to systematically misappropriate funds that should have been paid to – and that belonged to – another physician, an anesthesiologist.  CMS Ex. 5.  In 2009, Petitioner told this physician that he was authorized to negotiate a contract with him for anesthesiology services on behalf of a local hospital.  CMS Ex. 11 at 18-19.  He executed a contract with the anesthesiologist to pay him up to $36,000 per month for anesthesiology services provided at the hospital.  Id.  Simultaneously, Petitioner advised the hospital that he was authorized to negotiate a contract on behalf of the anesthesiologist.  Id. at 19.  He then entered a contract with the hospital that provided for payments of up to $48,000 per month for the anesthesiologist’s services.  Id.  The anesthesiologist was unaware of the fee agreement negotiated between Petitioner and the hospital and the hospital’s management was unaware of the separate agreement that Petitioner had negotiated with the anesthesiologist.  Id.

For a period of several years Petitioner pocketed the difference between what the hospital paid for the anesthesiologist’s services and the payments that Petitioner directed to the anesthesiologist.  CMS Ex. 11 at 20.  Petitioner’s scheme was not exposed until 2012.  Id.

Petitioner’s crime had a substantial financial impact.  His sentence included a prison term and the requirement that he pay restitution of $508,150 to the local hospital.  CMS Ex. 1 at 22.

On August 14, 2018, a Medicare contractor, acting on behalf of CMS, revoked Petitioner’s Medicare enrollment and imposed a three-year reenrollment bar against him.  CMS Ex. 8.  Petitioner did not challenge the contractor’s determination.

Page 3

On October 11, 2022, after the expiration of the reenrollment bar, Petitioner filed an application with the contractor for Medicare enrollment.  The contractor denied this application.  CMS Ex. 2.  Petitioner requested reconsideration of this determination.  CMS Ex. 1 at 1-2.  The contractor affirmed the determination on reconsideration.

The contractor denied Petitioner’s request to enroll on the authority of 42 C.F.R. § 424.530(a)(3).  This section authorizes denial of enrollment to any supplier who has been convicted within the previous ten years of a federal or state felony offense that CMS (or a contractor acting on behalf of CMS) determines is detrimental to the best interests of the Medicare program and its beneficiaries.  These felonies are defined to include:  “Financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud, or other similar crimes . . . .”  42 C.F.R. § 424.530(a)(3)(i)(B).

The evidence unequivocally establishes that Petitioner was convicted of a felony falling within the reach of 42 C.F.R. § 424.530(a)(3).  Denial of enrollment thus fell within the contractor’s discretion.  I have no authority to reverse that determination.

It is undisputed that Petitioner was convicted of a felony within the ten-year period prior to the determination to deny his enrollment application.  That felony – Grand Theft – plainly is a “financial crime” as the regulation utilizes that term.  Stealing funds, or misappropriating them, is of a class of crimes that includes embezzlement, one of the examples cited by the regulation to describe a financial crime.

These examples are just that and not an exclusive list of the crimes that are financial crimes.  The regulation does not suggest a narrow definition of the term “financial crimes,” but rather, a very broad one.  The examples cited by the regulation are modified by the term “such as,” clearly stating that they do not make up a laundry list of financial crimes but are merely examples of what may constitute a financial crime.  Consequently, Petitioner’s crime falls within the regulation’s ambit and denial of enrollment is amply justified by that crime.  Saeed A. Bajwa, MD, DAB No. 2799 at 8 (2017).

I have considered Petitioner’s arguments and I find them to be without merit.

Petitioner argues that he was not convicted of a financial crime.  Rather, he asserts, he was convicted of a “failure to disclose that he was receiving payments based on a contractual arrangement.”  Petitioner’s Memorandum of Points and Authorities in Opposition to Respondent’s Motion for Summary Judgment; and His Prehearing Brief (Petitioner’s brief) at 7.  He asserts that he had no intent to defraud anyone.  Id.  He argues also that his crime was effectively victimless because neither the anesthesiologist whose services were involved, nor the hospital, claimed that they were damaged by Petitioner’s conduct.  Id. at 8.

Page 4

I find these assertions to be unavailing.  The undeniable fact is that Petitioner was convicted of theft.  The essence of his crime was that he stole money that either should have been paid by the hospital directly to the anesthesiologist for his services or not paid at all.  The amount of Petitioner’s theft can be measured by the restitution – more than a half million dollars – that the court ordered him to pay.  It can also be measured, albeit indirectly, by the fact that Petitioner was sentenced to, and served, a term of imprisonment as punishment for his crime.

Petitioner argues that the contractor erred in determining that Petitioner’s crime was detrimental to the best interests of the Medicare program.  Petitioner’s brief at 8 – 11.  As support for this contention, he avers that:

• The hospital that paid for the anesthesiologist’s services does not assert it was defrauded.  Indeed, the hospital’s chief executive would like to see Petitioner re-enrolled as a Medicare provider because the hospital and the local community have need of his services.  Petitioner’s brief at 8-9; P. Ex. 2.
• He poses no risk to the Medicare program.  He has completed a four-year probation as part of a settlement with the Medical Board of California, a probation that included taking an ethics course and providing 300 hours of community service.  Petitioner’s brief at 10; P. Ex. 3.

Effectively, Petitioner argues that the contractor abused its discretion in determining to deny him enrollment.  He requests that I substitute my judgment for that of the contractor and decide de novo whether Petitioner’s crime merits denial of enrollment.  I am without authority to do what Petitioner asks.  For that reason, I find Petitioner’s arguments and his supporting evidence to be irrelevant.

The regulation vests authority in CMS and its contractors to determine whether a crime is detrimental to the best interests of the Medicare program and its beneficiaries.  It does not authorize me to second guess that exercise of discretion.  Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 12 (2008).  My reviewing authority is limited to deciding whether a regulatory basis exists for CMS or a contractor to deny enrollment.  If that regulatory basis is present, I may not look behind a denial determination to question whether CMS or the contractor acted properly, nor may I supersede CMS or its contractor’s determination.

As I have explained above, there is a clear regulatory basis to deny enrollment.  Petitioner was convicted of a financial crime as is defined by 42 C.F.R. § 424.530(a)(3)(i)(B).  That is enough to conclude that the contractor acted within its delegated authority.

Petitioner asserts that this case is distinguishable from those in which the Departmental Appeals Board has found that the administrative law judge lacks the authority to conduct

Page 5

a de novo review because those cases involved financial crimes that automatically justify denial of enrollment.  P. Br. at 10-11.  Here, according to Petitioner, no financial crime occurred.  Thus, the determination by the contractor to deny enrollment is solely discretionary, and therefore ripe for de novo review.  Id. at 10.

I disagree with this analysis.  First, Petitioner’s crime was a financial crime as is defined by the regulation, for reasons that I have stated.  Second, I lack authority to look behind the contractor’s exercise of discretion even if Petitioner’s crime is not a financial crime.  CMS and its contractors may deny enrollment to an individual who is convicted of a crime that is determined to be “detrimental to the best interests of the Medicare program and its beneficiaries.”  42 C.F.R. § 424.530(a)(3).  Such crimes include financial crimes, but they are not limited to such crimes.  42 C.F.R. § 424.530(a)(3)(i).  It is within CMS’s or its contractors’ discretionary authority to decide whether a felony conviction is detrimental to the best interests of the Medicare program and its beneficiaries, authority that I may not second guess.

Petitioner argues that CMS and its contractor should be estopped from denying enrollment to Petitioner.  Petitioner’s brief at 11-12.  He contends that he relied on the prior determination to impose a three-year reenrollment bar and assumed that he would be able to re-enroll once the bar expired.  He argues that he relied to his detriment on that assumption, including foregoing the opportunity to join a potentially lucrative practice that did not obtain reimbursement from Medicare.  Id.

Petitioner’s argument fails, for two reasons.  First, and as a matter of law, CMS and its contractors are not precluded from denying enrollment to an individual who has previously been barred from enrolling as a Medicare supplier for the same crime that is the basis for the current enrollment denial.  John A. Hartman, D.O., DAB No. 2911 at 18 (2018).  Second, Petitioner’s argument is fundamentally equitable.  He essentially contends that it would now be unfair to deny his enrollment application.  I have no authority to decide whether CMS or the contractor violated principles of equity.  Gregory J. Frazer, Au.D, Ph.D., DAB No. 3038 at 9 (2021).¹

Endnotes

¹ Moreover, Petitioner has no basis to assert estoppel against CMS or its contractor in that Petitioner has not alleged any affirmative misconduct by either entity.