Tawni Fuller, DAB CR6389 (2023)

DECISION

Petitioner, Tawni Fuller, was a registered nurse who worked at a medical center in Ohio.  She falsely told her employer and co-workers that she had a fatal disease, which allowed her to claim leave under the Family and Medical Leave Act and to receive money donations from co-workers.  She was caught and pleaded guilty to one felony count of telecommunications fraud and two felony counts of theft.  She did not report her conviction to the Medicare contractor.  Based on the convictions and her failure to report, the Centers for Medicare and Medicaid Services (CMS) revoked her Medicare enrollment and imposed a three-year enrollment bar.

The enrollment bar expired, and Petitioner applied to reenroll in the Medicare program.  Again, because of her felony convictions, CMS has denied her application.  Petitioner appealed, and the matter is before me.

I find that CMS is authorized to deny Petitioner Fuller’s Medicare enrollment because, within the ten years preceding her filing the application, she was convicted of felonies that are detrimental to the best interests of the Medicare program and its beneficiaries.  I therefore affirm CMS’s determination.

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Background

By letter dated December 27, 2022, the Medicare contractor, CGS, denied Petitioner Fuller’s application for enrollment in the Medicare program because, on November 26, 2018, she was convicted of felony telecommunications fraud, and felony theft.  CMS Ex. 2.¹  Petitioner requested reconsideration.

In a reconsidered determination, dated May 30, 2023, a CMS hearing officer upheld CMS’s determination.  The hearing officer concluded that the enrollment denial was appropriate under section 424.530(a)(3) because, within the preceding ten years, Petitioner was convicted of a felony offense that CMS determined is “per se detrimental to the best interests of the Medicare program and its beneficiaries.”  CMS Ex. 1 at 3-5.

Petitioner appealed.

Decision based on the written record.  The parties have filed cross-motions for summary judgment.  However, this matter may be decided based on the written record without considering whether the standards for summary judgment have been met.  Neither party proposes 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.  El Medical, Inc., DAB No. 3117 at 15 (2023); see Acknowledgment and Pre-hearing Order at 4, 5, 6 (¶¶ 4(c)(iv), 8, 9, 10) (July 28, 2023).²

CMS has submitted its motion and brief (CMS Br.), along with 13 exhibits (CMS Exs. 1-13).  Petitioner has submitted her own motion and brief with no exhibits.  In the absence of any other objections, I admit into evidence CMS Exs. 1-13.

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Discussion

1. CMS may deny Petitioner enrollment in the Medicare program because, within the ten years preceding her enrollment application, she was convicted of a felony that is detrimental to the best interests of the Medicare program and its beneficiaries.  42 C.F.R. § 424.530(a)(3).³

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, home health, and hospice care.  Act § 1811 (42 U.S.C. § 1395c);
• Part B, which is voluntary, is the supplementary medical insurance program, covering physician, home health, outpatient rehabilitation, 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 (such as Petitioner) 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), (s)(2)(H)(K) (42 U.S.C. § 1395x(d), (s)(2)(H)(K)); 42 C.F.R. § 400.202.

Enrollment denial.  CMS may deny a supplier’s enrollment in the Medicare program if, within the preceding ten years, she 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. § 424.530(a)(3); see also Act §§ 1842 (h)(8) and

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1866(b)(2)(D).  Offenses for which billing privileges may be denied include – but are not limited to –financial crimes such as extortion, embezzlement, income tax evasion, insurance fraud, and similar crimes; a felony that places the Medicare program or its beneficiaries at immediate risk (such as malpractice); and felonies “that would result in mandatory exclusion under section 1128(a) of the Act.”  42 C.F.R. § 424.530(a)(3)(i)(B) and (a)(3)(i)(D).⁴

So long as the regulatory elements required for denial of enrollment under section 424.530(a) are present, I must affirm.  William Garner, M.D., DAB No. 3026 at 16 (2020); John A. Hartman, D.O., DAB No. 2911 at 17 (2018); Norman Johnson, M.D., DAB No. 2779 at 11 (2017); Douglas Bradley, M.D., DAB No. 2663 at 6-7, 13-14 (2015) and cases cited therein.

Petitioner’s felony offense.  Petitioner was a registered nurse and registered nurse anesthetist, licensed in Ohio.  CMS Ex. 6 at 9.  From about May through August 2016, she worked at the Ohio State University Wexner Medical Center.  She told her employer and co-workers that she had a serious medical condition.  She did not have a serious medical condition.  Nevertheless, she submitted falsified paperwork to her employer for leave under the Family Medical Leave Act, which her employer approved and which she took.  She also accepted money donations and donated leave from her co‑workers.  When her employer discovered the fraud, she resigned.  CMS Ex. 6 at 10.  As a result of her deception, she collected $45,469.66 from her employer and smaller amounts from her co-workers, totaling approximately $47,774.28.  CMS Ex. 7 at 16.

On October 23, 2018, Petitioner Fuller pleaded guilty to:  one felony count of telecommunications fraud, in violation of Ohio Revised Code § 2913.05(A), and two counts of theft, in violation of Ohio Revised Code § 2913.02(A)(3).  CMS Ex. 10 at 2.

Those statutes read as follows:

Telecommunications fraud.  No person, having devised a scheme to defraud, shall knowingly disseminate, transmit, or cause to be disseminated or transmitted by means of a wire, radio, satellite, telecommunication, telecommunications device, or telecommunications service any writing, data, sign, signal, picture, sound, or image with purpose to execute or otherwise further the scheme to defraud.

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Ohio Rev. Code Ann. § 2913.05(A).

Theft.  No person, with purpose to deprive the owner of property or services, shall knowingly obtain or exert control over either the property or services . . . by deception.

Ohio Rev. Code Ann. § 2913.02(A)(3).

The court accepted her plea and entered judgment against her on November 26, 2018.  CMS Ex. 10.

The court found that a prison sentence was necessary “to protect the public from future crimes by the offender and others” and that she was “not amenable to community control sanctions.”  CMS Ex. 10 at 2.  She was sentenced to 24 months in prison for the telecommunications fraud, plus 18 and 12 months in prison for the two theft charges, the sentences to be served concurrently.  The court ordered her to pay $45,469.68 in restitution to the medical center and $2,304.60 in restitution to her other victims.  CMS Ex. 10 at 3-4.

The Medicare revocation.  Petitioner Fuller was then enrolled in the Medicare program.  She did not notify CMS of the convictions.  CMS Ex. 4 at 1.  In a notice dated September 5, 2018, the Medicare contractor advised Petitioner that her Medicare privileges were revoked, effective November 26, 2018, because of her felony convictions (42 C.F.R. § 424.535(a)(3) and her failing to report those convictions to CMS (42 C.F.R. § 424.535(a)(9).  CMS Ex. 4.  CMS imposed a three-year reenrollment bar, effective October 5, 2019.  CMS Ex. 4 at 2.

Petitioner’s reenrollment application.  The reenrollment bar expired, and, in an application filed on November 21, 2022, Petitioner applied for reenrollment in the Medicare program.  CMS Ex. 12.  CMS has denied her application because her felony convictions are detrimental to the best interests of the Medicare program and its beneficiaries.

Petitioner admits that, within the last ten years, she was convicted of fraud and theft, but she argues that her crimes are not “of a similar nature to those offenses” listed in the regulation as detrimental to the Medicare program.  P. Br. at 2.  Although “undeniably fraudulent,” Petitioner distinguishes her crimes from the crime of embezzlement.  According to Petitioner, the embezzler is first entrusted with other people’s money, and then she steals it; in contrast, Petitioner more directly stole people’s money through her fraud and deception.  In Petitioner’s view, she could not have embezzled because she never had lawful possession of the money in the first instance.  P. Br. at 3-4.

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For purposes of determining whether a felony is detrimental to the Medicare program, this very fine distinction makes no practical sense.  Theft and the fraud are the critical elements here, not the details as to how she carried out those crimes.  The Departmental Appeals Board has recognized this repeatedly:  the qualifying conviction for a financial crime under section 424.530(a)(3) (or section 424.535(a)(3)) need not be one of the crimes expressly identified in the regulation as a financial crime (extortion, income tax evasion, insurance fraud).  Those named crimes “are illustrative examples of financial crimes.”  Michael Scott Edwards, OD, and M. Scott Edwards, OD, PA, DAB No. 2975 at 10 (2019).  By drafting section 424.530(a)(3), CMS deemed all financial crimes to be detrimental to the Medicare program.  Cornelius M. Donohue, DPM, DAB No. 2888 at 4‑5 (2018) (citing Stanley Beekman, D.P.M., DAB No. 2650 at 7 (2015)) (emphasis added).

Following this broad definition of the regulation, the Board has upheld denials of enrollment and revocations in cases involving a wide variety of financial felonies.  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, D.P.M., DAB No. 2650 (making false statements on a bank loan application).

I therefore agree with CMS that Petitioner was convicted of felonies that are detrimental to the best interests of the Medicare program and its beneficiaries.

Conclusion

CMS is authorized to deny Petitioner Fuller’s Medicare enrollment application because, within the ten years preceding her filing the application, she was convicted of felonies that CMS has determined are detrimental to the best interests of the Medicare program and its beneficiaries.  42 C.F.R. § 424.530(a)(3).  I therefore affirm CMS’s determination.

Endnotes

¹  In error, the contractor’s letter cites 42 C.F.R. § 424.535(a)(3), instead of 42 C.F.R. § 424.530(a)(3), as the basis for the denial.  Section 424.535 sets forth bases for revoking a supplier’s Medicare enrollment.  Section 424.530 sets forth bases for denying applications for Medicare enrollment.  The Medicare hearing officer corrected the error in his reconsidered determination.

²  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 42 C.F.R. § 498.66(d) (on conducting a hearing without oral testimony); CNG Transmission Corp. v. FERC, 40 F.3d 1289, 1293 (D.C. Cir. 1994) (holding that a “paper hearing” satisfies statutory requirements for “notice and opportunity for hearing.”).

³  I make this one finding of fact/conclusion of law.

⁴  Section 1128 crimes include:  program-related crimes; crimes related to the neglect or abuse of patients in connection with the delivery of a healthcare item or service; crimes relating to health care fraud; crimes relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance; and convictions relating to the obstruction of an investigation or audit.  See 42 C.F.R. §§ 1001.101, 1001.301.