Omair Chaudry, MD, DAB CR6390 (2023)

DECISION

Petitioner Omair Chaudry, MD, is currently a physician, licensed to practice in Texas.  He pleaded guilty, in federal court, to one felony count of misprision of a felony, and, on July 19, 2017, judgment was entered against him.  He subsequently completed medical school and applied to enroll in the Medicare program.  His application did not disclose his conviction.  The Medicare contractor approved his application, and he participated in the program as a supplier of services.

When the Centers for Medicare & Medicaid Services (CMS) learned of Petitioner Chaudry’s conviction, it determined that he had been convicted of a felony offense that was detrimental to the best interests of the Medicare program, which he failed to report on his Medicare application.  CMS revoked Petitioner’s Medicare enrollment pursuant to 42 C.F.R. §§ 424.535(a)(3) and 424.535(a)(4), imposed a ten-year reenrollment bar, and placed him on the Medicare Preclusion List.

Petitioner appealed.

I affirm CMS’s determinations.  I find that CMS is authorized to revoke the Petitioner Chaudry’s Medicare enrollment, impose a ten-year reenrollment bar, and place him on the preclusion list for two reasons:  1) within the preceding ten years, he was convicted of

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a felony that CMS reasonably deems detrimental to the best interests of the Medicare program; and 2) he failed to report the felony conviction on his Medicare application.

Background

In a letter dated March 8, 2023, the Medicare contractor, Wisconsin Physicians Service Insurance Corporation, advised Petitioner Chaudry:  that his Medicare privileges were revoked, pursuant to 42 C.F.R. §§ 424.535(a)(3) and (a)(4); that he was under a ten-year reenrollment bar; and that he was being added to the CMS Preclusion List, as authorized by 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  Request for Hearing Supporting Documents (e-file # 1b).

Petitioner requested reconsideration.  CMS Ex. 7.

In a reconsidered determination, dated June 5, 2023, a CMS hearing officer upheld the revocation under both section 424.535(a)(3) and section 424.535(a)(4).  She also affirmed the duration of the reenrollment bar and Petitioner Chaudry’s placement on the preclusion list.  Originating Case Decision (e-file # 1a).

Petitioner timely appealed, and the matter is now before me.

CMS has filed a motion for summary judgment with a pre-hearing brief (CMS Br.) and eight exhibits (CMS Exs. 1-8).  Petitioner filed his own brief in opposition to summary judgment and pre-hearing brief (P. Br.) with 21 exhibits (P. Exs. 1-21).

Decision based on the written record.  This matter may be decided on the written record without considering whether the standards for summary judgment have been met.  CMS proposes no witnesses.  Petitioner proposes 13 witnesses and, in accordance with my pre-hearing order, has submitted their written declarations (P. Exs. 9-21).  CMS objects to my admitting most of these declarations (discussed below), and, in any event, has not asked to cross-examine any of the witnesses.  Because there are no witnesses to be examined further 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, 6 (¶¶ 4(c)(iv), 8, 9, 10) (July 10, 2023).¹

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Exhibits.  In the absence of any objections, I admit into evidence CMS Exs. 1-8.

CMS objects to many of Petitioner’s proposed exhibits:  P. Exs. 1-8 and 13-21.

Objections based on 42 C.F.R. § 498.56(e).  CMS objects to two of Petitioner’s exhibits because they were offered, for the first time, at this level of review:  P. Ex. 1 and P. Ex. 4.  Unless I find that good cause exists for Petitioner’s submitting them, for the first time, at this level of review, I must exclude this evidence.  42 C.F.R. § 498.56(e).  The contractor’s March 8, 2023 notice letter warned Petitioner:

[Y]ou must submit [any additional] information with your request for reconsideration.  This is your only opportunity to submit information during the administrative appeals process unless an ALJ allows additional information to be submitted.

Request for Hearing Supporting Documents (e-file # 1b) at 3 (emphasis added).

P. Ex. 1 is a presentence investigation report, which Petitioner suggests, establishes that his felony offense was not severe enough to merit revocation.  See P. Br. at 4, 6.

Consistent with my initial order, Petitioner identified P. Ex. 1 as a new exhibit and asserts that good cause exists for my receiving it at this stage of review.  Acknowledgment and Pre-hearing Order at 5 (¶ 6) (July 10, 2023).  Petitioner argues that the CMS hearing officer could have located the document and considered it in determining whether Petitioner’s offense was severe enough to justify revocation.  P. Br. at 4 n2; P’s List of Proposed Exhibits at 2 (e-file # 6a).²  As to why he did not submit the document himself, Petitioner claims that, at the time he requested reconsideration, “he had no idea what the basis of the revocation was other than there was a conviction.”  P’s List of Proposed Exhibits at 2 (e-file # 6a).

Petitioner has not established good cause for failing to submit the exhibit at the reconsideration level.  He may not have had the document, but it was available, and he could have obtained it (certainly as easily as the hearing examiner could have obtained it).  Nor do I accept his suggestion that he didn’t then understand that it could be relevant.  In its initial notice letter, the Medicare contractor advised Petitioner that his enrollment was being revoked based on 42 C.F.R. § 424.535(a)(3), which says that CMS may revoke a supplier’s Medicare enrollment if the supplier was, within the preceding ten years,

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convicted of a felony that “CMS determines is detrimental to the best interest of the Medicare program and its beneficiaries.”  Request for Hearing Supporting Documents (e-file # 1b).

Petitioner was thus advised that any evidence suggesting that his felony offense was not detrimental to the program and its beneficiaries could be relevant.  Petitioner understood this.  At reconsideration, he argued some of the more favorable aspects (and omitted the less favorable aspects) of the presentence investigation report.  He argued:  “[G]iven that his probation was only for two years and that he was allowed to leave the country to attend medical school in Antigua while on probation, the Court felt that Dr. Chaudry was trustworthy enough to allow him latitude to begin his medical school studies.”  Originating case decision (e-file # 1a).

P. Ex. 4 is Petitioner’s medical school transcript.  Petitioner does not identify the document as new or suggest good cause for failing to offer it at the reconsideration level.

Because Petitioner has not shown good cause for failing to submit P. Exs. 1 and 4 at an earlier stage of review, as required by 42 C.F.R. § 498.56(e), I decline to admit them.

Duplicate exhibits.  CMS also objects to my admitting P. Exs. 2-3 and 5-8 because those documents are already in the record as sections of CMS Ex. 8.³  Because these documents are already in the record, I decline to admit the duplicates.

Relevance.  Finally, CMS objects to P. Exs. 13-21, which are written declarations from Petitioner’s friends and family members attesting to his good character.  CMS argues that the declarations are not relevant or material to the question of whether CMS had a lawful basis for revoking Petitioner’s Medicare enrollment and placing him on the preclusion list.  I agree.  The questions before me are whether CMS reasonably determined that Petitioner’s felony is detrimental to the best interests of the Medicare program and whether he reported that conviction on his application for enrollment.  The good opinions of Petitioner’s friends and family members are not relevant to those questions.

I admit into evidence P. Exs. 9-12.

Discussion

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

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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 entities that furnish healthcare services may participate in the program as “suppliers” of services; however, they must enroll in the program in order to receive Medicare payments.  Act §§ 1861(d), (q), (r) (42 U.S.C. §§ 1395x(d), (q), (r)); 42 C.F.R. §§ 400.202, 424.505.

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

1. CMS may revoke the Petitioner Chaudry’s Medicare enrollment pursuant to 42 C.F.R. § 424.535(a)(3), because, within ten years preceding the revocation, he was convicted of a felony that CMS reasonably finds detrimental to the best interests of the Medicare program and its beneficiaries.⁴

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42 C.F.R. § 424.535(a)(3).  Among other regulatory bases, CMS may revoke a supplier’s Medicare billing privileges if, within the preceding ten years, the supplier or any owner or managing employee was convicted of a “felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.”  42 C.F.R. § 424.535(a)(3)(i); see also Social Security Act (Act) §§ 1842 (h)(8) and 1866(b)(2)(D).  Offenses for which billing privileges may be terminated include – but are not limited to – financial crimes such as extortion, embezzlement, income tax evasion, insurance fraud, and other similar crimes.  42 C.F.R. § 424.535(a)(3)(ii)(B).

If the conviction is for a crime other than the ones listed in the regulations, CMS may decide, on a case-by-case basis, whether the felony conviction is detrimental the Medicare program and its beneficiaries.  Stephen C. White, M.D., DAB No. 3116 at 12 (2023), and cases cited therein.

Petitioner Chaudry’s felony offense.  On May 10, 2017, Petitioner Chaudry pleaded guilty to misprision of a felony, in violation of 18 U.S.C. § 4.  CMS Ex. 1.  A person is guilty of misprision of a felony if he has knowledge of a felony and does not, as soon as possible, make that known to a responsible authority.

Petitioner was more than a passive recipient of information about a felony.  Albeit unwittingly, he actively participated in at least one aspect of a scheme to defraud the Kroger Company.  He was not charged for that participation.  But, after learning that he had participated in a felony, he acted affirmatively to conceal the crime.  For that, he was charged and convicted of misprision of a felony.  CMS Ex. 2 at 2.

Specifically, Petitioner’s friend, Rani Alabed, was stealing money from his employer, the Kroger Company, by submitting fraudulent purchase orders.  At Alabed’s request, Petitioner set up, under his own name, a sham “metal fabrication business” and a bank account for that business to receive Kroger’s payments for services that were never provided.  Petitioner withdrew the payments in cash and paid Alabed (who apparently kept most of the money).  Petitioner did not know that the payments were for false requisitions and purchase orders; he thought that he was helping his friend and an “underpaid” (and fictitious) Kroger employee, who wanted to start the business but supposedly could not do so because he had a conflict of interest.  Petitioner was to receive 10% of the funds deposited into the account.  CMS Ex. 2 at 2-4.

The scheme lasted for about ten months, from November 19, 2014, until September 3, 2015, when Kroger discovered the fraud and fired Alabed.  CMS Ex. 2 at 4.  Alabed then told Petitioner that the enterprise had been a scam and that the purported “underpaid employee” did not exist.  He also told Petitioner not to talk to investigators.  CMS Ex. 2 at 5.

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A year later, on October 17, 2016, Petitioner was attending medical school when an FBI special agent interviewed him about his sham company.  Petitioner lied to the agent.  He told the agent that he had, in fact, performed actual metal fabrication work, running the company out of his parents’ garage.  This was a complete falsehood.  CMS Ex. 2 at 5.

The conviction.  On May 25, 2017, the United States District Court for the Northern District of Texas accepted Petitioner’s guilty plea and entered judgment against him.  CMS Ex. 3.⁵  The court subsequently sentenced Petitioner Chaudry to 24 months of probation and ordered him to pay a $100 assessment.  CMS Ex. 4.

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

Petitioner concedes that he was convicted of the felony but points out that the revocation was discretionary, not mandatory, and complains that CMS did not properly consider relevant regulatory factors:  the severity of the offense, when the offense occurred, and other relevant information.  P. Br. at 7, citing 42 C.F.R. §§ 422.2, 423.100.⁶

Here, the underlying crime went on for ten months.  Although Petitioner was not aware of the extent of the fraud, he must certainly have known that he was creating the false impression that he owned and operated a legitimate business in order to deceive the Kroger company.  At a minimum, he thought he was covering for someone who could not ethically have owned or operated the business.  More important, by September 2015, Petitioner was fully aware that a serious crime had been committed and that he had been

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a part of it.  Yet, he said nothing to law enforcement for a full year.  Then, when ultimately questioned by the FBI, he lied.

I agree with CMS and the Medicare Hearing Officer:

[Petitioner’s] conduct displays dishonest behavior and reflects negatively on [his] ethics and professionalism.  [The] felony conviction calls into question his trustworthiness and veracity.  Payment under the Medicare program is made for claims submitted in a manner that relies upon the trustworthiness and best judgment of [CMS’s] Medicare partners.  Given the facts underlying [Petitioner’s] felony conviction, the Trust Funds may be at risk if [he] remains a supplier in the Medicare program.

Originating Case Decision (e-file # 1a) at 5.  Based on the facts underlying his felony conviction, CMS reasonably determined that his felony is detrimental to the best interests of the Medicare program and its beneficiaries and was therefore authorized to revoke his enrollment pursuant to section 424.535(a)(3).

2. In the alternative, CMS properly revoked Petitioner Chaudry’s Medicare enrollment pursuant to 42 C.F.R. § 424.535(a)(4) because the information on his Medicare enrollment application was false or misleading.

42 C.F.R. § 424.535(a)(4).  CMS may also revoke a supplier’s Medicare enrollment if, on his enrollment application, he certified, as “true,” misleading or false information.

Petitioner was unquestionably convicted of a felony.  Yet, his Medicare enrollment application, indicates “no” in response to the question:  “Has a final adverse legal action ever been imposed against an applicant under any current or former name or business entity?”  CMS Ex. 5 at 2.

Petitioner argues that he was not responsible for the misinformation provided.  According to Petitioner, his employer’s credentialing department submitted the application, and he “was not privy to any aspect of that process.”  He did not review it; he did not sign it.  P. Ex. 9 at 4 (Chaudry Decl. ¶ 8); P. Ex. 11 (Flora Decl. ¶¶ 3, 4); P. Ex. 12 (Martin Decl. ¶¶ 3, 4).

Petitioner has not explained how his employer came to submit the enrollment application on his behalf.  He has not established, or even argued, that his employer was not authorized to do so.  See 42 C.F.R. § 24.510(d)(3) (“The certification statement found on the enrollment application must be signed by an individual who has the authority to bind

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the provider or supplier, both legally and financially, to the requirements set forth in this chapter.”).

Section 424.535(a)(4) “does not require proof that [the applicant] subjectively intended to provide false information, only proof that [he] in fact provided misleading or false information that [he] certified as true.”  Sandra E. Johnson, CRNA, DAB No. 2708 at 15 (2016), quoting Mark Koch, D.O., DAB No. 2610 at 4-5 (2014).

[I]t is ultimately immaterial whether [the petitioner] actually completed the [application] forms [himself], or someone else completed the forms for [him] and intentionally or negligently omitted [from the forms] information about the negative . . . history. . . .  Nor is it relevant whether a billing person did or did not provide [the petitioner] an opportunity to review the forms before they were filed. . . .

Id. at 14 (emphasis added).  See Angela R. Styles, DAB No. 2882 at 9-10 (2018) (holding that an applicant may not escape his obligation to report by shifting the responsibility to someone else); Tammy Dobbins, APN and Ebony Wellness, LLC, DAB CR6316 at 11-13 (2023).⁷

Because Petitioner’s enrollment application did not disclose his felony conviction, CMS was authorized to revoke his Medicare enrollment pursuant to section 424.535(a)(4).

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

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

I have no authority to review the length of a reenrollment bar.  42 C.F.R. § 498.3(b); Duke Ahn, M.D., DAB No. 3093 at 7 (2023); Linda Silva, P.A., DAB No. 2966 at 11 (2019); Vijendra Dave, M.D., DAB No. 2672 at 9-12 (2016); accord, Garner, M.D., DAB No. 3026 at 16, Lilia Gorovits, M.D., P.C., DAB No. 2985 at 15-16 (2020).  I am authorized to review initial determinations “to deny or revoke a provider or supplier’s Medicare enrollment in accordance with . . . [section] 424.535.”  42 C.F.R.

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§ 498.3(b)(17).  As the Board observed in Vijendra Dave, the regulations confer no such right to appeal CMS’s determination concerning the duration of a post-revocation re-enrollment bar.  Dave, DAB No. 2672 at 10.

CMS made this clear when it amended section 424.535(c) to allow CMS to add three or more years to an existing reenrollment bar if it found that the provider or supplier had attempted to circumvent an existing reenrollment bar.  CMS afforded appeal rights to providers and suppliers affected by the change.  Thus, if CMS adds years to an existing reenrollment bar, the supplier can “appeal CMS’ imposition of additional years to the . . . supplier’s existing enrollment bar under [section] 424.535(c)(2).  These appeal rights would be governed by 42 CFR part 498.”  However, CMS was explicit that those appeal rights “would not extend to the imposition of the original reenrollment bar under [section] 424.535(c)(1); they would be limited to the additional years imposed under [section] 424.535(c)(2).”  84 Fed. Reg. 47,794, 47,826 (Sept. 10, 2019) (emphasis added).

Thus, the amended regulation lists as an initial determination, subject to appeal, “whether under [section] 424.535(c)(2)(i) of this chapter, to add years to a . . . supplier’s existing re-enrollment bar.”  42 C.F.R. § 498.3(b)(17)(ii) (emphasis added).  Lest there be any doubt as to the limits of a supplier’s appeal rights, the amended version also provides that a supplier’s appeal rights “[d]o not extend to the imposition of the original reenrollment bar under paragraph (c)(1) of this section.”  42 C.F.R. § 424.535(c)(2)(ii)(B).

4. CMS acted within its authority when it added Petitioner Chaudry to its preclusion list because, within the preceding ten years, he was convicted of a felony that CMS reasonably determined is detrimental to the best interests of the Medicare program.

The preclusion list.  Effective January 1, 2019, CMS implemented a “preclusion list” as part of its effort to “prevent fraud, waste, and abuse, and to protect Medicare enrollees,” particularly with respect to prescription drug abuse.⁸  Pursuant to 42 C.F.R. § 422.2 (Part C) and 42 C.F.R. § 423.100 (Part D) CMS’s “preclusion list” includes individuals and entities that have “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

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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; 423.100 (defining “preclusion list”).

Petitioner’s placement on the preclusion list.  I have discussed in some detail the elements of Petitioner Chaudry’s crime, which CMS reasonably determined is detrimental to the best interests of the Medicare program and its beneficiaries.  CMS was therefore authorized to add him to the Medicare preclusion list.  42 C.F.R. §§ 422.2, 423.100.

Conclusion

CMS justifiably determined that, within the preceding ten years, Petitioner Chaudry was convicted of a felony detrimental to the best interests of the Medicare program and its beneficiaries.  His Medicare enrollment application falsely denied that he had been subject to any adverse legal action.  CMS is therefore authorized to revoke his Medicare enrollment pursuant to either section 424.535(a)(3) or section 424.535(a)(4); it may also impose a reenrollment bar and place him on the preclusion list.

For these reasons, I affirm CMS’s determination.

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Endnotes

¹  That I decide this case based on the written record does not mean that Petitioner has not had a hearing.  Courts recognize that, although a case may be decided on summary judgment or based on the written record, the administrative law judge, by considering the evidence and applying the law, has granted the petitioner a hearing.  See 42 C.F.R. § 498.66(d) (on conducting a hearing without oral testimony); CNG Transmission Corp. v. FERC, 40 F.3d 289, 293 (D.C. Cir. 1994) (holding that a “paper hearing” satisfies statutory requirements for “notice and opportunity for hearing.”).

²  The regulations do not require that the hearing officer to track down and submit any evidence.  To the contrary, they provide that she “receives evidence” and “considers evidence submitted.”  42 C.F.R. § 498.24 (emphasis added).  The parties, not the hearing officer, are charged with submitting the evidence.

³  P. Ex. 2 replicates CMS Ex. 8 at 6; P. Ex. 3 replicates CMS Ex. 8 at 4-5; P. Ex. 5 replicates CMS Ex. 8 at 8-13; P. Ex. 6 replicates CMS Ex. 8 at 14-17; P. Ex. 7 replicates CMS Ex. 8 at 18; and P. Ex. 8 replicates CMS Ex. 8 at 19.

⁴  My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.

⁵  When a revocation is based on a felony conviction, its effective date is the date of the conviction.  42 C.F.R. § 424.535(g).  Here, however, Petitioner was not enrolled in the Medicare program at the time of his conviction.  His Medicare enrollment was effective on June 21, 2022, and his revocation is therefore effective on that date.

⁶  These are definition sections of the regulations.  The criteria Petitioner lists are found under the definitions of “preclusion list.”

⁷  This well-researched and reasoned decision by one of my colleagues has not yet been uploaded to the DAB website.  I therefore include it as an addendum to this decision.

⁸  Apparently, CMS considered requiring Medicare enrollment for all providers and suppliers of Medicare Advantage services and subscribers of Part D drugs but, ultimately, opted for a preclusion list instead.  CMS concluded that the burden of requiring Medicare enrollment for hundreds of thousands of additional providers, suppliers, and prescribers would be too great and would threaten beneficiary access to prescriptions and services.  See 82 Fed. Reg. at 56,442, 56,448 (November 28, 2017); 83 Fed. Reg. 16,646 (April 16, 2018).