Duke Ahn, M.D., DAB No. 3093 (2023)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Duke Ahn, M.D. (Petitioner) appeals the June 28, 2022 decision of an Administrative Law Judge (ALJ), captioned Duke Ahn, M.D., DAB CR6105 (ALJ Decision).  The ALJ Decision upheld the determination of the Centers for Medicare & Medicaid Services (CMS) to revoke Petitioner’s Medicare enrollment and billing privileges, impose a three-year reenrollment bar, and add Petitioner’s name to the Medicare preclusion list.  We affirm the ALJ Decision for the reasons stated below.

Legal Background

Under the Social Security Act (Act), the Department of Health and Human Services administers the Medicare program through CMS and administrative contractors.  Act §§ 1816, 1842, 1874A.  The Act authorizes CMS to regulate the enrollment of health care practitioners in the Medicare program.  Act § 1866(j)(1)(A).  A physician or other “supplier” of health care services must be enrolled in Medicare to bill the program for services furnished to program beneficiaries.  Act §§ 1835(a), 1842(h)(1); 42 C.F.R. §§ 424.500, 424.505. ¹   CMS may revoke an enrolled supplier’s Medicare enrollment and billing privileges for any reason listed in 42 C.F.R. § 424.535(a). 

One authorized reason for CMS’s revocation of a supplier’s Medicare enrollment and billing privileges occurs when the supplier “is terminated, revoked or otherwise barred from participation in a State Medicaid program or any other federal health care program,” and “has exhausted all applicable appeal rights.”  42 C.F.R. § 424.535(a)(12)(i), (ii).²

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The Medicaid program, which is distinct from Medicare, authorizes federal grants to states for medical assistance to individuals in specified eligibility categories.  Act §§ 1900-1903; 42 C.F.R. § 430.0; 42 C.F.R. Part 435.  Each participating state operates a Medicaid program subject to federal requirements and the state’s CMS-approved state plan for medical assistance.  Act § 1902; 42 C.F.R. §§ 430.10-430.16, 430.20.  The “State Medicaid Agency” is “the agency established or designated by the State under title XIX of the Act that administers the Medicaid program in accordance with implementing regulations at 42 CFR parts 430 through 456.”  45 C.F.R. § 155.300.  

When a supplier is terminated or otherwise barred from Medicaid, CMS considers three regulation-specified factors in determining whether a revocation of Medicare billing privileges is then appropriate.  42 C.F.R. § 424.535(a)(12)(i)(A)-(C).  Those factors are:  the reason(s) for the Medicaid termination; whether the supplier is currently terminated or otherwise barred from more than one program or has been subject to any other program sanctions; and any other information that CMS deems relevant to its determination.  Id. 

When CMS exercises its revocation authority, the supplier is “barred from participating in the Medicare program from the date of the revocation until the end of the reenrollment bar” that CMS imposes.  42 C.F.R. § 424.535(c).  A supplier seeking to re-establish enrollment after notice of revocation “must re-enroll in the Medicare program through the completion and submission of a new applicable enrollment application and applicable documentation . . . for validation by CMS.”  Id. § 424.535(d)(1).

CMS may put an individual on its “preclusion list” when (among other circumstances) the individual is revoked from Medicare, is barred from reenrollment under 42 C.F.R. § 424.535(c), and “CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.”  42 C.F.R. §§ 422.2 (definition of “Preclusion list” at subsection (1)); 423.100 (same).  In making that determination, CMS considers the seriousness of the conduct underlying the revocation, the degree to which that conduct could affect the integrity of the Medicare program, and any other evidence that CMS deems relevant.  Id. at §§ 422.2, 423.100.   

An individual may contest revocation, and placement on the preclusion list, per the administrative appeal regulations in 42 C.F.R. Part 498.  42 C.F.R. §§ 422.222(a)(2), (3); 423.120(c)(6)(v); 424.545(a).  An individual placed under either sanction may request reconsideration of an initial determination by CMS or its contractor, then a hearing on the reconsidered determination before an ALJ, then review of the ALJ’s decision by the Departmental Appeals Board (Board).  Id. §§ 498.3(b)(17), (20); 498.5(l), (n); 498.22. 

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Case Background³

This case arises from six years’ worth of intersecting state criminal, state administrative, and federal revocation proceedings.

A.        Petitioner’s criminal prosecution and guilty plea

Petitioner, a physician, was licensed in California in 1998.  ALJ Decision at 1; CMS Ex. 8, at 1.  On April 3, 2017, prosecutors filed criminal charges against Petitioner in the Superior Court of California for the County of Orange (State Court).  ALJ Decision at 6; CMS Ex. 6.  Petitioner faced 17 felony counts alleging conspiracy to commit medical insurance fraud, false and fraudulent claims, rebates for patient referrals, and insurance fraud, based on conduct from May 1, 2013, through September 1, 2015.  ALJ Decision at 6; CMS Ex. 6.  On April 30, 2019, Petitioner signed a plea form admitting guilt to one misdemeanor count of receiving consideration for patient referrals in violation of section 650 of the California Business and Professions Code.  ALJ Decision at 6-7; CMS Ex. 8, at 4.  On May 10, 2019, the State Court accepted Petitioner’s guilty plea, imposed three years of probation, and ordered Petitioner to pay $80,114 in restitution.  ALJ Decision at 7; CMS Ex. 8, at 4.  Petitioner also agreed not to treat patients through workers’ compensation.  ALJ Decision at 7; CMS Ex. 8, at 4; CMS Ex. 9, at 1.  On January 16, 2020, the Medical Board of California filed an Accusation seeking revocation or suspension of Petitioner’s medical license based on the criminal conviction and alleged Medical Practice Act violations and unprofessional conduct.  CMS Ex. 8, at 3-5. 

B.        Termination of Petitioner’s Medicaid enrollment

On February 13, 2020, California’s Health and Human Services Agency, Department of Health Care Services (the State Medicaid Agency), which administers the state’s Medicaid program (known as Medi-Cal), terminated Petitioner’s enrollment as a Medicaid provider, effective March 5, 2020.  ALJ Decision at 1-3, 7; CMS Ex. 1, at 2; CMS Ex. 10, at 1.  The State Medicaid Agency’s notice letter stated that termination was required because of Petitioner’s conviction, which “was determined to be substantially related to the qualifications, functions, or duties of a provider of service.”  CMS Ex. 10, at 1.  The letter stated that Petitioner was “prohibited from billing for or receiving payment from the Medi-Cal program for an indefinite period of time” and that Petitioner’s name would be posted on the “Medi-Cal Suspended and Ineligible Provider List.”  Id.  The letter did not afford Petitioner any appeal rights; it advised submitting any questions or concerns about the agency’s action to the agency in writing.  Id. at 1-2.

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On March 9, 2020, Petitioner asked the State Medicaid Agency for reconsideration, because Petitioner admittedly had “agreed to plea to a misdemeanor” but attributed the plea to litigation delays, problems, and stresses, and claimed to be a “victim in this process.”  ALJ Decision at 7; CMS Ex. 17, at 2, 3.  On April 14, 2020, the State Medicaid Agency denied Petitioner’s request.  ALJ Decision at 7; CMS Ex. 11.  The State Medicaid Agency electronically reported to CMS that Petitioner’s Medicaid participation was terminated because of the criminal conviction and any appeal period had expired.  ALJ Decision at 7; CMS Ex. 18, at 2-3; CMS Ex. 19, at 1.

C.        CMS’s initial revocation determination

By letter dated June 18, 2020, CMS, through Medicare contractor Noridian Healthcare Solutions, gave notice that Petitioner’s Medicare billing privileges were revoked effective July 18, 2020.  ALJ Decision at 2; CMS Ex. 2, at 1.  The revocation was pursuant to 42 C.F.R. § 424.535(a)(12), because Petitioner’s Medicaid participation was terminated and appeal rights with respect to the termination were exhausted.  ALJ Decision at 2; CMS Ex. 2, at 1.  CMS imposed a three-year reenrollment bar pursuant to section 424.535(c) and placed Petitioner on the preclusion list pursuant to sections 422.2, 422.222, 423.100, and 423.120(c)(6).  ALJ Decision at 2; CMS Ex. 2, at 1, 3.  On August 3, 2020, Petitioner timely requested reconsideration by CMS.  ALJ Decision at 2; CMS Exs. 3-5.  Petitioner reasserted the grounds raised before the State Medicaid Agency, and also argued that Petitioner had “not been advised about resolution of that appeal” so it was “premature” to “revoke [Petitioner’s] Medicare privileges and place him on the Preclusion List.”  CMS Ex. 3, at 1. 

D.        Dismissal of Petitioner’s criminal case

On August 20, 2020, after a hearing and over the prosecution’s objection that Petitioner’s plea agreement required probation through May 2022, the State Court dismissed the criminal count against Petitioner “pursuant to Penal Code section 1385 – furtherance of Justice.”  CMS Ex. 15, at 2; ALJ Decision at 8.  The court’s order stated that Petitioner had served 15 months of probation and paid $80,114 in restitution and $8,000 to the Victim Witness Emergency Fund.  CMS Ex. 15, at 2; ALJ Decision at 8.  On or about August 24, 2020, Petitioner asked the State Medicaid Agency for reinstatement as a provider in the Medicaid program and for removal of Petitioner’s name from the agency’s Suspended and Ineligible Provider List.  CMS Ex. 12, at 1; P. Ex. 10, at 1.⁴  On September 1, 2020, the Medical Board of California withdrew its Accusation against Petitioner’s medical license.  ALJ Decision at 4; CMS Ex. 16.

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E.        CMS’s reconsidered determination

On September 14, 2020, Petitioner gave CMS an “update” on the State Court’s dismissal of the criminal case.  CMS Ex. 13.  Petitioner claimed the dismissal had the effect of “erasing his former misdemeanor plea,” and also reported the California Medical Board’s withdrawal of its Accusation.  CMS Ex. 13 at 1-2.   

In a reconsidered determination dated October 15, 2020, CMS upheld Petitioner’s Medicare revocation and placement on CMS’s preclusion list because all regulatory requirements were met.  ALJ Decision at 2; CMS Exs. 1, 3, 5.  Petitioner had been, and remained, terminated from the California Medicaid program.  CMS Ex. 1, at 3-4.  CMS acknowledged Petitioner’s claims “that his appeal regarding the termination from the California Medicaid program is still pending,” but rejected them as “incorrect” because on April 14, 2020, the State Medicaid Agency had denied Petitioner’s request for reinstatement.  CMS Ex. 1, at 3.  CMS also acknowledged “the recent dismissal of the criminal case against [Petitioner] and the withdrawal of the California Medical Board’s accusation against him,” but concluded “these actions do not negate” Petitioner’s prior guilty plea and its consequences.  Id. at 4.  CMS upheld its discretionary revocation determination because, among other things, Petitioner pled guilty to receiving financial consideration for potentially medically unnecessary patient referrals, was court-ordered to pay restitution for criminal wrongdoing, and presented a potential risk to the health and safety of Medicare beneficiaries.  Id.  CMS deemed Petitioner’s placement on the preclusion list appropriate for reasons including that “CMS considers medical insurance fraud to be a very serious matter” and Petitioner’s conduct did not show the “reliability, integrity, and good judgement” on which Medicare’s integrity depends.  Id. at 5.

F.        Proceedings before the ALJ and Petitioner’s Medicaid reinstatement

On November 13, 2020, Petitioner appealed from CMS’s reconsidered determination by timely requesting an ALJ hearing, arguing that, “because the former criminal conviction against [Petitioner] has now been dismissed, the debarment of [Petitioner] from service as a Medicare provider now is unwarranted and contrary to law.”  RFH at 1.  Petitioner characterized the issue of administrative exhaustion concerning the Medicaid termination as “moot” in light of the State Court’s dismissal of the criminal conviction.  RFH at 3.  On December 23, 2020, CMS filed its pre-hearing brief and motion for summary judgment with 19 exhibits, including the testimonial written declaration of one witness.  CMS Pre-Hr’g Br. & Mot. for Summ. J.; CMS Ex. & Witness List; CMS Exs. 1-19.  On January 25, 2021, Petitioner requested an unopposed 90-day extension of time to file a responsive brief, “to allow [the] Medi-Cal suspension to resolve, in accord with California law, prior to resolution of this proceeding.”  P. Mot. for Extension of Time at 1-2, 3.  The ALJ granted Petitioner’s request.  Order (Jan. 26, 2021).

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On April 26, 2021, the State Medicaid Agency issued a letter (Medicaid Reinstatement Letter) granting Petitioner immediate reinstatement into the California Medicaid program.  P. Ex. 10, at 2.  The letter further stated that Petitioner would need to reenroll in Medi-Cal if Petitioner wished to participate in that program.  Id. at 2-3.

The next day, April 27, 2021, which was Petitioner’s extended deadline for responding to CMS’s filing before the ALJ, Petitioner gave notice of new counsel and requested a further 30-day extension, which the ALJ granted.  Notice of Substitution of Att’y; P. Mot. for Extension of Time; Order (Apr. 27, 2021).  Petitioner later filed a timely pre-hearing brief and opposition to summary judgment with 10 exhibits, including the Medicaid Reinstatement Letter.  P. Pre-Hr’g Br. & Opp’n to Mot. for Summ. J.; P. Ex. & Witness List; P. Exs. 1-10.  Petitioner did not ask to cross-examine CMS’s sole listed witness, and named three witnesses without providing their written testimony.  ALJ Decision at 2.  CMS objected to all of Petitioner’s exhibits and witnesses on various grounds.  CMS Objs. to P.’s Proposed Exs. & Witnesses. 

On June 28, 2022, the ALJ issued a written decision.  The ALJ admitted the Medicaid Reinstatement Letter (P. Ex. 10) but excluded Petitioner’s other proposed exhibits either as improperly presented for the first time after the reconsideration stage without good cause (P. Ex. 1), or as duplicative of CMS’s exhibits (P. Exs. 2 through 9).  ALJ Decision at 3.  The ALJ admitted all of CMS’s proposed exhibits without objection.  Id.  The ALJ excluded Petitioner’s witnesses due to the lack of their required written testimony, and observed that Petitioner did not request cross-examination of CMS’s sole witness; therefore, the ALJ concluded that no in-person hearing was required.  Id. at 2-3.  The ALJ determined that “this case presents no dispute of a material fact,” but also that “this matter may be decided based on the written record, without considering whether the standards for summary judgment have been met.”  Id. at 2.  The ALJ held that CMS properly revoked Petitioner’s Medicare enrollment under 42 C.F.R. § 424.535(a)(12), because the record showed the regulatory criteria were satisfied.  Id. at 6-9, 11.  The ALJ also upheld CMS’s placement of Petitioner on the preclusion list because the regulatory criteria for that measure were fulfilled as well.  Id. at 9-11.

G.        Petitioner’s appeal to the Board

Petitioner requested Board review, seeking reversal of the ALJ Decision on the basis of the ALJ’s asserted “misinterpretation of California Penal Code Section 1385.”  Request for Review (RR) at 2.  In response, CMS sought affirmance of the ALJ Decision, arguing that it was supported by substantial evidence and free of legal error, that revocation was proper under 42 C.F.R. § 424.535(a)(12), and that the ALJ’s upholding of CMS’s preclusion list determination was both correct and unchallenged by Petitioner.  Id. at 1, 4-10.  Petitioner filed no reply brief.

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Standard of Review

In cases proceeding under 42 C.F.R. Part 498, the Board reviews disputed factual issues to determine whether the ALJ’s decision is supported by substantial evidence in the record as a whole, and reviews disputed legal issues to determine whether the ALJ decision is erroneous.  See Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s or Supplier’s Enrollment in the Medicare Program (Guidelines), “Completion of the Review Process,” ¶ (c), available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.htm.

Analysis

Petitioner’s request for Board review focuses on the single issue of whether the ALJ’s alleged “misinterpretation of California Penal Code Section 1385” with respect to CMS’s revocation determination was reversible error.  RR at 2.  Petitioner does not appeal any other aspect of the ALJ Decision, including the ALJ’s evidentiary determinations, the ALJ’s decision not to hold an in-person hearing, or (as further discussed below) the ALJ’s affirmance of CMS’s placement of Petitioner on the preclusion list.  Id. at 1-5.

Board review of CMS’s revocation of a supplier’s Medicare billing privileges under 42 C.F.R. § 424.535 “is limited to determining only whether CMS had a legal basis for its decision.”  Blair Allen Nelson, M.D., DAB No. 3024, at 11 (2020); see also Lorrie Laurel, PT, DAB No. 2524, at 7 (2013).  Thus, “in reviewing the legality of a revocation under section 424.535(a)(12), an administrative law judge is authorized to decide only whether (1) a supplier’s Medicaid billing privileges have been terminated or revoked by a State Medicaid Agency and (2) that action has become unappealable, or otherwise final, under state law.”  Douglas Bradley, M.D., DAB No. 2663, at 16 (2015).  If those conditions are fulfilled, then the Board must sustain the revocation and has no authority to substitute its own discretion for CMS’s in determining whether revocation is appropriate under all the circumstances.  Abdul Razzaque Ahmed, M.D., DAB No. 2261, 19 (2009), aff’d sub nom. Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010).

Upon reviewing the record, we conclude that the ALJ Decision is supported by substantial evidence and free of legal error, and we conclude, as the ALJ did, that CMS had a valid basis for revocation.  “Where, as here, CMS had a valid basis to revoke a supplier’s Medicare billing privileges, the ALJ and the Board must sustain the revocation and may not disturb the length of the re-enrollment bar set by CMS or the date that the re-enrollment bar began.”  Lilia Gorovits, M.D., P.C., DAB No. 2985, at 16 (2020), aff’d sub nom. Gorovits v. Becerra, No. 20-1850, 2021 WL 1962903 (E.D. Pa. May 17, 2021).  We also summarily affirm the ALJ Decision as to CMS’s placement of Petitioner upon the preclusion list.  We explain our reasoning more fully below.

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A.       The ALJ did not err in determining that CMS established a lawful basis for revocation of Petitioner’s Medicare billing privileges.

If the record substantiates one or more of the grounds for revocation in 42 C.F.R. § 424.535(a), then “the revocation must be sustained.”  Bradley at 6.  Two regulatory elements must be satisfied to sustain Petitioner’s revocation under section 424.535(a)(12).  First, Petitioner must have been terminated, revoked or otherwise barred from participation in a State Medicaid program.  42 C.F.R. § 424.535(a)(12)(i).  Second, Petitioner must have exhausted all applicable appeal rights.  Id. § 424.535(a)(12)(ii).

Regarding the requirement for revocation under 42 C.F.R. § 424.535(a)(12)(i), the record contains substantial evidence supporting the ALJ’s factual finding that, effective March 5, 2020, the State Medicaid Agency terminated Petitioner’s Medicaid participation.  See ALJ Decision at 1, 3, 6, 7; CMS Ex. 10, at 1.  Indeed, Petitioner has admitted that fact.  See RFH at 2 (acknowledging that State Medicaid Agency “terminated [Petitioner’s] billing privileges effective March 5, 2020”); Tanya A. Chuoke, R.N., DAB No. 1721, at 10-11 (2000) (stating that petitioner’s request for ALJ hearing “is indeed part of the case record” and its “contents constituted a party admission”).

Regarding the requirement for revocation under 42 C.F.R. § 424.535(a)(12)(ii), the record contains substantial evidence supporting the ALJ’s factual finding that, at the time of the Medicare revocation, Petitioner’s applicable appeal rights were exhausted.  See ALJ Decision at 6, 9; CMS Ex. 18, at 2; CMS Ex. 19, at 1.  Before the ALJ, Petitioner initially described the issue of exhaustion of Medicaid termination appeal rights as “moot,” but later characterized the Medicaid appeal process as “still pending” and thus CMS’s revocation as “premature.”  RFH at 2-3; P. Pre-Hr’g Br. and Opp’n to Summ. J. at 5, 6.  Before the Board, Petitioner asserts no error in the ALJ’s findings and conclusions concerning section 424.535(a)(12)(ii)’s administrative exhaustion requirement.  RR at 1-5.  Therefore, we need not and do not consider this unpreserved issue further.  See Roji Esha, DAB No. 3076, at 16-17 (2022) (stating that after raising certain arguments before the ALJ, “Petitioner does not reprise these arguments on appeal to the Board . . . thus waiving such arguments”). 

Despite the evident fulfilment of the regulatory requirements for revocation under 42 C.F.R. § 424.535(a)(12), Petitioner argues that the ALJ Decision is erroneous in two respects.  First, Petitioner asserts that the Medicaid Reinstatement Letter effected “a complete reversal of the original [Medicaid] termination letter of February 13, 2020,” and that the ALJ erred in concluding that the Medicaid reinstatement “does not negate Petitioner’s termination from the Medicaid program [u]pon which the [Medicare] revocation is based.”   RR at 2, 3.  Second, Petitioner contends the ALJ erroneously treated the criminal case’s dismissal as a “conviction,” whereas California Penal Code section 1385 authorizes dismissal “without final judgment and without any adverse record,” which “should not be considered a ‘conviction’” under federal law (specifically,

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the definition of “Convicted” at 42 C.F.R. § 1001.2).  Id. at 2-3. 

We discuss below, and ultimately reject, each of Petitioner’s two asserted points of error.

1. The ALJ did not err in concluding that the State Medicaid Agency’s reinstatement of Petitioner’s Medicaid participation did not require reversal of CMS’s revocation of Petitioner’s Medicare privileges.

The ALJ determined that the “Medicaid agency’s actions . . . do not negate Petitioner’s termination from the Medicaid program, upon which this revocation is based,” ALJ Decision at 7, and Petitioner claims that determination is erroneous, RR at 2.  Petitioner argues that the ALJ’s conclusion “completely ignores the plain language of” the Medicaid Reinstatement Letter, which “specifically cites Penal Code Section 1385 as the authority” effecting “a complete erasure of records,” which thus makes the reinstatement “a complete reversal of the original termination.”  RR at 3. 

The ALJ did not err in rejecting Petitioner’s arguments.  As further discussed below, those arguments misconstrue the Medicaid Reinstatement Letter’s plain language, the scope of the State Medicaid Agency’s authority, the federal requirements for reenrollment after revocation, and the regulations implementing appeal rights from a revocation of Medicare billing privileges.

The Medicaid Reinstatement Letter’s plain language makes clear that it is not a complete (or even partial) reversal of Petitioner’s prior Medicaid termination.  Invoking the applicable federal standard, the State Medicaid Agency declared that it “may grant reinstatement only if it is reasonably certain that the types of actions that formed the basis for the original exclusion have not recurred and will not recur.”  P. Ex. 10, at 2 (quoting 42 C.F.R. § 1002.215(a)) (emphasis added).  This language does not reverse or negate “the original exclusion,” but instead confirms its existence, and the types of actions that caused the exclusion cannot have recurred unless they originally occurred.  The federal standard quoted in the Medicaid Reinstatement Letter further requires consideration of the individual’s conduct “after the date of the notice of exclusion,” including whether the individual has paid or made satisfactory arrangements to pay “all fines, and all debts due and owing” to Medicare or Medicaid.  Id.  This requirement to consider the individual’s post-termination conduct, including whether and how the individual addressed the financial consequences of pre-termination conduct, would be nonsensical if, as Petitioner contends, the Medicaid reinstatement effected “a complete reversal” of the prior termination.  See RR at 3.  We reject such misconstructions of CMS regulations.  See Cary Health & Rehab. Ctr., DAB No. 1771, at 9 (2001) (rejecting petitioner’s regulatory construction due to its “implausibility” and the “absurd” result it would produce).  Most significantly, the State Medicaid Agency granted Petitioner’s request for reinstatement “effective with the date of this letter,” that is, on April 26, 2021.  P. Ex. 10, at 2.  The Medicaid reinstatement was effective only prospectively and did not erase, negate,

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rescind, or reverse the prior termination in 2020, or retroactively reinstate Petitioner for the intervening period.

Furthermore, the State Medicaid Agency’s discretionary decision to reinstate Petitioner into the Medicaid program did not have a preclusive (or any other) effect on the revocation determination of CMS, the federal agency responsible for administering the separate Medicare program.  The State Medicaid Agency’s director has “sole discretion,” after an individual’s Medicaid suspension for a qualifying conviction, to determine “if the circumstances surrounding the conviction justify rescinding or otherwise modifying” the Medicaid suspension – but not a related Medicare revocation.  Cal. Welf. & Inst. Code § 14123(a)(3).  The State Medicaid Agency also is authorized to grant reinstatement into the Medicaid program, but only on fulfilment of federally specified conditions, and is empowered only to determine whether and when “Medicaid program participation may resume” – not whether and when Medicare enrollment and billing privileges may resume.  42 C.F.R. § 1002.215(a), (b)(1).

Petitioner cites no legal authority requiring CMS automatically to reinstate a revoked supplier’s participation in Medicare upon the supplier’s reinstatement into the Medicaid program.  On the contrary, 42 C.F.R. § 424.535(d) requires that a revoked supplier “must re-enroll in the Medicare program through the completion and submission of a new applicable enrollment application and applicable documentation, as a new provider or supplier, for validation by CMS.”  Id. § 424.535(d)(1).  The regulation specifies no exception for individuals reinstated into Medicaid, and the Board has no authority to imply one.  See Vijendra Dave, M.D., DAB No. 2672, at 8 (2016) (stating Board “is bound by applicable statutes and regulations and has no authority to make exceptions to their applicability”).

The ALJ Decision is also consistent with the preamble to the regulations implementing appeal rights from an “adverse enrollment determination,” including the “revocation of billing privileges.”  Medicare Program; Appeals of CMS or CMS Contractor Determinations When a Provider or Supplier Fails to Meet the Requirements for Medicare Billing Privileges, 73 Fed. Reg. 36,448, 36,452 (June 27, 2008).  The Secretary explained in the preamble that “appeal rights are limited to provider or supplier eligibility at the time the Medicare contractor made the adverse determination.”  Id.  The preamble further states that “a provider or supplier is required to furnish the evidence that demonstrates that the Medicare contractor made an error at the time an adverse determination was made, not that the provider or supplier is now in compliance.”  Id. (emphasis added).  In reviewing the revocation determination here, the ALJ appropriately focused on whether there was a legal basis for the revocation when that determination was made.  Petitioner presented no evidence demonstrating that Noridian made an error when it revoked Petitioner’s Medicare enrollment in June 2020 because Petitioner’s Medicaid participation was terminated and appeal rights with respect to that termination were exhausted. 

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The ALJ appropriately applied the foregoing principles and rejected Petitioner’s argument concerning the Medicaid Reinstatement Letter’s effect upon Petitioner’s Medicare revocation, concluding:

More than a year after the termination, the Medicaid agency granted Petitioner’s request for reinstatement. Significantly, it did not rescind its earlier termination and, like any supplier whose participation has been terminated, Petitioner is required to reenroll in order to participate in the program. The Medicaid agency’s actions thus do not negate Petitioner’s termination from the Medicaid program, upon which this revocation is based.

ALJ Decision at 7. 

The ALJ also appropriately recognized what Petitioner’s payment of court-ordered restitution confirms:  Petitioner’s conduct caused actual financial harm, and “CMS thus justifiably determined that the actions underlying Petitioner’s conviction undermine the integrity of health care programs and are therefore detrimental to the best interests of the Medicare program.”  ALJ Decision at 11.  See Edwin L. Fuentes, DAB No. 2988, at 13 (2020) (“Court-ordered restitution is one reasonable measure for the extent of financial loss.”), aff’d sub nom. Fuentes v. Becerra, No. 4:20-cv-00026, 2021 WL 4341115 (W.D. Va. Sept. 23, 2021).

We emphasize that, despite the State Medicaid Agency’s discretionary decision to reinstate Petitioner’s Medicaid participation, Petitioner admittedly received consideration for patient referrals, and revocation is appropriate to protect Medicare beneficiaries and funds from abuse by suppliers who acknowledge engaging in such conduct.  See Aiman M. Hamdan, M.D., DAB No. 2955, at 1-2, 3 n.4, 5, 7 (2019) (affirming exclusion of physician who pled guilty to one count of racketeering by accepting bribes for patient referrals, which violated physician’s professional duty of fidelity to patients and “is precisely the type of criminal conduct that facilitates or increases the risk of Medicare fraud or otherwise improper billing”); Farzana Begum, M.D., DAB No. 2726, at 1, 3, 11 (2016) (affirming exclusion of “a physician entrusted to play an important role in maintaining the integrity of the Medicare program,” who nevertheless “took kickbacks” and pled guilty to receiving them), aff’d sub nom. Begum v. Hargan, No. 16 CV 9624, 2017 WL 5624388 (N.D. Ill. Nov. 21, 2017); Dinesh Patel, M.D., DAB No. 2551, at 1, 4, 6 n.6 (2013) (affirming exclusion of physician who pled guilty to participating in a cash-for-patients scheme and accepted cash kickbacks in exchange for referrals of Medicare and Medicaid patients); see also Laurel at 5 (recognizing that, “[l]ike exclusions, revocations are designed to protect the Medicare program and its beneficiaries”).

Thus, upholding Petitioner’s Medicare revocation is consistent with “the central purpose of the enrollment provisions,” which “is to protect beneficiaries and the Medicare Trust

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Funds from ‘fraudulent and abusive providers and suppliers.’”  See Kimberly Shipper, P.A., DAB No. 2804, at 8 (2017) (quoting 71 Fed. Reg. 20,754, 20,773 (Apr. 21, 2006)), aff’d sub nom. Shipper v. Price, No. 17-CV-00253, 2019 WL 2098120 (W.D. Tex. Mar. 1, 2019) (Order Adopting Magistrate Report and Recommendation at 2019 WL 1029118 (W.D. Tex. Feb. 11, 2019)).

The ALJ did not err in concluding that the State Medicaid Agency’s reinstatement of Petitioner’s Medicaid participation did not require reversal of CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

2. The ALJ did not err in concluding that the State Court’s dismissal of Petitioner’s criminal case did not negate the legal basis for CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

Petitioner argues that under section 1385 of the California Penal Code and People v. Chavez, 208 Cal. Rptr. 3d 921 (Cal. Ct. App. 2016), aff’d on different grounds, 415 P.3d 707 (Cal. 2018), Petitioner “suffered no conviction.”  RR at 2, 3.  Chavez states that “the effect of a dismissal under section 1385 is to wipe the slate clean as if the defendant never suffered the prior conviction in the initial instance.”  Chavez, 208 Cal. Rptr. 3d at 926 (quoting People v. Barro, 112 Cal. Rptr. 2d 797, 801, reh’g denied (Cal. Ct. App. 2001)).  Thus, Petitioner argues, “the allegations against him have been dismissed in [their] entirety as if no prosecution [had] ever taken place,” and the ALJ’s “application of a temporary determination by a judge is improper and should be reversed.”  RR at 3.

Petitioner’s argument is largely beside the point and establishes no error because, as the ALJ aptly stated, Petitioner’s criminal conviction relates to Petitioner’s Medicare revocation “only indirectly.”  See ALJ Decision at 8.  CMS based the Medicare revocation on Petitioner’s termination from the Medicaid program, under 42 C.F.R. § 424.535(a)(12).  A separate regulatory provision, section 424.535(a)(3), authorizes revocation when a supplier “was, within the preceding 10 years, convicted” of a federal or state felony “that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries,” but CMS did not revoke on that basis.  Petitioner cites no authority, and we know of none, for the proposition that a state court’s dismissal of a criminal conviction under a state penal code provision necessarily wipes clean not only the conviction, but also any resulting Medicaid termination and any Medicare revocation relating to that Medicaid termination.⁵

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CMS’s revocation authority is discretionary, see Bradley at 13, and to the extent Petitioner complains that CMS should have exercised its discretion differently concerning the dismissed criminal case, Petitioner states no basis for relief.  By regulation, CMS considers three specified factors when making its discretionary determination whether to revoke the Medicare enrollment of a supplier who, like Petitioner, has been terminated or otherwise barred from a state Medicaid program.  See 42 C.F.R. § 424.535(a)(12)(i)(A)-(C).  In summary terms, those factors are:  the reason(s) for the supplier’s Medicaid termination; the existence of other program participation terminations or sanctions against the supplier; and “[a]ny other information that CMS deems relevant to its determination.”  Id.  Dismissal of a supplier’s criminal case is not a required factor for consideration, yet CMS did consider it as information potentially “relevant to its determination” under section 424.535(a)(12)(i)(C).  See CMS Ex. 1, at 4. 

CMS made the discretionary determination that, despite the State Court’s dismissal of Petitioner’s criminal case, revocation remained appropriate to prevent “a potential risk to the health and safety of Medicare beneficiaries,” id., and neither an ALJ nor the Board may overrule that exercise of discretion by CMS.  See Nelson at 11 (“While CMS has discretion to consider mitigating circumstances and other factors in exercising its revocation authority, neither the ALJ nor the Board may substitute their discretion for that of CMS”).  In other words, “ALJs and this Board may review only whether CMS had a valid legal basis to revoke billing privileges, and, if it did, may not address whether it properly exercised its discretion to do so.”  Wendell Foo, M.D., DAB No. 2904, at 25 (2018), aff’d sub nom. Foo v. Azar, 420 F. Supp. 3d 1100 (D. Haw. 2019).  “Concluding that CMS had one of the bases for revocation enumerated in the regulations,” as we hold that CMS did here, under 42 C.F.R. § 424.535(a)(12), “is all that is necessary to uphold revocation.”  See id. at 3.

The ALJ did not err in concluding that the State Court’s dismissal of Petitioner’s criminal case did not negate the legal basis for CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

B.       We affirm the ALJ’s unchallenged conclusion that CMS established a lawful basis for placing Petitioner on the preclusion list.

Before the ALJ, Petitioner argued that CMS did not have a legitimate basis to include Petitioner on the preclusion list.  P. Pre-Hr’g Br. and Opp’n to Summ. J. at 6.  The ALJ thoroughly addressed the preclusion list requirements, the applicable facts, and Petitioner’s arguments on this issue.  ALJ Decision at 2, 8-11.  The ALJ concluded that

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“CMS may add [Petitioner] to the preclusion list because [Petitioner’s] enrollment was revoked, [Petitioner] is under a reenrollment bar, and CMS reasonably determined that the conduct underlying [Petitioner’s] revocation is detrimental to the Medicare program.”  Id. at 11.

Before the Board, Petitioner neither contests the ALJ’s conclusion that CMS appropriately placed Petitioner on the preclusion list, nor raises any further issue concerning the applicable regulatory requirements in 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  RR at 1-5.  CMS asserts that the ALJ “correctly held that CMS acted within its authority when it added Petitioner to its preclusion list,” and that Petitioner’s failure to challenge that holding means it “is not before the [Board] and is final.”  CMS Br. at 9.  Petitioner was on notice of the opportunity to file a reply brief, see Acknowledgment Letter (Sept. 29, 2022) at 2, but did not file one.  Failure to articulate at least some disagreement with the basis for an ALJ’s decision of an issue permits the Board to summarily affirm the ALJ’s findings of fact and conclusions of law on that issue.  Amber Mullins, N.P., DAB No. 2729, at 5 (2016).  Thus, we summarily affirm the ALJ Decision as to CMS’s placement of Petitioner upon the preclusion list.

Conclusion

We affirm the ALJ’s conclusion that CMS lawfully revoked Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(12) and lawfully placed Petitioner on the preclusion list.

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Endnotes

¹   We apply the regulations in effect on June 18, 2020, the date of CMS’s initial determination.  See Meadowmere Emergency Physicians, PLLC, DAB No. 2881, at 2 n.2 (2018) (“We cite to the regulations in effect on . . . the date of the initial revocation determination.”).

²   A regulatory amendment added the words “or the timeframe for filing an appeal has expired without the provider or supplier filing an appeal” to the end of 42 C.F.R. § 424.535(a)(12)(ii), effective January 1, 2023.  87 Fed. Reg. 69,404, 70,000, 70,232 (Final Rule) (Nov. 18, 2022).  That amendment does not apply to this appeal.

³   This section, drawn from the administrative record, is not meant to replace or modify the ALJ’s findings.

⁴   Citations to Petitioner’s Exhibit 10 do not count its cover sheet as an initial page, but instead use the document’s internal pagination.

⁵   As the ALJ correctly recognized, federal law and not state law governs whether a supplier has been “convicted” in the revocation context.  See ALJ Decision at 8; John Hartman, D.O., DAB No. 2564, at 3 (2014).  The definition of “Convicted” in 42 C.F.R. § 1001.2 includes convictions that have been “expunged or otherwise removed.”  Petitioner asserts that a “section 1385 dismissal” is “not an expungement,” and therefore Petitioner was not “convicted” within the federal definition, see RR at 2, 3.  Petitioner relies solely on the intermediate Court of Appeal decision in Chavez, without addressing its subsequent review by the Supreme Court of California, which summarized that the appellant was seeking to “expunge his record.”  415 P.3d 707, 708 (2018).  Whether a “section 1385 dismissal” operates as an expungement under California law, or qualifies as a conviction under 42 C.F.R. § 1001.2, are issues the Board need not and does not decide in this appeal.  CMS’s basis for revocation was Petitioner’s Medicaid termination, not Petitioner’s criminal conviction.