EI Medical, Inc., DAB No. 3117 (2023)

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

EI Medical, Inc. (Petitioner) appeals the decision of an administrative law judge (ALJ), captioned EI Medical, Inc. d/b/a Wheelchair and Scooter Repair, a/k/a WSR Solutions, DAB CR6187 (2022) (ALJ Decision).  The ALJ upheld a determination by the Centers for Medicare & Medicaid Services (CMS) to revoke Petitioner’s Medicare enrollment and billing privileges as a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).  The ALJ concluded that CMS had a lawful basis for the revocation pursuant to 42 C.F.R. § 424.535(a)(3) and (a)(9) based, respectively, on the felony conviction of Petitioner’s sole owner at the time of conviction, and on Petitioner’s failure to report the conviction within 30 days.  The ALJ also upheld February 24, 2021 as the effective date of Petitioner’s revocation under section 424.535(a)(3).  We affirm the ALJ Decision for the reasons stated below.

Legal Background

A.     Medicare enrollment and revocation

Under the Social Security Act (Act), the Department of Health and Human Services administers the Medicare program through CMS and administrative contractors.  Act §§ 1816(a), 1842(a), 1874A; 42 C.F.R. §§ 421.3, 421.5.¹  The Act authorizes CMS to regulate the enrollment of health care practitioners in the Medicare program.  Act § 1866(j)(1)(A).  Enrollment confers on a supplier “billing privileges,” meaning the right to claim and receive payment for Medicare-covered health care items and services provided to program beneficiaries.  42 C.F.R. §§ 424.502 (defining “Enroll/Enrollment”), 424.505.

Any physician or supplier may enter into an agreement with the Secretary of Health and Human Services (Secretary) to become a Medicare-participating physician or supplier. 

Page 2

Act § 1842(h)(1).  A DMEPOS supplier, such as Petitioner, is a qualified “entity or individual . . . which sells or rents Part B covered items to Medicare beneficiaries.”  42 C.F.R. § 424.57(a).  DMEPOS suppliers enrolled in Medicare receive a supplier number conveying Medicare billing privileges.  Id. §§ 424.502, 424.57.

The Secretary may terminate or refuse to renew a supplier’s agreement if the supplier has been convicted of a felony that the Secretary deems detrimental to the best interests of the Medicare program or its beneficiaries.  Act § 1842(h)(8).  Specifically, revocation of a supplier’s Medicare enrollment and supplier agreement is authorized if:

[t]he . . . supplier, or any owner or managing employee of the . . . supplier was, within the preceding 10 years, convicted (as that term is defined in 42 CFR 1001.2) of a Federal or State 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).  Offenses include “[f]inancial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was convicted, including guilty pleas.”  Id. § 424.535(a)(3)(ii)(B).  The term “convicted,” as defined in section 1001.2, includes, among other things, when a court “has made a finding of guilt against an individual” or “has accepted a plea of guilty . . . by an individual.”  See 42 C.F.R. § 1001.2(b), (c) (defining “Convicted”).

CMS also may revoke a DMEPOS supplier’s enrollment under 42 C.F.R. § 424.535(a)(9) for failure to comply with the reporting requirements in sections 424.57(c)(2) and 424.516(c).  Pursuant to section 424.57(c)(2), a DMEPOS supplier “must report to CMS any changes in information supplied on the application within 30 days of the change.”  42 C.F.R. § 424.57(c)(2); see also id. § 424.516(c) (referencing DMEPOS reporting requirements at 42 C.F.R. § 424.57(c)(2)).

After revocation, a supplier is “barred from participating in the Medicare program from the effective date of the revocation until the end of the reenrollment bar,” which generally “lasts a minimum of 1 year, but not greater than 10 years.”  42 C.F.R. § 424.535(c)(1)(i).  Revocation generally becomes effective 30 days after CMS or its contractor mails notice of the determination to the supplier; however, when, as here, a revocation is based on a felony conviction, the revocation is effective with the conviction date.  Id. § 424.535(g).

A dissatisfied supplier may request reconsideration of the revocation, then a hearing on the reconsidered determination before an ALJ, then review by the Departmental Appeals Board (Board).  42 C.F.R. §§ 424.545(a); 498.5(l); 498.22; 498.40; 498.80.

Page 3

B.     Federal Rule of Criminal Procedure (Fed. R. Crim. P.) 11(c)(1)(C)

Petitioner’s arguments largely concern Fed. R. Crim. P. 11, “the principal provision in the Federal Rules of Criminal Procedure dealing with the subject of guilty pleas and plea agreements.”  See United States v. Hyde, 520 U.S. 670, 673-74 (1997). 

Pertinent portions of Fed. R. Crim. P. 11 state:

(a) Entering a Plea.

(1) In General.  A defendant may plead . . . guilty. . . .

(2) Conditional Plea.  With the consent of the court and the government, a defendant may enter a conditional plea of guilty. . . .

* * * *

(b) Considering and Accepting a Guilty or Nolo Contendere Plea.

(1) Advising and Questioning the Defendant.  Before the court accepts a plea of guilty . . . , the defendant may be placed under oath, and the court must address the defendant personally in open court [and advise and question the defendant on specified topics];

(2) Ensuring That a Plea Is Voluntary.  Before accepting a plea of guilty . . . , the court must address the defendant personally in open court and determine that the plea is voluntary and did not result from force, threats, or promises (other than promises in a plea agreement).

(3) Determining the Factual Basis for a Plea.  Before entering judgment on a guilty plea, the court must determine that there is a factual basis for the plea.

(c) Plea Agreement Procedure.

(1) In General.  An attorney for the government and the defendant’s attorney . . . may discuss and reach a plea agreement. . . . .  If the defendant pleads guilty . . . to either a charged offense or a lesser or related offense, the plea agreement may specify that an attorney for the government will:

* * * *

(C) agree that a specific sentence or sentencing range is the appropriate disposition of the case, or that a particular provision of the Sentencing Guidelines, or policy statement, or sentencing factor does or does not apply (such a recommendation or request binds the court once the court accepts the plea agreement).

* * * *

(4) Accepting a Plea Agreement.  If the court accepts the plea agreement, it must inform the defendant that to the extent the plea agreement is of the type specified in Rule 11(c)(1)[](C), the agreed disposition will be included in the judgment.

Page 4

* * * *

(d) Withdrawing a Guilty or Nolo Contendere Plea.  A defendant may withdraw a plea of guilty . . . :

* * * *

(2) after the court accepts the plea, but before it imposes sentence if:

(A) the court rejects a plea agreement . . . or

(B) the defendant can show a fair and just reason for requesting the withdrawal.

(e) Finality of a Guilty or Nolo Contendere Plea.  After the court imposes sentence, the defendant may not withdraw a plea of guilty . . . .

Fed. R. Crim. P. 11.

Case Background²

Petitioner was enrolled in the Medicare program as a DMEPOS supplier.  ALJ Decision at 2; CMS Ex. 13, at 2.  When revalidating its Medicare enrollment on December 3, 2018, Petitioner provided a Virginia mailing address and listed only one individual, Stefanie Hirsch, as holding an ownership interest.  ALJ Decision at 2; CMS Ex. 13, at 3, 6.  Hirsch also served as a director/officer, authorized official, and managing employee.  ALJ Decision at 2; CMS Ex. 13, at 6. 

A.     The criminal charges and guilty plea

On October 2, 2020, a criminal Information filed in the United States District Court for the District of Massachusetts (District Court) charged Hirsch with violating 42 U.S.C. § 1320d-6 and 18 U.S.C. § 2.  The charged offenses were criminally violating the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and aiding and abetting others in committing offenses against the United States.  ALJ Decision at 2; CMS Ex. 8, at 7; see 42 U.S.C. § 1320d-6(a) (providing in pertinent part that punishable offense occurs when a person, without authorization, “knowingly . . . (1) uses or causes to be used a unique health identifier; (2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information to another person”); 18 U.S.C. § 2 (providing that whoever “commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission,” or “willfully causes an act to be done which if directly performed by him or another would be an offense against the United States,” is punishable as a principal).  The Information also charged two co-defendants of Hirsch with crimes including illegally

Page 5

receiving kickbacks in connection with a federal health care program.  ALJ Decision at 2; CMS Ex. 8, at 1, 5-7.  Specifically, Count 3 of the Information charged that from approximately January 2014 through July 2019, Hirsch “did knowingly use and cause to be used a unique health identifier, obtain individually identifiable health information relating to an individual, and disclose individually identifiable health information to another person.”  ALJ Decision at 2-3; CMS Ex. 8, at 7. 

The Information was based on the following alleged facts.  Petitioner’s Medicare enrollment as a DMEPOS supplier qualified Petitioner for an account with MVP, a national health care clearinghouse, which stores the personal, demographic, medical, and insurance information for millions of Medicare beneficiaries and private insurance patients.  ALJ Decision at 2-3; CMS Ex. 8, at 4; CMS Ex. 20, at 1.  Hirsch sold Petitioner’s access to the MVP database to Hirsch’s two co-defendants by setting up credentials for one of them under Petitioner’s account, then charging that co-defendant approximately $0.25 for each patient eligibility check.  ALJ Decision at 2, 4; CMS Ex. 8, at 4, 7.  That co-defendant, “his employees, and the call centers with which he worked used MVP’s patient eligibility checks to obtain individually identifiable health information” for “more than 350,000 patients.”  ALJ Decision at 2-3 (quoting CMS Ex. 8, at 4).  That co-defendant disclosed the individually identifiable health information to others “for commercial advantage and personal gain” as part of a scheme involving submission and payment for “millions of dollars in false and fraudulent Medicare claims for durable medical equipment.”  ALJ Decision at 3 (quoting CMS Ex. 8, at 4); CMS Ex. 8, at 1-2. 

On October 2, 2020, the same date the criminal Information was filed, Hirsch entered into a plea agreement with the United States.³  CMS Ex. 10.  “[T]he Government required Ms. Hirsch to plead guilty to a felony, rather than a misdemeanor HIPAA violation.”  CMS Ex. 17, at 9.  Hirsch agreed to “expressly and unequivocally admit[] that she committed the crimes charged in count 3 of the Information, did so knowingly, and is in fact guilty of that offense.”  CMS Ex. 10, at 1; see ALJ Decision at 3.  Hirsch agreed to plead guilty “[a]t the earliest practicable date” and stated that she “understands and acknowledges that she may not withdraw her plea of guilty unless the [District] Court rejects this Plea Agreement.”  CMS Ex. 10, at 1, 2; ALJ Decision at 3.  The plea agreement stated it was “made pursuant to Fed. R. Crim. P. 11(c)(1)(C),” and if the District Court accepted the agreement, “the [District] Court must include the agreed disposition in the judgment.”  CMS Ex. 10 at 2; ALJ Decision at 3.  The agreed disposition included a $2,500 fine, a $100 special assessment, 36 months of supervised

Page 6

release, and no imprisonment.  ALJ Decision at 3; CMS Ex. 10, at 3.  Hirsch signed an Acknowledgment of Plea Agreement that confirmed, “I am entering into this Plea Agreement freely, voluntarily, and knowingly because I am guilty of the offense to which I am pleading guilty and I believe this Plea Agreement is in my best interest.”  CMS Ex. 10, at 7.

B.     The plea hearing on February 24, 2021

At the February 24, 2021 plea hearing before the District Court, Hirsch waived indictment and pled guilty to Count 3 of the Information.  ALJ Decision at 4; CMS Ex. 9, at 3 (Docket Entry No. 45); CMS Ex. 22, at 3-18.  The parties and District Court mutually acknowledged that the parties’ plea agreement was offered under Fed. R. Crim. P. 11(c)(1)(C).  CMS Ex. 22, at 3.  Hirsch’s counsel “want[ed] to be clear that that plea is entered on condition of the acceptance of the plea agreement by the court,” to which the District Court responded, “All right.  Okay.”  Id. at 4. 

The District Court further addressed Fed. R. Crim. P. 11 and conditional acceptance of the plea as follows:

Now, if I accept your plea, I will do so conditionally, as [Hirsch’s counsel] has also already said. . . .  

The Federal Rules of Criminal Procedure have a provision which permits the parties to agree on a particular disposition.  The parties can’t require the court to impose that disposition. The court may find the suggestion appropriate and ultimately impose it, but the court may for other reasons decide that it’s not an appropriate disposition of the case and decline to impose it. . . .  [Y]ou and the government agree that if that should happen, if the court should reject the parties’ suggested disposition, you would have the right to withdraw your guilty plea and we’d proceed as if you had never offered it. . . .

Now, if I conditionally accept your plea today, we’ll continue the case for sentencing to sometime in the future, several months from now.  Between now and then our probation office will conduct what’s called a presentence investigation and prepare a presentence report . . . .

CMS Ex. 22, at 11-12; ALJ Decision at 5.  The District Court then completed the colloquy by advising and questioning Hirsch on various topics to ensure that the plea was voluntary and had a factual basis, all as Fed. R. Crim. P. 11(b) requires.  CMS Ex. 22, at 8, 9, 10-11, 12-14, 17-18.  

Page 7

After the colloquy, Hirsch entered the guilty plea.  CMS Ex. 22, at 17-18; ALJ Decision at 5.  The District Court then stated, “I will conditionally accept the plea subject to the rule, and we’ll accordingly find the defendant guilty at this point of the offense charged in Count Three of the indictment.”  CMS Ex. 22, at 18. 

C.     Developments between the plea hearing and the sentencing hearing

Certain developments occurred after the Rule 11 hearing and before the sentencing hearing.  In July 2021, the parties revised their plea agreement to reflect an agreed disposition of 36 months of probation in lieu of 36 months of supervised release.  ALJ Decision at 3 n.7; CMS Ex. 15, at 6.  On September 16, 2021, Hirsch submitted to the District Court a memorandum, which, among other things, recognized “the potential for administrative proceedings which may result in adverse outcomes to [the] business.”  ALJ Decision at 5; CMS Ex. 17, at 8.  On September 20, 2021, the Government’s Sentencing Memorandum informed the District Court that Hirsch’s co-defendants both had pleaded guilty to using Hirsch’s MVP access to commit health care fraud and anti-kickback statute violations.  CMS Ex. 20, at 2.

D.     The sentencing hearing on September 21, 2021

At a hearing on September 21, 2021, the District Court stated that “Hirsch appears this afternoon for sentencing on her conviction of one count,” with “that conviction coming upon her tender of a plea of guilty to that offense . . . pursuant to a written plea agreement.”  P. Ex. 1, at 3.  After hearing from the prosecuting Assistant United States Attorney (AUSA), Hirsch’s counsel, and Hirsch, the District Court stated:

Well, as I’ve indicated, I’ve reviewed the papers that have been submitted both by the parties and probation, and I will accept the plea agreement that the parties have reached pursuant to [Fed. R. Crim. P.] 11(c)(1)(C).  I don’t remember whether I formally accepted the plea and found her guilty subject to revocation or whether I deferred it.  If I deferred it, I now will find the fact of guilt and impose the agreed disposition.

ALJ Decision at 5; P. Ex. 1 at 12-13. 

Accordingly, on September 21, 2021, the District Court entered a criminal judgment against Hirsch, based on Hirsch’s February 24, 2021 guilty plea to Count 3 of the criminal Information, for violating HIPAA and for aiding and abetting.  CMS Ex. 5, at 2.  Hirsch received the agreed criminal sentence of a $2,500 fine, a $100 assessment, 36 months of probation, and no imprisonment.  Id. at 3-6.  

Page 8

E.     CMS’s initial determination and Petitioner’s reconsideration request

By letter dated October 5, 2021, CMS, through Medicare contractor Palmetto GBA, gave notice that Petitioner’s Medicare billing privileges were revoked effective February 24, 2021, “which is the date [Hirsch’s] felony conviction became effective.”  ALJ Decision at 6; CMS. Ex. 4, at 2.  The revocation was pursuant to 42 C.F.R. § 424.535(a)(3) and (a)(9), because Hirsch, Petitioner’s owner and managing employee, had been convicted of a felony, as defined in section 1001.2, on February 24, 2021, and Petitioner had not timely reported this conviction to CMS.  ALJ Decision at 6; CMS Ex. 4, at 2.  CMS also imposed a 10-year re-enrollment bar.  CMS Ex. 4, at 2, 4.

On October 15, 2021, Petitioner timely requested reconsideration by CMS.  ALJ Decision at 6 & n.10; CMS Ex. 2.  Petitioner argued that Hirsch’s “plea was merely entered in February,” but “was not accepted and there was not a final judgement until September 21, 2021” – that is, at the sentencing hearing.  CMS Ex. 2, at 2; ALJ Decision at 6.  Thus, Petitioner argued that “Hirsch was not convicted for purposes of 42 C.F.R. §§ 1001.2 and 424.535(a)(3) until the plea was accepted on September 21, 2021.”  CMS Ex. 2, at 3; ALJ Decision at 6.  Petitioner also claimed that the business was sold to Hirsch’s son on October 11, 2021, and all required information was promptly and timely reported to CMS on October 14, 2021.  ALJ Decision at 7 & n.12; CMS Ex. 2, at 2, 3-4; see also CMS Ex. 6, at 2 (Change of Ownership for EI Medical, Inc. filed with Georgia Secretary of State October 11, 2021); CMS Ex. 7 (Petitioner’s CMS Form 855 change of ownership submission signed October 11, 2021); CMS Ex. 14 (October 15, 2021 CMS Form-855S change of ownership submission).  From those alleged facts, Petitioner argued that revocation of its billing privileges under section 424.535(a)(9) “is inappropriate because all changes to the Supplier’s enrollment information have been timely reported,” and also (citing CMS’s discretionary authority at section 424.535(e)) that the revocation “must” be reversed.  See ALJ Decision at 7 & n.12; CMS Ex. 2, at 3, 4.

In response to Petitioner’s allegation that the District Court had not accepted Hirsch’s plea on February 24, 2021, CMS emailed an inquiry to the prosecuting AUSA, stating:

CMS has taken administrative action against an entity, EI Medical, Inc., of which Stefanie Hirsch is the owner of record.  The action is based on Ms. Hirsch’s felony conviction.  CMS’ definition of conviction includes when a court accepts a guilty plea.  The effective date of our action is February 24, 2021, the date of Ms. Hirsch’s plea agreement.  EI Medical[,] Inc. has appealed this action and is claiming that the date the court accepted Ms. Hirsch’s plea is September 21, 2021 and not the date of her guilty plea February 24, 2021, referencing Fed. R. Crim. P. 11(c)(1)(C) as the basis of its argument.  We need to determine the date her plea was accepted by the court.  We have reviewed the case documents in PACER, but do not see

Page 9

specific reference to the court’s acceptance of the plea.  Can you please confirm the date her plea was accepted by the court?

ALJ Decision at 19-20 (citing P. Ex. 2, at 2; CMS Ex. 1, at 2, 4-5).  The AUSA responded, “The court accepted Ms. Hirsch’s guilty plea on February 24, 2021,” and provided a screen shot of the docket entry (electronic clerk’s notes for the February 24, 2021 plea hearing).  ALJ Decision at 20 (citing P. Ex. 2, at 1-2; CMS Ex. 1, at 2, 4-5). 

F.     CMS’s reconsidered determination

In a reconsidered determination dated January 21, 2022, CMS upheld Petitioner’s revocation, under 42 C.F.R. § 424.535(a)(3) and (a)(9), based, respectively, on Hirsch’s felony conviction and on Petitioner’s failure to report the conviction within 30 days.  ALJ Decision at 7; CMS Ex. 1.  CMS explained that revocation under section 424.535(a)(3) was warranted because Hirsch, as Petitioner’s owner, had been convicted of a felony financial crime in the previous 10 years, and such an offense is per se detrimental to the best interests of the Medicare program and its beneficiaries.  ALJ Decision at 7; CMS Ex. 1, at 5; see also 42 C.F.R. § 424.535(a)(3)(ii)(B).  Alternatively, CMS determined that, based on a case-specific-analysis, Hirsch’s felony offense was detrimental to the best interests of the Medicare program and its beneficiaries.  ALJ Decision at 7; CMS Ex. 1, at 6; see also 42 C.F.R. § 424.535(a)(3)(i).  CMS explained that revocation under section 424.535(a)(9) was warranted because “Ms. Hirsch was convicted by the [District] Court on February 24, 2021,” so that “the October 15, 2021 reporting of Ms. Hirsch’s February 24, 2021 felony conviction” was untimely under the 30-day reporting requirement.  CMS Ex. 1, at 7; ALJ Decision at 7.

CMS acknowledged Petitioner’s claim that Hirsch was not “convicted” of a felony offense until September 21, 2021, but concluded that the District Court “acknowledge[d], enter[ed], and accept[ed] Ms. Hirsch’s plea of guilty” on February 24, 2021.  CMS Ex. 1, at 4; ALJ Decision at 7.  CMS explained that on February 24, 2021, the District Court “accepted Ms. Hirsch’s plea of guilt,” and “scheduled a sentencing date based on Ms. Hirsch’s plea of guilt.”  CMS Ex. 1, at 5.  CMS stated that the prosecuting AUSA had confirmed that the District Court “accepted Ms. Hirsch’s plea of guilty” and Hirsch “was convicted, as the term is defined in 42 C.F.R. § 1001.2, on February 24, 2021.”  ALJ Decision at 20; CMS Ex. 1, at 5.  CMS further explained:

Although the Supplier argues that Ms. Hirsch was convicted by the [District] Court for her felonious acts on September 21, 2021, the documentation and evidence indicates otherwise.  On February 24, 2021, when [the District Court] accepted Ms. Hirsch’s plea of guilt and ordered presentencing documentation, [the District Court] scheduled a sentencing date based on Ms. Hirsch’s plea of guilt (see Exhibits 8 and 10).  Thus, CMS finds that the effective date of revocation was properly determined to

Page 10

be February 24, 2021, when the [District] Court accepted Ms. Hirsch’s guilty plea and she was convicted as the term is defined in § 1001.2.

CMS Ex. 1, at 5; ALJ Decision at 20.⁴ 

CMS upheld the 10-year re-enrollment bar and, while acknowledging Petitioner’s claim that the company was sold to Hirsch’s son in October 2021, declined to provide a discretionary reversal of the revocation under 42 C.F.R. § 424.535(e).  CMS Ex. 1, at 4, 5, 6, 8.  CMS explained that removing Hirsch as Petitioner’s owner did “not negate that Ms. Hirsch was the listed owner, managing employee, director and authorized official on the Supplier’s Medicare enrollment record at the time of her February 24, 2021 felony conviction.”  Id. at 5.

G.     Proceedings before the ALJ

On March 22, 2022, Petitioner timely requested an ALJ hearing.  Request for Administrative Law Judge Hearing (RFH).  Petitioner argued that CMS’s determination that Hirsch was “convicted when the plea was entered, on February 24, 2021, rather than when it was accepted, September 21, 2021, is in error and not a proper basis for revocation under 42 C.F.R. § 424.535(a)(3) or (a)(9).”  RFH at 6.  Petitioner contended that “September 21, 2021 is the date the plea was accepted and therefore is also the date on which Ms. Hirsch was convicted for purposes of 42 C.F.R. §§ 1001.2 and 424.535(a)(3).”  Id.  Petitioner further argued that “no reportable final adverse action existed” until September 21, 2021, and Petitioner “severed its business relationships with” Hirsch and timely reported all required information within 30 days thereafter, so “there is no basis for revocation of billing privileges under 42 C.F.R. § 424.535(a)(9).”  Id. at 10.  Petitioner maintained that the revocation should be reversed under section 424.535(e).  Id. at 10-11.  Finally, Petitioner argued against revocation of Petitioner’s billing privileges and the 10-year reenrollment bar based on various circumstances including Hirsch’s claimed lack of financial profit from the crime, her personal history, and her philanthropy.  Id. at 11-14.

CMS filed a combined brief and motion for summary judgment, arguing that:  revocation was warranted under 42 C.F.R. § 424.535(a)(3) – specifically, subsections (a)(3)(i) and (a)(3)(ii)(B) – and 42 C.F.R. § 424.535(a)(9); reversal of revocation was unwarranted; the 10-year reenrollment bar was authorized; and the correct revocation effective date was February 24, 2021.  CMS’s Combined Mot. for Summ. J. & Pre-Hr’g Br. (CMS Br. & Mot. to ALJ) at 1, 2, 4, 11-23.  CMS noted that revocation under 42 C.F.R. § 424.535(a)(9) would support an effective date of November 5, 2021 (30 days after

Page 11

mailing of the October 5, 2021 revocation notice), but CMS relied on revocation under section 424.535(a)(3) to establish the effective date of February 24, 2021 (Hirsch’s conviction date).  Id. at 19 n.4 (citing 42 C.F.R. § 424.535(g)).  CMS submitted 22 exhibits and no witness testimony.  

Petitioner filed a combined brief, motion for summary judgment, and opposition to CMS’s motion for summary judgment.  P. Pre-Hr’g Br., Mot. for Summ. J., & Resp. in Opp. to Resp’t’s Mot. for Summ. J. (P. Br. & Mot. to ALJ).  Petitioner maintained that CMS improperly determined the conviction date, and thus the effective date of revocation, because “[i]t was not until September 21, 2021 that the [District] Court rendered its judgment formally and unconditionally accepted the previously entered guilty plea.”  P.  Br. & Mot. to ALJ at 4.  Petitioner submitted four exhibits, including the written declaration of a retired judge of the United States District Court for the District of Maryland (the Retired Judge), and named two other proposed witnesses without providing their written testimony.  P. Exs. 1-4; P.’s List of Witnesses. 

The parties also briefed extensive evidentiary objections.  Petitioner objected to CMS’s Exhibits 20 and 21 (consisting of the government’s sentencing memorandum and certain email correspondence of Hirsch).  P.’s Obj. to Exs. Proposed by Resp’t.  CMS objected to all of Petitioner’s exhibits and witnesses on various grounds, and Petitioner replied to CMS’s objections.  CMS’s Objs. to P.’s Proposed Exs. & Witnesses; P. Reply to CMS Objs. to P.’s Exs. & Witnesses.  CMS also filed an opposition to Petitioner’s summary judgment motion.  CMS’s Opp. to P.’s Mot. for Summ. J.

On November 8, 2022, the ALJ issued a written decision, which first addressed evidentiary issues.  The ALJ admitted all four of Petitioner’s Exhibits, including the written direct testimony (P. Ex. 3) and resume (P. Ex. 4) of the Retired Judge.  ALJ Decision at 8.  The ALJ deemed the Retired Judge “qualified to address whether an individual has been convicted by the federal criminal justice system,” but “with the caveat that the witness’s opinion is based on a limited factual discussion and is premised on caselaw that is contrary to the stated opinion.”  Id. at 8, 10.  The ALJ excluded Petitioner’s two other proposed witnesses because Petitioner “neither submitted these witnesses’ written direct testimony nor requested . . . a subpoena to compel their testimony.”  Id. at 11 n.17.  The ALJ admitted all of CMS’s exhibits except proposed CMS Exhibit 21, which the ALJ excluded due to lack of foundation and relevance.  Id. at 10.  The ALJ observed that “[n]either party has requested a hearing for the purpose of cross-examination of any witnesses,” so an in-person hearing was unnecessary; the ALJ also considered it unnecessary to address the parties’ motions for summary judgment and decided the case on the written record.  Id. at 10-11 & n.18. 

The ALJ then made numerous findings, based on which the ALJ affirmed CMS’s revocation of Petitioner’s Medicare billing privileges effective February 24, 2021.  Id. at 12-14, 26.  First, the ALJ concluded that “CMS had a legitimate basis to revoke

Page 12

Petitioner’s supplier number pursuant to 42 C.F.R. § 424.535(a)(3) after Ms. Hirsch, the sole owner of Petitioner, was convicted of a felony offense.”  Id. at 15.  (Specifically, the ALJ upheld CMS’s determination under section 424.535(a)(3)(i), and so did not consider whether Hirsch’s offense also was a “financial crime” warranting revocation under section 424.535(a)(3)(ii)(B).)  Id. at 16-17.  Second, the ALJ ruled that “CMS had a legitimate basis, based on the definition of ‘conviction’ found at 42 C.F.R. § 1001.2, to impose the revocation pursuant to 42 C.F.R. § 424.535(a)(3) effective February 24, 2021, which is the date Ms. Hirsch’s guilty plea was accepted by a federal court.”  Id. at 18.  Third, “CMS had a legitimate basis to revoke Petitioner’s enrollment pursuant to 42 C.F.R. § 424.535(a)(9).”  Id. at 24.  Fourth, “CMS is not required to exercise its discretion to reverse the revocation,” and an ALJ is “not empowered to reverse a revocation pursuant to 42 C.F.R. § 424.535(e).”  Id.  Finally, “CMS was authorized to impose a 10-year bar to re-enrollment, which is not subject to review.”  Id. at 25. 

Petitioner timely appealed to the Board, asserting that the ALJ Decision was “clearly erroneous and must be reversed,” and also requesting an opportunity “to present evidence or oral argument” to the Board.  P.’s Req. for Review (RR) at 1, 24.  The Board’s March 2, 2023 letter acknowledging Petitioner’s appeal allowed CMS to oppose or support Petitioner’s request, and directed Petitioner to state the intended purpose and topics of oral argument.  Neither party filed anything in response.  The Board sees no factual questions or legal issues requiring clarification through oral argument, and denies Petitioner’s request.

Standard of Review

The standard of review on a disputed factual issue is whether the ALJ’s decision is supported by substantial evidence in the record as a whole, and the standard of review on a disputed issue of law is whether the ALJ’s 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 (“Board Guidelines”), at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html (last visited Oct. 12, 2023).

Analysis

Petitioner contends that the ALJ “denied Petitioner due process and a full and fair hearing on its appeal” by depriving Petitioner of an opportunity to challenge CMS’s evidence and present additional witness testimony at an in-person hearing.  RR at 2, 17-22.  However, Petitioner identifies the “fundamental issue on appeal” as determining “when the conviction of Stefanie Hirsch became an effective conviction for purposes of the notification requirements of 42 C.F.R. § 424.516(c)” for DMEPOS suppliers.  RR at 2; see also CMS Br. at 1 (concurring that the “main issue on appeal” is “whether the ALJ erred in determining that revocation under 42 C.F.R. § 424.535(a)(3) was effective on the

Page 13

date of Ms. Hirsch’s guilty plea (February 24, 2021) as opposed to the date of her sentencing (September 21, 2021)”).  Petitioner contends the ALJ erred in upholding February 24, 2021 as the effective date of Petitioner’s revocation per section 424.535(a)(3) because a conditionally accepted plea is not a “conviction” as defined by section 1001.2(c).  RR at 10-20.  Petitioner also argues that both CMS and the ALJ engaged in “arbitrary and capricious” action.  Id. at 1, 9, 22-24.  Petitioner summarizes, “[i]n light of the numerous errors of law and the lack of substantial evidence in the record to support the factual findings that underpin the decision to sustain the revocation of EI Medical’s billing privileges, the ALJ’s Decision must be overturned.”  Id. at 24.

In response, CMS denies that Petitioner “was deprived of the ability to present testimony from witnesses at a hearing,” and requests affirmance of the ALJ Decision because “Petitioner’s assertions lack any basis in fact or law.”  CMS Br. at 2, 20.  CMS contends that the February 24, 2021 revocation effective date was proper because the date of the District Court’s conditional acceptance of Hirsch’s guilty plea is the date of Hirsch’s conviction under the applicable regulations.  Id. at 10-19.  CMS also denies that Petitioner has been deprived of due process.  Id. at 2, 20-22. 

Aside from the issues specified above, no other issues are preserved for Board review.  In particular, Petitioner presents and supports no argument against the ALJ’s determinations that revocation was appropriate under 42 C.F.R. § 424.535(a)(3), and that CMS acted within its unreviewable discretion by refusing to reverse the revocation under section 424.535(e) and by imposing a 10-year re-enrollment bar.  Petitioner’s bare assertion, in a single footnote in its reply brief, that “Petitioner has appealed the ALJ’s decision in its entirety, requesting the decision be overturned,” P. Reply at 3 n.3, is insufficient to challenge those determinations by the ALJ, which we therefore summarily affirm.  See Board Guidelines, “Starting The Review Process,” ¶ (d) (requiring request for review to “specify each finding of fact and conclusion of law” disagreed with and set forth “the basis for each challenge” separately, with “concisely stated” arguments including, where applicable, citations to the record and supporting law); see also Arthur L. Jenkins III, M.D. & Jenkins NeuroSpine LLC, DAB No. 3070, at 7 (2022) (stating that, when facing a submission that fails to conform to Board Guidelines, the Board may summarily affirm a factual finding or legal conclusion if the Board cannot discern the factual or legal basis for the party’s disagreement) (citing cases).⁵  We also summarily

Page 14

reject Petitioner’s claims that the ALJ “disregarded record evidence demonstrating genuine issues of material disputed fact” and erroneously determined that CMS “carried its burden of establishing its entitlement to judgment as a matter of law.”  RR at 1.  Petitioner thus invokes summary judgment standards in a case that the ALJ expressly did not decide by summary judgment.  See ALJ Decision at 11 n.18; see also Emmanuel Uko Akpan, DAB No. 2330, at 8 (2010) (distinguishing summary judgment proceedings from adjudication on the written record without an in-person hearing).

As to the issues that Petitioner has properly preserved and presented, we affirm the ALJ Decision for the reasons discussed below.

A.     The ALJ did not err by deciding the case on the written record, without an in-person hearing.

Petitioner asserts two reasons that the ALJ erred by denying Petitioner an in-person hearing.  First, Petitioner claims the ALJ incorrectly concluded that “[n]either party ha[d] requested a hearing for the purpose of cross-examination of any witnesses.”  RR at 20 (quoting ALJ Decision at 10).  According to Petitioner, the ALJ’s conclusion had “no basis in law or fact” because Petitioner asked to present testimony from three witnesses at a hearing and CMS asked to cross-examine the Retired Judge.  Id. at 20-21.  Second, Petitioner claims the ALJ allegedly erred by concluding that Petitioner requested no subpoenas for two proposed witnesses.  Id. at 21.  Because the two witnesses are government employees, Petitioner argues that it “had no ability to obtain written direct testimony in advance of a hearing and did not yet have the information necessary to request issuance of a subpoena.”  Id. at 21-22.  We discuss below, and ultimately reject, Petitioner’s arguments.

1.     The ALJ did not err in determining that an in-person hearing was not necessary because neither party requested cross-examination of a witness.

The ALJ ruled that “[n]either party has requested a hearing for the purpose of cross-examination of any witnesses, and a hearing is therefore unnecessary.”  ALJ Decision at 10-11.  The ALJ informed the parties by pre-hearing order that each party “has the right to cross-examine any witness for the opposing party,” but, “[a]bsent an explicit request for cross-examination of a particular witness, I will not afford an opportunity for cross-examination.”  Pre-Hr’g Order at 9 (¶ 13).  In conspicuous type, the ALJ directed that “A request for cross-examination must be in the form of a notice that is filed separately from a brief,” and “must list the specific witness(es) and must indicate the anticipated amount of time that will be required for cross-examination of each witness.”  Id.  Neither party submitted a request in the required format.

Page 15

Petitioner incorrectly contends that “CMS requested the opportunity to cross-examine Petitioner’s witness,” the Retired Judge, “making a decision on the record thoroughly inappropriate.”  RR at 9.  However, CMS merely commented, when objecting to Petitioner’s exhibits, that if the ALJ admitted the Retired Judge’s declaration, “it should be admitted only after CMS has had a chance to cross-examine the witness.”  CMS’s Objs. to P.’s Proposed Exs. and Witness at 11.  Under those circumstances, where “CMS asked the ALJ to convene a hearing only if necessary to protect its right to cross-examine [petitioner’s] witnesses should [CMS’s] objections be overruled,” the Board has found no error in an ALJ’s proceeding without an in-person hearing.  See HeartFlow, Inc., DAB No. 2781, at 16 (2017) (emphasis omitted).  Even if CMS had intended to file an unconditional cross-examination request, the ALJ permissibly disregarded it for not being filed separately from a brief and not listing the anticipated amount of time required for cross-examination, as the ALJ had ordered.  See Pre-Hr’g Order at 9 (¶ 13); see also Chit-Chat Inc., DAB No. 2936, at 9 (2019) (“Compliance with ALJ orders is not optional.”).

Petitioner also protests that it “did not waive its right to appear and present evidence at a hearing,” implying that Petitioner became entitled to an in-person hearing merely by not waiving one, but that premise is incorrect.  See RR at 20 (citing 42 C.F.R. § 498.66).  While 42 C.F.R. § 498.66(a)(1) requires a party wishing to waive the right to appear and present evidence at a hearing to “file a written waiver with the ALJ,” a party “does not acquire an absolute, unqualified right to a hearing merely by not waiving one.”  Timothy Onyiuke, M.D., DAB No. 3092, at 8 (2023) (citing Sylvie Wamba, DAB No. 3068, at 8 (2022)).  Instead, “[d]eciding [a] case based on the written record, including any written direct testimony, is consistent with due process so long as in-person cross-examination is available,” as it was in this case (if properly requested).  George Yaplee Med. Ctr., DAB No. 3003, at 5 (2020) (citing cases).  “The Board has therefore long held that convening a hearing would be pointless, where . . . all witness testimony is completed in writing and no cross-examination is sought.”  Id. (listing cases); see also Jackson at 12 (stating that “holding a hearing is unnecessary where all direct testimony is submitted in writing and neither party seeks to cross-examine witnesses, as the hearing would not add new evidence to the record” and “not holding a hearing in such an instance also raises no due process concerns”).  Furthermore, the Board has ruled that a petitioner has “suffered no prejudice by the ALJ not permitting the cross-examination of its own witness by CMS.”  Five Star Healthcare, LLC, DAB No. 3089, at 8 (2023).

Accordingly, we find no error in the ALJ’s determination that an in-person hearing was unnecessary because neither party requested cross-examination of a witness.

Page 16

2.     The ALJ appropriately excluded Petitioner’s proposed witnesses when Petitioner neither supplied their testimony in writing nor requested a subpoena to compel their testimony.

When determining that an in-person hearing was unnecessary, the ALJ noted that “Petitioner listed [Hirsch’s] federal prosecutor and a CMS official as potential witnesses,” but had “neither submitted these witnesses’ written direct testimony nor requested that I issue a subpoena to compel their testimony.”  ALJ Decision at 11 n.17.  The ALJ further commented that, “even if Petitioner had requested the issuance of a subpoena, it is difficult to fathom how the testimony of either witness is ‘reasonably necessary for the full presentation of a case’ or what relevant and material facts these witnesses would establish.”  Id. (quoting 42 C.F.R. § 498.58). 

Petitioner claims the ALJ’s determination is erroneous for several reasons.  RR at 21.  Petitioner asserts the ALJ “ignored the text of [Petitioner’s] witness list,” which stated that Petitioner “intends to request a subpoena for” these two witnesses.  Id. (quoting P.’s List of Witnesses at 1).  Petitioner complains that the “date and time of the testimony” are important details to include in a subpoena, yet “[a]t the time of the briefing, the ALJ had not yet ruled whether there would be a hearing, let alone set a date and time for the hearing.”  Id.  Petitioner also contends that, because one witness was employed at the Department of Justice (DOJ), a request for a subpoena “would likely require a request pursuant to the DOJ Touhy regulations,” and “[w]ithout a hearing date and time set, relevant requirements could not be met.”  Id. at 22 (citing United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951) and 28 C.F.R. §§ 16.1-16.11).  Petitioner further claims that the ALJ’s expressed skepticism about the relevance and materiality of either witness’s testimony “demonstrates her clear bias,” and “it is hard to imagine more relevant testimony” than that of “the CMS decision-maker” concerning Hirsch’s conviction date and “the witness she relied on.”  Id.

Petitioner’s arguments establish no error.  A party is not entitled to an in-person hearing before an ALJ specifically for the purpose of examining the party’s own witnesses when, as here, the party neither presented written direct testimony from the witnesses nor subpoenaed them.  HeartFlow at 16, 18.  The governing regulations in 42 C.F.R. Part 498 provide “ALJs only one means – the issuance of a subpoena – to compel the production of relevant evidence that the parties themselves have not produced for admission into the record.”  Thomas Falls, M.D., DAB No. 3056, at 17 (2022) (citing Michael Turano, M.D., DAB No. 2922, at 14 (2019)).  Therefore, Petitioner’s only means to compel the appearance of a witness was “through the issuance of a subpoena to compel that individual to present herself or himself to testify (and produce documents if ordered to do so).”  Id. at 17. 

Petitioner was on notice how to request a subpoena.  The Civil Remedies Division Procedures (CRDP), provided along with acknowledgement of Petitioner’s hearing

Page 17

request, explain how a party “may move for issuance of a subpoena requiring a witness to appear and testify, as provided by regulation.”  CRDP (Mar. 28, 2016 ed.) at 17 (¶ 17(b)).  The ALJ’s pre-hearing order stated that 42 C.F.R. § 498.58 applied to any subpoena requests.  Pre-Hr’g Order at 8.  Under that regulation, an ALJ “may issue subpoenas if they are reasonably necessary for the full presentation of a case,” but a requesting party “must file a written request for a subpoena with the ALJ at least 5 days before the date set for the hearing.”  42 C.F.R. § 498.58(a), (b).  A subpoena request must include the desired witnesses’ identity and address, “the pertinent facts the party expects to establish by the witnesses,” and an indication “why those facts could not be established without use of a subpoena.”  Id. § 498.58(c).  Both the CRDP and the controlling regulation clearly required Petitioner to file a formal written request for a subpoena at least five days before the date set for any hearing.  See CRDP at 17 (¶ 17(b)); 42 C.F.R. § 498.58(b). 

Yet Petitioner did not file a timely request – in fact, any request – for a subpoena in accordance with the CRDP and 42 C.F.R. § 498.58.  Instead, Petitioner supplied the names (but not addresses) of two government employees as potential witnesses and stated that Petitioner “intend[ed] to request” subpoenas for them, but never followed through on that expressed intent.  See P.’s List of Witnesses.

We reject Petitioner’s complaint that it “was unable to request issuance of a subpoena prior to a hearing date being set.”  See RR at 8.  Neither 42 C.F.R. § 498.58(c) nor the CRDP requires inclusion of the anticipated hearing date in a subpoena request.  Section 498.58(b) requires filing of a subpoena request “at least 5 days before the date set” for a hearing, but does not prohibit filing a subpoena request earlier, including before any hearing date is set.  Thus, “[n]either the fact that no hearing date was set, nor the deadline in section 498.58(b), precluded Petitioner from submitting a subpoena request in accordance with section 498.58” once Petitioner determined (by the time of its pre-hearing exchange) that it wanted the witnesses to provide testimony.  See Falls at 18.

Petitioner makes bare assertions, without specific factual or legal support, that the so-called Touhy regulations “likely” applied and imposed unspecified “relevant requirements” that “could not be met” without a scheduled hearing date.  See RR at 22.  Petitioner was obligated to support this argument “by precise citations to the record and/or by precise citations to statutes, regulations or other relevant authorities,” and has not done so.  See Board Guidelines, “Starting the Review Process,” ¶ (d) (emphasis added).  Petitioner has not established that the Touhy regulations apply either in addition to, or instead of, 42 C.F.R. § 498.58, which clearly required Petitioner to file a timely subpoena request in order to compel the testimony of the two desired governmental witnesses.  Even if Petitioner had established the applicability of the Touhy regulations, Petitioner has not specified how the lack of a fixed hearing date prevented Petitioner from fulfilling any of their particular requirements. 

Page 18

Petitioner also establishes no error in the ALJ’s assessment that neither proposed witness had relevant or material testimony to offer in any event.  Even if Petitioner had asked the ALJ to issue a subpoena, the ALJ would have had to consider whether the two witnesses’ testimony was “reasonably necessary for the full presentation of [this] case” in accordance with 42 C.F.R. § 498.58(a).  “The Board has repeatedly rejected allegations of ALJ error or abuse of discretion in denying subpoena requests where the evidence sought was determined not reasonably necessary for the full presentation of the case.”  Falls at 18 (citing Turano at 15-16).  “The ALJ has broad discretionary authority over evidentiary matters,” and “[w]e defer to the ALJ’s evidentiary rulings in the absence of a compelling reason not to do so.”  Id. at 18 (citing HeartFlow at 19).  We see no compelling reason to reject the ALJ’s assessment in this case.

Accordingly, we find no error in the ALJ’s determination that an in-person hearing was unnecessary because Petitioner did not present the written testimony of, or request subpoenas for the testimony of, two proposed witnesses.

B.     The ALJ did not err in upholding CMS’s determination of February 24, 2021 as the effective date of Petitioner’s revocation.

The effective date of a revocation based on a felony conviction under 42 C.F.R. § 424.535(a)(3) is the date of the “conviction,” which includes a federal court’s acceptance of an individual’s guilty plea.  42 C.F.R. §§ 424.535(g), 1001.2(c); Meadowmere Emergency Physicians, PLLC, DAB No. 2881, at 13 (2018) (stating that for “purposes of section 424.535(a)(3), a person is deemed to have been ‘convicted’ of a felony offense when the court in the person’s criminal case has accepted his no-contest or guilty plea”) (quoting Norman Johnson, M.D., DAB No. 2779, at 20 (2017)).

Petitioner raises two primary arguments against the ALJ’s determination that February 24, 2021 was the effective date of Petitioner’s revocation.  See RR at 10-20; P. Reply at 2.  First, Petitioner argues, a conditionally accepted plea is not a “conviction” as defined by 42 C.F.R. § 1001.2 for purposes of section 424.535(a)(3).  RR at 11-17.  Second, Petitioner argues that, even if the Board accepted the ALJ’s “strained and unfair interpretation” of section 1001.2, the regulation was ambiguous and Petitioner’s interpretation was reasonable.  Id. at 17-20.  We address and reject Petitioner’s arguments below.

1.     The ALJ did not err in determining that the District Court’s conditional acceptance of Hirsch’s guilty plea on February 24, 2021, establishes acceptance of a guilty plea by a federal court, as contemplated by 42 C.F.R. § 1001.2.

The ALJ found and concluded that “[t]he district judge’s conditional acceptance of Ms. Hirsch’s guilty plea on February 24, 2021, establishes acceptance of a guilty plea by a

Page 19

federal court, as contemplated by 42 C.F.R. § 1001.2.”  ALJ Decision at 14. 

Petitioner insists that there was no plea acceptance “until September 21, 2021,” RR at 14, on several grounds.  Petitioner argues that on February 24, 2021, the District Court “was unable to accept Ms. Hirsch’s plea because it had not yet approved the plea agreement.”  Id. at 16.  Petitioner asserts that, after the February 24, 2021, plea hearing, Hirsch “maintained her unencumbered right to withdraw” her plea, as the District Court had “explicitly stated it would defer its decision on acceptance until sentencing at a later date,” and “the plea accordingly had not been accepted.”  Id. at 14-15.  Petitioner also contends that “the plea deal was still being modified after” February 24, 2021, so “it is logically impossible that the conviction was entered as of” that date.  Id. at 14; see also id. at 6 (“The fact that the plea was not formally accepted on February 24, 2021 is underscored by a subsequent July 9, 2021 amendment to the Plea Agreement by the parties changing the agreed disposition.”).  In support of these contentions, Petitioner relies largely on the interpretation of United States v. Andrews, 857 F.3d 734 (6th Cir. 2017), and Meadowmere, DAB No. 2881 (2018), by Petitioner’s sole witness, the Retired Judge.  RR at 12-16, 18; P. Ex. 3, ¶¶ 5, 7, 11.

We reject Petitioner’s contentions as inconsistent with the long-standing construction of 42 C.F.R. § 1001.2(c) by the Board.  Interpreting “conviction” by means of a court-accepted guilty plea, the Board has stated that “the two elements of a conviction are:  (1) the individual has entered a guilty plea, and (2) the court has accepted the guilty plea.”  Akpan at 6 (interpreting section 1128(i)(3) of the Act, which defines “convicted” consistently with section 1001.2(c)).  “With respect to the second element, the Board has observed that it ‘is well-established that a guilty plea is “accepted” when a court concludes, after personal questioning of the defendant under oath, that there is a factual basis for the plea and that the plea is voluntary and informed.’”  Id. (quoting Michael S. Rudman, M.D., DAB No. 2171, at 6 n.5 (2008) (citing McCarthy v. United States, 394 U.S. 459, 464-65 (1969), and Fed. R. Crim. P. 11(b)), aff’d, 578 F. Supp. 2d 812 (D. Md. 2008)).

Under these standards, and to the extent the District Court’s acceptance of Hirsch’s guilty plea presents a factual issue, substantial evidence supports the ALJ’s conclusion.  See Stuart Alan Rockwell, DAB No. 3022, at 9 (2020) (finding that “there was substantial evidence supporting the ALJ’s conclusion that the Arkansas court accepted Petitioner’s guilty plea”); Stephen White, M.D., DAB No. 2912, at 12 (2018) (stating that “substantial evidence in the record supports the conclusion that Petitioner pleaded guilty and the court accepted his plea”).  There is no dispute that on February 24, 2021, Hirsch entered a guilty plea and the District Court stated, “I will conditionally accept the plea subject to the rule, and we’ll accordingly find the defendant guilty at this point of the offense charged in Count Three of the indictment.”  CMS Ex. 22, at 4, 18 (emphasis added).  The District Court accepted Hirsch’s plea after conducting an extensive colloquy that established that the plea had a factual basis, id., at 16-17, was voluntary, id. at 17-18, and

Page 20

was informed, id. at 11-15.  Petitioner does not deny that the colloquy was proper, or establish that any subsequent event negated the District Court’s express acceptance of the plea – including the parties’ subsequent adjustment of one term of their plea agreement, which the District Court accepted in full on September 21, 2021.  See P. Ex. 1, at 5, 12-13.  Nor is it significant that, at the sentencing hearing, the District Court remarked, “I don’t remember whether I formally accepted [Hirsch’s] plea” previously and, “[i]f I deferred it, I now will find the fact of guilt and impose the agreed disposition.”  See id. at 13.  As CMS noted, and we agree, “this passing remark does not change the conditional acceptance of the plea that actually occurred during the Rule 11 hearing” seven months earlier.  See CMS Br. at 16 n.4. 

The ALJ thus found upon substantial evidence that “[t]he plea hearing transcript factually demonstrates” that the District Court judge did not defer accepting Hirsch’s plea, “but rather, conditionally accepted the guilty plea and made an explicit finding of guilt.”  ALJ Decision at 10.  The District Court’s use of the word “conditionally” simply means, as the District Court explained to Hirsch, that “if the court should reject the parties’ suggested disposition, you would have the right to withdraw your guilty plea and we’d proceed as if you had never offered it.”  CMS Ex. 22, at 12.  Neither potentiality – the court’s rejection of the plea agreement, or Hirsch’s consequent withdrawal of her plea – ever happened.  The theoretical potential for later withdrawal did not prevent the court from accepting the guilty plea; on the contrary, as the ALJ explained, “[i]f a guilty plea has not, in fact, been accepted, then logically there would be no reason for a defendant to withdraw the guilty plea.”  ALJ Decision at 22 n.23. 

Petitioner’s claims of legal error by the ALJ ignore a crucial distinction between two different events that occurred at Hirsch’s February 24, 2021 sentencing hearing:  the District Court accepted Hirsch’s plea, but deferred acceptance of Hirsch’s plea agreement until the sentencing hearing on September 21, 2021.  The text of Fed. R. Crim. P. 11 shows that “[g]uilty pleas can be accepted while plea agreements are deferred, and the acceptance of the two can be separated in time.”  Hyde, 520 U.S. at 674 (emphasis added). 

The ALJ’s analysis is consistent with the reasoning and rulings of several federal circuit courts, which, on analogous facts and in accordance with Hyde, have found a district court’s conditional or provisional acceptance of a guilty plea to be an effective plea acceptance.⁶  See United States v. Robinson, 587 F.3d 1122, 1126 (D.C. Cir. 2009) (reasoning that “a court may accept a defendant’s guilty plea and temporarily refrain

Page 21

from accepting or rejecting a corresponding plea agreement,” and holding that district court’s “use of the term ‘conditional’ did not nullify its acceptance of the appellants’ guilty pleas”); United States v. Jones, 472 F.3d 905, 908, 909 (D.C. Cir. 2007) (holding plea accepted, where district court told defendant that “the plea of guilty is conditionally accepted subject to review of the plea agreement and the presentence report, and I find you guilty,” and confirming that “Hyde ensures that such conditions subsequent do not nullify otherwise valid acceptances”) (emphasis omitted); United States v. Overton, 24 F.4th 870, 872, 875 (2d Cir. 2022) (holding that district court “did accept” defendant’s guilty plea despite the court’s “deferred decision on his plea agreement”), cert. denied, 143 S. Ct. 155 (2022); United States v. Battle, 499 F.3d 315, 321 (4th Cir. 2007) (concluding that district court accepted guilty plea, recognizing “the inherently conditional nature of guilty pleas under Rule 11” and stating that, “once the district court has satisfied Rule 11’s colloquy requirement, there is a presumption that the court has accepted the defendant’s guilty plea”), cert. denied, 552 U.S. 1166 (2008); United States v. Arafat, 789 F.3d 839, 844 (8th Cir. 2015) (holding conditional plea was accepted, for “at no time did the district court explicitly state that it would defer acceptance of the guilty plea,” and instead “it deferred only acceptance of the plea agreement”), cert. denied, 577 U.S. 947 (2015); United States v. Byrum, 567 F.3d 1255, 1257, 1262 (10th Cir. 2009) (holding that district court accepted guilty plea, because “where a district court conducts a Rule 11 plea colloquy and then provisionally or conditionally accepts the defendant’s guilty plea pending its review of the PSR [i.e., presentence report], the district court has accepted the plea for the purposes of Rule 11”).  

These cases refute Petitioner’s assertion that “Hyde is entirely unpersuasive.”  See RR at 17.  On the contrary, Hyde remains controlling law.  Despite amendments to the Federal Rules of Criminal Procedure in 2002, “the advisory committee note accompanying the amendments indicates the amendments were intended to incorporate Hyde’s holding.”  Battle, 499 F.3d at 320; accord Byrum, 567 F.3d at 1259 n.3 (“[T]he advisory committee note accompanying the amendments specifically states that Hyde’s holding was incorporated into the Rule 11 changes.”) (citing Fed. R. Crim. P. 11 advisory committee note (2002 Amendments)). 

While incorrectly dismissing Hyde, Petitioner relies on precedents that are easily distinguishable because in each the trial judge either did not expressly accept the defendant’s plea (conditionally or otherwise), or expressly deferred acceptance of the plea itself and not the plea agreement.  See United States v. Tyerman, 641 F.3d 936, 938, 943 (8th Cir. 2011) (finding no plea acceptance because district court twice told defendant, “I’m going to put off accepting your plea” pending preparation and review of the presentence report, which was “a deferral of acceptance of the guilty plea itself”) (internal quotation marks omitted); United States v. Mendez-Santana, 645 F.3d 822, 825 (6th Cir. 2011) (finding no plea acceptance when district court stated, “I’m going to hold off on accepting Mr. Mendez’ plea at this point given the nature of the fact that there’s no plea agreement”); United States v. Head, 340 F.3d 628, 630 (8th Cir. 2003) (finding no

Page 22

acceptance when trial court did “not explicitly do so through the use of words such as ‘I accept your plea of guilty’”); United States v. Shaker, 279 F.3d 494, 496 (7th Cir. 2002) (per curiam) (finding no plea acceptance when trial court pronounced, “I am deferring my decision on acceptance or rejection of your plea of guilty and your Plea Agreement until after I’ve had an opportunity to study the Presentence Report”). 

In light of this body of law, the ALJ committed no legal error in rejecting Petitioner’s arguments based on Andrews and Meadowmere and their interpretation by Petitioner’s sole witness, the Retired Judge.  The ALJ rejected the witness’s opinion on Andrews, explaining that Andrews acknowledged the apparent “consensus that a proper Rule 11 colloquy creates the presumption that a guilty plea was accepted,” which is rebutted only “when the district court explicitly deferred acceptance of the plea” itself, rather than the plea agreement.  ALJ Decision at 22 (quoting Andrews, 857 F.3d at 740).  The ALJ correctly reasoned that the presumption of acceptance was unrebutted in the present case, in which “[t]he district judge did not ‘explicitly defer acceptance’ of the plea.”  Id.  “[R]ather, the district judge conditionally accepted the plea, made a finding of guilt, and explained that his acceptance of a guilty plea pending approval of a plea agreement is subject to revocation.”  Id. (emphasis added).  The ALJ also did not err in determining that Petitioner’s witness “misapplied” Meadowmere.  Id. at 9.  The ALJ explained, “[i]n Meadowmere, the [Board] modified the effective date of revocation based on the date the district court accepted a guilty plea that had been entered before a magistrate judge who was not authorized to accept the felony guilty plea, which is irrelevant to the circumstances presented here.”  Id. (emphasis added).  The ALJ properly distinguished Meadowmere, because “[t]he taking of a plea by a magistrate judge does not bind the district court to accept that plea,” but rather “the district court retains ultimate control over the plea proceedings, which are submitted to the court for its approval.”  United States v. Dees, 125 F.3d 261, 268 (5th Cir. 1997), cert. denied, 522 U.S. 1152 (1998).

In summary, we perceive no factual or legal error in the ALJ’s determination that the District Court’s conditional acceptance of Hirsch’s guilty plea on February 24, 2021, constituted acceptance of a guilty plea as contemplated by 42 C.F.R. § 1001.2, and we therefore affirm that determination. 

2.     The ALJ did not err in finding and concluding that, pursuant to 42 C.F.R. §§ 424.535(g) and 1001.2, the effective date of Petitioner’s revocation pursuant to 42 C.F.R. § 424.535(a)(3) is February 24, 2021.

The ALJ found and concluded that, “[p]ursuant to 42 C.F.R. §§ 424.535(g) and 1001.2, the effective date of Petitioner’s revocation pursuant to 42 C.F.R. § 424.535(a)(3) is February 24, 2021.”  ALJ Decision at 14. 

Petitioner argues, however, that even if the Board agrees with the ALJ’s “strained and unfair interpretation of 42 C.F.R. § 1001.2” establishing a February 24, 2021 conviction

Page 23

(and thus revocation) date, Petitioner’s contrary interpretation nevertheless was “reasonable.”  RR at 17.  Petitioner further asserts that the ALJ’s interpretation was not “clearly established law,” so “should be treated [as] retroactive application of a new rule,” and “retroactively imposing a revocation” on that basis “violates due process and is an ex post facto penalty in violation of the Fifth Amendment.”  Id. at 18-20 (italics removed).  Petitioner thus contends that, “[e]ven if this Board upholds the revocation and the ALJ’s interpretation, it should make the effective date September 21, 2021 based on relevant Constitutional protections.”  Id. at 20. 

We disagree with Petitioner’s position, first, because the ALJ’s interpretation of 42 C.F.R. §§ 424.535 and 1001.2 is reasonable and consistent with the fundamental purpose of the governing regulatory scheme.  “Like the overarching objective of program exclusions,” the Board has explained, “the central purpose of the enrollment provisions is to protect beneficiaries and the Medicare Trust Funds from ‘fraudulent and abusive providers and suppliers.’” Kimberly Shipper, P.A., DAB No. 2804, at 8 (2017) (citing 71 Fed. Reg. 20,754, 20,773-74 (Apr. 21, 2006)), aff’d, No. 6:17-CV-00253-ADA, 2019 WL 2098120 (W.D. Tex. Mar. 1, 2019) (Order Adopting Magistrate R. & R. at 2019 WL 1029118 (W.D. Tex. Feb. 11, 2019)).  “In order to promote program integrity on a department-wide basis, the Secretary thus logically interprets the term ‘convicted’ broadly, to include circumstances in which a practitioner’s involvement in the criminal justice system raises sufficient concerns about their integrity or trustworthiness to justify a revocation of Medicare enrollment or exclusion from federal health care programs.”  Id.  In this case, Petitioner does not dispute that, on February 24, 2021, Hirsch pled guilty to violating HIPAA by selling access to a clearinghouse that enabled two individuals to improperly access hundreds of thousands of patients’ personal and medical data.  ALJ Decision at 17; CMS Ex. 1, at 5.  Nor does Petitioner dispute CMS’s determination that Hirsch’s criminal conduct was detrimental to the Medicare program and its beneficiaries.  Therefore, upholding Petitioner’s Medicare revocation based on the effective date of February 24, 2021 is consistent with “the central purpose of the enrollment provisions” to protect the Medicare program and its beneficiaries.  See Shipper at 8. 

Petitioner’s interpretation of 42 C.F.R. § 1001.2, by contrast, would undermine the protective purpose of the enrollment provisions.  If Petitioner were correct, then a supplier whose owner pled guilty to criminal conduct detrimental to the best interests of the Medicare program and its beneficiaries still could receive payments from Medicare for many more months, until the court eventually accepted all terms of the owner’s plea agreement at sentencing.  Yet permitting Petitioner to keep receiving Medicare payments for nearly seven months after Hirsch’s conviction would be contrary to the purpose and goals of the enrollment provisions.  See 71 Fed. Reg. 20,754, 20,773-74 (Apr. 21, 2006); see also 57 Fed. Reg. 3,298, 3,330 (Jan. 29, 1992).  CMS determined that Hirsch’s conviction “calls into question her trustworthiness and veracity as it relates to her ability and willingness to obey and follow government regulations and protect individuals’ sensitive information,” such that “the Medicare Trust Funds and beneficiaries could be at

Page 24

risk if the Supplier remains enrolled.”  CMS Ex. 1, at 6.  Petitioner has acknowledged that upholding the February 2021 revocation date “will result in a tremendous, alleged debt for [Petitioner], estimated to be in the hundreds of thousands of dollars.”  P. Br. & Mot. to ALJ at 21.  Stated differently, revising the revocation date from February 2021 to September 2021 would entitle Petitioner to retain hundreds of thousands of dollars of Medicare funds after its owner already had pled guilty to feloniously disclosing the individually identifiable health information of hundreds of thousands of individuals.  We reject regulatory interpretations, such as Petitioner’s here, which would have such illogical results and be inconsistent with the purpose of the pertinent regulatory and statutory scheme.  See, e.g., Sandeep Gupta, M.D., DAB No. 3088, at 9-10 (2023); Dennis McGinty, PT, DAB No. 2838, at 9-10 (2017), affirmance recommended, No. 3:18-cv-359-S, 2019 WL 3044183 (N.D. Tex. May 15, 2019), R. & R. adopted, 2019 WL 3034596 (N.D. Tex. July 11, 2019).  

We also reject Petitioner’s contentions that the ALJ’s interpretation of 42 C.F.R. § 1001.2 does not represent established law.  Petitioner argues that “the agency should defer to the Federal Court[s] on questions of criminal procedure,” P. Reply at 2 n.2, yet both CMS and the ALJ essentially did so, while retaining their own primacy in interpreting federal law governing the Medicare program.  See, e.g., CMS Br. at 14-17 (citing Jones, Battle, Byrum, Overton, and Arafat); ALJ Decision at 10, 22, 23 (recognizing and applying to Petitioner’s revocation the relevant “consensus” among federal courts).  The ALJ rightly recognized the propriety of the District Court’s colloquy, and that even Andrews, on which Petitioner heavily relies, acknowledges the apparent “consensus that a proper Rule 11 colloquy creates the presumption that a guilty plea was accepted.”  See ALJ Decision at 21, 23 (quoting Andrews, 857 F.3d at 740).  Thus, as the ALJ accurately summarized, the issue this case presents – that a court’s conditional acceptance of a guilty plea, pending approval of a plea agreement, presumptively constitutes acceptance of a guilty plea – is “not novel” but rather “appears to be well-settled.”  Id. at 23.   

Petitioner also incorrectly asserts that, when weighing the testimony of Petitioner’s sole witness, the ALJ “presume[d] to place her consideration of relevant law as more informed than that of an experienced, retired, Article III appointed, United States District Court Judge,” and “needlessly belittle[d]” the Retired Judge’s interpretation of the law.  RR at 3, 4.  Whether or not the ALJ “needlessly belittle[d]” the witness’s legal interpretation is a contention we need not address as part of our substantive analysis.  We find that the ALJ carefully considered the Retired Judge’s opinion before concluding that it was “based on a limited factual discussion” and “premised on caselaw that is contrary to the stated opinion.”  ALJ Decision at 10.  The ALJ explained that the Retired Judge “did not provide any meaningful support for his determination” that, “for purposes of 42 C.F.R. § 1001.2, the District Court ‘accepted’ Ms. Hirsch’s guilty plea at the September 21 hearing.”  Id. (citing P. Ex. 3, at 5).  “[T]he witness did not recognize, much less address, that the presiding judge made an explicit finding of guilt at the February 24, 2021 plea hearing.”  Id. at 9.  In addition, the ALJ determined that the Retired Judge

Page 25

misapplied Meadowmere because it involved circumstances irrelevant to the present case, and Andrews because it contradicted the Retired Judge’s opinion that a conditionally accepted plea could not have been accepted until acceptance of the plea agreement.  Id.  We perceive no error in the ALJ’s assessment.

The ALJ thus rightly rejected Petitioner’s expectation that it must “be put ‘on notice’ of how CMS would apply the law to” Hirsch’s conviction.  See ALJ Decision at 23.  The Board repeatedly has rejected arguments comparable to Petitioner’s, well before Petitioner’s 2021 guilty plea.  See Shipper at 5; Michael D. Miran, Esta Miran, & Michael D. Miran, Ph.D. Psychologist P.C., DAB No. 2469, at 4 (2012).  For example, in Shipper, a supplier contesting revocation argued that the criminal court “did not ‘accept’ the [supplier’s] guilty plea but only ‘received’ it without ‘entering an adjudication of guilt.’”  Shipper at 5.  The Board concluded that, on the contrary, section 1001.2 “does not require that a court adjudicate guilt in order for a practitioner to be considered ‘convicted.’”  Id.  In Miran, the petitioners argued the I.G. could not subject them to exclusion because “their pleas were ‘conditional,’ so their convictions are not yet final and they cannot yet be subject to exclusion.”  Miran at 4.  The Board disagreed, observing that petitioners did not “point to anything in the text or legislative history of the Act that supports their assertion that it matters whether the plea is ‘conditional’,” and pointing to contrary legislative history indicating an intentionally broad definition of “conviction.”  Id. (citing S. Rep. No. 100-109, at 14 (1987), reprinted in 1987 U.S.C.C.A.N. 682, 694).

Having dispensed with Petitioner’s argument that it interpreted 42 C.F.R. § 1001.2 reasonably and the ALJ’s contrary interpretation was unfairly novel, we also dispose of Petitioner’s claims that it consequently suffered due process violations and ex post facto penalties.  “Procedural due process imposes constraints on governmental decisions which deprive individuals of ‘liberty’ or ‘property’ interests within the meaning of the Due Process Clause of the Fifth or Fourteenth Amendment” to the United States Constitution.  Mathews v. Eldridge, 424 U.S. 319, 332 (1976).  “An ex post facto law is one that is ‘passed after the occurrence of a fact or commission of an act, which retroactively changes the legal consequences or relations of such fact or deed.’”  Narendra M. Patel, M.D., DAB 1736, at 28 (2000) (quoting BLACK’S LAW DICTIONARY (6th ed. 1990)), aff’d sub nom. Patel v. Thompson, 319 F.3d 1317 (11th Cir. 2003) (per curiam), cert. denied, 539 U.S. 959 (2003). 

Petitioner’s invocation of constitutional “due process” and “ex post facto” arguments is unavailing because the Board repeatedly “has held it lacks authority to overturn, on constitutional grounds, a revocation that was imposed in accordance with the applicable enrollment regulations.”  See Pennsylvania Physicians, P.C., DAB No. 2980, at 7 (2019); see also Lilia Gorovits, M.D., P.C., DAB No. 2985, at 18-19 (2020) (declining to consider substantive and procedural due process arguments as grounds for reversing or modifying revocation), aff’d, No. 20-1850, 2021 WL 1962903 (E.D. Pa. May 17, 2021);

Page 26

Michael Scott Edwards, OD, & M. Scott Edwards, OD, PA, DAB No. 2975, at 17 (2019) (“The Board and the ALJ must follow the applicable enrollment law and regulations and have no authority to refuse to apply those authorities based on constitutional challenges.”); Saeed A. Bajwa, M.D., DAB No. 2799, at 15 (2017) (“ALJs and the Board are bound by the regulations and may not declare them unconstitutional or decline to follow them on that basis.”).  As discussed above, Petitioner’s revocation was imposed in accordance with the revocation regulations; therefore, the Board lacks authority to overturn that revocation on constitutional grounds. 

Even if the Board could address Petitioner’s constitutional arguments, they lack merit.  The essence of due process is the requirement that a person in jeopardy of serious loss must receive notice of the government’s case and opportunity to meet it.  Mathews at 348.  It is questionable whether Petitioner even has established a risk of serious loss, in constitutional terms.  See Robert F. Tzeng, M.D., DAB No. 2169, at 13 n.16 (2008) (noting, in rejecting a petitioner’s allegations of retroactive application of 42 C.F.R. § 424.535(a)(3), that “[c]ourts that have considered the issue have almost without exception concluded that a physician or other health care practitioner or entity does not have a protected interest in continuing eligibility for Medicare participation or reimbursement”).  It is certain that Petitioner has not established a denial of the required notice and opportunity in this case.  Petitioner was on ample notice that the conduct to which Hirsch pled guilty, as Petitioner’s sole owner and managing employee, was a federal crime.  See CMS Ex. 10, at 1 (plea agreement); CMS Ex. 22, at 17.  Petitioner (through Hirsch) also acknowledged being on notice of “the potential for administrative proceedings which may result in adverse outcomes to her business.”  CMS Ex. 17 at 8 (Hirsch’s presentencing memorandum).  Petitioner has received detailed notice of the government’s civil case, and abundant opportunities to challenge it, at every stage of the Part 498 administrative process, from the initial determination by CMS’s contractor, through CMS’s reconsidered decision, to further review by the ALJ, and final administrative decision by the Board.  As for the “ex post facto prohibition,” it “has been held repeatedly not to apply to remedial sanctions, but only to punitive sanctions,” Patel at 28, and therefore is inapplicable here.  “Revocation is a remedial measure whose purpose is not to punish the program participant for past misconduct but to protect the program and its beneficiaries from fraud, abuse, and other harm that might arise in the future.”  Tzeng at 14.

The authorities Petitioner cites regarding retroactive application of a new rule are not on point.  See RR at 19; Portlock v. Barnhart, 208 F. Supp. 2d 451 (D. Del. 2002); Clay v. Johnson, 50 F. Supp. 2d 816 (N.D. Ill. 1999).  As an initial matter, Portlock and Johnson are decisions of federal district courts in Delaware and Illinois (in, respectively, the Third and Seventh Circuits), whereas this case concerns a supplier located in Virginia (in the Fourth Circuit) and an individual convicted in federal court in Massachusetts (in the First Circuit).  The Board is not even “bound by a federal court of appeals decision from a judicial circuit other than the circuit to which its decision in the pending matter may be

Page 27

appealed,” see Garner at 11 n.11, much less by district court decisions from within such circuits.  Furthermore, Portlock only briefly addresses due process arguments, see Portlock, 208 F. Supp. 2d at 457, Clay does not, and neither case discusses ex post facto laws.  Both Portlock and Clay also are distinguishable because they concern actual textual revisions to agency regulations and guidance.  See Portlock, 208 F. Supp. 2d at 461-63 (discussing whether deletion of specific provision of Social Security regulations at 20 C.F.R. pt. 404, subpt. P, could be retroactively applied); Clay, 50 F. Supp. 2d at 818-21 (discussing whether a Federal Reserve Board comment to a Truth in Lending Act regulation should be applied retroactively).  By contrast, in this case, there has been no such revision of 42 C.F.R. §§ 424.535 or 1001.2 during the relevant timeframe.  “The legal test for determining whether the retroactive application of a law is permissible is not relevant where,” as here, “in fact, there has been no retroactive application.”  See Bajwa at 9.

We also note, as the ALJ did, the District Court’s express finding of Hirsch’s guilt on February 24, 2021, which further undercuts any claim by Petitioner of unfair surprise or lack of due process in CMS’s establishment of Petitioner’s revocation date.  See ALJ Decision at 18 n.22.  At the plea hearing, the District Court stated, “I will conditionally accept the plea subject to the rule, and we’ll accordingly find the defendant guilty at this point of the offense charged in Count Three of the indictment.”  CMS Ex. 22, at 18 (emphasis added).  For purposes of 42 C.F.R. § 1001.2, an individual is “convicted” not only when a court has accepted the individual’s guilty plea under subsection (c), but also when a “Federal, State or local court has made a finding of guilt against an individual” under subsection (b).  The ALJ did not rely on the District Court’s finding of Hirsch’s guilt, because CMS did not rely on section 1001.2(b) in establishing Petitioner’s revocation date.  ALJ Decision at 18 n.22; CMS Ex. 1, at 4 (specifying, in CMS’s reconsidered determination, only subsection 1001.2(c)).  Yet we agree with the ALJ’s observation that the District Court’s express finding of Hirsch’s guilt “is nonetheless a fact raised by the same evidence” – the February 24, 2021 plea hearing transcript – that Petitioner characterized as essential to determining when Hirsch’s plea was formally accepted.  ALJ Decision at 18 n.22.  We further agree with the ALJ that the express finding of Hirsch’s guilt at the plea hearing further “undermines Petitioner’s claim that the district judge did not accept the guilty plea on February 24, 2021.”  Id.  In short, we are especially skeptical of Petitioner’s claims of agency overreach, given that CMS conservatively cited only section 1001.2(c) as the basis for setting Petitioner’s revocation date as February 24, 2021, when undisputed facts might well have supported that same revocation date under section 1001.2(b) as well.

C.     CMS had a legitimate basis to revoke pursuant to 42 C.F.R. § 424.535(a)(9).

The ALJ concluded that, “[b]ecause Petitioner did not report Ms. Hirsch’s felony conviction to the Medicare program within 30 days of her conviction, as defined by 42 C.F.R. § 1001.2, CMS had a legitimate basis to uphold the revocation of Petitioner’s

Page 28

supplier number pursuant to 42 C.F.R. § 424.535(a)(9).”  ALJ Decision at 14.  As the ALJ noted, “[o]ther than challenging the date Ms. Hirsch was convicted pursuant to 42 C.F.R. § 1001.2,” Petitioner “has not otherwise challenged its revocation pursuant to 42 C.F.R. § 424.535(a)(9).”  Id. at 6 n.9. 

Before the Board, Petitioner does not (and may not) assert any new challenges to that determination by the ALJ.  See Board Guidelines, “Completion of the Review Process,” at ¶ (a) (“The Board will not consider issues not raised in the request for review, nor issues which could have been presented to the ALJ but were not.”) 

For the reasons explained above, we have affirmed the ALJ’s conclusion that CMS permissibly set the beginning date of Petitioner’s revocation under 42 C.F.R. § 424.535(a)(3) as February 24, 2021.  There is no factual dispute that Petitioner did not timely report Hirsch’s conviction within 30 days after February 24, 2021. 

The ALJ therefore did not err in concluding that CMS had a legitimate basis for revocation of Petitioner’s billing number under 42 C.F.R. § 424.535(a)(9), and we affirm that conclusion.

D.     We reject Petitioner’s argument that the ALJ erred in upholding CMS’s revocation decision because that decision was arbitrary and capricious.

Petitioner contends that CMS made the revocation decision “in an arbitrary and capricious way,” and “the ALJ’s Decision is arbitrary and capricious” also.  RR at 1, 9, 23-24; see also id. at 22 (complaining of “the arbitrary and capricious nature of the ALJ’s determination”); id. at 24 (accusing CMS of being “arbitrary and capricious”); P. Reply at 3 (“The ALJ erred as a matter of law in upholding the revocation where the agency admitted to imposing the regulation without supporting evidence in an arbitrary and capricious manner.”).  Reiterating similar arguments made before the ALJ, Petitioner asserts that CMS’s reconsidered determination relied upon a “previously undisclosed conversation with the AUSA to get a one-sided opinion” on when the District Court accepted Hirsch’s plea.  RR at 23.  Petitioner complains that “CMS just accepted and relied on the two-line opinion of the AUSA in reaching its decision,” and “lacked any documentary evidence” otherwise supporting its position.  Id. at 24.  

Rejecting Petitioner’s arguments, the ALJ found:

Palmetto, acting on behalf of CMS, had already determined that Petitioner’s Medicare enrollment should be revoked based on the felony conviction of Ms. Hirsch, effective February 24, 2021.  CMS Ex. 4.  CMS squarely upheld that determination.  CMS Ex. 1.  To the extent CMS developed new evidence, it did so to investigate and address Petitioner’s unsupported claims that Ms. Hirsch’s guilty plea was not accepted on February 24,

Page 29

2021.  The evidence demonstrates that CMS objectively requested that the AUSA identify the date the district court accepted Ms. Hirsch’s guilty plea.

ALJ Decision at 20. 

We perceive no error by the ALJ.  “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, 420 F. Supp. 3d 1100 (D. Haw. 2019).  To the extent Petitioner complains that CMS should have exercised its discretion differently when investigating and preparing its reconsidered decision, Petitioner states no basis for relief.  The ALJ and the Board have no authority to review CMS’s exercise of its discretion, and thus “no authority to determine whether that exercise [of discretion] was arbitrary and capricious based on the mitigating circumstances alleged by Petitioner.”  Bajwa at 16.  To the extent Petitioner contends that the ALJ Decision itself is arbitrary and capricious, “Petitioner’s apparent reliance on the Administrative Procedure Act’s (APA’s) ‘arbitrary and capricious’ standard is misplaced in these proceedings.”  See Gorovits at 17.  “This is not the standard of review that applies to administrative appeals of CMS Medicare enrollment revocations, which are governed by the regulatory process established under 42 C.F.R. Part 498.”  Id.  Under the appropriate standard of review for that process, we affirm the ALJ Decision as factually supported and not legally erroneous.

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)(3) and (a)(9).  We also affirm the ALJ’s decision upholding CMS’s determination that February 24, 2021 is the effective date of Petitioner’s revocation under 42 C.F.R. § 424.535(a)(3).

Endnotes

¹  We apply the enrollment regulations in effect on October 5, 2021, the issuance date of the initial revocation determination.  See Diagnostic Imaging Network Med. Grp., Inc., DAB No. 3100, at 1 n.2 (2023).

²  This section provides background and context from the ALJ Decision and the record before the ALJ; however, it is not intended to substitute for the ALJ’s findings. 

³  The ALJ Decision states that Hirsch entered into the plea agreement on October 1, 2020, “a day before the United States filed the aforementioned information.”  ALJ Decision at 1.  However, Hirsch and Hirsch’s counsel did not sign the Acknowledgment of Plea Agreement until October 2, 2020.  CMS Ex. 10, at 7.  That minor factual discrepancy has no legal significance to this case.

⁴  The ALJ Decision miscites this passage of CMS’s reconsidered decision (CMS Ex. 1, at 4-5) both to “CMS Ex. 2” (Petitioner’s October 8, 2021 reconsideration request), and to “CMS Ex. 4” (the initial determination of October 5, 2021).  ALJ Decision at 20.  These incorrect citations to the record are not prejudicial to Petitioner and constitute harmless error.

⁵  Even if Petitioner had preserved any argument that 42 C.F.R. § 424.535(a)(3) was not a valid basis for revocation, we would affirm the ALJ’s contrary conclusion.  The record contains substantial evidence supporting the ALJ’s findings that Petitioner’s “owner of record” was convicted, within the preceding 10 years, of a felony offense that CMS has determined is detrimental to the best interests of the Medicare program and its beneficiaries.  See ALJ Decision at 16-17; CMS Ex. 1, at 5-6; see also Brenda Lee Jackson, DAB No. 2903, at 8 (2018) (“[T]he Board has repeatedly held that if the conviction is for a crime other than one of the enumerated felonies [in 42 C.F.R. § 424.535(a)(3)(ii)], CMS may make the determination, on a case-by-case basis, whether the felony conviction at issue is detrimental to the Medicare program and its beneficiaries.”).

⁶  “The Board is not required to treat as ‘controlling precedent’ a district court holding from a federal judicial district different than the one from which the pending Board appeal arises.”  See William Garner, M.D., DAB No. 3026, at 11 (2020).  We do not address the choice of law question, which neither party raised, of which federal judicial district(s) would have jurisdiction over any appeal from this Decision.