Syed M. Aziz, M.D., DAB No. 3124 (2023)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Syed M. Aziz, M.D. (Petitioner) appeals the August 9, 2022 decision of an Administrative Law Judge (ALJ), Syed M. Aziz, M.D., DAB CR6138 (ALJ Decision).  The ALJ upheld a reconsidered determination by the Centers for Medicare & Medicaid Services (CMS) to revoke Petitioner’s Medicare enrollment under 42 C.F.R. § 424.535(a)(2) and (a)(9) because Petitioner was excluded by the Office of the Inspector General (I.G.) from all federal health care programs and failed to report that exclusion to the Medicare program.  The ALJ left undisturbed CMS’s imposition of a five-year reenrollment bar until June 19, 2025 and upheld CMS’s placement of Petitioner on CMS’s preclusion list.  We affirm the ALJ Decision because it is supported by substantial evidence and free of legal error.

Legal Background

The Social Security Act (Act) authorizes CMS to regulate the enrollment of health care suppliers in the Medicare program.  Act § 1866(j)(1)(A).  CMS regulations in 42 C.F.R. Part 424, subpart P, require a physician or other “supplier” of Medicare services to be enrolled, and to maintain active enrollment status, in Medicare.  Act §§ 1835(a), 1842(h)(1) (defining “Supplier”), 42 C.F.R. §§ 424.500, 424.505.¹  Enrollment confers “billing privileges,” i.e. the right to claim and receive Medicare payment for health care services provided to Medicare beneficiaries.  42 C.F.R. §§ 424.502 (defining “Enroll/Enrollment”), 424.505. 

CMS is authorized to revoke a supplier’s Medicare enrollment and billing privileges for any of the reasons stated in 42 C.F.R. § 424.535(a).  Relevant here, those reasons include:

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• Section 424.535(a)(2):  The supplier is excluded from Medicare, Medicaid, or any other federal health care program under section 1128 of the Act. 

• Section 424.535(a)(3):  The supplier was convicted, within the preceding 10 years, of a federal or state felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.

• Section 424.535(a)(9):  The supplier did not comply with certain reporting requirements in section 424.516(d), including a requirement in section 424.516(d)(1)(ii) to report “an[y] adverse legal action” to the Medicare program within 30 days.

When CMS, or its contractor, revokes a supplier’s billing privileges, 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).  When a revocation is based on federal exclusion or debarment, felony conviction, license suspension or revocation, or a determination by CMS that a practice location is not operational, the revocation “is effective with the date of exclusion[.]”  Id. § 424.535(g). 

When an individual is revoked from Medicare and 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,” CMS may place that individual on its “preclusion list.”  42 C.F.R. §§ 422.2, 423.100.  An individual on the preclusion list may not be paid for Medicare items or services by Medicare Advantage plans under Medicare Part C (Medicare + Choice Program) or by Medicare Part D (Voluntary Prescription Drug Benefit Program) prescription drug plans.  Id. §§ 422.222(a); 422.224(a), (b); 423.120(c)(6).  CMS considers several factors in determining whether conduct is detrimental to the Medicare program, including the seriousness of the individual’s conduct, the degree to which the conduct could affect the integrity of the Medicare program, and any other evidence that CMS deems relevant.  Id. §§ 422.2, 423.100.

A supplier may appeal the revocation determination, and its placement on the preclusion list, in accordance with the regulations in 42 C.F.R. Part 498.  42 C.F.R. §§ 422.222(a)(2), (3); 423.120(c)(6)(v)(A); 424.545(a).  A supplier must first request “reconsideration” of the CMS contractor’s initial determination.  Id. §§ 498.3(b)(17), (20); 498.5(l), (n); 498.22.  If dissatisfied with the reconsidered determination, an individual may request a hearing from an ALJ, and, if dissatisfied with the ALJ’s decision, then review by the Department Appeals Board (Board).  Id. §§ 498.40, 498.80, 498.82. 

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Case Background²

A. Petitioner’s criminal prosecution and guilty plea

Petitioner, a licensed physician, served as a medical director for a Texas hospice service agency, Novus Health Services (Novus), and agreed to be a participating physician³ in the Medicare program during a period that lasted “[f]rom in or about 2015 through October 2[01]5.”  CMS Ex. 5, at 1.  On February 23, 2017, Petitioner was indicted, along with 15 other individuals, on one count of conspiracy to defraud Medicare and Medicaid health care benefit programs from May 2012 through October 2015, and one count of health care fraud in violation of 18 U.S.C. § 1347.  CMS Ex 1, at 8-15, 18; ALJ Decision at 2.  The two criminal counts were based on conduct wherein Petitioner certified (or recertified) patients as having a terminal illness, which resulted in the patients’ eligibility for hospice services (or for continued hospice services), whether or not this was true and in violation of Medicare regulations.  CMS Ex. 1, at 11.  The initial indictment alleged that Petitioner, while serving as medical director of Novus, falsely certified at least one Medicare beneficiary, who received hospice services despite ineligibility for those services.  Id. at 6, 18.  In a superseding information, the government alleged that Petitioner violated 42 U.S.C. § 1395u(h)(1) when Petitioner permitted Novus clinic staff to use a “rubber stamp depicting a production of his signature” to “affix . . . his signature to orders regarding hospice patients that had been verbally approved” or to other verbal orders that required Petitioner’s signature.  CMS Ex. 5; CMS Ex. 12, at 3-4; see also CMS Motion for Summary Judgment (MSJ), at 2 n.2.  In a “Factual Resume” submitted to the court at the same time as the superseding information, Petitioner stipulated “that in 2015, continuing through October 2015, he knowingly, willfully, and repeatedly violated a term of his obligations as a ‘participating physician’ under 42 U.S.C. § 1395u(h)(1), and that he committed all the essential elements of the offense charged in the Superseding Information.”  CMS Ex. 12, at 4-5.

On July 30, 2019, Petitioner signed a plea agreement in which he admitted guilt to a single misdemeanor count of violating 42 U.S.C. § 1320a-7b(e), which prohibits a Medicare-participating physician from knowingly, willfully, and repeatedly violating the terms of a Medicare physician agreement under 42 U.S.C § 1395u(h)(1).  ALJ Decision at 3; CMS Ex. 11, at 1.  On October 21, 2019, the United States District Court for the Northern District of Texas, Dallas Division accepted Petitioner’s guilty plea.  CMS Ex. 2, at 15.

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B. Inspector General’s exclusion of Petitioner from participation in Medicare, Medicaid and all federal health care programs

By letter dated May 29, 2020, the I.G. notified Petitioner that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for five years.  ALJ Decision at 3; CMS Ex. 6, at 1.  The I.G. stated that it was excluding Petitioner under section 1128(a)(1) of the Act because his 2019 federal conviction was for “a criminal offense related to the delivery of an item or service under the Medicare or a State health care program, including the performance of management or administrative services relating to the delivery of items or services, under any such program.”  CMS Ex. 6, at 1; see also 42 C.F.R. § 1001.101(a).  The letter stated that the exclusion was effective “20 days from the date of this letter” –  June 18, 2020.  CMS Ex. 6, at 1.

The I.G.’s May 29, 2020 letter informed Petitioner of the right under the I.G.’s regulations to appeal the exclusion by requesting a hearing before an ALJ within 60 days after receiving notice of the exclusion.  CMS Ex. 6, at 4.  There is no evidence in the record that Petitioner appealed the exclusion to an ALJ using the process afforded by the regulations.  ALJ Decision at 9.

C. CMS’s initial revocation determination and reconsideration determination

On July 14, 2020, a CMS contractor, Novitas Solutions (Novitas), notified Petitioner that it was revoking Petitioner’s Medicare billing privileges, effective October 21, 2019, on the following grounds:

• 42 C.F.R. § 424.535(a)(2) Provider or Supplier Conduct – Petitioner was excluded by the I.G. on June 18, 2020 from Medicare, Medicaid, and all federal health care programs;

• 42 C.F.R. § 424.535(a)(3) Felonies – Novitas stated in its notice that CMS “has been made aware of [Petitioner’s] October 21, 2019, felony conviction, as defined in 42 C.F.R. § 1001.2, for the Violation of Terms involving Federal Health Care Programs”; and

• 42 C.F.R. § 424.535(a)(9) Failure to Report – Petitioner failed to notify CMS of the “felony conviction,” an “adverse legal action” as 42 C.F.R. § 424.516 required. 

CMS Ex. 7, at 1.  Novitas further informed Petitioner that it was establishing a 10-year reenrollment bar (until October 22, 2029) and adding Petitioner to the CMS preclusion list.  Id. at 1, 3.

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On August 13, 2020, Petitioner timely requested reconsideration of the initial determination.  ALJ Decision at 4; CMS Ex. 8.  Petitioner chiefly contended that Novitas’s revocation, reenrollment bar, and preclusion list determinations were invalid because they rested on a mistaken belief that Petitioner’s 2019 federal conviction was for a felony offense, when in fact he had pled guilty to a misdemeanor.  ALJ Decision at 4; CMS Ex. 8, at 1-2. 

In a reconsidered determination dated December 18, 2020, CMS upheld Petitioner’s revocation and placement on the preclusion list but overturned one of the grounds for revocation stated in the initial determination.  CMS Ex. 9.  First, CMS acknowledged that Petitioner’s 2019 conviction was for a misdemeanor, not a felony, and therefore determined that Petitioner was not subject to revocation under section 424.535(a)(3), which requires conviction for a felony offense.  Id. at 5, 8.  CMS instead sustained the revocation under sections 424.535(a)(2) and (a)(9).  Id. at 4, 5-6.  CMS found that Petitioner was subject to revocation under section 424.535(a)(2) because Petitioner was “excluded by the OIG on June 18, 2020” under section 1128(a)(1) based on the “program-related” misdemeanor offense and “remain[ed] presently excluded.”  Id. at 4.  CMS also upheld Novitas’s determination that Petitioner was subject to revocation under section 424.535(a)(9), not for failure to report the 2019 conviction but for failure to report the exclusion to CMS within 30 days, “or at all,” in accordance with section 424.516(d).⁴  Id. at 5-6.  Because it “overturn[ed] the revocation under § 424.535(a)(3),” CMS revised the reenrollment bar to end on June 19, 2025 (instead of October 22, 2029).⁵  Id. at 6.  Finally, CMS determined that Petitioner’s placement on the preclusion list was appropriate and in the process found that “the conduct which led to [Petitioner]’s revocation is detrimental to the best interests of the Medicare program.”  Id. at 8.

The ALJ Decision

On January 5, 2021, Petitioner timely requested an ALJ hearing to appeal CMS’s reconsidered determination, arguing that CMS based the revocation on an “arbitrary and capricious” exclusion by the I.G.  Request for Hearing (RFH) at 3-4.  On February 4, 2021, Petitioner filed a supplemental hearing request asking the ALJ to review the “merits” of the I.G.’s May 29, 2020 exclusion decision, along with CMS’s revocation and

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preclusion-list determinations.⁶  Supplement to RFH at 2.  Thereafter, CMS filed a combined motion for summary judgment and pre-hearing brief, along with 12 proposed exhibits, urging the ALJ to sustain Petitioner’s revocation and placement on the preclusion list for the reasons stated in the reconsidered determination.  CMS Brief (Br.).  Petitioner filed a pre-hearing brief opposing CMS’s motion and submitted 12 proposed exhibits.  Petitioner (P.) Br.  Petitioner submitted a three-page affidavit but no other direct witness testimony, and CMS did not request to cross-examine Petitioner.  ALJ Decision at 7.  

Finding an in-person hearing unnecessary, the ALJ decided the case “on the written record, without considering whether the standards for summary judgment [were] met.”  ALJ Decision at 7.  The ALJ admitted CMS’s exhibits and Petitioner’s exhibits 1-8 and 12, but excluded from consideration Petitioner’s exhibits 9-11 as irrelevant and five of Petitioner’s supplemental briefs and pleadings (dated June 2, 2021, August 5, 2021, August 18, 2021, December 30, 2021, and April 13, 2022) as unresponsive and outside the scope of review.  Id.  The ALJ then held that CMS lawfully revoked Petitioner’s Medicare enrollment pursuant to 42 C.F.R. § 424.535(a)(2) and (a)(9), because the I.G. had excluded Petitioner from all federal health care programs and Petitioner did not timely report that adverse legal action to CMS.  Id. at 10.  The ALJ further held that she lacked jurisdiction to review the duration of the reenrollment bar and upheld Petitioner’s placement on the preclusion list, finding that the regulatory criteria for such placement were met.  Id. at 12-13.

Petitioner appealed to the Board.

Standard of Review

The Board’s 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.  The Board’s standard of review on a disputed legal issue is 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).⁷

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Analysis

Petitioner appeals the ALJ Decision and repeats many of the same arguments Petitioner raised before the ALJ, arguments that flow from Petitioner’s belief that the exclusion was improper.⁸  P. Reply (Rep.) Br. at 2-8.  Although Petitioner does not deny that he was excluded from all federal health care programs for five years, effective June 18, 2020, Petitioner contends that the I.G.’s decision to exclude him under section 1128(a)(1) of the Act was improper because the conviction upon which the exclusion rests was not for a felony but for a misdemeanor offense.  P. Rep. Br. at 2-3; see also P.’s Pre-Hr’g Br. & Opposition to CMS MSJ at 4.  Petitioner further contends that because the exclusion is (in Petitioner’s view) “illegitimate” for that reason, the revocation and placement on the preclusion list – actions based directly on the fact of his exclusion and failure to report it to the Medicare program – are invalid and must be set aside.  P. Rep. Br. at 3-8.  Finally, Petitioner argues that the I.G.’s exclusion and CMS’s subsequent sanctions violate Petitioner’s constitutional rights and are an abuse of discretion.  Id. at 8.  Petitioner seeks unspecified damages as a result.  Id.

Preliminarily, we note that there is no basis in the record to support Petitioner’s claim that the I.G.’s exclusion rested on a “mistaken belief that Petitioner ha[d] a felony conviction.”  See P. Rep. Br. at 6.  The I.G.’s May 2020 exclusion notice to Petitioner stated that the basis for exclusion was pursuant to section 1128(a)(1) of the Act for Petitioner’s conviction of “a criminal offense related to the delivery of an item or service under the Medicare or a State health care program, including the performance of management or administrative services relating to the delivery of items or services, under any program.”  CMS Ex. 6, at 1.  The exclusion notice did not indicate whether Petitioner’s conviction was a felony, and section 1128(a)(1) does not require that the offense be a felony to support exclusion.  See Craig Richard Wilder, DAB No. 2416, at 6 (2011) (“Nothing in the language of section 1128(a)(1) requires Petitioner’s conviction to be for a felony rather than a misdemeanor. . . Indeed, the text of section 1128(a)(1) plainly applies to all ‘criminal offenses’ related to federal health care programs[.]”).

Exclusion by the I.G. and revocation by CMS, moreover, are “two separate and distinct types of administrative enforcement actions.”  Dinesh Patel, M.D., DAB No. 2551, at 9 (2013).  These administrative remedial tools are “carried out by two different HHS components pursuant to different regulatory authorities.”  John O. Dimowo, M.D., DAB No. 3101, at 4 n.5 (2023) (citing Patel, DAB No. 2551, at 9).  The administrative

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remedies differ from each other:  for example, revocation impacts “only Petitioner’s ability to bill the Medicare program for physician services” whereas exclusion prohibits participation in all federal health care programs.  Gregory J. Salko, M.D., DAB No. 2437, at 7 (2012) (citing 73 Fed. Red. 36,448, 36, 454 (June 27, 2008)).  Given the distinct, separate regulatory authorities for these administrative actions, the ALJ properly concluded that a reviewing authority does not have jurisdiction to “revisit a determination that was finalized in a different forum.” ⁹  ALJ Decision at 9.  Petitioner does not dispute that the Board and the ALJ lack jurisdiction to review the I.G.’s exclusion in this appeal.

As more fully explained below, we conclude that the ALJ Decision is supported by substantial evidence and free of legal error; therefore, CMS had a valid legal basis to revoke Petitioner’s enrollment and billing privileges under section 424.535(a)(2) and (a)(9).  We also affirm the ALJ Decision as to CMS’s placement of Petitioner on the preclusion list.  Finally, we explain that neither an ALJ, nor this Board, has authority to consider Petitioner’s abuse of discretion, constitutional, and equitable claims.

A. The ALJ’s determination that CMS had a lawful basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(2) and (a)(9) is supported by substantial evidence and free of legal error.

The Board’s review of a determination to revoke a supplier’s Medicare billing privileges is limited to “decid[ing] only whether CMS has established a lawful basis for the revocation.”  Blair Allen Nelson, M.D., DAB No. 3024, at 6 (2020) (quoting Cornelius M. Donohue, DPM, DAB No. 2888, at 4 (2018)).  The regulatory framework affords CMS discretion to revoke, or not, on a case-by-case basis, and the Board (like the ALJ) “has no authority to substitute its own authority for CMS’s in determining whether revocation is appropriate under all the circumstances.”  Duke Ahn, M.D., DAB No. 3093, at 7 (2023) (citing Abdul Razzaque Ahmed, M.D., DAB No. 2261, 19 (2009), aff’d 710 F. Supp. 2d 167 (D. Mass. 2010)).  “[I]f the regulatory elements for revocation are satisfied, ‘then the revocation must be sustained.’”  Five Star Healthcare, LLC, DAB No. 3089, at 9 (2023) (quoting Douglas Bradley, M.D., DAB No. 2663, at 13 (2015)).  Additionally, where CMS revokes a supplier’s enrollment and billing privileges on multiple bases, the revocation “need only be upheld on one regulatory ground in order to be sustained.”  Lilia Gorovits, M.D., P.C, DAB No. 2985, at 10 (2020), aff’d No. 20-1850, 2021 WL 1962903 (E.D. Pa. May 17, 2021) (quoting AR Testing Corp., DAB No. 2679, at 4 n.7 (2016)). 

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1. 42 C.F.R. § 424.535(a)(2) authorizes revocation of Petitioner’s enrollment in the Medicare program because evidence in the record shows that Petitioner was excluded by the I.G. on June 18, 2020 from Medicare, Medicaid, and all federal health care programs.

Section 424.535(a)(2) authorizes CMS to revoke a supplier’s enrollment if the supplier “is…[e]xcluded from Medicare, Medicaid, and any other Federal health care program. . . in accordance with section 1128” of the Act.  42 C.F.R. § 424.535(a)(2).  The ALJ properly concluded that CMS had a lawful basis to exclude Petitioner under that section because there is no dispute that when Novitas and CMS issued the initial and reconsidered determinations, Petitioner was excluded (effective June 18, 2020) from Medicare, Medicaid, and all other federal health care programs for five years.  ALJ Decision at 11; CMS Ex. 6, at 1. 

As noted, Petitioner contends that the basis for CMS’s revocation under section 424.535(a)(2) is “unsupported” because Petitioner “had never been convicted of a felony.”  P. Rep. Br. at 4.  This contention does not undercut the ALJ’s conclusion because section 424.535(a)(2) authorized CMS to revoke Petitioner based on the fact that Petitioner “is . . . [e]xcluded” from all federal health care programs under section 1128(a)(1) of the Act, a fact that Petitioner does not deny.  Nothing in section 424.535(a)(2) suggests that CMS must establish – or an ALJ or the Board must verify – that the I.G. had sufficient legal and factual grounds for the supplier’s exclusion.

The Board has held that CMS has the authority under section 424.535(a) to revoke a supplier’s enrollment based on the fact of a conviction.  See Mark Koch, D.O., DAB No. 2610, at 3-4 (2014).  The supplier in Koch, similar to Petitioner here, questioned the validity of the underlying conviction that served as the basis for CMS’s revocation.  Id.The Board explained that the revocation was based on “the fact of a conviction” and there was no evidence that the conviction had been vacated or overturned.  Id.  CMS’s authority to revoke under section 424.535(a) applies as equally to section (a)(3) (as in Koch) as to section (a)(2) (here) because revocation is based on the fact that the supplier was previously subjected to an adverse action by a different entity.  The ALJ did not err in concluding that CMS lawfully revoked Petitioner’s enrollment based on the fact of the I.G.’s exclusion of Petitioner.

2. 42 C.F.R. § 424.535(a)(9) authorizes revocation of Petitioner’s enrollment in the Medicare program because evidence in the record shows, and Petitioner does not dispute, that Petitioner failed to report his exclusion by the I.G. to CMS within 30 days, in accordance with section 424.516(d) of the regulations.

Section 424.535(a)(9) authorizes CMS to revoke a supplier’s enrollment if the supplier “did not comply with the reporting requirements” in section 424.516(d).  Section

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424.516(d)(1)(ii) requires a supplier to report certain events or actions to the Medicare program within 30 days, including “[a]ny adverse legal action.”  In determining whether revocation is appropriate for failure to comply with a reporting requirement, “CMS considers . . . (i) [w]hether the data in question was reported[;] (ii) [i]f the data was reported, how belatedly[;] (iii) the materiality of the data in question[;] and (iv) [a]ny other information CMS deems relevant to its determination.”  42 C.F.R. § 424.535(a)(9).

The ALJ held that the I.G.’s exclusion of Petitioner under section 1128 constituted an adverse legal action, that there was “no dispute that Petitioner did not report the OIG’s decision to the Medicare contractor within the requisite 30 days,” and that “[a]ccordingly, CMS was authorized to revoke Petitioner’s billing privileges” under section 424.535(a)(9).  ALJ Decision at 11.

Petitioner does not dispute the failure to comply with the regulatory requirement to report “any adverse legal action.”  See 42 C.F.R. § 424.516(d)(1)(ii).  Petitioner challenges CMS’s revocation on the basis that the exclusion was not “legitimate,” and claims, therefore, that the reporting requirement does not require “illegitimate” adverse legal actions to be reported.  P. Rep. Br. at 5 (“Petitioner was not subject to any legitimate adverse legal action, as OIG’s purported exclusion lacked a valid factual basis[.]”).  Petitioner repeats his earlier arguments that “Petitioner was never convicted of a felony,” and therefore the I.G.’s exclusion “had no basis in fact or law,” was premised on a “mistake of fact,” and was not a “legitimate, valid adverse action[.]”  Id. at 5-6.Petitioner argues that “the purported exclusion . . . had no legal effect.”  Id. at 6.  

Petitioner’s allegation that the exclusion was illegitimate relies on Petitioner’s mistaken belief that section 1128(a)(1) of the Act requires that the offense be a felony to support exclusion.  As explained above, and as included in the I.G.’s May 2020 exclusion notice to Petitioner, the basis for exclusion was Petitioner’s conviction of “a criminal offense related to the delivery of an item or service under the Medicare or a State health care program.”  CMS Ex. 6, at 1 (emphasis added); see also 42 C.F.R. § 1001.101(a).  Petitioner provides no other reason that the I.G.’s exclusion (and, therefore, CMS’s revocation arising from the fact of, and the failure to report, the exclusion) was “illegitimate.”  P. Rep. Br. at 2-6.

Where CMS has a valid basis for revocation, “the ALJ and the Board must sustain the revocation[.]”  Gorovits, DAB No. 2985, at 16.  The ALJ did not err in concluding that CMS had a lawful basis for revocation under sections 424.535(a)(2) and 424.535(a)(9).  The ALJ could have upheld Petitioner’s revocation based on either the exclusion or Petitioner’s failure to report the exclusion.  See id. at 10 (explaining that a lawful revocation “need only be upheld on one regulatory ground in order to be sustained.”).

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B. The duration of Petitioner’s reenrollment bar is not reviewable by the ALJ or the Board.

Petitioner objects to being “subject to a Medicare re-enrollment bar because the revocation of Petitioner’s Medicare enrollment and billing privileges has no legitimate basis.”  P. Rep. Br. at 6.  However, as the ALJ properly concluded, CMS had a valid basis to revoke Petitioner’s enrollment under sections 424.535(a)(2) and 424.535(a)(9).  ALJ Decision at 10-11.  CMS was therefore authorized to impose a reenrollment bar lasting a “minimum of [one] year, but not greater than 10 years” (except in certain circumstances not applicable here), “depending on the severity of the basis for revocation.”  42 C.F.R. § 424.535(c)(1)(i). 

Petitioner contends that “the five-year duration of the reenrollment bar is also arbitrary, capricious, and an abuse of discretion.” ¹⁰  P. Rep. Br. at 6.  Petitioner suggests, without citation to any statutory or regulatory authority, that the reenrollment bar “should be shortened to only that time which Petitioner has already been excluded from Medicare and had his Medicare privileges revoked because Petitioner’s conduct falls far short of a five-year reenrollment bar.”  Id. at 6-7.

The ALJ concluded that “the duration of the reenrollment bar is not subject to ALJ review because it is not an initial determination described in 42 C.F.R. § 498.3(b).”  ALJ Decision at 12 (citing Vijendra Dave, M.D., DAB No. 2672, at 9-10 (2016)).  That conclusion is not erroneous.  Section 498.3(b) lists appealable “initial determinations” made by CMS, including a determination “to . . . revoke a . . . supplier’s Medicare enrollment in accordance with . . . [42 C.F.R.] § 424.535.”  42 C.F.R. § 498.3(b)(17)(i).  That list “does not include CMS’s decision on the duration of a post-revocation re-enrollment bar.”  Gorovits, DAB No. 2985, at 15 (citing Dave, DAB No. 2672, at 10).  Consequently, the Board has held that when CMS lawfully revokes a supplier’s Medicare billing privileges – as it did in this case – the ALJ and the Board “may not disturb the length of the re-enrollment bar set by CMS or the date that the re-enrollment bar began.”  Id. at 16; see also Dimowo, DAB No. 3101, at 12 (“The Board has repeatedly held that the duration of a reenrollment bar is not an initial determination subject to review by the ALJ or the Board.”).  Therefore, the ALJ did not err in concluding that an ALJ has no authority to review the length of a reenrollment bar on appeal.  

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C. The ALJ did not err in concluding that CMS lawfully included Petitioner on its preclusion list.

Petitioner contends that CMS did not have a legitimate basis to include him on the preclusion list and that CMS failed to satisfy the three elements required for placing Petitioner on the preclusion list pursuant to sections 422.2(1) and 423.100(1)(iii).  P. Rep. Br. at 7. 

CMS established the following three requirements for placing an individual on the preclusion list, which are defined in the regulations for Medicare Parts C and D under “preclusion list”:  

(i) The individual or entity is currently revoked from Medicare for a reason other than that stated in § 424.535(a)(3) . . .[;] (ii) the individual or entity is currently under a reenrollment bar under § 424.535(c)[; and] (iii) CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination under this paragraph [(iii)], CMS considers the following factors: (A) The seriousness of the conduct underlying the individual’s or entity’s revocation[;] (B) The degree to which the individual’s or entity’s conduct could affect the integrity of the Medicare program[; and] (C) Any other evidence that CMS deems relevant to its determination[.]

42 C.F.R. § 422.2; see id. § 423.100 (identical text with “prescriber” in place of “individual or entity”). 

The ALJ found, and the record confirms, that Petitioner met all three requirements for placement on the preclusion list.  First, Petitioner’s Medicare enrollment was revoked for reasons (namely, his exclusion from all federal health care programs and failure to report that exclusion to the Medicare program within 30 days) other than the reason stated in section 424.535(a)(3) (conviction of a felony offense within the preceding ten years).  Second, Petitioner is currently under a reenrollment bar.  Third, CMS determined in the reconsidered determination that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  ALJ Decision at 12-13; CMS Ex. 9, at 7-8.

The ALJ noted that CMS, in considering whether the conduct underlying Petitioner’s revocation is detrimental to Medicare, explained that “[i]naccurate or outdated information puts the Medicare Trust Funds at risk” and that failure to report an event affecting “a supplier’s enrollment eligibility represents a significant program integrity risk.”  ALJ Decision at 13 (citing CMS Ex. 9, at 7).  The ALJ also noted that CMS had found Petitioner’s criminal conduct “indicate[d] his inability or unwillingness to exercise good judgment regarding adhering to the Medicare program’s government rules [and]

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regulations.”  Id. at 14.  The ALJ concluded that “it is apparent” that CMS considered Petitioner’s offense and its impact on the Medicare program in accordance with the regulations set forth at sections 422.2, 423.100, even though the “regulations do not require CMS to explain the factors upon which it relies in finding that an offense is detrimental to Medicare or to otherwise explain that finding.”  Id.   

Petitioner does not question any aspect of CMS’s determination that the conduct underlying the revocation was detrimental to Medicare or dispute the ALJ’s finding that this determination satisfied the third requirement for placing Petitioner on the preclusion list.  Petitioner merely suggests that the third requirement is not met because the revocation is based on an exclusion for a “non-existent felony conviction.”  P. Rep. Br. at 5.  However, as discussed above, Petitioner’s claim to have been excluded for committing a felony offense is unfounded.  There is no evidence of record that the I.G. excluded Petitioner on the basis that the conviction was for a felony offense, and whether or not Petitioner’s offense was a felony is immaterial under the statute that authorized exclusion in this case. 

Petitioner does not challenge the factual or legal basis of the ALJ’s conclusions.  Because all three requirements for including Petitioner on the preclusion list are satisfied, we determine that the ALJ’s conclusions are supported by substantial evidence and free of legal error.

D. Neither an ALJ, nor this Board, has authority to consider Petitioner’s constitutional and equitable claims.

Petitioner argues that the I.G.’s and CMS’s actions “have wrongfully deprived Petitioner of valid, recognized constitutional property interests.”  P. Rep. Br. at 8.  Petitioner claims to have suffered “actual harm, both financially (an assessed overpayment of $ _____  pending with the Treasury Department[ )] and reputationally,” as a result of his exclusion and revocation.¹¹  Id. (dollar amount left blank in original).  Petitioner alleges losses of between “$49,000 to $54,000 monthly since the date of his illegitimate exclusion” and seeks an unspecified amount of damages “plus applicable interest” from CMS and the I.G. “based on their arbitrary, capricious, and without a rational basis” actions “in violation of Petitioner’s substantive due process rights.”  Id. 

Petitioner’s arguments raising constitutional challenges to CMS’s (and the I.G.’s) actions are unavailing.  The Board has previously considered, and rejected, the argument that a supplier’s “revocation was an unconstitutional abridgment of property rights.”  Michael

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Scott Edwards, OD, and M. Scott Edwards, OD, PA, DAB No. 2975, at 18 (2019), appeal dismissed, No. 2:29-cv-00048 (E.D.N.C. Feb. 26, 2020) (citing Mohammad Nawaz, M.D., & Mohammad Zain, M.D., P.A., DAB No. 2687, at 15 (2016)).  Furthermore, the Board has held that neither it nor an ALJ is empowered to “overturn a legally valid revocation on constitutional grounds,” Nelson, DAB No. 3024, at 9 (citing Gorovits, DAB No. 2985, at 18-19), or to invalidate or “‘refuse to follow Federal statutes or regulations’ on constitutional grounds.”  Zahid Imran, M.D., DAB No. 2680, at 9 (2016) (quoting Ethan Edwin Bickelhaupt, M.D., DAB No. 2480, at 3 (2012), aff’d No. 12-CV-09598 (N.D. Ill. May 29, 2014)).

The Board has explained that neither “constitutional invalidity” nor “alleged harsh economic consequences to the entity whose enrollment and billing privileges were revoked” are grounds on which the Board may “reverse a revocation by the regulations.”  Horace Bledsoe, M.D. & Bledsoe Family Med., DAB No. 2753, at 11 (2016) (citing Nawaz, DAB No. 2687, at 14-15).  Petitioner’s request for damages due to allegedly improper actions by CMS and the I.G. is not a request the Board may grant.  It is well settled that the Board and the ALJs are bound by the applicable statutes and regulations, which do not authorize “a remedy in the nature of damages based purely on equitable grounds.”  Pepper Hill Nursing & Rehab. Ctr., LLC, DAB No. 2395, at 10 (2011) (quoting Community Hosp. of Long Beach, DAB No. 1938, at 12-13 (2004)); see also US Ultrasound, DAB No. 2302, at 8 (2010) (“Neither the ALJ nor the Board is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”).  Furthermore, the “arbitrary, capricious and without a rational basis” standard is not applicable to the Board’s review of CMS Medicare enrollment revocation proceedings.  See Gorovits, DAB No. 2985, at 17.  ALJ and Board review in this case is limited to deciding whether CMS established a lawful basis to revoke Petitioner’s enrollment and place Petitioner on the preclusion list.  Id.; see also Ahn, DAB No. 3093, at 13.

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Conclusion

We affirm the ALJ’s conclusions that CMS lawfully revoked Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(2) and (a)(9), and that the length of Petitioner’s reenrollment bar is not reviewable.  We further affirm the ALJ’s conclusion that CMS lawfully placed Petitioner on the preclusion list. 

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Endnotes

¹  We cite to and apply the regulations in 42 C.F.R. Part 424 that were in effect on July 14, 2020, the date of CMS’s, or its contractor’s, initial determination to revoke.  See, e.g., Duke Ahn, M.D., DAB No. 3093, at 1 n.1 (2023) (applying regulations in effect on date of initial determination to revoke supplier enrollment).

²  The factual information in this section is drawn from the ALJ Decision and the record and is not intended to replace, modify, or supplement the ALJ’s findings of fact.

³  “Participating physician” is defined as a physician who, in agreement with the Secretary of Health & Human Services, accepts payment “on an assignment-related basis for all items and services furnished to individuals enrolled” in Medicare.  42 U.S.C. § 1395u(h)(1).

⁴  CMS determined that section 424.516(d) did not require Petitioner to report a misdemeanor conviction.  CMS Ex. 9, at 5.

⁵  CMS’s reconsidered determination did not make explicit that it reconsidered the effective date of revocation based on overturning the revocation under section 424.535(a)(3).  Given that the revised reenrollment bar will end on June 19, 2025, it is implicit that CMS revised the effective date of revocation to correspond with the date of the I.G.’s exclusion.  See CMS Ex. 9, at 6.  Neither party has challenged CMS’s finding regarding the effective date of revocation, before the ALJ or the Board.

⁶  Petitioner conceded that the request to review the I.G.’s decision was “untimely” but argued that in the interest of judicial efficiency, and because CMS “relies exclusively upon” the I.G. decision, the ALJ must consider the merits of the I.G.’s decision.  Supp. RFH at 2.

⁷  The Guidelines are available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html?language=en.

⁸  Petitioner’s Request for Review listed all of the ALJ’s findings of facts and conclusions of law and argued that these findings and conclusions have “no bases in law or in fact.”  Request for Review.  Petitioner’s reply brief did not state why he disagreed with the ALJ’s findings of fact or conclusions of law but argued instead that the I.G. and CMS erred.  P. Rep. Br. at 2-8; see also Arthur L. Jenkins, III, M.D. & Jenkins NeuroSpine LLC,DAB No. 3070, at 7 (2022) (summarily affirming ALJ Decision where Petitioners did not argue any error with, or address any part of, the ALJ Decision).

⁹  Petitioner does not challenge this conclusion, and we decline to disturb that holding.

¹⁰  Petitioner’s use of the “arbitrary and capricious, and abuse of discretion” standard of review of the ALJ’s determination is misplaced in this appeal.  That standard– “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law” – is defined in the Administrative Procedure Act (APA) as a standard of review for federal court review of final agency action on the record.  5 U.S.C § 706(2)(A); Nelson, DAB No. 3024, at 11.  The APA standard does not apply in the administrative forum to “appeals of CMS Medicare enrollment revocations, which are governed by the regulatory process established under 42 C.F.R. Part 498.”  Gorovits, DAB No. 2985, at 17.

¹¹  To the extent that Petitioner may be seeking relief from Medicare overpayment recovery determinations resulting from CMS’s revocation, Petitioner must use a separate administrative appeal process to properly seek that relief.  See 42 C.F.R. Part 405, subpart I (setting out administrative appeal process relating to initial determinations regarding claims for benefits under Medicare Parts A and B, including determinations regarding overpayment); see also Horace Bledsoe, M.D. & Bledsoe Family Med., DAB No. 2753, at 11 n.13 (2016).