Omair Chaudry, M.D., DAB No. 3145 (2024)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Omair Chaudry, M.D. (Petitioner) appeals the decision of an administrative law judge (ALJ) in Omair Chaudry, MD, DAB CR6390 (2023) (ALJ Decision).  The ALJ upheld determinations by the Centers for Medicare & Medicaid Services (CMS) to revoke Petitioner’s enrollment in the Medicare program under 42 C.F.R. § 424.535(a)(3) based on Petitioner’s felony conviction, and under 42 C.F.R. § 424.535(a)(4) because Petitioner allegedly provided false information on his enrollment application that he certified as true.  The ALJ further upheld CMS’s decision to place Petitioner on the preclusion list based on his felony conviction.  For the reasons explained below, we affirm the ALJ’s conclusion that CMS had a legal basis to revoke Petitioner’s Medicare enrollment under section 424.535(a)(3) and to include Petitioner on the preclusion list; however, we reverse the ALJ’s conclusion that CMS had a legal basis to revoke Petitioner’s Medicare enrollment under section 424.535(a)(4).

Legal Background

A supplier of Medicare services, such as a physician, must enroll in the Medicare program to receive payment for Medicare-covered items and services furnished to Medicare beneficiaries.  42 C.F.R. §§ 400.202 (defining “supplier”), 424.500, 424.505.  To enroll in Medicare, a supplier must submit an enrollment application with supporting documentation.  Id. § 424.510(d).  The term “enrollment application” is defined to mean the “CMS-approved paper enrollment application” – form CMS-855 – or the internet-based electronic application, which is submitted through the Medicare Provider Enrollment, Chain, and Ownership System (PECOS).  Id. § 424.502. 

An enrollment application must include “[c]omplete, accurate, and truthful responses to all information requested within each section as applicable to the provider or supplier type.”  Id. § 424.510(d)(2)(i).  Enrollment applications also must include a signed certification statement attesting that “the information submitted is accurate and that the provider or supplier is aware of, and abides by, all applicable statutes, regulations, and program instructions.”  Id. § 424.510(d)(3).  When an individual practitioner applies for

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enrollment, the applying practitioner must sign the enrollment application.  Id. § 424.510(d)(3)(i)(A).  “Individual practitioners . . . cannot delegate signature authority when submitting an enrollment application for any reason.”  Id. § 424.510(d)(3)(ii).  “All enrollment applications submitted by individual practitioners . . . must be signed by the enrolling or enrolled individual.”  Id.

CMS may revoke a supplier’s Medicare enrollment for any of the reasons listed in 42 C.F.R. § 424.535(a).¹  Section 424.535(a)(3) authorizes CMS to revoke a supplier’s Medicare enrollment if the supplier was, withing the preceding 10 years, convicted (as that term is defined in 42 C.F.R. § 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.  Id. § 424.535(a)(3)(i).  An individual is “convicted” within the meaning of section 1001.2 when, among other things, a court accepts that individual’s guilty plea.  Id. § 1001.2 (defining “Convicted”). 

Section 424.535(a)(4) authorizes CMS to revoke a supplier’s Medicare enrollment if the supplier certified as “true” misleading or false information on the application to enroll or maintain enrollment in the Medicare program.  Id. § 424.535(a)(4).

If CMS revokes a supplier’s Medicare enrollment, the supplier is “barred from participating in the Medicare program from the effective date of the revocation until the end of the reenrollment bar.”  Id. § 424.535(c)(1).  Revocations, with some exceptions, become effective 30 days after CMS or the CMS contractor mails notice of the revocation to the supplier.  Id. § 424.535(g).  When a revocation is based on a felony conviction, the revocation takes effect on the date of the conviction.  Id.  A re‑enrollment bar “[b]egins 30 days after CMS or its contractor mails notice of the revocation and lasts a minimum of 1 year, but not greater than 10 years . . . depending on the severity of the basis for revocation.”  Id. § 424.535(c)(1)(i). 

Effective January 1, 2019, CMS implemented a “preclusion list” applicable to Medicare Part C (Medicare Advantage) and Medicare Part D (Voluntary Medicare Prescription Drug Benefit) as part of its effort to “prevent fraud, waste, and abuse, and to protect Medicare enrollees.”  See 82 Fed. Reg. 56,336, 56,448 (Nov. 28, 2017); 83 Fed. Reg. 16,440, 16,646 (Apr. 16, 2018).  CMS must notify an individual in writing of the decision to place the individual on the preclusion list, the basis for the decision, and the right to appeal it.  42 C.F.R. §§ 422.222(a)(2)(i), 423.120(c)(6)(v)(A).  After receiving proper notice, an individual placed on the preclusion list is prohibited from receiving reimbursement for health care items, services, or drugs provided under Medicare Part C

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(42 C.F.R. § 422.222) and from receiving reimbursement for drugs prescribed under Medicare Part D (42 C.F.R. § 423.120(c)(6)). 

CMS may place an individual on the preclusion list when, among other things, the individual, “regardless of whether they are or were enrolled in Medicare, has been convicted of a felony under Federal or State law within the previous 10 years that CMS deems detrimental to the best interests of the Medicare program.”  42 C.F.R. §§ 422.2, 423.100.  To determine whether a felony conviction is detrimental to the best interests of the Medicare program, CMS considers the severity of the offense, when the offense occurred, and any other information CMS deems relevant to its determination.  Id.  An individual or entity placed on the preclusion list based on a felony conviction will remain on the preclusion list for ten years, beginning on the date of the felony conviction, unless CMS determines a shorter period is warranted.  Id. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C). 

A supplier may appeal a revocation determination and placement on the preclusion list in accordance with the administrative appeal procedures in 42 C.F.R. Part 498.  42 C.F.R. §§ 422.222(a)(2)(i), 423.120(c)(6)(v)(A), 424.545(a).  CMS’s decision to revoke a supplier’s Medicare enrollment and place the supplier on the preclusion list is an “initial determination” under Part 498.  Id. §§ 498.3(b)(17), (20).  The supplier must first request “reconsideration” of the initial determination and, if dissatisfied with the reconsidered determination, may request a hearing before an ALJ.  Id. §§ 498.5(1), 498.5(n), 498.22, 498.40.  A party dissatisfied with an ALJ’s decision may request Board review of the ALJ decision.  Id. §§ 498.5(1)(3), 498.5(n)(3), 498.80.

Case Background

1. Petitioner was convicted of “misprision of a felony” after knowingly concealing a federal wire fraud offense by lying to the FBI.

On May 10, 2017, in the United States District Court for the Northern District of Texas (district court), Petitioner pleaded guilty to one felony count of “misprision of a felony” in violation of 18 U.S.C. § 4.  ALJ Decision at 6; CMS Ex. 1; CMS Ex. 3, at 3.  Misprision of a felony consists of four elements:  (i) a federal felony was committed; (ii) the defendant had knowledge of the commission of the felony; (iii) the defendant failed to notify an authority, such as a federal judge or some other federal authority, as soon as possible; and (iv) the defendant did an affirmative act, as charged, to conceal the crime.  CMS Ex. 2, at 1-2. 

In his plea agreement, Petitioner admitted that his friend, R.A., perpetrated a scheme to steal money from R.A.’s employer, a dairy processing plant owned by Kroger Company (Kroger).  ALJ Decision at 6 (citing CMS Ex. 2, at 2-4).  The scheme involved R.A.’s submission of fraudulent purchase orders to Kroger for metal fabrication work that was

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never performed.  Id.  At R.A.’s request, Petitioner set up, in his own name, a business entity and a bank account to receive payments from Kroger for the metal fabrication work.  Id.  Petitioner withdrew the bulk of the Kroger payments in cash and gave the money to R.A., while R.A. permitted Petitioner to keep 10% for himself.  Id.  Initially, Petitioner did not know the payments from Kroger were for false requisitions and purchase orders; he believed he was helping his friend and a fictitious metal fabricator, who purportedly could not operate the business due to a conflict of interest.  Id.

The scheme lasted for about ten months, from November 2014 until September 2015, during which R.A. electronically submitted 68 fraudulent requisition and purchase orders to Kroger.  CMS Ex. 2, at 4.  Kroger paid Petitioner’s company approximately $203,924 for services that were never performed.  Id.  In September 2015, Kroger discovered the fraud and fired R.A.  ALJ Decision at 6 (citing CMS Ex. 2, at 5).  R.A. subsequently told Petitioner that he had been fired from Kroger for stealing money, that the fictitious metal fabricator did not exist, that no work had been performed, and that he had pocketed the money Kroger had paid to Petitioner’s company.  Id.  R.A. told Petitioner not to talk to investigators.  Id.

Approximately one year later, in October 2016, while attending medical school in Antigua, an FBI agent interviewed Petitioner about his sham company and Kroger.  ALJ Decision at 6 (citing CMS Ex. 2, at 5).  “[Petitioner] lied to the FBI agent to conceal the wire fraud, telling the agent that he did actual metal fabrication work for [Kroger] and ran the company out of his parents’ garage.”  CMS Ex. 2, at 5.  Petitioner did not report the wire fraud scheme to the FBI or any federal authority.  Id. 

On May 25, 2017, the district court accepted Petitioner’s guilty plea.  ALJ Decision at 7 (citing CMS Ex. 3, at 3).  The district court sentenced Petitioner to 24 months of probation and ordered him to pay a $100 special assessment.  Id. (citing CMS Ex. 4).  While on probation, the district court permitted Petitioner to attend medical school in Antigua.  CMS Ex. 8, at 4-5.

Petitioner subsequently obtained a medical degree and became licensed as a physician.  ALJ Decision at 1; CMS Ex. 5, at 2.  McClaren Flint (the Hospital) hired Petitioner as a resident in training.  P. Ex. 11, at 1 (¶ 1).  On June 21, 2022, before Petitioner’s first day of work, the Hospital submitted, on Petitioner’s behalf, an application to enroll in Medicare through PECOS, Medicare’s electronic enrollment process.  CMS Ex. 5; P. Ex. 12, at 1 (¶ 2).  The application identified Petitioner as the “authorized signer” and indicated that he electronically signed the certification statement.  CMS Ex. 5, at 1.  Although Petitioner disclosed his felony conviction to the Hospital, the Hospital mistakenly submitted his application without reporting that he had been convicted of a felony within the preceding 10 years.  See CMS Ex. 5, at 2 (responding “No” to the question of whether a final adverse legal action had been imposed against Petitioner); P. Ex. 10, at 1-2 (¶ 3); P. Ex. 11, at 1-2 (¶ 2); P. Ex. 12, at 1-2 (¶¶ 3-4).  A CMS contractor

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approved Petitioner’s application effective June 23, 2022.  CMS Ex. 6.  Petitioner began his employment at the Hospital on June 24, 2022.  P. Ex. 9, at 4 (¶ 8).

2. CMS revoked Petitioner’s Medicare enrollment and placed him on the preclusion list.

By letter dated March 8, 2023, Wisconsin Physicians Service Insurance Corporation (WPS), a Medicare contractor, notified Petitioner that his Medicare enrollment and billing privileges were revoked under 42 C.F.R. § 424.535(a)(3) based on his felony conviction, and under 42 C.F.R. § 424.535(a)(4) because Petitioner answered “no” in section three of the application, falsely indicating that he did not have any adverse legal history despite his felony conviction.  CRD Docket No. C-23-563, Doc. #1b (Revocation Notice), at 1.  WPS further notified Petitioner that he would be added to the preclusion list.  Id. at 1-2.  CMS also imposed a 10-year re-enrollment bar in connection with the revocation.  Id. at 3.  The revocation notice advised Petitioner that he may request reconsideration and warned that the reconsideration stage was the “only opportunity to submit information during the administrative appeals process unless an ALJ allows additional information to be submitted.”  Id.

Petitioner timely requested reconsideration of the revocation and preclusion list determinations.  CMS Ex. 7.  In his initial reconsideration request, Petitioner stated:  “If I have clicked NO on the CMS application, please believe me that it was an oversight or error and was not intended to deceive CMS or anyone else.”  Id.  Petitioner maintained that he had been open and honest about his felony conviction and disclosed his conviction on his residency application, state medical license application, and employment paperwork.  Id.  Petitioner, through counsel, later submitted a supplemental reconsideration request.  CMS Ex. 8.  There, Petitioner argued that the felony conviction was “a lone outlier in an otherwise stellar life,” and Petitioner’s conduct since the conviction has been “exemplary.”  Id. at 1-2.  Petitioner emphasized that he disclosed his felony conviction to his employer, and he “neither prepared, nor was ever given an opportunity to review the Medicare application.”  Id. at 2.  Petitioner further clarified that, “[c]ontrary to the statement in his request for reconsideration, . . . [he] did not inadvertently click the wrong box”; rather, his employer (the Hospital) incorrectly completed the enrollment application without his involvement.  Id.

3. CMS upheld on reconsideration Petitioner’s revocation and placement on the preclusion list.

On June 5, 2023, CMS issued a reconsidered determination upholding Petitioner’s revocation under section 424.535(a)(3) because he was convicted of a felony offense that CMS determined is detrimental to the best interests of the Medicare program and its beneficiaries.  CRD Docket No. C-23-563, Doc. #1a (Reconsidered Determination), at 4‑5.  CMS found, “based on the specific facts and circumstances of his conviction,”

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that Petitioner “knowingly concealed” a fraudulent scheme perpetrated by his friend by “falsely representing, to an agent of the FBI,” that Petitioner performed metal fabrication work that he did not perform.  Id.  CMS found that such conduct “displays dishonest behavior and reflects negatively on [Petitioner’s] ethics and professionalism”; “calls into question his trustworthiness and veracity”; and puts the Medicare trust funds at risk given that the program “relies upon the trustworthiness and best judgment of our Medicare partners.”  Id. at 5. 

CMS also upheld Petitioner’s revocation under section 424.535(a)(4) based on its finding that he certified as “true” false or misleading information on his enrollment application.  Id. at 5-6.  Specifically, CMS found that Petitioner responded “no” to the application question asking about final adverse legal actions.  Id.  CMS concluded:  “By signing and submitting the June 21, 2022 Medicare enrollment application, Dr. Chaudry certified as ‘true’ that he did not have any final adverse legal actions imposed against him when, in fact, there was one that he was required to report.”  Id. at 6.

CMS upheld the 10-year re-enrollment bar based on the two grounds for revocation, stating as follows:

Based on the facts and circumstances that led to Dr. Chaudry’s felony conviction and his failure to report that felony conviction as required, CMS determines that Dr. Chaudry’s actions are severe and serious.  In addition, Dr. Chaudry has demonstrated non-compliance with Medicare program requirements by failing to report his conviction.  As a result, CMS determines that the period of the re-enrollment bar is appropriate.

Id. 

Finally, CMS upheld Petitioner’s placement on the preclusion list based on his felony conviction and his revocation under section 424.535(a)(4).  Id. at 6-8.  For purposes of the preclusion list determination, CMS analyzed the factors under 42 C.F.R. §§ 422.2 and 423.100 and found that Petitioner’s felony conviction and false certification in connection with Petitioner’s enrollment application were detrimental to the best interests of the Medicare program.  Id.

4. The ALJ sustained the revocation of Petitioner’s Medicare enrollment and placement on the preclusion list.

Petitioner appealed the reconsidered determination by requesting an ALJ hearing.  ALJ Decision at 2.  In his request for hearing, Petitioner denied that his conviction was detrimental to the Medicare program and its beneficiaries.  Request for Hearing at 1-3.  Petitioner further argued that he did not see any part of the enrollment application before

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it was submitted to CMS and did not sign the application.  Id. at 4.  Petitioner also challenged his placement on the preclusion list.  Id. at 5.

CMS filed a combined prehearing brief and motion for summary judgment, along with eight proposed exhibits (CMS Exs. 1-8).  Petitioner filed a combined pre-hearing brief and response to CMS’s motion for summary judgment, along with 21 proposed exhibits, including written declarations of four “fact” witnesses and nine “character” witnesses.  See Petitioner’s List of Proposed Witnesses.  The ALJ admitted CMS’s exhibits without objection.  ALJ Decision at 3.  The ALJ admitted the written declarations of Petitioner’s “fact” witnesses – Petitioner and three employees of McLaren Health Care – that had information about the preparation and submission of Petitioner’s enrollment application.  Id. at 4 (admitting P. Exs. 9-12).  The ALJ excluded P. Ex. 1 (presentence investigation report) and P. Ex. 4 (medical school transcript) because they were untimely filed without good cause, and P. Exs. 2-3 and 5-8 because they were duplicates of other exhibits in the record.  Id. at 4.  The ALJ also excluded the written declarations of Petitioner’s “character” witnesses because their opinions were not relevant or material to any issue before the ALJ.  Id. (excluding P. Exs. 13-21).  CMS did not request to cross-examine any of Petitioner’s witnesses and, therefore, the ALJ decided the case based on the written record having found that an in-person hearing would serve no purpose.  Id. at 2 (“This matter may be decided on the written record without considering whether the standards for summary judgment have been met.”).

The ALJ sustained CMS’s decision to revoke under section 424.535(a)(3) because Petitioner was convicted of a felony offense (misprision of a felony) that CMS “reasonably determined” is detrimental to the best interests of the Medicare program and its beneficiaries.  ALJ Decision at 5-8 (summarizing the facts and circumstances of Petitioner’s crime and CMS’s assessment of the facts underlying the conviction).  The ALJ also sustained, “in the alternative,” CMS’s decision to revoke Petitioner’s Medicare enrollment under section 424.535(a)(4) “because the information on his Medicare enrollment application was false or misleading.”  Id. at 8-9.  Specifically, the ALJ concluded:  “Because Petitioner’s enrollment application did not disclose his felony conviction, CMS was authorized to revoke his Medicare enrollment pursuant to section 424.535(a)(4).”  Id. at 9.  The ALJ also upheld CMS’s decision to place Petitioner on the preclusion list based on his felony conviction.  Id. at 10-11.  The ALJ did not address CMS’s additional basis for including Petitioner on the preclusion list due to the revocation under section 424.535(a)(4).  Id.²

Petitioner filed a Request for Review (RR) with the Board challenging the revocation and preclusion list determinations upheld by the ALJ.

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Standard of Review

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

In his reply, Petitioner states that the case was “decided by the ALJ on a Motion for Summary Judgment” and “the entire proceeding at the ALJ level was governed by [Federal Rule of Civil Procedure Rule] 56.”  Reply at 2, 12.  Several of Petitioner’s arguments are predicated on his contention that the ALJ purportedly granted CMS’s motion for summary judgment.  Id. at 2, 12, 13 (arguing that the ALJ misapplied the summary judgment standard by failing “to construe all evidence in the light most favorable” to Petitioner).  The ALJ did not grant summary judgment; rather, the ALJ issued a decision on the merits based on the written record.  ALJ Decision at 2.  Thus, there was no need for the ALJ to consider the evidence in a light most favorable to Petitioner or to draw all reasonable inferences in favor of Petitioner.  We reject Petitioner’s arguments that are based on the summary judgment standard and address Petitioner’s arguments based on the standard of review articulated above.

Analysis

1. The ALJ did not err by excluding Petitioner’s presentence investigation report.

Petitioner did not challenge the ALJ’s evidentiary rulings in his request for review.  See 42 C.F.R. § 498.82(b) (“A request for review of an ALJ decision . . . must specify the issues, the findings of fact or conclusions of law with which the party disagrees, and the basis for contending that the findings and conclusions are incorrect.”); Guidelines, “Completion of the Review Process,” ¶ (a) (“The Board will not consider issues not raised in the request for review . . . .”).  In his reply brief, however, Petitioner challenges the ALJ’s exclusion of his presentence investigation report (P. Ex. 1).  Reply at 2, 6-7.  The failure to raise this issue in Petitioner’s request for review deprived CMS of the opportunity to respond to this alleged ALJ error in its brief.  Thus, this argument is not properly before the Board and, for that reason alone, we reject it. 

Even if the argument were properly before the Board, we would find no error in the ALJ’s exclusion of the presentence investigation report (P. Ex. 1).  The regulations applicable to Medicare enrollment appeals, including revocation appeals, impose special evidentiary rules that require providers and suppliers to submit any evidence they want

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considered at the time of their request for reconsideration.  See 42 C.F.R. § 405.803(c).  “If the provider or supplier fails to submit the evidence before the contractor issues its [reconsidered determination], the provider or supplier is precluded from introducing new evidence at higher levels of the appeals process.”  Id. § 405.803(e).  The purpose of this requirement is to “expedite the provider enrollment appeals process” by, among other things, enabling contractors or CMS Regional Office personnel to make determinations at the reconsideration level based on all available facts and by using the first level of appeal “to build the administrative record and help facilitate timely decisions at higher levels of appeals.”  See 73 Fed. Reg. 36,448-01, 36,452 (June 27, 2008). 

This evidentiary exclusion rule is subject to a “good cause” exception at the ALJ level.  See 42 C.F.R. § 498.56(e)(1) (“[T]he ALJ will examine any new documentary evidence submitted to the ALJ by a provider or supplier to determine whether the provider or supplier has good cause for submitting the evidence for the first time at the ALJ level.”).  “If the ALJ determines that there was not good cause for submitting the evidence for the first time at the ALJ level, the ALJ must exclude the evidence from the proceeding and may not consider it in reaching a decision.”  Id. § 498.56(e)(2)(ii).  “A determination of whether good cause has been established under [section 498.56(e)] is a matter for the ALJ’s discretion, to which we would defer in the absence of a compelling reason to do otherwise.”  HeartFlow, Inc., DAB No. 2781, at 19 (2017).  Thus, the Board reviews an ALJ’s “good cause” determination under section 498.56(e) for abuse of discretion and does not substitute its judgment for that of the ALJ.  Id. at 19 n.12. 

The ALJ excluded the presentence investigation report because Petitioner had not shown good cause for submitting it for the first time at the ALJ level.  ALJ Decision at 3-4.  The ALJ rejected Petitioner’s argument that he had good cause for not submitting the report because the CMS hearing officer could have obtained the report herself.  Id. at 3.  The ALJ explained that Petitioner could have obtained the report as easily as the CMS hearing officer and that it was Petitioner’s – not the hearing officer’s – responsibility to “track down and submit” evidence in support of his request for reconsideration.  Id. at 3 & n.2 (citing 42 C.F.R. § 498.24).  The ALJ also rejected Petitioner’s argument that at the time of his reconsideration request he did not understand the basis for his revocation or the potential relevance of the presentence investigation report.  Id. at 3.  The ALJ noted that the revocation notice advised Petitioner of the basis for his revocation under section 424.535(a)(3) (i.e., a felony conviction that CMS found detrimental to the Medicare program and its beneficiaries) and warned Petitioner that his only opportunity to submit information during the administrative appeal process was at the reconsideration stage, unless an ALJ allowed additional information to be submitted.  Id. at 3-4 (citing Revocation Notice, at 1, 3).  The ALJ also pointed out that at the reconsideration level, Petitioner argued some of the more favorable aspects of the presentence investigation report and omitted the less favorable aspects, contravening his contention that he did not understand the basis for his revocation.  Id. at 4; see also CMS Ex. 8, at 1-3.

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Petitioner asserts that the ALJ erred by excluding the presentence investigation report because the evidence is “highly relevant.”  Reply at 2.  Petitioner argues that “as a general rule” such evidence “should be admitted.”  Id. at 6 (citing Medstar Health, Inc., DAB No. 2684, at 6 (2016) and 1866ICPayday.com, DAB No. 2289, at 3-4 (2009)).  Neither of the cases Petitioner cites supports his contention.  Those cases hold that in supplier or provider enrollment appeals, 42 C.F.R. § 498.86(a) prohibits the Board from admitting evidence that had not been proffered before the ALJ.  See Medstar at 6; 1866ICPayday.com at 3-4.  Neither case involved the question of what constitutes good cause for an ALJ to admit new evidence under 42 C.F.R. § 498.56(e), and neither case found good cause to admit such evidence merely because it is “highly relevant.” 

The question here is not whether the presentence investigation report is relevant; the question is whether Petitioner had shown “good cause” for submitting the evidence for the first time before the ALJ.  Petitioner’s assertion that the CMS hearing officer could have accessed the report because it “came from the identical Pacer file” that CMS purportedly used to locate other documents relating to his conviction is beside the point.  Reply at 6-7 n.3.  Petitioner made no showing that the document was unavailable to him or that he could not have submitted the document with either his initial or supplemental reconsideration requests.  Petitioner has not identified any compelling reason to disturb the ALJ’s decision to exclude P. Ex. 1.  Accordingly, we find no error or abuse of discretion in the ALJ’s exclusion of the presentence investigation report under section 498.56(e) because Petitioner failed to show good cause for submitting the evidence for the first time at the ALJ level.

2. The ALJ’s conclusion that CMS had a lawful basis to revoke Petitioner’s Medicare enrollment under 42 C.F.R. § 424.535(a)(3) is supported by substantial evidence and free of legal error.

In reviewing the revocation of a supplier’s Medicare billing privileges, the Board (and ALJs) decide only whether CMS has established a lawful basis for the revocation.  See Cornelius M. Donohue, DPM, DAB No. 2888, at 4 (2018).  CMS is authorized to revoke a supplier’s Medicare enrollment under section 424.535(a)(3) if two conditions are met:  (i) the supplier was, within the preceding 10 years, convicted of a felony offense; and (ii) the conviction was for an “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); Eva Orticio Villamor-Goubeaux, DAB No. 2997, at 6 (2020).  If both conditions are met, then we must sustain the revocation.  See Stanley Beekman, D.P.M., DAB No. 2650, at 10 (2015) (“If the record establishes that the regulatory elements are satisfied . . . the ALJ and the Board must sustain the revocation.” (internal quotations omitted)). 

Here, Petitioner was charged with and pleaded guilty to the felony offense of misprision of a felony.  CMS Ex. 1; CMS Ex. 2; CMS Ex. 3, at 1 (indicating Petitioner was charged with a felony under 18 U.S.C. § 4).  Petitioner was “convicted” of a felony within the

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meaning of 42 C.F.R. § 1001.2 when the district court accepted his guilty plea on May 25, 2017.  CMS Ex. 3, at 3; ALJ Decision at 7; CMS Ex. 8, at 1 (“The felony conviction cannot be disputed.”).³  CMS’s contractor issued the relevant revocation determination on March 8, 2023 – less than six years after Petitioner’s conviction.  Revocation Notice at 1.  Thus, the first element for revocation under section 424.535(a)(3) was met, and Petitioner does not challenge that finding here. 

Petitioner challenges the second element, arguing that the determination that Petitioner’s offense is detrimental to the best interests of the Medicare program and its beneficiaries is unsupported by any evidence (RR at 1-2), and further argues that CMS should not have revoked his enrollment even if it had authority to do so (Reply at 2, 8).  We reject Petitioner’s arguments for the reasons explained below.

1. CMS lawfully determined that Petitioner’s felony offense is detrimental to the best interests of the Medicare program and its beneficiaries.

Having determined that Petitioner was convicted of a felony within 10 years preceding his revocation, the only remaining question is whether CMS lawfully determined that Petitioner’s felony offense “is detrimental to the best interests of the Medicare program and its beneficiaries.”  42 C.F.R. § 424.535(a)(3)(i).  CMS did not rely on the listing of per se detrimental offenses in section 424.535(a)(3)(ii) but found that Petitioner’s felony offense is detrimental to the best interests of the Medicare program and its beneficiaries “based on the specific facts and circumstances of his conviction.”  Reconsidered Determination at 4; see also ALJ Decision at 8.  The Board has repeatedly held that section 424.535(a)(3)(i) authorizes CMS to make a case-specific determination about whether a felony offense is detrimental to the Medicare program and its beneficiaries.  See Villamor-Goubeaux at 8 (“[Section] 424.535(a)(3)(i) authorizes CMS to determine on a case-by-case, adjudicative basis whether a felony, even one that does not fall within any named category of felony offenses, is detrimental to the Medicare program and its beneficiaries.”); Michael Scott Edwards, OD, and M. Scott Edwards, OD, PA, DAB No. 2975, at 9 (2019) (“CMS has the authority to determine on a case-by case basis whether a

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felony crime that is not identified in the regulations is detrimental to the best interests of the Medicare program.”).⁴

When CMS revised the Medicare regulations (effective February 3, 2015), CMS explained that “considering the very serious nature of any felony conviction, our authority in §§ 424.530(a)(3)(i) and 424.535(a)(3)(i) should not be restricted to the [specified] categories of felonies.”  79 Fed. Reg. 72,500, 72,509-10 (Dec. 5, 2014).  CMS “modif[ied] the list of felonies in each section such that any felony conviction that [CMS] determine[s] to be detrimental to the best interests of the Medicare program and its beneficiaries would constitute a basis for denial or revocation.”  Id. at 72,509, 72,512.  The regulations, therefore, permit CMS to conclude, based on the facts of a particular case, that “misprision of a felony” is a felony offense that is detrimental to the best interests of the Medicare program and its beneficiaries.

Petitioner argues that there is no evidence his conviction, which occurred over six years ago, “poses any danger to Medicare or its beneficiaries” and “proves only that [he] made a mistake.”  RR at 1.  Petitioner contends that his conviction does not threaten the Medicare trust funds and that CMS has not shown “any nexus between the conviction and the threat to the Medicare system.”  Id. at 1, 2.  Petitioner asserts that CMS failed to consider the severity of the underlying offense and that “everything about the severity finding” by CMS and the ALJ “points to a failure to consider this particular incident on its own peculiar facts.”  Reply at 8-10.⁵  Petitioner’s arguments are without merit.

As an initial matter, the fact that Petitioner was convicted more than six years ago does not preclude CMS from determining that Petitioner was convicted of a qualifying felony warranting revocation under section 424.535(a)(3).  “The only time limit mandated by the applicable regulation is that the conviction occur ‘within the preceding 10 years.’”  Blair Allen Nelson, M.D., DAB No. 3024, at 12 (2020) (quoting section 424.535(a)(3)).

Here, CMS made a case-specific, adjudicative determination that Petitioner’s felony offense (misprision of a felony) is detrimental to the best interests of the Medicare program and its beneficiaries.  Contrary to Petitioner’s assertions, CMS considered all

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relevant facts, and its determination is supported by the record evidence.  Reconsidered Determination at 4-5.  CMS reviewed Petitioner’s reconsideration request and the evidence submitted (CMS Exs. 7, 8) and acknowledged that the district court sentenced Petitioner to two years of probation and allowed Petitioner to continue his medical education outside of the United States while on probation.  Id. at 3-4.  CMS noted, however, that Petitioner “knowingly concealed the fraud scheme by falsely representing, to an agent of the FBI, that his company performed the metal fabrication work.”  Id. at 4-5.  In other words, in attempting to conceal a federal felony offense, Petitioner lied to federal authorities, claiming that he personally performed services that he knew were never performed and for which his company was paid more than $200,000.  CMS Ex. 2, at 3-5.  CMS found, “based on the specific facts and circumstances” of Petitioner’s case, that the conduct underlying Petitioner’s offense “displays dishonest behavior and reflects negatively on [his] ethics and professionalism”; “calls into question his trustworthiness and veracity”; and jeopardizes the Medicare trust funds, which relies on the trustworthiness of its Medicare partners to bill Medicare truthfully and accurately.  Reconsidered Determination at 5.  CMS, therefore, concluded that Petitioner’s offense is detrimental to the best interests of the Medicare program and its beneficiaries.  Id.     

The ALJ agreed with CMS’s assessment of the evidence, finding that CMS “reasonably determined” Petitioner’s felony offense is detrimental to the best interests of the Medicare program and its beneficiaries.  ALJ Decision at 8.  The ALJ pointed out that Petitioner must have known he was “creating the false impression that he owned and operated a legitimate business” to deceive R.A.’s employer, or at least thought he was covering for someone who could not ethically own or operate the business.  Id. at 7.  More importantly, the ALJ noted, Petitioner was fully aware by September 2015 that a serious crime was committed and that he had been a part of it; yet, he said nothing to law enforcement for a full year, and when questioned about it by the FBI, he lied.  Id.

Petitioner’s further assertion that misprision of a felony is of “very limited importance in American criminal law” is also unavailing.  Reply at 3.  Without citing any legal authority, Petitioner argues that misprision of a felony “has never been adopted as a crime by most states”; or, if it was adopted, “it has been abolished”; or, if it is still a crime, “it is almost never prosecuted or is a misdemeanor.”  Id.  Petitioner asserts, again without authority, that misprision of a felony is “rarely charged” but concedes that “when it is charged the act of concealment is usually obvious.”  Id. (surmising that misprision of a felony “is rarely prosecuted, perhaps because prosecutors have more important crimes to deal with”).⁶  Regardless of Petitioner’s views regarding his criminal prosecution, the fact remains that “misprision of a felony” is a felony offense under federal law (CMS Ex. 3, at 1); Petitioner was prosecuted for this crime in federal court (CMS Exs. 1, 4); and Petitioner pleaded guilty to the crime, stipulated to the factual allegations establishing each element of the crime, and was convicted (CMS Exs. 1, 2, 3, 4).

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Still further, CMS’s case‑specific determination that Petitioner’s felony offense is detrimental to the Medicare program and its beneficiaries is consistent with other revocation determinations imposed by CMS where a supplier lied to federal investigators within the context of a criminal investigation.  In Saeed A. Bajwa, M.D., DAB No. 2799 (2017), the Board upheld a supplier’s revocation under section 424.535(a)(3) based on a felony conviction for making a false statement to the FBI.  Id. at 1, 11.  CMS determined that the supplier’s offense was detrimental to the best interests of the Medicare program and its beneficiaries given that the “‘conviction for providing material misstatements to the FBI . . . within the context of a criminal investigation raises questions about [the supplier’s] trustworthiness and veracity.’”  Id. at 11 (quoting reconsidered determination).  In Daniel Wiltz, M.D., et al., DAB No. 2864 (2018), the Board similarly upheld a supplier’s revocation under section 424.535(a)(3) based on a felony conviction for making false statements to a federal investigator.  Id. at 3, 11.  There, the Board noted that “CMS determined that the crime of making false statements is a crime detrimental to the Medicare program and its beneficiaries because making false statements, like insurance fraud, which ATF was investigating when the investigator questioned Dr. Wiltz about the insurance money, implicates the supplier’s trustworthiness that is considered essential for maintaining the integrity of the Medicare program and protecting program funds.”  Id. at 11.  Petitioner did not address either of these cases in his arguments before the Board, and both cases support CMS’s revocation determination in this case.

The central purpose of the enrollment provisions is to protect beneficiaries and the Medicare trust funds and, to that end, CMS is concerned about maintaining the integrity of the Medicare program.  See 71 Fed. Reg. 20,754, 20,758, 20,773-74 (Apr. 21, 2006).  As CMS explained, the enrollment provisions are based on the understanding that “there is a relationship between fulfilling the requirements stipulated in the Medicare program statutes and related laws, the integrity of the provider and supplier, the quality of care furnished to Medicare beneficiaries, and the confidence of the public in the Medicare program.”  Id. at 20,758.  Here, Petitioner knowingly concealed a scheme to defraud his friend’s employer through the submission of fraudulent purchase orders that resulted in payments of more than $200,000 to a sham company created and owned by Petitioner; Petitioner failed to report the scheme to federal authorities and, when asked about it, he lied to the FBI and claimed to have personally performed services that he knew had not been performed.  ALJ Decision at 6-8; CMS Ex. 2, at 3-5.  Given the concerns such conduct raises about one’s integrity, professionalism, ethics, and veracity, as well as CMS’s goal to protect the Medicare trust funds from dishonest and unprincipled suppliers and providers, we find no error in the ALJ’s conclusion that CMS reasonably determined that Petitioner’s felony offense is detrimental to the best interests of the Medicare program and its beneficiaries.

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2. The ALJ had no authority to review how CMS exercised its discretionary authority to revoke.

Petitioner argues that the issue is not whether CMS “can” revoke, but whether it “should have” revoked.  Reply at 2, 8 (“No one dispute the power or authority [of CMS] to revoke.  The larger issue is should they revoke.”).  The ALJ, consistent with Board precedent, declined to review how CMS exercised its discretionary authority to revoke.  ALJ Decision at 7 (“I may not substitute my discretion for that of CMS in determining whether the revocation is appropriate.”).  Despite well-established limitations on the review authority of ALJs and the Board, Petitioner points to various facts and circumstances that he contends warrant overturning his revocation under section 424.535(a)(3).  Petitioner argues that after his conviction, the district court allowed him to continue his medical studies outside the country while on probation (RR at 2); that the Michigan Board of Medicine granted him an unrestricted medical license (RR at 1); and that the Hospital, part of a well-respected medical system, hired him as a resident to treat both Medicare and Medicaid patients (RR at 1-2, Reply at 9).  Petitioner further argues that his record before and after his conviction was “spotless” (Reply at 9); that his prior military service is evidence of his good character (RR at 1); and that “every single person or organization since the arrest has examined [his] character and integrity and found it deserving of opportunity” (RR at 2).  

None of these assertions, even if true, are relevant to determining whether a basis for revocation under section 424.535(a)(3) exists.  See John Hartman, D.O., DAB No. 2564, at 5-6 (2014) (holding that mitigating factors, such as the supplier’s lack of repeat offenses, favorable medical licensing determinations by other state and federal agencies, compliance with probation requirements, and good reputation among patients and colleagues, are irrelevant in determining whether a legal basis exists for revocation under section 424.535(a)(3)).  Once the Board finds that the reason cited for the revocation “was grounded in fact and satisfied the applicable regulatory criteria, the Board is obligated to uphold the revocation.”  Id. 

In other words, we do not review CMS’s exercise of discretion in determining whether to revoke billing privileges.  The Board reviews only whether the regulatory elements necessary for CMS to exercise its revocation authority were satisfied.  . . .  If the record establishes that the regulatory elements are satisfied, as they are here, we must sustain the revocation and may not substitute our discretion for that of CMS in determining whether revocation is appropriate under all the circumstances.

Id. at 6 (internal citations and quotation marks omitted). 

Accordingly, in reviewing a revocation determination, ALJs and the Board “decide only whether CMS has established a lawful basis for the revocation.”  Donohue at 4; see also

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Meadowmere at 8-9 (“[W]hile CMS may have discretion to consider unique or mitigating circumstances in deciding whether, or how, to exercise its revocation authority, ALJs and the Board may not substitute their discretion for that of CMS . . . .” (internal quotation marks and brackets omitted)); Bajwa at 15 (“[N]either an ALJ nor the Board may review how CMS exercises its discretion or substitute its own discretion.”); Wiltz at 12 (“Once CMS, in exercising its discretion, proceeds with revocation because, as it determined here, the supplier’s crime is detrimental to the Medicare program and its beneficiaries, on appeal, the ALJ and the Board must uphold the revocation if there is a legal basis for revocation.”).  Accordingly, having determined there is a legal basis for the revocation under section 424.535(a)(3), we decline to review CMS’s decision to revoke.⁷

We further reject Petitioner’s contention that his revocation should be overturned because he has no role in billing or collection at the Hospital and, therefore, no direct access to the Medicare trust funds.  RR at 2; Reply at 9-10.  Such assertions do not demonstrate that there is not a legal basis for Petitioner’s revocation.  Regardless of whether Petitioner’s current role includes billing or collection responsibilities, enrollment in Medicare confers billing privileges, and Petitioner’s specific job responsibilities and employer are not permanently fixed.  Still further, the regulations governing revocation under section 424.535(a) are not limited to suppliers or providers that have Medicare billing responsibilities with their current employer.  Rather, CMS is authorized to revoke any supplier or provider “currently enrolled” in Medicare, regardless of whether the supplier or provider is actively billing Medicare or exercising billing privileges.  See White, DAB No. 3116, at 17-18; see also 42 C.F.R. § 424.535(a). 

CMS had a lawful basis to revoke Petitioner’s Medicare enrollment under section 424.535(a)(3) because Petitioner was, within the preceding 10 years, convicted of a felony offense that CMS determined is detrimental to the best interests of the Medicare program and its beneficiaries.  Having concluded that the regulatory elements in section 424.535(a)(3) are met, we must sustain the revocation regardless of other factors that CMS might have weighed in exercising its discretion to revoke.  See Hartman at 6; Bajwa at 15; Wiltz at 12.  We therefore affirm the ALJ’s conclusion that CMS was authorized to revoke Petitioner’s Medicare enrollment under section 424.535(a)(3).

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3. The ALJ did not err in concluding that CMS had a legitimate basis to include Petitioner on the preclusion list based on his felony conviction.

CMS placed Petitioner on the preclusion list based on his felony conviction and his revocation under section 424.535(a)(4).  Reconsidered Determination at 6-8.  The ALJ upheld CMS’s preclusion list determination based only on Petitioner’s felony conviction.  ALJ Decision at 10-11.  An individual may be placed on the preclusion list when they have “been convicted of a felony under Federal or State law within the previous 10 years that CMS deems detrimental to the best interests of the Medicare program.”  42 C.F.R. §§ 422.2, 423.100.  In determining whether a felony conviction is detrimental to the program, CMS considers (i) the severity of the offense, (ii) when the offense occurred, and (iii) any other information CMS deems relevant to its determination.  Id. 

There is no dispute Petitioner was convicted of a felony offense within the previous 10 years.  Petitioner, however, challenges his placement on the preclusion list arguing that “[CMS] did not apply two of the three factors for evaluating the conviction.”  RR at 2.  Petitioner expands this argument in reply, claiming that CMS and the ALJ did not “look[] at the severity” of this specific case, CMS “completely ignored the second factor, the age of the offense,” and “neither [CMS] nor the ALJ even attempted to address [the third] factor.”  Reply at 9.  Contrary to Petitioner’s argument, and as the ALJ found, CMS considered all three regulatory factors in determining that Petitioner’s felony conviction is detrimental to the best interests of the Medicare program.  ALJ Decision at 11; Reconsidered Determination at 6-7.

Regarding the first factor, CMS determined that the felony offense of misprision of a felony is a “very serious offense.”  Reconsidered Determination at 6.  CMS found that Petitioner “had knowledge of the actual commission of wire fraud and concealed the fraud by falsely representing to an FBI agent that his company performed the metal fabrication work when [neither] he nor his company did such work.”  Id.  CMS explained that Petitioner’s conduct was “extremely severe” because he “knowingly and willfully concealed a crime cognizable by a court of the United States.”  Id.  Regarding the second factor, CMS acknowledged that although the conduct underlying the felony offense occurred several years ago from September 2015 through October 2016, the length of the offense shows that “[Petitioner] had knowledge and concealed the scheme for over one year.”  Id. at 7.  CMS also explained that “this factor alone is not dispositive of CMS’ determination.”  Id.  Regarding the third factor, CMS found relevant that inherent in the revocation under section 424.535(a)(3) is a determination that Petitioner’s felony conviction is detrimental to the best interests of the Medicare program and its beneficiaries.  Id. at 7.  CMS further found that “[Petitioner’s] conduct negatively affects the integrity of the Medicare program” because “[h]is actions jeopardize public confidence in Medicare providers and suppliers.”  Id. (“Public confidence is vital to the success of the Medicare program . . . .”).

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The record reflects that CMS considered each regulatory factor in concluding that Petitioner’s felony conviction is detrimental to the best interests of the Medicare program.  Id. at 6-7.  Moreover, having determined that Petitioner’s felony offense is detrimental to the Medicare program for purposes of revocation, we can discern no legal basis that would compel CMS to find the offense not detrimental to the Medicare program for purposes of the preclusion list.  We affirm the ALJ’s conclusion that CMS was authorized to include Petitioner on the preclusion list based on his felony conviction because it is supported by substantial evidence and free of legal error.⁸

4. Section 424.535(a)(4) does not provide CMS authority to revoke in this case.

Section 424.535(a)(4) authorizes CMS to revoke the Medicare enrollment and billing privileges of a supplier who has “certified as ‘true’ misleading or false information on the enrollment application to be enrolled or maintain enrollment in the Medicare program.”  To ensure that Medicare enrolls only qualified and trustworthy suppliers, the program’s regulations require a supplier to:  (i) provide “[c]omplete, accurate, and truthful responses” to all information requested on an enrollment application (42 C.F.R. § 424.510(d)(2)(i)); (ii) provide those responses “on the applicable enrollment application” (id. § 424.510(a)(1)); and (iii) certify, by a signature on the application, that the information provided therein is “accurate” (id. § 424.510(d)(3)).  “All enrollment applications submitted by individual practitioners . . . must be signed by the enrolling or enrolled individual.”  Id. § 424.510(d)(3)(ii).  “Individual practitioners cannot delegate signature authority when submitting an enrollment application for any reason.”  Id.

“[I]f a supplier submits a signed application and fails to list a final adverse legal action on the application, then the supplier will have certified as true information concerning [their] adverse legal history that is manifestly not ‘complete, accurate, and truthful,’ but rather false or misleading.”  William Garner, M.D., DAB No. 3026, at 9 (2020) (emphasis in original).  In those circumstances, CMS may revoke the supplier’s Medicare enrollment and billing privileges under section 424.535(a)(4).  See, e.g., Dennis McGinty, PT, DAB No. 2838, at 6, 8 (2017) (holding that the supplier was subject to revocation because he certified his enrollment application as true and complete, yet failed to report a final adverse legal action), aff’d, No. 3:18-cv-359, 2019 WL 3034596 (N.D. Tex. July 19, 2019); Garner at 9 (upholding revocation where supplier certified that revalidation application was true and complete but “omitted the fact that his California medical license had been revoked”).

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There is no dispute Petitioner’s enrollment application did not disclose his felony conviction.  CMS Ex. 5, at 2 (responding “No” to the question of whether a final adverse legal action had been imposed against Petitioner).  The application identified Petitioner as the “authorized signer” and indicated that he electronically signed the certification statement on the application.  Id. at 1.  CMS, therefore, revoked Petitioner’s Medicare enrollment based on its finding that he certified as “true” false or misleading information on his enrollment application.  Reconsidered Determination at 5-6 (“By signing and submitting the June 21, 2022 Medicare enrollment application, Dr. Chaudry certified as ‘true’ that he did not have any final adverse legal actions imposed against him when, in fact, there was one that he was required to report.”).

At the time of reconsideration, Petitioner had submitted some evidence that he did not sign or submit the June 21, 2022 enrollment application.  See CMS Ex. 8, at 19 (letter from the Chief Academic Officer/Vice President of Academic Affairs at McLaren Health Care stating that Petitioner had disclosed his felony conviction to the Hospital, and the Hospital completed and submitted Petitioner’s enrollment application without reporting the conviction or giving Petitioner the opportunity to review).  Although CMS acknowledged the letter, it nevertheless determined that “[b]y signing the enrollment application, Dr. Chaudry certified under the penalty of perjury that he ‘read the contents of this application, and the information contained [t]herein is true, correct, and complete.’”  Reconsidered Determination at 5.

Petitioner subsequently requested an ALJ hearing, again challenging the determination that he signed and submitted the enrollment application.  Request for Hearing at 4 (“He did not see, nor did he sign the form.  Having not signed the document, the allegation that Dr. Chaudry provided incorrect information is completely without merit.”).  Petitioner submitted his own declaration and three declarations from employees of the Hospital who had knowledge about the submission of his application to CMS.  See P. Exs. 9, 10, 11, 12.  Each of the declarations directly refuted the assertion that Petitioner signed and submitted his enrollment application to CMS: 

• The Credentialing Specialist for McLaren Health Care Corporation, who “personally prepared and submitted” Petitioner’s application to CMS, provided written direct testimony that, consistent with “McLaren practice,” Petitioner “took no part in” the enrollment process.  P. Ex. 12, at 1-2 (¶¶ 2-3).  Regarding Petitioner’s enrollment application, the Specialist testified that Petitioner “did not sign the submission, prepare any part of the submission, nor was he asked to do so.”  Id. at 1-2 (¶ 3).  The Specialist confirmed that Petitioner’s felony conviction was part of his employment record, but she inadvertently failed to include it on the application.  Id. at 1-2 (¶¶ 3-4) (“I fully but mistakenly believed the information [on the application] to be accurate.”).  The Specialist further testified that Petitioner’s application “was submitted without his input nor did he review the [application] before it was submitted” and, because of this incident, “McLaren has

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changed [its] process to ensure that all residents fully review these CMS submissions to prevent such inadvertent inaccuracies in the future.”  Id. at 2 (¶ 4).

• The Director of Facility & Provider Enrollment at McLaren Health Care Corporation, who oversees the submission of Medicare enrollment documents on behalf of residents, provided written direct testimony that Petitioner “did not misrepresent his felony conviction” to the Hospital and “took no part in” the enrollment process.  P. Ex. 10, at 1-2 (¶¶ 2-3).  Regarding Petitioner’s enrollment application, the Director confirmed that Petitioner “did not sign the submission, prepare any part of the submission, provide any information for the submission, nor was he asked to do so.”  Id. at 1-2 (¶ 3).  The Director testified that their department “accidentally overlooked the conviction” in the Hospital’s records, and they have since “changed [their] process to ensure that all residents fully review these CMS submissions to prevent such inadvertent inaccuracies in the future.”  Id. at ¶¶ 3-4.
• The Chief Academic Officer/Vice President of Academic Affairs at McLaren Health Care, who has personal knowledge about “how the credentialing process is done,” provided written direct testimony that “Medicare enrollment for residents is handled by the McLaren Provider Enrollment Department.”  P. Ex. 11, at 1-2 (¶ 2).  He testified that Petitioner “fully disclosed his conviction” to the Hospital and “[d]espite a record of the conviction” in the Hospital’s files, the Provider Enrollment Department completed Petitioner’s Medicare application without listing his felony conviction.  Id. (“This was an oversight by the Provider Enrollment Department.”).  The Chief Academic Officer confirmed that, “[a]s with all our interns,” Petitioner “did not prepare, sign, or otherwise have any input into the CMS application before submission by the provider enrollment team” and “had no opportunity to review the submission before it was made.”  Id. at 1-2 (¶¶ 2-3).  He further testified that the Hospital has since “changed its process to ensure the residents review the application before submission.”  Id. at 2 (¶ 3).
• Petitioner submitted his own written direct testimony explaining that the Hospital’s credentialing department prepared and submitted his enrollment application to CMS before he started working at the Hospital.  P. Ex. 9, at 4 (¶ 8).  Petitioner testified:  “I was not privy to any aspect of that process.  I was not told it was being filed nor was I asked to authorize the process.  I did not see it as it was assembled, I was not allowed to review it before it was submitted, and I did not sign it.”  Id.  Petitioner further testified:  “I had no part whatsoever in the CMS credentialing process and I certainly did not make any misrepresentation to CMS about my conviction.  . . .  I had no control whatsoever over how [the enrollment application process] was done or what was disclosed.”  Id.

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The ALJ admitted these declarations into evidence, but upheld CMS’s decision to revoke Petitioner’s enrollment under section 424.535(a)(4) “because the information on his Medicare enrollment application was false or misleading.”  ALJ Decision at 4, 8.  The ALJ further found:  “Petitioner has not explained how his employer came to submit the enrollment application on his behalf.  He has not established, or even argued, that his employer was not authorized to do so.”  Id. at 8 (noting that 42 C.F.R. § 424.510(d)(3) requires that the certification statement on an enrollment application must be signed by an individual with authority to bind the provider or supplier).  Relying on two Board decisions and a prior ALJ decision, the ALJ held that it was “immaterial” whether someone else completed Petitioner’s enrollment application and omitted his negative history; nor was it relevant whether Petitioner had the opportunity to review the application before it was submitted.  Id. at 9 (citing Sandra E. Johnson, CRNA, DAB No. 2708, at 14-15 (2016); Angela R. Styles, M.D., DAB No. 2882, at 9-10 (2018); Tammy Dobbin, APN and Ebony Wellness, LLC, DAB CR6316, at 11-13 (2023)).  The ALJ thus concluded:  “Because Petitioner’s enrollment application did not disclose his felony conviction, CMS was authorized to revoke his Medicare enrollment pursuant to section 424.535(a)(4).”  Id.  We reverse this part of the ALJ Decision and overturn the revocation under section 425.535(a)(4) because it is inconsistent with the plain language of the regulation and the record evidence does not support a revocation on this basis.

The legal error in this case arises from a misunderstanding of Board precedent.  In Johnson, the Board upheld a supplier’s revocation under section 424.535(a)(4) because the supplier submitted enrollment applications containing misleading or false information that the supplier “certified as true.”  Johnson at 15 (emphasis added).  The Board determined it was immaterial whether the supplier completed the enrollment forms herself or reviewed them before they were submitted because it was undisputed that the supplier had signed the certification statements on both applications and, therefore, certified the false information on the applications “as true.”  Id. (“By signing the certification statements in both application forms (and she does not dispute that the signatures are hers), she attested to the truth, accuracy and completeness of their content, as is.”).  The Board rejected Petitioner’s attempt to blame others for the omission because “[t]he responsibility for reviewing the content of her applications before attesting to their accuracy lay entirely with [the supplier] and she averred by her signature that she had performed such a review.”  Id. at 14 (emphasis added).  The Board did not hold in Johnson, or any other case, that section 424.535(a)(4) authorizes CMS to revoke a supplier’s Medicare enrollment merely because information on their enrollment application is false or misleading.  Rather, consistent with the plain language of section 424.535(a)(4), it is the supplier’s certification of the false information “as true” that provides a legal basis for revocation under section 424.535(a)(4).  Johnson at 14-15. 

The ALJ’s reliance on Styles is also misplaced.  Styles involved a revocation under section 424.535(a)(9) for the failure to timely report a medical license suspension.  Styles at 9-10.  The supplier argued that she relied on her “billing company” to make such

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reports.  Id. at 9.  The Board rejected that argument because it was the supplier’s duty under the regulation to make the required report.  Id.  Here, Petitioner does not argue that he relied on his employer to submit a true and accurate enrollment application; rather, he provided unrefuted testimony that his employer acted without his involvement, input, signature, or review.  P. Ex. 10, at 1-2 (¶ 3); P. Ex. 11, at 1-2 (¶¶ 2-3); P. Ex. 12, at 1-2 (¶¶ 3-4).  Petitioner further provided uncontroverted testimony that he did not authorize his employer to act and was not told that the application was being submitted to CMS.  P. Ex. 9, at 4 (¶ 8).  Styles is inapposite and has no bearing on this case. 

The ALJ’s reliance on a prior ALJ decision (Dobbin) is also unavailing.  “ALJ decisions have no precedential weight and so are useful only to the extent their reasoning is on point and persuasive.”  Wassim Younes, M.D., et al., DAB No. 2861, at 8 n.9 (2018).  The Board does not find the ALJ’s reasoning in Dobbin to be persuasive and, in fact, expressly declined to follow the ALJ’s analysis in Dobbin regarding section 424.535(a)(4).  See Tammy Dobbin, APN and Ebony Wellness, LLC, DAB No. 3136, at 15-16 (2024) (declining to affirm that part of the ALJ decision concluding that CMS had a legal basis to revoke under section 424.535(a)(4) merely because the suppliers purportedly “authorized” the filing of enrollment applications containing false or misleading information).  Dobbin, therefore, provides no support for upholding Petitioner’s revocation under section 424.535(a)(4) in this case. 

Moreover, the ALJ’s finding that Petitioner did not explain “how his employer came to submit the enrollment application on his behalf” is not supported by substantial evidence.  Petitioner fully explained how his employer came to submit the enrollment application before he started working at the Hospital and further demonstrated that it was submitted by his employer without his prior knowledge or authorization.  P. Ex. 9, at 4 (¶ 8) (“I was not privy to any aspect of that process.  I was not told it was being filed nor was I asked to authorize the process.  I did not see it as it was assembled, I was not allowed to review it before it was submitted, and I did not sign it.”).  Petitioner’s employer confirmed that his enrollment application was prepared and submitted without his involvement, that he did not sign or review it, that the credentialing team made a mistake, and that they have since changed their practice.  See P. Ex. 10, at 1-2 (¶ 3); P. Ex. 11, at 1-2 (¶¶ 2-3); P. Ex. 12, at 1-2 (¶¶ 3-4).    

We find there is not substantial evidence in the record to support CMS’s revocation of Petitioner’s enrollment under section 424.535(a)(4) because the uncontroverted testimony in this case establishes that Petitioner did not provide misleading or false information that he certified as true.  Petitioner did not sign the certification statement in the application (electronically or otherwise) and was not involved in the preparation or submission of the application to CMS.  The evidence further demonstrates that Petitioner did not “authorize” his employer to submit the application on his behalf, nor could Petitioner lawfully authorize his employer to do so.  The ALJ Decision did not address the fact that Petitioner could not lawfully delegate signature authority to his employer and, as an

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individual practitioner, was required to sign the enrollment application himself.  See 42 C.F.R. § 424.510(d)(3)(ii).   

We also do not accept CMS’s argument before the Board that there is no “legal significance” to an applicant’s failure to personally sign an application’s certification statement.  CMS Br. at 14.  As an initial matter, CMS upheld Petitioner’s revocation under section 424.535(a)(4) because it found that, by “signing and submitting” the enrollment application, Petitioner certified “as true” information on his application that was false.  Reconsidered Determination at 5-6.  Moreover, the plain language of section 424.535(a)(4) makes clear that it is the supplier’s certification of misleading or false information “as true” that provides a legal basis for the revocation.  “ALJs and the Board are required to apply the regulations as written.”  Bajwa at 8.  Finally, CMS’s argument that the Board and ALJs should not attribute “legal significance” to an applicant’s failure to sign an application is directly contradicted by the enrollment regulations.  See 42 C.F.R. § 424.510(d)(3).  Individual practitioners applying for enrollment, such as Petitioner, must sign their enrollment applications and cannot lawfully delegate their signature responsibility to others for any reason.  Id. § 424.510(d)(3)(ii).    

For all these reasons, we conclude that Petitioner successfully rebutted the basis for the revocation under section 424.535(a)(4) and established by a preponderance of the evidence that he did not, in fact, provide false information on his enrollment application that he certified as true.  Cf. Dobbin, DAB No. 3136, at 12; Johnson at 15.  Thus, based on the record in this case, we conclude that CMS does not have authority to revoke Petitioner’s Medicare enrollment under section 424.535(a)(4).

5. The Board has no authority to review the length of the re-enrollment bar but will afford CMS an opportunity to reassess the length of the re-enrollment bar in light of this decision.

The Board need not sustain more than one of the bases for revocation under section 424.535(a) to uphold a revocation.  See Meadowmere at 8; see also Brenda Lee Jackson, DAB No. 2903, at 11 (2018) (“Concluding that CMS was authorized to act under one of the bases for revocation enumerated in the regulations is all that is necessary to uphold revocation.”); Donna Maneice, M.D., DAB No. 2826, at 8 (2017) (“CMS needs to establish only one ground for revocation.”).  When a supplier has their enrollment revoked, they are barred from seeking re-enrollment for a “minimum” of one year, but not more than 10 years, “depending on the severity of the basis for revocation.”  42 C.F.R. § 424.535(c)(1)(i). 

Here, CMS imposed a 10-year re-enrollment bar based on both grounds for revocation.  Reconsidered Determination at 6 (concluding that Petitioner’s actions are “severe and serious” based on the facts and circumstances leading to Petitioner’s “felony conviction and his failure to report that felony conviction as required”).  While the Board does not

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have authority to review CMS’s assessment of the severity of the basis for revocation or the length of a re-enrollment bar, see Vijendra Dave, M.D., DAB No. 2672, at 8-9 (2016), whether CMS would need to reassess the length of the re-enrollment bar given that only one of the two grounds for revocation has been sustained is an open question.

The Board requested further briefing from the parties on this issue.  Order for Further Briefing (May 13, 2024).  CMS responded indicating that it “would reassess the length of Petitioner’s re-enrollment bar if required to do so by the Board or by the ALJ.”  CMS Response to Order for Further Briefing at 2.  Petitioner responded stating that if the matter were “remanded” for reassessment of the re-enrollment bar, “that reassessment might end the contested matter.”  Petitioner Reply to CMS Response at 4 (explaining that if the re-enrollment bar were reduced, then a further appeal may be moot).

We do not perceive any basis to remand this matter to the ALJ.  We will, however, give CMS the opportunity to reassess the length of the re-enrollment bar in light of our decision.  CMS shall advise the Board within 15 days whether it intends to reassess the length of the re-enrollment bar and, if so, the amount of time it will need to complete such a reassessment.  If CMS reassesses the length of the re-enrollment bar, it should make its determination part of the administrative record in this case by filing a copy of the determination with the Board.  The Board has no authority to review the length of the re-enrollment bar and will not undertake the review of any adjustment of the re-enrollment bar.  However, to avoid requiring Petitioner to initiate an appeal in federal court before CMS has had an opportunity to reassess the re-enrollment bar, Petitioner may request an extension of time to seek judicial review of this decision pursuant to 42 C.F.R. § 498.95.

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Conclusion

We conclude as follows:  (i) we affirm the ALJ’s conclusion that CMS had a legal basis to revoke Petitioner’s Medicare enrollment under 42 C.F.R. § 424.535(a)(3); (ii) we affirm the ALJ’s conclusion that CMS lawfully placed Petitioner on the preclusion list based on his felony conviction; (iii) we reverse the ALJ’s conclusion that CMS had a legal basis to revoke Petitioner’s Medicare enrollment under 42 C.F.R. § 424.535(a)(4) and, therefore, affirm the revocation based only on section 424.535(a)(3).  We will allow CMS a reasonable time to reassess the length of the re-enrollment bar in light of our decision and will extend the time for Petitioner to seek judicial review of our decision during such reassessment if requested pursuant to 42 C.F.R. § 498.95.  

Endnotes

¹  CMS amended the regulations at section 424.535(a) effective January 1, 2024; however, we cite to and apply the regulations in effect on March 8, 2023, when CMS’s contractor issued the initial determination revoking Petitioner’s enrollment.  See Meadowmere Emergency Physicians, PLLC, DAB No. 2881, at 2 n.2 (2018).  Even if the amendments were applicable here, they would have no material effect on this decision.

²   CMS did not appeal the ALJ Decision and, therefore, we decline to further address this issue.  See, e.g., Beverly Health Care Lumberton, DAB No. 2156, at 16 n.7 (2008) (declining to review an issue that CMS could have appealed but did not), aff’d, 338 F. App’x 307 (4th Cir. 2009).       

³  Before the ALJ, Petitioner conceded that he was convicted of a felony.  Request for Hearing at 3 (“[N]o one denies the felony conviction.”).  Before the Board, Petitioner asserts, for the first time and without any evidence, that he was convicted of a misdemeanor.  Reply at 5, 17.  This argument is not properly before the Board and, in any event, it is unsupported by the record evidence.  See Meadowmere at 15 (“A party appearing before the Board is not permitted to raise on appeal issues that could have been raised before the ALJ but were not.”) (citing Guidelines, “Completion of the Review Process,” ¶ (a)).

⁴  CMS’s authority to determine whether a felony is detrimental is derived from section 1842(h)(8) of the Social Security Act, which expressly authorizes the Secretary of Health and Human Services to “terminate or refuse to renew” a supplier agreement to participate in Medicare “in the event that such . . . supplier has been convicted of a felony under Federal or State law for an offense which the Secretary determines is detrimental to the best interests of the program or program beneficiaries.”  Lilia Gorovits, M.D., P.C., DAB No. 2985, at 11 (2020).  That authority is conferred to CMS through section 424.535(a)(3).  Id.

⁵  Petitioner asserts that CMS did not consider the three factors at 42 C.F.R. §§ 422.2, 423.100.  Reply at 9.  As the ALJ pointed out, the three factors Petitioner lists are criteria CMS uses to determine whether Petitioner should be placed on the preclusion list and, as further explained below, CMS did consider each of those factors.  ALJ Decision at 7 n.6; see infra Analysis, Part III (discussing Reconsidered Determination at 6-7).  

⁶  The act of concealment in Petitioner’s case, lying to the FBI, is an obvious and uncontroverted fact.

⁷  We further note that CMS’s determination that an offense is detrimental to the Medicare program and its beneficiaries is distinct from the decision to revoke.  See Fady Fayad, M.D., DAB No. 2266, at 16 (2009) (“[The] determination [that the offense was detrimental] was distinct from the decision to revoke because CMS could have refrained from revoking Petitioner’s billing privileges despite its determination that the crime was detrimental to Medicare.”), aff’d, 803 F. Supp. 2d 699 (E.D. Mich. 2011).  To the extent Petitioner contends that circumstances, such as his compliance with probation requirements, subsequent medical licensing, subsequent employment history, prior military service, and otherwise good character demonstrate that his felony offense was not detrimental to the Medicare program or its beneficiaries, we reject that contention.  Such facts and circumstances do not show that the felony offense itself is not detrimental to the best interests of the Medicare program and its beneficiaries or that CMS’s determination in that regard was unreasonable.  Cf. Stephen C. White, M.D., DAB No. 3116, at 15 (2023), appeal docketed, No. 2:19-cv-37 (E.D. Wash. Jan. 24, 2019).

⁸  When an individual is placed on the preclusion list based on a felony conviction, that individual is to remain on the preclusion list beginning on the date of the conviction, for a 10-year period (or a shorter period as CMS determines, which it did not do here).  42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C); see also Reconsidered Determination at 7.  Petitioner was convicted on May 25, 2017.  Accordingly, the 10-year preclusion period began on the date of the conviction and the last day on which Petitioner would remain on the preclusion list is May 25, 2027.