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                              Lloyd Landsman, MD, DAB CR5581 (2020)
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Lloyd Landsman, MD, DAB CR5581 (2020)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





Lloyd Landsman, MD
	(NPI: 1831297977; PTAN: A300215410),
	Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-20-188Decision No. CR5581April 6, 2020

        
              
    

      DECISION
The Centers for Medicare & Medicaid Services (CMS), and its administrative contractor, National Government Services, Inc. (NGS), revoked the Medicare enrollment and billing privileges of Petitioner, Lloyd Landsman, MD, based on his failure to report on a Medicare enrollment application his misdemeanor conviction that was related to theft, fraud, embezzlement, breach of fiduciary duty, or other financial misconduct in connection with the delivery of a health care item or service.  CMS and NGS also imposed a three-year bar to re-enrollment, and placed Petitioner on CMS's preclusion list.
Subsequent to filing his request for hearing, Petitioner has abandoned his challenges to both the revocation of his Medicare enrollment and billing privileges and his placement on CMS's preclusion list.  Petitioner thereby limits his appeal to the duration of the re‐enrollment bar and requests that the three‐year re‐enrollment bar be reduced to one year in duration.  However, the duration of an enrollment bar is not an initial determination that is subject to review, and Petitioner has no right to challenge the duration of the re-enrollment bar.  I uphold the determinations of CMS and NGS.
**Page 2**
I.  Background and Procedural History
Petitioner is physician who specializes in plastic and reconstructive surgery.  CMS Ex. 1 at 2.  On November 27, 2017, the United States Attorney for the Eastern District of New York filed a one-count misdemeanor information charging that Petitioner committed the following offense, in violation of 21 U.S.C. §§ 331(c), 333(a)(1) and 18 U.S.C. § 3551 *et. seq.*:
On or about and between May 1, 2013 and June 1, 2016, both dates being approximate and inclusive, within the Eastern District of New York and elsewhere, [Petitioner] did knowingly and intentionally receive in interstate commerce from locations outside the United States and cause the receipt in interstate commerce from locations outside the United States and cause the delivery and proffered delivery thereof for pay to recipients, to wit: patients located in Smithtown, New York, one or more drugs that were misbranded, to wit: non-FDA-approved injectable botulinum toxin ("Botox").
CMS Ex. 2 at 1.  On December 5, 2017, Petitioner pleaded guilty to the charged offense.  CMS Exs. 4 at 5; 5 at 7.  At the time he entered his guilty plea, Petitioner's attorney acknowledged that Petitioner "delivered to his patients a non-FDA approved injectable, being [B]otox."  CMS Ex. 4 at 14.  Likewise, Petitioner acknowledged that he "delivered to [his] patients for pay, a non-FDA approved injectable [B]otox."  CMS Ex. 4 at 18.  Petitioner informed the presiding federal magistrate judge that he consented to an order of forfeiture that he pay $250,000, which amounted to the "gross proceeds traceable" to his crime.  CMS Exs. 4 at 22-23; 5 at 7.
On February 5, 2019, the presiding magistrate judge imposed judgment.  CMS Ex. 5 at 1.  The magistrate judge ordered, *inter alia*, that Petitioner serve two years of probation, to include performing 200 hours of community service.  CMS Ex. 5 at 2.  The term of probation included the following additional supervision requirement in addition to the standard conditions of supervision:
Upon request, [Petitioner] shall provide the U.S. Probation Department with full disclosure of his financial records, including co-mingled income, expenses, assets and liabilities, to include yearly income tax returns.  With the exception of the financial accounts reported and noted within the presentence report, the defendant is prohibited from maintaining and/or opening any additional individual and/or joint checking, savings, or other financial accounts, for either personal or business purposes, without the knowledge and approval of the U.S. Probation Department.  [Petitioner] shall cooperate with the Probation Officer in the investigation of his financial dealings and shall provide truthful monthly statements of [his]
**Page 3**
income and expenses.  [Petitioner] shall cooperate in the signing of any necessary authorization to release information forms permitting the U.S. Probation Department access to [his] financial information and records[.]
CMS Ex. 5 at 4.
On the same day that the federal court imposed judgment, February 5, 2019, Petitioner submitted an application to revalidate his enrollment in the Medicare program.  CMS Ex. 6 at 1; *see* CMS Ex. 10 at 2.  Petitioner provided a negative response to the following question:  "Has a final adverse legal action ever been imposed against an applicant under any current or former name or business entity?"1
  CMS Ex. 6 at 1, 3.  Petitioner provided updated enrollment information on March 21, 2019, and again certified that he had not been the subject of a final adverse legal action.  CMS Ex. 6 at 7.
On August 9, 2019, NGS revoked Petitioner's Medicare enrollment and billing privileges based on its determination that he had provided false or misleading information on an enrollment application.  CMS Ex. 8 at 1; *see* 42 C.F.R. § 424.535(a)(4).  NGS explained that the effective date of the revocation was September 8, 2019, and it imposed a three-year bar to re-enrollment.  CMS Ex. 8 at 1.  NGS also informed Petitioner that he would be placed on CMS's preclusion list, effective February 1, 2020.  CMS Ex. 8 at 1.
Petitioner, through his current counsel, submitted a request for reconsideration on August 19, 2019.  CMS Ex. 9.  Petitioner argued that his offense was not an offense that is related to theft, fraud, embezzlement, breach of fiduciary duty or other financial misconduct in connection with the delivery of a health care item or service, and therefore, he was not required to report the conviction on his Medicare enrollment application.  CMS Ex. 9 at 1-2.  Petitioner also stated that he "was not charged with administering misbranded Botox – simply purchasing it," implying that this criminal activity solely involved the *purchase* of misbranded Botox.  CMS Ex. 9 at 2.
In a reconsidered determination dated October 18, 2019, CMS's Provider Enrollment & Oversight Group informed Petitioner that NGS had correctly revoked his enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(4).  CMS provided the following discussion in support of its determination:
**Page 4**
In this instance, [Petitioner] was asked, if a final adverse legal action has ever been imposed against the applicant under any current or former name or business identity. [Petitioner] answered "no" to this question . . .  [Petitioner] claims that he was not required to report his conviction because there was no allegation of theft, fraud, embezzlement, and breach of a fiduciary duty or any other financial misconduct on his part. CMS disagrees with this contention. [Petitioner] pleaded guilty to count one of the misdemeanor information, referencing non-FDA approved Botox.  It specifically states that [Petitioner], "cause[ed] the delivery and proffered delivery thereof for pay to recipients" . . . [Petitioner's] financial misconduct involves the proffering of non-FDA approved Botox for pay. Thus, this misdemeanor conviction should have been disclosed.
In signing the March 21, 2019 PECOS Medicare web application, [Petitioner] certified that the information in his application was true, correct, and complete.  By failing to disclose his misdemeanor conviction on his application, CMS finds that [Petitioner] certified as "true" misleading or false information on his application to be enrolled or maintain enrollment in the Medicare program.  Therefore, CMS determines that the revocation of [Petitioner's] Medicare billing privileges is appropriate under § 424.535(a)(4).
CMS Ex. 10 at 3.  CMS also determined that NGS correctly determined that Petitioner should be added to its preclusion list, stating:
As stated at § 422.2 and 423.100, the CMS Preclusion List is a compiled list of individuals and entities or prescribers that meet the following requirements: (1) currently revoked from Medicare under § 424.535; (2) currently under a re-enrollment bar under § 424.535(c); and (3) CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.
* * *
CMS must make a determination that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination, CMS takes into consideration: (1) the seriousness of the conduct-underlying individual's revocation; (2) the degree to which the individual's conduct could affect the integrity of the Medicare program; and (3) any other evidence that CMS deems relevant to such determination.
**Page 5**
[Petitioner's] Medicare billing privileges were revoked because he did not report his final adverse legal action on his March 21, 2019 PECOS Medicare web application.  This conduct demonstrates [Petitioner's] unwillingness to be forthcoming and honest.  [Petitioner's] neglect in ensuring the accuracy of the information reported on his application calls into question his capacity to be a trustworthy partner in the Medicare program.  CMS finds his conduct to be serious given that the Medicare program relies on the integrity of its partners.
CMS also deems relevant to its determination the unprofessional behavior surrounding [Petitioner's] misdemeanor conviction.  From May 1, 2013 to June 1, 2016, [Petitioner] knowingly received non-FDA approved Botox from outside the U.S.A. and he caused the delivery thereof for pay to his patients in Smithtown, New York . . . Moreover, [Petitioner] admitted that the Botox his patients received did not have the correct warnings on the labels.  The misbranding of drugs presents a danger to the health, safety, and welfare of Medicare beneficiaries.  As a result, CMS finds that [Petitioner's] behavior is detrimental to the best interests of the Medicare program.  Therefore, CMS upholds [Petitioner's] inclusion on the CMS Preclusion List as it pertains to both Medicare Advantage and Medicare Part D.
CMS Ex. 10 at 3-4.
Petitioner filed a request for hearing on December 16, 2019, in which he challenged the determinations revoking his enrollment and billing privileges, placing him on the preclusion list, and imposing a three-year re-enrollment bar.  Petitioner appended an affidavit to his request for hearing in which he stated the following:  "There was no allegation that the substances purchased [Botox] were administered or resold."  *See* P. Ex. 2 at 33.
On December 23, 2019, the Civil Remedies Division issued my standing pre-hearing order, which directed the parties to file their respective pre-hearing exchanges.  CMS filed a pre-hearing brief and motion for summary judgment, along with 10 exhibits (CMS Exs. 1-10).  Petitioner submitted a pre-hearing brief and opposition to CMS's motion for summary judgment (P. Br.) and six exhibits. (P. Exs. 1-6).  In the absence of any objections, I admit CMS Exs. 1-10 and P. Exs. 1-6 into the evidentiary record.
CMS did not submit any written direct testimony, and Petitioner submitted an affidavit as P. Ex. 1, which I construe as his written direct testimony.  Because CMS has not requested an opportunity to cross-examine Petitioner, a hearing is not necessary for the purpose of cross-examination of any witnesses.  *See* Pre-Hearing Order §§ 11-13.  CMS has requested a decision on the written record if summary judgment is not granted, and
**Page 6**
Petitioner consents to CMS's request.  CMS Br. at 2; P. Br. at 1.  I consider the record in this case to be closed, and the matter is ready for a decision on the merits.2
II.  Issue
Because Petitioner has abandoned his request for hearing with respect to challenging whether CMS and NGS had a legitimate basis to revoke his enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(4) and place him on the preclusion list pursuant to 42 C.F.R. §§ 422.2 and 423.100, the sole remaining issue raised by Petitioner is whether CMS had a legitimate basis to impose a three-year re-enrollment bar.
III.  Jurisdiction
I have jurisdiction over the appeals of the types of initial determinations listed in, *inter alia*, 42 C.F.R. § 498.3(b)(17), (20).  *See* 42 C.F.R. § 498.5(*l*), (n)(2).
IV.  Findings of Fact, Conclusions of Law, and Analysis3
As a physician, Petitioner is a "supplier" for purposes of the Medicare program.  *See* 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(1).  In order to participate in the Medicare program, a supplier must meet certain criteria to enroll and receive billing privileges.  42 C.F.R. §§ 424.505, 424.510.
CMS may revoke a supplier's enrollment and billing privileges for any reason stated in 42 C.F.R. § 424.535(a).  Specifically, CMS may revoke a supplier's Medicare enrollment and billing privileges based on the supplier providing false or misleading information in its enrollment application, as is set forth in 42 C.F.R. § 424.535(a)(4):
(4) *False or misleading information.* The provider or supplier certified as "true" misleading or false information on the enrollment application to be enrolled or maintain enrollment in the Medicare program. (Offenders may be subject to either fines or imprisonment, or both, in accordance with current law and regulations.)
After a supplier's Medicare enrollment is revoked, the supplier is "barred from participating in the Medicare program from the effective date of the renovation until the end of the reenrollment bar."  42 C.F.R. § 424.535(c)(1).  At the time NGS and CMS
**Page 7**
issued their determinations, the length of the re-enrollment bar ranged from one to three years.  42 C.F.R. 424.535(c)(1) (2018).
Further, CMS has established a single list of individuals and entities for whom Medicare Advantage plans cannot provide reimbursement for items and services they provide, and for prescribers to whom Medicare Part D plans cannot provide reimbursement for any prescriptions the individuals write.4
  42 C.F.R. §§ 422.222, 423.120(c)(6).  In order for CMS to include an individual, entity, or prescriber on its preclusion list, all of the following three requirements must be met:
(i) The [individual] is currently revoked from Medicare for a reason other than that stated in [42 C.F.R.] § 424.535(a)(3).
	(ii) The [individual] is currently under a reenrollment bar under [42 C.F.R.] § 424.535(c).
	(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 . . . , CMS considers the following factors:
(A) The seriousness of the conduct underlying the . . . revocation.
	(B) The degree to which the . . . conduct could affect the integrity of the [Medicare/Part D] program.
	(C) Any other evidence that CMS deems relevant to its determination . . . .
42 C.F.R. §§ 422.2; *see* 423.100.
***1. Petitioner has abandoned his appeal to the extent he no longer challenges that NGS and CMS each had a legitimate basis to revoke his Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(4) based on his failure to report on an enrollment application that he had a misdemeanor conviction related to theft, fraud, embezzlement, breach of fiduciary duty, or other financial misconduct in connection with the delivery of a health care item or service.***
**Page 8**
***2. Petitioner has abandoned his appeal to the extent that he no longer challenges that NGS and CMS had a legitimate basis to add him to the preclusion list, effective February 1, 2020, and continuing for the duration of his re-enrollment bar, based on their determinations that the underlying conduct that led to Petitioner's revocation is detrimental to the best interests of the Medicare program and its beneficiaries.***
***3. The sole remaining issue disputed by Petitioner is that "the imposition of a three-year re-enrollment bar is excessive and without any basis in law or reason," and that it should be reduced to "a period of one year."***
***4. The length of a re-enrollment bar is not an initial determination listed in 42 C.F.R. § 498.3, and pursuant to 42 C.F.R. § 498.5(l), a supplier has no right to request a hearing with respect to the duration of a re-enrollment bar.***
***5. Because I lack jurisdiction to review the length of three-year re-enrollment bar, the three-year length of the re-enrollment bar must stand.***
Petitioner states the following in his brief:  "Based upon a review of applicable case law and precedent, [Petitioner] no longer contests the basis for revocation."  P. Br. at 1.  Further, Petitioner raises no arguments regarding his placement on the preclusion list.  Therefore, Petitioner has abandoned his challenges to both the revocation of his enrollment and billing privileges and his placement on the preclusion list.
Petitioner argues that he should not be subject to a three-year re-enrollment bar because it is "unreasonably excessive."  P. Br. at 6.  Petitioner makes the disingenuous allegation that there was a "lack of any criminal intent associated with the offense" to which he pleaded guilty.  P. Br. at 6.  However, the evidence supports Petitioner's criminal intent.  *See* CMS Ex. 4 at 18 (transcript of court proceedings) ("From May 2013 until June 2016 . . . I knowingly and intentionally received from Canada and Great Britain and delivered to my patients for pay, a non-FDA approved injectable [B]otox.").  Petitioner obtained misbranded drugs and delivered them to his patients, and he acknowledged that he derived $250,000 as the proceeds of this scheme.  CMS Ex. 5 at 7. Petitioner's claim that he lacked any criminal intent in a scheme in which he administered misbranded injectable Botox "for pay" is incredible.  *See* P. Ex. 1 at 2; CMS Ex. 4 at 18.
I further note that Petitioner's conduct in this matter demonstrates a pattern of providing false and misleading information with respect to his Medicare enrollment.  Petitioner provided false information to NGS when he failed to report his conviction in conjunction with the revalidation enrollment application that he completed on March 21, 2019, and his report of false information was the basis for the revocation of his Medicare enrollment and billing privileges.  *See* 42 C.F.R. § 424.535(a)(4).  Thereafter, Petitioner continued to provide misleading information in connection with his efforts to challenge his revocation
**Page 9**
and placement on the preclusion list.  When Petitioner filed his request for reconsideration, he implied that his crime involved "simply purchasing" Botox because he "was not charged with administering misbranded Botox."  CMS Ex. 9 at 2.  And then, in conjunction with the filing of his request for hearing, Petitioner claimed that "[t]here was no allegation that the [Botox was] administered or resold."  P. Ex. 2 at 33.  Only after CMS submitted evidence, namely the transcript of his guilty plea proceeding, did Petitioner acknowledge that the Botox "purchased [was] in fact administered to patients."5
  P. Ex. 1 at 2; *see* CMS Ex. 4.  While I question whether a supplier who has *repeatedly* provided misleading information in connection with his Medicare enrollment, to include in a sworn statement submitted to an administrative law judge, will embrace truthfulness following the passage of three years, I am not empowered to question the discretion employed by NGS and CMS regarding the length of the three-year re-enrollment bar.
CMS argues that Petitioner has no right of review regarding the duration of his re‐enrollment bar (CMS Br. at 21-23), and although Petitioner disputes the length of the bar, he fails to acknowledge, much less address, CMS's jurisdictional arguments.  P. Br. at 6-7.  The Departmental Appeals Board (DAB) has explained that "CMS's determination regarding the duration of the re-enrollment bar is not reviewable."  *Vijendra Dave, M.D.*, DAB No. 2672 at 11 (2016).  The DAB explained that "the only CMS actions subject to appeal under Part 498 are the types of initial determinations specified in section 498.3(b)."  *Id.* The DAB further explained that "[t]he determinations specified in section 498.3(b) do not, under any reasonable interpretation of the regulation's text, include CMS decisions regarding the severity of the basis for revocation or the duration of a revoked supplier's re-enrollment bar."  *Id.* The DAB discussed that a review of the rulemaking history showed that CMS did not intend to "permit administrative appeals of the length of a re-enrollment bar."  *Id*., citing 71 Fed. Reg. 20,754, 20,781 (Apr. 21, 2006); 71 Fed. Reg. 37,504, 37,505 (June 30, 2006); 72 Fed. Reg. 9479, 9485 (Mar. 2, 2007); 73 Fed. Reg. 36,448, 36,461 (June 27, 2008)*.* I have no authority to review this issue, and therefore, I do not disturb the three-year length of the re-enrollment bar.
**Page 10**
V.  Conclusion
For the reasons explained above, I affirm the revocation of Petitioner's Medicare enrollment and billing privileges, effective September 8, 2019, and his placement on the preclusion list, effective February 1, 2020.  I lack authority to review the length of the three-year re-enrollment bar.


          /s/
        Leslie C. Rogall

                      Administrative Law Judge
      1. Petitioner completed his applications via the internet-based Provider, Enrollment, Chain, and Ownership System (PECOS).  PECOS explains to users that, as relevant here, an applicant must report "[a]ny misdemeanor conviction, under federal or state law, related to the theft, fraud, embezzlement, breach of fiduciary duty, or other financial misconduct in connection with the delivery of a health care item or service."  CMS Ex. 7 at 1. back to note 1
                      2. Because a hearing is unnecessary, I need not address whether summary judgment is appropriate. back to note 2
                      3. My numbered findings of fact and conclusions of law are set forth in italics and bold font. back to note 3
                      4. CMS developed the preclusion list pursuant to the Comprehensive Addiction and Recovery Act of 2016 (CARA) that was enacted on July 22, 2016.  The stated purpose of the CARA was to "authorize the Attorney General and Secretary of Health and Human Services to award grants to address the prescription opioid abuse and heroin use crisis, and for other purposes."  Pub. L. No. 114-198, 130 Stat. 695 (2016).  Section 704 of the CARA called on the Secretary of the Department of Health and Human Services (Secretary) to establish a program to prevent prescription drug abuse under Medicare Parts C and D.  130 Stat. at 742-52. back to note 4
                      5. Petitioner made the following statement in a sworn declaration submitted with his pre‐hearing exchange:  "In my prior affidavit dated December 16, 2019 . . . I indicated there was no allegation that the [Botox was] administered or sold.  My recollection at that time was inaccurate and has since been sufficiently refreshed."  P. Ex. 1 at 2.  The fact that Petitioner somehow forgot that he administered misbranded Botox to his patients over a three-year period, until he reviewed the transcript of a federal court proceeding, is simply preposterous.  See P. Ex. 1 at 2. back to note 5 Back to top
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