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                              Anthony Del Piano, M.D., DAB No. 3096 (2023)
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Anthony Del Piano, M.D., DAB No. 3096 (2023)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Appellate Division





Anthony Del Piano, M.D.
Docket No. A-23-12Decision No. 3096May 9, 2023

        
              
    

      FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE AMENDED DECISION

Petitioner Anthony Del Piano, M.D. appeals the amended decision of an administrative law judge (ALJ), issued on October 27, 2022, affirming a decision by the Centers for Medicare & Medicaid Services (CMS) to deny, pursuant to 42 C.F.R. § 424.530(a)(3), Petitioner’s application to enroll as a supplier in the Medicare program, and to place Petitioner on CMS’s preclusion list for 10 years, pursuant to the regulations in 42 C.F.R. Parts 422 and 423.  CMS denied enrollment and put Petitioner on the preclusion list based on Petitioner’s 2015 felony conviction for commercial bribery, which CMS determined was detrimental to the best interests of the Medicare program.  *Anthony Del Piano, M.D.*, DAB CR6158 (2022) (ALJ Decision).  We affirm the ALJ Decision because it is supported by substantial evidence of record and free of legal error.

Legal Background

The Medicare program, established under authority of title XVIII of the Social Security Act (Act), provides health insurance benefits to persons 65 years and older and to persons with certain disabilities.  Act §§ 1811, 1831, 1833.  CMS, acting on behalf of the Secretary of Health and Human Services (Secretary), administers the program through contracts with Medicare administrative contractors.  *See* *id*. §§ 1816, 1842, 1874A; 42 C.F.R. §§ 421.5(b), 421.404(c).

Part B of title XVIII of the Act authorizes the administration of supplementary medical insurance under Medicare Part B, which covers services such as physician services, home health care, and outpatient rehabilitation services.  Act §§ 1831-1848.  A physician (such as Petitioner) may enroll and participate in the program as a supplier of services and receive payment (under Part B) for covered physician and outpatient services.  *Id*. §§ 1861(d), (q), (r), 1842; 42 C.F.R. §§ 400.202 (defining “*Medicare Part B*” and “*Supplier*”), 424.505.  The regulations in 42 C.F.R. Part 424, subpart P set out the rules for enrollment.  Enrollment in conformity with subpart P regulations confers on a supplier “billing privileges,” *i.e.*, the right to claim and receive Medicare payment for health care services provided to program beneficiaries.  42 C.F.R. §§ 424.500, 424.502

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(definitions of “*Approve/Approval*” and “*Enroll/Enrollment*”), 424.505.  To enroll in Medicare, a prospective supplier must submit to a CMS contractor complete, accurate, and true information in an enrollment application along with all applicable federal and state licenses and certifications and other documentation necessary to establish eligibility to furnish Medicare-covered items or services.  *Id*. §§ 424.502 (definition of “*Enrollment application*”), 424.510.

The Secretary may refuse to enter into an agreement or terminate or refuse to renew an agreement with a supplier who “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.”  Act § 1842(h)(8).  CMS, acting on behalf of the Secretary, “may” deny enrollment in Medicare for any one or more of the “reasons” enumerated under 42 C.F.R. § 424.530(a).  A prospective supplier whose enrollment application was denied “has been determined to be ineligible to receive Medicare billing privileges for Medicare covered items or services provided to Medicare beneficiaries.”  42 C.F.R. § 424.502 (definition of “*Deny/Denial*”).

The regulations in 42 C.F.R. § 424.530(a)(3) state in part:

(3)  *Felonies*.  The . . . supplier . . . was, within the preceding 10 years, convicted (as that term is defined in 42 [C.F.R. §] 1001.2[1]) of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.

(i) Offenses include, but are not limited in scope or severity to –

* * *

(D) Any felonies that would result in mandatory exclusion under section 1128(a) of the Act.

42 C.F.R. § 424.530(a)(3)(i)(D).2

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The Medicare program includes Part A (providing hospital insurance benefits) (*see* Act §§ 1811-1821), Part B (supplementary medical insurance, discussed above), Part C (a managed care option), and Part D (prescription drug coverage).  The Medicare managed care program permits participants or enrollees “the choice of [receiving] Medicare benefits through Medicare Advantage plans authorized under Part C of . . . title XVIII of the Act.”  42 C.F.R. § 400.202 (defining “*Medicare Part C*”); *see*Act §§ 1851-1859; 42 C.F.R. Part 422.  “Medicare Part D” is “the voluntary prescription drug benefit program authorized under Part D of title XVIII of the Act.”  42 C.F.R. § 400.202; *see* Act § 1860D1-1860D-43; 42 C.F.R. Part 423.

On July 22, 2016, Congress enacted the Comprehensive Addiction and Recovery Act of 2016 (CARA), Pub. L. 114-198, 130 Stat. 695 (2016), to respond to the epidemic of abuse of heroin and prescription drugs, particularly opioids.  Of note, section 704 of CARA amended the Social Security Act to authorize the Secretary to establish a program designed to prevent prescription drug abuse under Medicare Parts C and D.  To that end, sections 704(a), (b), and (g) of CARA amended the Act to require the Secretary to, among other things, establish a drug management program to limit at-risk beneficiaries’ access to frequently abused drugs; develop a “utilization management tool” to prevent drug abuse and to perform a retrospective utilization review to identify those who may be facilitating or diverting frequently abused drugs by beneficiaries; and to promulgate regulations implementing the statutory mandate, for prescription drug plans for plan years starting on or after January 1, 2019.  *See* § 704, 130 Stat. at 742-52.  In 2018, CMS amended 42 C.F.R. Parts 422 (Part C) and 423 (Part D).  The purposes of the amendments were, among other things, to implement the provisions of CARA and to address program integrity policies related to Medicare payments for Part C and Part D programs.  *See* 82 Fed. Reg. 56,336 (proposed Nov. 28, 2017); Final Rule, 83 Fed. Reg. 16,440 (Apr. 16, 2018).  CMS published additional regulations in 2019.  *See* Final Rule, 84 Fed. Reg. 15,680 (Apr. 16, 2019).

The amendments to Parts 422 and 423 established the “preclusion list,” which is a “CMS compiled list” of individuals and entities (Part C) and prescribers (Part D) who meet the definitional requirements in 42 C.F.R. §§ 422.2 and 423.100.3  Applicable to this case, an individual may be included in the preclusion list when that 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 (paragraph (3) under definition of “*Preclusion list*”).  The definition of “preclusion list” in section 423.100 (paragraph (3))

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as it relates to Part D prescription drug prescribers is similar to that in section 422.2.4  To determine whether a felony conviction is detrimental to the best interests of Medicare, CMS considers:  (1) the severity of the offense; (2) when the offense occurred; and (3) any other information that CMS deems relevant to its determination.  *Id*. §§ 422.2, 423.100.

An individual, whether or not enrolled in Medicare, who is included in the preclusion list because of a felony conviction will remain on the preclusion list for a 10-year period, beginning on the date of the felony conviction, unless CMS determines that a shorter period is warranted.  42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).  To determine whether a shorter preclusion period is warranted, CMS considers:  (1) the severity of the offense; (2) when the offense occurred; and (3) any other information that CMS deems relevant to its determination.  *Id*. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).  CMS must notify an individual in writing of the decision to put the individual on the preclusion list, the basis for that decision, and the right to appeal it.  *Id*. §§ 422.222(a)(2)(i), 423.120(c)(6)(v)(A).  CMS has discretion not to include a particular individual on (or remove the individual from) the preclusion list if CMS determines that exceptional circumstances exist regarding beneficiary access to items, services, or drugs, by considering the degree to which access is impaired and other evidence CMS deems relevant.  *Id*. §§ 422.222(a)(6), 423.120(c)(6)(vi).

A supplier whose application to enroll (or to renew enrollment) in Medicare has been denied is entitled to a hearing.  Act § 1866(j)(8).  The denial of enrollment is an appealable “initial determination.”  42 C.F.R. § 498.3(a)(1), (b)(17).  The supplier may request reconsideration of the initial determination and, if dissatisfied with the reconsidered (or revised reconsidered) determination, may request a hearing before an ALJ.  *Id*. §§ 498.5(*l*)(1), 498.22, 498.40.  A party dissatisfied with the ALJ’s decision may seek Board review of that decision.  *Id*. § 498.80.

The decision to put an individual on the preclusion list is also an appealable “initial determination.”  42 C.F.R. §§ 498.3(b)(20), 498.5(n)(1)(i), 422.222(a)(2)(i), 423.120(c)(6)(v)(A).  A right to a hearing before an ALJ on a reconsidered (or revised reconsidered) determination is available.  *Id*. § 498.5(n)(2).  The last level of administrative review is available through an appeal of the ALJ’s decision to the Board.  *Id*. § 498.5(n)(3).

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Case Background and Procedural History

Petitioner is a physician in New Jersey.  CMS Ex. 1, at 1; CMS Ex. 2, at 1.  By Information filed with the United States District Court for the District of New Jersey (court) on February 4, 2015, the United States Attorney for the District of New Jersey charged Petitioner with taking, “[f]rom at least in or about October 2005 through in or about March 2013,” bribes totaling approximately $189,175 in exchange for referring blood specimens to Biodiagnostic Laboratory Services, LLC, a clinical laboratory, which used those specimens to submit claims to, and received reimbursement from, Medicare and private payors.  CMS Ex. 2, at 1, 3-4.

On February 4, 2015, Petitioner pleaded guilty to commercial bribery in violation of 18 U.S.C. §§ 2 and 1952(a)(3).  CMS Ex. 2, at 4; CMS Ex. 3, at 1; CMS Ex. 4.  The court accepted the guilty plea that day.  CMS Ex. 4.  The court sentenced Petitioner to 21 months of incarceration5 and one year of probation and ordered Petitioner to undergo mental health treatment and pay a $10,000 fine.  CMS Ex. 3, at 2-3, 7.  Petitioner paid a criminal forfeiture money judgment of $207,500.  CMS Ex. 6.  The court entered judgment on July 22, 2015.  CMS Ex. 3, at 1 (Judgment in a Criminal Case, reflecting commission of “racketeering – commercial bribery” during the period “10/2005-3/2013” and bearing the judge’s signature on July 22, 2015).6

By initial determination dated July 27, 2015, Novitas Solutions, Inc. (Novitas), a CMS contractor, revoked Petitioner’s Medicare enrollment and billing privileges, effective July 22, 2015.  CMS Ex. 7, at 1 (stating “42 C.F.R. § 424.535(a)(3) – Felony Plea or Conviction” (Novitas’s emphasis omitted) as the “reason” for revocation).  Novitas

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imposed a three-year re-enrollment bar.7  *Id*. at 2.  Petitioner did not request reconsideration, making this revocation determination administratively final.  P. Ex. 2, at 3.

By notice dated January 29, 2016, the Inspector General of the United States Department of Health and Human Services (I.G.) excluded Petitioner from participation in all federal health care programs for a statutory minimum of five years, effective 20 days from the date of the notice, pursuant to two statutory provisions:

section 1128(a)(1) of the Act, based on a conviction, as defined in section 1128(i) of the Act, “in the United States District Court for the District of New Jersey, of a criminal offense related to the delivery of an item or service under Medicare or a State health care program”; and

section 1128(a)(3) of the Act, based on the conviction, as defined in section 1128(i) of the Act, “of a criminal offense,” a felony, “related to the fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service[.]”

CMS Ex. 8, at 1; *see* Act § 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a) (providing that the mandatory minimum exclusion period for an exclusion imposed under section 1128(a) is five years), 1001.2002(b) (stating that the exclusion takes effect 20 days from the date of the I.G.’s exclusion notice).

By “Notice of Disqualification” dated February 24, 2016, the New Jersey Office of the State Comptroller, Medicaid Fraud Division (Comptroller) disqualified Petitioner from participation in the New Jersey Medical Assistance and Health Services program (Medicaid) and other state health care programs, effective March 24, 2016, based on the I.G.’s exclusion.  CMS Ex. 9, at 1.

By notice dated February 25, 2016, the United States Office of Personnel Management (OPM) debarred Petitioner from participating in the Federal Employees Health Benefits Program (FEHBP) effective March 31, 2016, based on the I.G. exclusion.  CMS Ex. 10, at 1 (citing 5 U.S.C. § 8902a(b)(5) and 5 C.F.R. § 890.1004(b); stating that if Petitioner does not “contest” the debarment, debarment would be “finalize[d]” on March 31, 2016).

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Petitioner represented that the New Jersey Board of Medical Examiners terminated Petitioner’s medical license and that the United States Department of Justice, Drug Enforcement Administration (DEA) terminated Petitioner’s Controlled Dangerous Substance registration.  *See* ALJ Decision at 5-6 (citing P. Br. at 3).8

By letter dated July 22, 2021, the I.G. approved Petitioner’s “request for reinstatement” of “eligibility to participate as a provider of services covered by [Medicare],” effective that day.  P. Ex. 7, at 1.  By notice dated August 19, 2021, OPM informed Petitioner that debarment from participation in FEHBP, which took effect on March 31, 2016, was “terminated” effective July 22, 2021, the date of the I.G.’s reinstatement determination.  CMS Ex. 11, at 1.9

Upon receipt of the I.G.’s notice of eligibility to resume participation in federal health care programs, Petitioner submitted a Medicare enrollment application to Novitas.  CMS Ex. 12; P. Ex. 9.  Petitioner disclosed, among other things, the 2015 felony conviction.  CMS Ex. 12 (application, submitted electronically and received on September 8, 2021), at 1, 3; P. Ex. 9, at 2-3.

By initial determination dated September 21, 2021, Novitas denied enrollment based on the “February 4, 2015, felony conviction” for “Racketeering – Commercial Bribery,” pursuant to 42 C.F.R. § 424.530(a)(3), and stated Petitioner was being placed on the preclusion list.  CMS Ex. 13, at 1*.*  Novitas stated that “CMS deem[ed]” the conviction “detrimental to the best interests of the Medicare program.”  *Id*.  Novitas also informed

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Petitioner that while Petitioner is on the preclusion list, any claims Petitioner submits for services provided to Medicare Advantage plan enrollees and any pharmacy claims Petitioner submits for drugs prescribed for Part D plan enrollees may be rejected or denied.  *Id*. at 1-2.  Novitas did not state how long Petitioner would be on the preclusion list.  Petitioner requested reconsideration.  CMS Ex. 14.

CMS issued an unfavorable reconsidered determination on January 25, 2022.  P. Ex. 2.  Noting the I.G. had excluded Petitioner under sections 1128(a)(1) and (a)(3) of the Act based on the 2015 felony conviction, CMS stated that the offense of which Petitioner was convicted was “*per se detrimental* to the Medicare program and its beneficiaries.”  *Id*. at 6 (CMS’s emphasis).  However, CMS went on to explain why it deemed the offense detrimental to the program and beneficiaries.  *Id*. at 7.  It explained its rationale for putting Petitioner on the preclusion list for 10 years.  *Id*. at 8-10 (citing preclusion list regulations and stating that those authorities “allow[ ] CMS to include [Petitioner] on the CMS Preclusion List for 10 years from the date of his conviction”).  It upheld the denial of enrollment based on the conviction, which “occurred within the preceding 10 years.”  *Id*. at 10.

Petitioner requested a hearing.  The ALJ admitted all exhibits submitted by the parties (CMS Exs. 1-14; P. Exs. 1-10) in the absence of any objection by either party to the opposing party’s exhibits.  ALJ Decision at 2, 2 n.1.  Each party moved for summary judgment in its favor.  *Id*. at 2.  The ALJ did not decide the case on summary judgment, and instead issued a decision based on the written record, finding an in-person hearing unnecessary since neither party identified and submitted the written direct testimony of anyone who would then be subject to cross-examination at hearing.  *See id*. (“CMS’s motion for summary judgment is denied as moot.”); *id*. at 2 n.2.

On October 27, 2022, the ALJ issued an amended decision, based on the written record, concluding that CMS lawfully denied Petitioner’s enrollment based on Petitioner’s 2015 felony conviction and lawfully included Petitioner on the preclusion list based on that conviction.  ALJ Decision at 1, 6-16.  The ALJ further found, without objection from CMS, that the date of Petitioner’s felony conviction was February 4, 2015, the date that the court accepted Petitioner’s guilty plea.  *Id*. at 1, 9; *see*42 C.F.R. § 1001.2 (paragraph (c) under the definition of “*Convicted*”).  The ALJ concluded that Petitioner would remain on the preclusion list from January 25, 2022 (the date of CMS’s reconsidered

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determination) through February 3, 2025 (10 years from the date of Petitioner’s conviction).  ALJ Decision at 16.10

We address the ALJ’s findings, conclusions, and rationale in more detail below.

Board Proceedings and Summary of the Parties’ Arguments

Petitioner timely appealed the ALJ Decision to the Board in accordance with 42 C.F.R. §§ 498.80 and 498.82.11  Petitioner urges the Board to reverse the ALJ Decision because, Petitioner says, it is legally erroneous and an abuse of discretion.  Request for Review (RR) at 2.  Petitioner contends that denying enrollment and putting Petitioner on the preclusion list under the circumstances of this case is punitive.  *Id*. at 5, 14.  Petitioner asserts the ALJ failed to recognize that in denying enrollment in 2021, CMS (through its contractor) violated “the one-year limitation on reopening CMS’s initial determination,” meaning that, in 2021, CMS improperly reopened the 2015 revocation decision.  *Id*. at 2, 7-11.  Petitioner also argues that the ALJ misapplied 42 C.F.R. § 424.530(a)(3)(ii), which “speaks to repeat offenders,” in upholding the decision to put Petitioner, who is not a “repeat offender,” on the preclusion list, thereby continuing to “exclude” him.  *Id*. at 2, 6, 12.  And, Petitioner says, placing Petitioner on the preclusion list constitutes an “impermissible retroactive application” of the preclusion list regulations, which were “adopted long after all the relevant facts” (meaning the events surrounding the 2015 felony conviction that led to multiple adverse determinations, including the revocation of enrollment and I.G. exclusion).  *Id*. at 2, 12-17.

CMS urges the Board to affirm the ALJ Decision because Petitioner raises no dispute about the ALJ’s fact-finding and identifies no legal error.  CMS Resp. Br. at 1.  CMS argues that the ALJ correctly upheld the decision to deny enrollment under 42 C.F.R. § 424.530(a)(3) (*id*. at 3-4) and to include Petitioner on the preclusion list for 10 years from the date of the conviction (*id*. at 9-12); that Petitioner’s arguments reflect a misunderstanding of the authorities and are not supported by Board decisions or are meritless (*id*. at 4-8, 12-14); and that the request for a reversal of the ALJ Decision

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amounts to a plea for equitable relief, which the ALJ properly determined an ALJ could not provide, and which the Board likewise cannot provide (*id*. at 15).

Petitioner asked for an opportunity to orally present arguments to the Board, but without stating a basis for that request.  RR at 1.  Under the Board’s guidelines for this type of appeal, which were provided to the parties with the ALJ Decision, a party wishing to present oral argument should request it no later than the time for filing the party’s last submission (meaning, for Petitioner, the reply brief) and state the purpose of the requested appearance.  *See* *Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s or Supplier’s Enrollment in the Medicare Program* (*Guidelines*), “Development of the Record on Appeal,” ¶ (g), available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html; Nov. 28, 2022 Acknowledgment Letter at 2.  However, Petitioner did not use the opportunity given to submit a reply brief in which Petitioner could have stated the purpose of oral argument and the issues Petitioner wished to address during it.  Petitioner did not ask for more time to submit a reply brief or otherwise communicate further with the Board about an opportunity to present additional argument, orally or in writing.  Accordingly, on February 8, 2023, the Presiding Board Member notified the parties that the Board would proceed to decision based on the parties’ written arguments.

Standard of Review

In cases proceeding under 42 C.F.R. Part 498, such as this case, 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’s decision is erroneous.  *See Duke Ahn, M.D.*, DAB No. 3093, at 7 (2023); *Guidelines*, “Completion of the Review Process,” ¶ (c).

Analysis

As we explain below in sections I and II, CMS lawfully denied Petitioner’s enrollment application under 42 C.F.R. § 424.530(a)(3) and lawfully placed Petitioner on the preclusion list for 10 years.  In section III, we explain why CMS’s decision to deny enrollment and to put Petitioner on the preclusion list is a remedial, not punitive, action.  In section IV, we reject Petitioner’s argument that the 2021 denial of enrollment was an impermissible “reopening” of the 2015 revocation decision.  In sections V and VI, we explain why we reject Petitioner’s arguments that CMS and the ALJ misapplied section 424.530(a)(3)(ii) and that application of the preclusion list regulations amounted to an impermissible retroactive application of those regulations.

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***I.     The ALJ’s determination to uphold the denial of enrollment under 42 C.F.R. § 424.530(a)(3) is supported by substantial evidence and free of legal error.***

CMS “may” deny a prospective supplier’s application to enroll in Medicare if that individual “was, within the preceding 10 years, convicted (as that term is defined in [section] 1001.2) of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.”  42 C.F.R. § 424.530(a)(3).  The decision whether to deny enrollment when any basis or bases for denial is (or are) established is one of discretion by CMS (and its contractor).  *See* *Brian K. Ellefsen, DO*, DAB No. 2626, at 4, 7 (2015) (cited in ALJ Decision at 7 n.6); *Letantia Bussell, M.D.*, DAB No. 2196, at 12 (2008) (recognizing that section 1842(h)(8) of the Act authorized the Secretary to decide whether an offense is detrimental to the best interests of the program and, by delegation of the Secretary’s authority to CMS, CMS makes such a determination in deciding whether to revoke enrollment); *Ronald Paul Belin, DPM*, DAB No. 2629, at 5 (2015) (“[W]here CMS is legally authorized to deny an enrollment application, neither an ALJ nor the Board itself is empowered to substitute for CMS or its contractor in determining *how* to exercise its discretion.” (underlining replaced with italics)).

Petitioner did not dispute, and the ALJ found, that “on February 4, 2015, Petitioner pleaded guilty to one felony count of Commercial Bribery.”  ALJ Decision at 7 (citing CMS Ex. 4).  The court accepted the plea that day.  CMS Ex. 4.  Petitioner was thus “convicted” on February 4, 2015, consistent with 42 C.F.R. § 1001.2.  In its September 21, 2021 initial determination denying the 2021 enrollment application under section 424.530(a)(3), less than seven years after the conviction, Novitas12 stated that CMS considered the conviction detrimental to the best interests of the Medicare program and its beneficiaries.  CMS Ex. 13, at 1.  Agreeing with Novitas, on reconsideration on January 25, 2022, P. Ex. 2, CMS explained in detail why it considered the conviction an impediment to permitting Petitioner to re-enroll in Medicare.  CMS wrote:

[Petitioner] committed Commercial Bribery related to the delivery of health care items and services . . . .  CMS considers such an act to be a severe threat to the safety of its Medicare beneficiaries.  [Petitioner] admitted that he accepted bribes to refer patients for blood specimen tests to Bio Diagnostics LLC for a period from October 2005 through April 2013.  [Petitioner’s] conduct calls into question his integrity in treating patients and demonstrates his reckless disregard for the health and safety of

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Medicare beneficiaries.  In committing the offense, [Petitioner] prioritized his financial interest over the health and safety interests of his patients.  This type of felonious behavior not only puts the health and safety of Medicare beneficiaries at risk, but also forms a threat to the integrity of the Medicare Trust funds.

[Petitioner’s] conduct not only resulted in [Petitioner] being excluded by the [I.G.], but also led to an imposition of penalties by various governmental agencies . . . .  These actions by other agencies are further evidence that [Petitioner’s] felony conviction is serious in nature and present[s] a threat to patients’ safety.

*Id*. at 7.  The ALJ noted the I.G.’s decision to exclude Petitioner under sections 1128(a)(1) and (a)(3) of the Act, as well as CMS’s assessment of the circumstances surrounding Petitioner’s felony conviction and its determination not to re-enroll Petitioner.  *See*ALJ Decision at 10 (“CMS exercised its discretion to determine that Petitioner’s felony conviction for commercial bribery was per se detrimental to the best interests of the Medicare program and its beneficiaries.”) (ALJ’s bolding and italics omitted), 11 (quoting portions of CMS’s rationale in Petitioner’s exhibit 2, page 7).

The record thus establishes a conviction of felony commercial bribery that CMS determined is detrimental to the best interests of Medicare and its beneficiaries.  That conviction occurred within the 10 years preceding the decision to deny enrollment.  ALJ Decision at 7 (“Petitioner does not contest . . . that [the] felony commercial bribery conviction occurred within the ten years preceding [the] enrollment application[.]”).

The ALJ also discussed CMS’s identification of certain classes or categories of felony offenses deemed per se, or presumptively, detrimental to the best interests of the Medicare program, which the ALJ had no discretion to disregard.  ALJ Decision at 4 (citing *Bussell*, DAB No. 2196, at 9, 13 n.13), 10 (citing *John Hartman, D.O.*, DAB No. 2564, at 4 (2014)).13  One such class or category of offenses is “[a]ny felonies that would

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result in mandatory exclusion under section 1128(a) of the Act.”  42 C.F.R. § 424.530(a)(3)(i)(D); *see* ALJ Decision at 10 (discussing “per se” offense category in section 424.530(a)(3)(i)(D) and stating that “[t]he mere existence of a mandatory exclusion for a felony conviction occurring within the ten years preceding an enrollment application is a sufficient basis for denial of enrollment”).

Felony commercial bribery is encompassed within the “per se” category of qualifying offenses in 42 C.F.R. § 424.530(a)(3)(i)(D).  In 2016, the I.G. excluded Petitioner from participation in federal health care programs under the mandatory exclusion provisions in sections 1128(a)(1) and 1128(a)(3) of the Act, based on the same felony conviction.14  CMS Ex. 8.  CMS expressly addressed the I.G.’s exclusion in its reconsidered determination.  *See*P. Ex. 2, at 6 (discussing conviction “of a felony offense identified in [sections] 1128(a)(1) and (a)(3) of the Act”).  Thus, Petitioner was convicted of a felony that “would result in,” and in fact resulted in, Petitioner’s “mandatory exclusion under section 1128(a) of the Act.”  42 C.F.R. § 424.530(a)(3)(i)(D).

Where, as here, the felony offense in question is one CMS identified by regulation as per se, or presumptively, detrimental to Medicare, CMS is not required to make a case-specific determination of whether it is detrimental to Medicare.  *See John A. Hartman, D.O.*, DAB No. 2911, at 14-17 (2018) (concluding, in a case arising from denial of re-enrollment under section 424.530(a)(3) and where, as here, enrollment was previously revoked based on the same qualifying conviction, *see* DAB No. 2564, that CMS was not required to make a case-specific determination whether the offense was detrimental to Medicare when the offense was per se detrimental); *Pennsylvania Physicians, P.C.*, DAB No. 2980, at 7 (2019) (citing *Hartman*, DAB No. 2911, at 14-15); *Cornelius M. Donohue, DPM*, DAB No. 2888, at 6 (2018) (“[N]o [case-specific] determination is required if . . . the supplier’s offense falls within one of the categories of crimes that CMS has, by rulemaking (in section 424.535(a)(3)), determined to be detrimental to Medicare.”).

Petitioner argues that “there was no evidence of harm to patients or financial harm to the Medicare program” from Petitioner’s crime, and that the ALJ’s contrary finding “was plain error.”  RR at 11.  Even were we to accept for the moment the bare assertions that Petitioner is no longer “a detriment to patient care and not a financial detriment to the Medicare program” and does not pose a risk of harm to patients or the program, *id*. at 6, 11, Petitioner could not prevail.  Petitioner’s offense was detrimental per se to Medicare, and therefore facially warranted a denial of Petitioner’s enrollment application, because Petitioner (1) was convicted of a felony offense within 10 years preceding the denial of enrollment; and (2) that conviction was the basis for the I.G.’s exclusion under section 1128(a) of the Act.  Accordingly, the ALJ did not err in concluding that CMS, in its

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exercise of discretion, lawfully denied enrollment under section 424.530(a)(3).  *See* ALJ Decision at 6, 9-10 (conclusions numbered 1, 2, 3).

Although here, CMS need not have laid out a case-specific analysis to deny enrollment, CMS’s rationale for that denial only serves to strengthen what is unquestionably an established basis for denial.  As the ALJ noted, CMS’s identification of certain classes or categories of qualifying felonies in 42 C.F.R. § 424.530(a)(3)(i) does not mean that *only* those classes or categories of felonies or the specified exemplar offenses could support a denial of enrollment under section 424.530(a)(3).  *See* ALJ Decision at 4 (citing *Abdul Razzaque Ahmed, M.D.*, DAB No. 2261, at 11 (2009), *aff’d*,*Ahmed v. Sebelius*, 710 F. Supp. 2d 167 (D. Mass. 2010)).  “[E]ven if a felony offense is not specifically listed or similar to those listed in the regulations, CMS may determine, on a case-by-case basis, that a felony conviction is detrimental to the best interests of the Medicare program and program beneficiaries.”  ALJ Decision at 5 (citing *Brenda Lee Jackson*, DAB No. 2903, at 8 (2018)*; Fady Fayad, M.D.*, DAB No. 2266, at 16-17 (2009), *aff’d*, *Fayad v. Sebelius*, 803 F. Supp. 2d 699, 704 (E.D. Mich. 2011)).  Here, even assuming Petitioner’s felony offense of commercial bribery is not detrimental “per se,” CMS had authority to and did decide that it was detrimental to Medicare because, among other things, Petitioner’s acceptance of bribes in exchange for referrals showed reckless disregard and lack of integrity in prioritizing personal financial interests over the welfare of Medicare beneficiaries, put the program and beneficiaries at risk, and “form[ed] a threat to the integrity of the Medicare Trust Funds.”  P. Ex. 2, at 7.

Petitioner asserts that the I.G.’s 2021 eligibility determination shows that the I.G. “recognized” that Petitioner was not detrimental to the Medicare program, RR at 10-11, but we reject Petitioner’s characterization of the I.G.’s eligibility determination.  The I.G. deemed Petitioner eligible to resume participation but did not set out its reasons for that determination.  In any case, the reasons for the I.G.’s eligibility determination are beyond the scope of the issue at hand, which is whether CMS had a lawful basis to deny enrollment, and it did have such a lawful basis.  CMS was not obliged, as Petitioner appears to believe or imply, to refrain from denying re-enrollment based on an eligibility determination made by the I.G.  CMS conveyed as much when it stated that the I.G.’s “reinstatement . . . of eligibility” did “not negate” the felony conviction that occurred within the preceding 10 years, and that the I.G.’s authority to exclude is “separate and distinct” from CMS’s authority over enrollment matters.  P. Ex. 2, at 6-7.  The ALJ acknowledged the I.G.’s eligibility determination but concluded that CMS lawfully denied enrollment.  ALJ Decision at 6; *see* *Kanowitz*, DAB No. 2942, at 6 (holding that I.G.’s reinstatement determination has “no bearing” on supplier’s appeal of enrollment denial and does not permit the Board to overturn CMS’s exercise of discretion to deny enrollment).

We note that the ALJ discussed CMS’s rationale for its determination that Petitioner’s felonious conduct posed a risk to the program and the ALJ expressly found CMS’s

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determination reasonable.  *See*ALJ Decision at 11.  However, Petitioner overlooks that an ALJ need not have made any “findings” about program risk; CMS had a lawful basis for denying enrollment regardless of any case-specific determination about the risk Petitioner poses to the program.  CMS could have lawfully denied enrollment based on the I.G.’s exclusion alone.  *See* 42 C.F.R. § 424.530(a)(3)(i)(D).  Arguments that Petitioner caused no harm to any patient or the program, and that all tests ordered were medically necessary and appropriate, amount to a fruitless attempt to undermine the legal basis for enrollment denial.

The Board’s and the ALJ’s task is to determine whether CMS has established a basis for the denial of enrollment.  If CMS’s denial is grounded in law and fact, as it is here, then the ALJ and the Board must uphold that denial as lawful, and they may not look behind the denial, substituting for CMS or its contractor on how to exercise discretion.  *See Ellefsen*, DAB No. 2626, at 7; *Pennsylvania Physicians*, DAB No. 2980, at 13 (“The Board is not authorized to review any exercise or non-exercise of discretion by CMS.”).

Accordingly, the ALJ correctly determined the ALJ could not reverse the lawful denial of enrollment on equity grounds.  ALJ Decision at 11 (“To the extent that Petitioner has raised a plea for equitable relief, I am unable to grant such relief.”) (citations omitted), 15  (“CMS alone is authorized to weigh equitable concerns against the risks to the Medicare program.”).  Nor can the Board.  *Kanowitz*, DAB No. 2942, at 7; *Hartman*, DAB No. 2911, at 21 (cited in ALJ Decision at 15).  We therefore cannot order CMS to reverse its denial based on Petitioner’s urging us to do so because “fairness and equity would permit” Petitioner “to resume” “serving Medicare and Medicaid patients.”  RR at 6, 11 (stating that CMS “does not need to try to impose an additional exclusion at this time”).

***II.     The ALJ’s decision to uphold Petitioner’s inclusion in the preclusion list for 10 years is supported by substantial evidence and free of legal error.***

Pursuant to 42 C.F.R. §§ 422.2 and 423.100, an individual who, regardless of whether the individual is or was 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 may be included in the preclusion list.  ALJ Decision at 4, 8 n.7.  An individual who is included in the preclusion list based on a qualifying felony conviction must remain on the preclusion list for a 10-year period, beginning on the date of the conviction, unless CMS decides to shorten the period after considering the severity of the offense, when it occurred, and any other relevant information.  *See* *id*. at 4, 9; 42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).  CMS also retains discretion not to put an individual on, or to remove the individual from, the preclusion list.  42 C.F.R. §§ 422.222(a)(6), 423.120(c)(6)(vi).

As the ALJ found and as detailed earlier, the record establishes a felony conviction for commercial bribery, in 2015, i.e., within the previous 10 years of the decision to include

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Petitioner in the preclusion list (and deny enrollment).  CMS explained that the felony conviction for commercial bribery was detrimental to the program and its beneficiaries because commercial bribery was a “severe” “health care related” offense that “direct[ly] result[ed] [from]” Petitioner’s lapses in “integrity,” and “ethics and professionalism.”  P. Ex. 2, at 8-9.  Far from evidencing “the use of good judgment” necessary to ensure “[t]he safety of beneficiaries” that “is of paramount concern to CMS,” Petitioner “display[ed] dishonest behavior,” “exercised poor judgment,” and “disregard[ed]” the law.  *Id*.  CMS also noted that, although Petitioner’s involvement in the bribery scheme “concluded several years ago,” Petitioner was involved “for a considerably long period of time.”  *Id*. at 9.  CMS moreover explained that evidence that other “agencies” took adverse actions against Petitioner based on the conduct that culminated in a felony conviction was “extremely relevant” to CMS’s determining whether to put Petitioner on the preclusion list.  *Id*.  Putting Petitioner on the preclusion list, CMS said, was necessary to ensure the safety of beneficiaries and the integrity of the program, especially since the conviction was “related to accepting bribes in return for patient blood specimen tests.”  *Id*.  CMS went on to write:  “[P]ayment under the Medicare program is made for claims submitted in a manner that relies upon the trustworthiness and best judgment of our Medicare partners.  [Petitioner’s] felonious behavior indicates to CMS that the Medicare Trust Funds may be at risk if [Petitioner] is allowed to participate in the Medicare program.”  *Id*.; *see*ALJ Decision at 11 (conclusion 4), 13-14 (discussing CMS’s rationale).  Moreover, as discussed above, the felony offense of which Petitioner was convicted is deemed “per se” detrimental to the Medicare program.

The requirements for placing Petitioner on the preclusion list were met, and the ALJ did not err in upholding CMS’s determination.  However, a brief discussion on the period during which Petitioner is to remain on the preclusion list is appropriate.  The ALJ wrote:

Although CMS did not indicate how long Petitioner would remain on the preclusion list, the regulations provide that Petitioner will be on the list for a ten-year period, beginning on the date of his felony conviction, unless CMS determines that a shorter length of time is warranted . . . . Neither party offered any arguments or evidence to show that CMS determined the duration to be less than ten years; accordingly, Petitioner will be on the preclusion list through February 3, 2025, ten years from the date of his felony conviction.

ALJ Decision at 14 (citations omitted).  Novitas did not specify for how long Petitioner would remain on the preclusion list.  CMS Ex. 13.  On reconsideration, CMS did not explicitly state that Petitioner would be on the preclusion list for 10 years from the conviction date; however, CMS specifically rejected Petitioner’s argument that Petitioner could not be placed on the preclusion list for 10 years.  P. Ex. 2, at 9-10.  Still further, CMS addressed the three factors for determining the appropriate length of the duration of time in which Petitioner would remain on the preclusion list, and then stated that the

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regulations authorize CMS to include Petitioner in the preclusion list for 10 years from the date of the conviction.  *See id*. at 8-10.  Although CMS could have been clearer about exactly how long Petitioner would remain on the preclusion list, the parties and the ALJ reasonably understood CMS to have placed Petitioner on the preclusion list for 10 years and there is now no dispute about this issue.

If, as here, CMS includes an individual in 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 CMS decided not to do here).  *See* ALJ Decision at 4; 42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).  Both parties agreed that Petitioner was convicted on February 4, 2015, and the ALJ’s amended decision reflects that date as the date of the conviction.  Accordingly, the 10-year preclusion period began on the date of the conviction, February 4, 2015, and the last day on which Petitioner would stay on the preclusion list is, as the ALJ stated, February 3, 2025.

As for when Petitioner was *added* to the preclusion list, the ALJ noted that CMS determined Petitioner would be included in the list “effective January 25, 2022, the date of the reconsidered determination.”  ALJ Decision at 14.  Similarly, in the conclusion paragraph, the ALJ stated in part:  “[T]he inclusion of Petitioner on the CMS Preclusion List, effective January 25, 2022, through February 3, 2025, [is] affirmed.”  *Id*. at 16.  Where, as here, an individual filed a request for reconsideration of the determination to put the individual on the preclusion list under 42 C.F.R. § 498.5(n)(1), the individual will be “added to the preclusion list effective on the date on which CMS . . . denie[d] the individual’s . . . reconsideration.”  42 C.F.R. §§ 422.222(a)(3)(i)(B), 423.120(c)(6)(v)(C)(1)(ii) (similar quoted language).

Thus, the ALJ’s decision to uphold Petitioner’s inclusion in the preclusion list for 10 years is supported by substantial evidence and free of legal error.

***III.     CMS’s action is a remedial measure to safeguard the Medicare program, not a penal measure to punish Petitioner.***

Petitioner expresses a belief that CMS is “again” imposing “punish[ment]” by putting Petitioner on the preclusion list “more than seven years after all the events that gave rise to this matter occurred.”  RR at 5; *id*. at 14 (asserting Petitioner was “already punished”).  Petitioner refers to gradual recovery toward resuming [Petitioner’s] practice after getting the medical license and DEA and controlled drug substance registrations reinstated, the expiration of the three-year re-enrollment bar, termination of OPM’s debarment, and being deemed eligible to resume participation in federal health care programs after “serv[ing]” a five-year I.G. exclusion.  *See id*. at 3-6.

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Petitioner’s arguments asserting unfair punishment are mistaken.  The process for screening and enrolling health care professionals in Medicare is necessary to carry out the purposes of the program, including the primary purpose of promoting beneficiary access to high quality medical care.  *See Fady Fayad, M.D.*, DAB No. 2266, at 19 (2009) (citations omitted).  The degree to which beneficiaries enjoy access to quality care depends in part on “Medicare’s fiscal integrity and the integrity and professional qualifications of health care practitioners and entities enrolled in the program,” which the enrollment process is designed to ensure.  *Id.*The enrollment rules are grounded in “a relationship between fulfilling the requirements stipulated in [applicable authorities], 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.”  Final Rule, 71 Fed. Reg. 20,754, 20,758 (Apr. 21, 2006).  The rules exist to protect the Medicare Trust Fund and beneficiaries from “fraudulent and abusive providers and suppliers.”  *Id*. at 20,773-74.

The preclusion list rules also are designed to serve the same important purpose.  The very language used in the regulations conveys that:  an individual who was convicted, within the previous 10 years, of a felony that “CMS deems detrimental to the best interests of the Medicare program” may be included in the preclusion list.  42 C.F.R. §§ 422.2, 423.100.  The factors CMS considers in determining whether a felony offense is detrimental to the program and whether to impose a preclusion period shorter than 10 years (e.g., severity and recency of the offense) indicate the preclusion list rules’ remedial, protective purpose.   *See* *id*. §§ 422.2, 422.222(a)(5)(iii), 423.100, 423.120(c)(6)(vii)(C); 82 Fed. Reg. 56,336, 56,443 (proposed Nov. 28, 2017) (“We have an obligation to protect the Trust Funds from providers and suppliers that engage in activities that could threaten the Medicare program, its beneficiaries, and the taxpayers.”).  Also, CMS’s discretionary authority not to include an individual in, or to remove an individual from, the preclusion list, is indicative of CMS’s need to assess the level and likelihood of risk that an individual’s resumption of enrollment in the program could pose to the integrity of the program.   *See*42 C.F.R. §§ 422.222(a)(6), 423.120(c)(6)(vi); Final Rule, 83 Fed. Reg. 16,440, 16,641 (Apr. 16, 2018) (explaining CMS’s determination that it could best safeguard the program by “concentrat[ing]” its “efforts on preventing Part D coverage of prescriptions written by prescribers who pose an elevated risk to Medicare beneficiaries and the taxpayer-funded Trust Funds” by using the preclusion list).

Accordingly, when CMS does decide to keep an individual out of the program, as CMS did here with Petitioner, that action is “a remedial measure whose purpose is not to punish [Petitioner] for past misconduct but to protect the program and its beneficiaries from fraud, abuse, and other harm that might arise in the future.”  *Robert F. Tzeng, M.D.*, DAB No. 2169, at 14 (2008); *see also* *Lilia Gorovits, M.D., P.C.*, DAB No. 2985, at 17-18 (2020) (holding that CMS’s and Novitas’ reopening and revising of an initial determination to revoke, after petitioner requested reconsideration of the initial

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determination, to add a ground for revocation “did not act to punish [p]etitioner’s owner but [instead] protect[ed] the Medicare program and its beneficiaries from a supplier that they determined posed a continued risk to the program”), *aff’d*, No. 20-1850, 2021 WL 1962903 (E.D. Pa. May 17, 2021); *Donohue*, DAB No. 2888, at 8-9 (rejecting argument that revocation was punishment because it amounted to an improper expansion of the criminal penalties, fines, and restitution imposed for the conviction on which revocation was based).

***IV.     The 2021 denial of Petitioner’s enrollment application was not a reopening under 42 C.F.R. § 498.30 of the 2015 initial determination revoking Petitioner’s enrollment, and Petitioner’s arguments mistakenly conflate distinct remedial measures.***

With exceptions not relevant here, 42 C.F.R. § 498.30, captioned “Limitation on reopening,” provides (in part) that “CMS or the [I.G.], as appropriate, may on its own initiative, reopen any . . . initial or reconsidered determination, within 12 months after the date of notice of the initial determination.”  Section 498.32 sets out the rules for notifying the affected party of the reopening and of any revision of the reopened determination.

Relying on 42 C.F.R. § 498.30, Petitioner argued below that the 2021 denial of enrollment violated the one-year limitation on reopening and revision of the 2015 initial determination revoking enrollment.  ALJ Decision at 7.

In rejecting Petitioner’s arguments, the ALJ distinguished Novitas’s 2015 revocation of enrollment from Novitas’s 2021 denial of enrollment (with which CMS agreed on reconsideration in 2022) as different actions authorized by different regulations in Part 424, subpart P.  *See*ALJ Decision at 7-8.  The ALJ also noted, correctly, that the 2021 enrollment application was a new application because Petitioner had “no status” with Medicare upon revocation, “until Petitioner met the requirements to re-enroll . . . .”  *Id*. at 8.  The ALJ wrote:

Petitioner seemingly argues that because both the revocation and reenrollment determinations were based on the same conviction, the initial determination is the revocation issued on July [27], 2015, and any later action by CMS regarding the same conviction, is an attempt to reopen the initial revocation determination.  However, Petitioner filed an application to “reactivate” his enrollment in the Medicare program on September 8, 2021.  CMS Ex. 12 at 1.  The application was treated as a new enrollment application because Petitioner was not enrolled in the Medicare program due to the previous revocation.  CMS Ex. 12.  As such, Petitioner’s application was subject to denial under section 424.530(a)(3), and not to revocation under section 424.535(a)(3).  The regulations do not prohibit CMS from denying a reenrollment application after an applicant was

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previously revoked.  The denial of Petitioner’s enrollment in September 2021 is not construed as an extension of, or a “re-opening” of the July 2015 initial determination to revoke Petitioner’s enrollment.  The regulations prohibit CMS from re-opening the July 27, 2015 initial determination revoking Petitioner’s Medicare enrollment.  42 C.F.R. § 498.30.  Instead, CMS issued a new initial determination on September 21, 2021 and denied Petitioner’s enrollment application under section 424.530(a)(3).  *Compare* CMS Ex. 13 and P. Ex. 1 *with* CMS Ex. 7 and P. Ex. 4.

*Id*.

As the ALJ correctly explained, when CMS in 2015 revoked Petitioner’s enrollment, a decision Petitioner did not appeal, Petitioner no longer was a supplier in the program.  When a supplier’s billing privileges are revoked, any provider agreement in effect at the time of revocation is terminated.  *See* 42 C.F.R. § 424.535(b).  When a supplier seeks to re-establish enrollment in the Medicare program after being revoked, the supplier must “re-enroll in the Medicare program through the completion and submission of a new applicable enrollment application and applicable documentation, as a new . . . supplier, for validation by CMS.”  *Id*. § 424.535(d)(1).  The decision to revoke under section 424.535 is thus distinguishable from the decision to deny enrollment under section 424.530.  *See Dr. Robert Kanowitz*, DAB No. 2942, at 6 (2019).  When, over six years after the conviction, Petitioner applied to re-enroll, Novitas reviewed and denied the application as a new application.  *See* P. Ex. 2, at 4 n.1 (“[S]ince [Petitioner] was in a revoked status and unenrolled in Medicare, [Novitas] considered the application to be a new enrollment application and processed it accordingly.”); *Kanowitz* at 6 (stating the end of the re-enrollment bar does not result in automatic re-enrollment and that the revoked supplier must file a new application to re-enroll).

Before the Board, Petitioner nevertheless asserts the ALJ erred in not recognizing that the denial of enrollment violated section 498.30.  Petitioner maintains that section 498.30 precludes the denial of the 2021 enrollment application because CMS issued the denial years after the 2015 revocation and the 2016 I.G. exclusion, and the ALJ wrongly “ma[de] the [2015] initial determination [revoking enrollment] distinct from the [later] action to reopen it.”  RR at 7-8.  According to Petitioner, CMS exceeded its authority under the reopening rules to “impose an additional period of exclusion for the very same offense” over six years after revocation and after the expiration of the three-year re-enrollment bar imposed concurrent with revocation.  *Id*. at 7-10.  Petitioner repeatedly characterizes the 2021 enrollment application as a request to be “reactivated,” as seeking “reactivation,” and as an application to “reactivate [Petitioner’s] Medicare number.”  *Id.* at 5-6.  Petitioner further asserts that if CMS and/or the I.G. “wanted to impose a longer period of revocation, they could have done so upon the initial determinations, or they could have reopened the initial determination” to do so within 12 months, but they may not do so now.  *Id.* at 3-4, 8, 10-11.

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Petitioner appears to incorrectly assume that the process for entering and participating in Medicare as a supplier operates on a continuum, without properly distinguishing various actions that different agencies can take to affect the supplier’s ability to participate in and bill the program.  CMS (and its contractors) decide whether a supplier may enroll and maintain enrollment in Medicare, in accordance with 42 C.F.R. Part 424, subpart P.  *Victor Alvarez, M.D.*, DAB No. 2325, at 9 (2010) (“The provisions governing whether to approve or deny an enrollment application are those in Part 424, subpart P.”).  CMS revoked Petitioner’s enrollment and billing privileges based on the 2015 felony conviction and imposed a three-year re-enrollment bar, pursuant to section 424.535(c) then in effect.  *See supra*note 7.

Novitas’s 2021 decision denying Petitioner enrollment cannot be a “reopening” of the 2015 revocation of Petitioner’s enrollment and billing privileges because, as the ALJ noted, and Petitioner does not disagree, the 2015 initial determination revoking enrollment became administratively final when Petitioner did not request reconsideration of that determination.  ALJ Decision at 5 (citing 42 C.F.R. § 498.20(b)(1) (stating that “[a]n initial determination is binding unless it is . . . [r]econsidered in accordance with [section] 498.24”)); P. Ex. 2 (2022 reconsidered determination denying enrollment), at 3 (stating that Petitioner did not seek reconsideration of the 2015 revocation of billing privileges).  When Petitioner sought to re-establish enrollment in Medicare in September 2021, CMS and Novitas lawfully denied enrollment under section 424.530(a)(3), based on the same conviction, but this new initial decision was not a “reopening” of the 2015 revocation.  Instead, it was a new determination by CMS that permitting Petitioner to re-enroll would not serve the best interests of the program.

Petitioner’s use of the term “reactivation” implies that CMS’s 2021 re-enrollment denial was a revisitation of the 2015 initial decision; however, the denial did not involve “reactivation” because Petitioner’s billing privileges were revoked and not merely deactivated.  Revocation of billing privileges is distinguishable from deactivation of billing privileges.  *Willie Goffney, Jr., M.D.*, DAB No. 2763, at 3 (2017) (discussing “several ways” in which enrollment revocation and deactivation differ), *aff’d*,No. CV 17-8032 MRW, 2019 WL 13067036 (C.D. Cal. Sept. 25, 2019), *aff’d*,995 F.3d 737 (9th Cir. 2021), *cert. denied*, 142 S. Ct. 589 (2021).  A supplier whose billing privileges were deactivated could get the privileges restored (reactivated) by submitting necessary information, whereas revocation terminates a provider agreement so that the supplier is no longer enrolled and has no billing privileges.  Revocation is appealable pursuant to 42 C.F.R. Part 498, whereas deactivation is not.  *See*42 C.F.R. §§ 424.540 (deactivation), 424.535 (revocation); *George Yaplee Med. Ctr. d/b/a Triangle Eye Inst.*, DAB No. 3003, at 4 (2020); *Arkansas Health Grp. d/b/a Baptist Health Fam. Clinic Lakewood*, DAB No. 2929, at 2-3 (2019). To be clear, the 2021 initial determination was not a denial of a request to “reactivate” inactive billing privileges; instead, that determination denied Petitioner’s request to re-enroll in Medicare.

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The 2016 I.G. exclusion, too, was based on the 2015 conviction and kept Petitioner out of the Medicare program, rendering Petitioner unable to bill Medicare; however, the exclusion was broader in the sense that Petitioner was prohibited from participating in *any* federal health care program during the exclusion period.  Although “sister agencies” within the Department of Health and Human Services (HHS) as the I.G. and CMS may be, RR at 10, the decision to exclude was made not by CMS but by the I.G.  The I.G.’s exclusion and CMS’s revocation (and subsequent denial of enrollment) are separate and distinct actions made under different authorities by different HHS components even though the I.G. and CMS took their actions based on the same felony conviction and their actions kept Petitioner out of Medicare.  *See*ALJ Decision at 9 (stating the I.G. is “distinct” from CMS and issued a decision – exclusion – that is “separate” from CMS’s denial of enrollment); *Ahmed v. Sebelius*, 710 F. Supp. 2d 167, 175-76 (D. Mass. 2010) (distinguishing revocation by CMS from exclusion by the I.G.); *Dinesh Patel, M.D.*, DAB No. 2551, at 9 (2013) (distinguishing revocation from exclusion as different administrative actions by different components of HHS which are authorized under different authorities to effectuate different actions); *Fady Fayad, M.D.*, DAB No. 2266, at 12 (2009) (distinguishing section 1128 exclusion from section 424.535 revocation as “separate and distinct enforcement tools, each with its own requirements and consequences”).  CMS cannot reopen and revise the I.G.’s decision to exclude under section 1128 of the Act any more than the I.G. can reopen and revise CMS’s decision on enrollment matters within CMS’s exclusive purview under Part 424, subpart P.15

It is true that the 2015 “initial determination” revoking Petitioner’s enrollment was one that CMS *could have* reopened within one year, under section 498.30, *see*RR at 9; however, section 498.30 is not implicated because neither CMS nor Novitas reopened the 2015 decision to revoke.  Nothing in the record indicates that CMS or Novitas reopened and revised the 2015 revocation by, for instance, adding a revocation basis, *see Lilia Gorovits, M.D., P.C.*, DAB No. 2985, at 17-18 (2020) (in which the contractor reopened and revised an initial determination to revoke to add a ground for revocation) or expanding the rationale for revocation.  *See Mark A. Kabat, D.O.*, DAB No. 2875, at 13 (2018) (reopening and revising to explain in detail why the felony offense was detrimental to the Medicare program), *appeal dismissed*, No. 1:18-cv-01969-WYD (D. Colo. Nov. 29, 2018).

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Petitioner also is mistaken in asserting that CMS could have kept Petitioner out of the program for a longer period upon revocation in 2015 by imposing a longer re-enrollment bar then.  As the ALJ accurately stated, CMS currently is authorized to revoke billing privileges for a minimum of one year up to a maximum of 20 years under section 424.535.  ALJ Decision at 8-9 (setting out section 424.535 provisions that went into effect on November 4, 2019); *see* 84 Fed. Reg. 47,794, 47,854-55 (Sept. 10, 2019).  However, as the ALJ also correctly recognized, those provisions did not take effect until more than four years after the 2015 revocation.  *See* ALJ Decision at 9 (referring to the revised regulations and stating “[t]hese circumstances did not apply when Petitioner was revoked in 2015”).  Section 424.535(c) that was in effect when Novitas revoked Petitioner’s enrollment authorized the imposition of a re-enrollment bar from one year to three years.  *See supra* note 7.  Because the maximum three-year re-enrollment bar was imposed in 2015 consistent with the regulation then in effect, CMS could not have imposed a longer re-enrollment bar in 2015 as Petitioner argues.  In any event, the length of the re-enrollment bar imposed in connection with Petitioner’s revocation is beside the point; nothing in sections 424.535 and 424.530 precluded “CMS from revoking and later denying re-enrollment based on the same underlying offense,” even after Petitioner’s re-enrollment bar expired.  *See John A. Hartman, D.O.*, DAB No. 2911, at 22-24 (2018).

As for Petitioner’s argument that the I.G. could have reconsidered its decision to lengthen the exclusion period, what the I.G. could or might have done is far beyond the scope of the issues we must (or can) decide in this appeal from a denial of re-enrollment by CMS.  What is undisputed, and what the record shows, is that the I.G. excluded Petitioner for a minimum five years based on a qualifying conviction, pursuant to sections 1128(a)(1) and 1128(a)(3) of the Act.  *Accord*42 C.F.R. § 1001.101(a), (c).16  The I.G.’s exclusion is relevant here because section 424.530(a)(3) authorizes CMS to deny enrollment based on a qualifying felony conviction, including a felony conviction that would result in (and here did result in) mandatory exclusion under section 1128(a) of the Act.  Petitioner’s arguments concerning how the I.G. could have exercised its discretionary authority differently when determining the length of Petitioner’s exclusion are not relevant in this case.

***V.     CMS and the ALJ did not apply or rely on 42 C.F.R. § 424.530(a)(3)(ii).***

Petitioner asserts that CMS wrongly applied 42 C.F.R. § 424.530(a)(3)(ii), “the regulation that speaks to repeat offenders,” in placing Petitioner on the preclusion list and the ALJ then erred in upholding that CMS decision.  RR at 2, 6, 11-12.  Petitioner has not

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had any “previous convictions and no subsequent convictions,” meaning that the 2015 conviction was the only one.  *Id*. at 12.  Petitioner writes:

CMS wrongfully relie[d] upon 42 C.F.R. § 424.530(a)(3) for the imposition of this additional exclusion.  This regulation does not mandate a ten-year exclusion for a first-time offender, like [Petitioner].  The mandatory ten-year exclusion in this regulation is only for repeat offenders.  It provides:  “Denials based on felony convictions are for a period to be determined by the Secretary [of HHS], but not less than 10 years from the date of conviction if the individual has been convicted on one previous occasion for one or more offenses.”  42 C.F.R. § 424.530(a)(3)(ii).

*Id*. at 11-12 (Petitioner’s emphases omitted).

Petitioner appears to mistakenly use the word “exclusion” to refer to CMS’s denial of enrollment under section 424.530(a)(3) or placement of Petitioner on the preclusion list for 10 years under parts 422 and 423 – and in any event, both of those determinations were lawful.17  To be clear, CMS did not state that it was prohibiting Petitioner from seeking to be re-enrolled for a 10-year period from the date of the conviction under section 424.530(a)(3)(ii).  And, as discussed, CMS determined that Petitioner would be on the preclusion list for 10 years from the 2015 conviction date but added Petitioner to the preclusion list starting on January 25, 2022.  To the extent Petitioner relies on section 424.530(a)(3)(ii) – a regulation governing denial of enrollment – to challenge the decision to put Petitioner on the preclusion list, Petitioner is mistaken in doing so. 
Petitioner is also mistaken in asserting that CMS and the ALJ misapplied 42 C.F.R. § 424.530(a)(3)(ii) when denying Petitioner enrollment.  Nothing in the record indicates that Novitas or CMS relied on this provision in denying Petitioner’s 2021 enrollment application or in placing Petitioner on the preclusion list.  Both of those decisions were based on evidence of one conviction, i.e., Petitioner’s 2015 felony conviction for commercial bribery.  Nor do we see anything in the ALJ Decision indicating that the ALJ reviewed this case on the assumption that Novitas or CMS made their decisions based on more than one conviction.  The ALJ *quoted* section 424.530(a)(3)(ii) (ALJ Decision at 3) but did not make any factual finding or cite to any record evidence concerning a conviction other than the 2015 conviction, as there was no such evidence.

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The Board explained the meaning of section 424.530(a)(3)(ii) in *Ronald Paul Belin, DPM*, DAB No. 2629, issued in 2015.18  The Board stated:

We note several regulatory indicia that the Secretary has reserved the ability to assess each application individually.  For example, the regulation provides that CMS may deny the enrollment and that denials based on felony convictions are “for a period to be determined by the Secretary[.]”  42 C.F.R. § 424.530(a)(3)(ii).  The regulation only restricts CMS’s authority to admit a supplier after a felony conviction to a period of “not less than 10 years” if the individual had one or more additional prior convictions.  *Id*.  **In other cases, the regulation does not impose a mandatory 10-year bar to re-enrollment but rather authorizes denials within the 10-year period.**

*Belin* at 4-5 (emphasis added); *see also Dr. Robert Kanowitz*, DAB No. 2942, at 6 (2019) (stating that section 424.530(a)(3) “subject[s]” an applicant to “the possibility of not being enrolled in the Medicare program for up to 10 years following a covered felony conviction” and “affords CMS discretion to grant enrollment earlier than 10 years after the applicant’s conviction”); *John A. Hartman, D.O.*, DAB No. 2911, at 21-22 (2018) (section 424.530(a)(3) “authorize[s] CMS to . . . deny enrollment . . . for a qualifying felony conviction that occurred ‘within the preceding 10 years’” and “contemplates the possibility that a supplier could be kept out of the program” beyond the then-applicable three-year re-enrollment bar “based on the same underlying conviction or on two different but nevertheless disqualifying convictions”).

Section 424.530(a)(3) authorizes CMS or its contractor to deny enrollment or re-enrollment for a qualifying conviction that occurred in the preceding 10 years, and the denial of Petitioner’s enrollment here was unquestionably lawful under that regulation.  CMS’s decision to deny enrollment was not unlawful merely because CMS had revoked Petitioner’s enrollment six to seven years earlier based on the same 2015 felony conviction.  *See Hartman*, DAB No. 2911, at 23-24 (noting that Part 424, subpart P does not prohibit CMS or its contractor from “us[ing]” a “qualifying offense” “twice” and that, when Dr. Hartman sought re-enrollment after expiration of the three-year bar, Dr. Hartman was “subject to CMS’s decision about whether denial of re-enrollment is appropriate when less than 10 years [had] elapsed since [Dr. Hartman’s] conviction”).  In sum, “[n]othing in the plain language of sections 424.535 and 424.530, or even more broadly the language in Part 424, subpart P, precludes CMS from revoking [enrollment] and later denying re-enrollment based on the same underlying offense.”  *Id.* at 22.

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***VI.     We reject Petitioner’s argument that CMS retroactively applied the preclusion list regulations.***

Relying on *Bowen v. Georgetown University Hospital*, 488 U.S. 204 (1988), Petitioner asserts that including Petitioner in the preclusion list based on regulations adopted long after the events that culminated in the conviction amounted to impermissible retroactive application of the preclusion list regulations.  RR at 6, 8, 12-14.  According to Petitioner, “Congress did not specifically grant the authority to [HHS] or CMS to apply the preclusion law retroactively” and “CMS has failed to establish that Congress gave it authority” to do so.  *Id.* at 14.  Accordingly, Petitioner argues, CMS’s application of the preclusion list regulations to Petitioner’s case ran afoul of the prohibition against retroactive application of rules.  *Id*. at 13-14.  Petitioner says that applicable law on the preclusion list “clearly ‘attaches new legal consequences to events completed before its enactment,’ the very scenario the Supreme Court found to be unacceptable.”  *Id*. at 14 (quoting*Landgraf v. USI Film Prods.*, 511 U.S. 244, 270 (1994)).  “Therefore,” Petitioner says, “[Petitioner] may not be subject to the preclusion law for the events of 2015 and 2016” (apparently referring to the conviction and I.G. exclusion), “prior to the preclusion laws’ enactment[.]”  *Id*.
Petitioner raised, and the ALJ rejected, a similar argument below.  ALJ Decision at 11-12.  The ALJ recognized that accepting Petitioner’s argument would require the ALJ to “first find the law invalid.”  *Id*. at 12.  After explaining the history of the relevant legislation and rulemaking, the ALJ concluded that an ALJ cannot reverse a petitioner’s placement on the preclusion list by declaring the preclusion list regulations invalid, but instead is bound by applicable law and regulations.  *Id.* (citing *1866ICPayday.com, L.L.C.*, DAB No. 2289, at 14 (2009)).

The Supreme Court has stated that “a statutory grant of legislative rulemaking authority will not, as a general matter, be understood to encompass the power to promulgate retroactive rules unless that power is conveyed by Congress in express terms.”  *Bowen*, 488 U.S. at 208.  “Even where some substantial justification for retroactive rulemaking is presented, courts should be reluctant to find such authority absent an express statutory grant.”  *Id*. at 208-09; *see also Landgraf*, 511 U.S. at 270 (recognizing the presumption that laws are not to be applied retroactively unless Congress communicated its intent otherwise).  However, the Court also has recognized that “[e]ven absent specific legislative authorization, application of new statutes passed after the events in suit is unquestionably proper in many situations.  When the intervening statute authorizes or affects the propriety of prospective relief, application of the new provision is not retroactive.”  *Landgraf*, 511 U.S. at 273.

Petitioner appears to acknowledge that the Board, like the ALJ, cannot invalidate regulations or refuse to apply them, and that is a correct understanding of the law.  *See* RR at 16 (“We are not asking for the law or regulation to be invalidated . . . .”); *see also*

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*1866IPayday.com, L.L.C.*, DAB No. 2289, at 14 (2009); *Central Kan. Cancer Inst.*, DAB No. 2749, at 10 (2016), *appeal dismissed*, No. 2:17-CV-02012 (D. Kan. June 2, 2017); *DMS Imaging, Inc.*, DAB No. 2313, at 11 (2010).  The Board can and does note that, in enacting section 704 of CARA, and in furtherance of curbing the epidemic of opioid abuse, Congress expressly directed the Secretary to identify individuals who may facilitate the abuse or diversion of frequently abused drugs by at-risk beneficiaries, and to promulgate implementing regulations for prescription drug plans for plan years beginning on or after January 1, 2019.  *See* Pub. L. 114-198, § 704, 130 Stat. 695, 742-48, 751-52 (2016); ALJ Decision at 12 (discussing section 704 of CARA).  As discussed, CMS promulgated the preclusion list regulations to comply with that mandate.  Those regulations necessarily entailed to some extent looking back to an individual’s background, which could reveal, for instance, information that the individual had improperly prescribed opioids or other frequently abused, highly addictive drugs.  Such information would and ought to inform CMS and their contractors in determining whether the individual posed a risk of harm to the best interests of the Medicare program and its beneficiaries going forward.

Petitioner’s argument, moreover, appears to assume, mistakenly, that any determination by CMS or its contractor that involves looking back at past conduct would be impermissible.  Petitioner disregards that the denial of enrollment under section 424.530(a)(3) and revocation under section 424.535(a)(3) – first published in 2006, 71 Fed. Reg. 20,754, 20,779-80 (Apr. 21, 2006), years before Petitioner’s conviction, the revocation of Petitioner’s enrollment, and the I.G.’s exclusion – entail looking back to an earlier event because the qualifying conviction on which denial of enrollment or revocation is based necessarily must have occurred before the decision to deny enrollment or to revoke is made.  In both instances, a decision affecting the individual’s ability to participate in and bill Medicare is being made based on past felonious conduct that resulted in a qualifying conviction.  In cases of revocation under section 424.535(a)(3) based on a qualifying felony conviction, the Board has repeatedly upheld revocations to take effect on the date of the conviction (which necessarily would be earlier than the decision to revoke), in accordance with section 424.535(g) in effect at the time of the revocation.  *See, e.g.,* *Norman Johnson, M.D.*, DAB No. 2779, at 18-19 (2017) (collecting cases); *Mark A. Kabat, D.O.*, DAB No. 2875, at 10-11 (2018) (following analysis in *Johnson*);*Pennsylvania Physicians, P.C.*, DAB No. 2980, at 9 (2019).

More to the point, Petitioner disregards that CMS’s application of the preclusion list rules in this case does not actually result in retroactive consequences.  As CMS states, CMS did not add Petitioner to the preclusion list until January 25, 2022 (the date of its reconsidered determination), and Petitioner would remain on the list through February 3, 2025.  CMS Resp. Br. at 14.  Petitioner’s inclusion on the preclusion list affected only Petitioner’s prospective participation in Medicare Parts C and D.  *Id*.  As CMS explains, being included on the preclusion list would not affect any of Petitioner’s Part C or Part D

Page 28

reimbursement claims made between the conviction date and January 25, 2022.  *Id*.  As CMS also accurately states, Petitioner had no vested right to continued reimbursement for any services provided or drugs prescribed for reimbursement under Medicare Parts C and D, *id.*, for suppliers do not have a right (through re-enrollment or otherwise) to continuing eligibility for Medicare participation or reimbursement.  *See Mission Home Health, et al*., DAB No. 2310, at 9 (2010), *appeal dismissed*, *Garcia v. Sebelius*, No. 5:10-cv-00456 (W.D. Tex. Apr. 6. 2011);*Robert F. Tzeng, M.D.*, DAB No. 2169, at 13-14 n.16 (2008) (citing cases).Petitioner had, but did not use, the opportunity to submit a reply brief addressing CMS’s persuasive arguments that its application of the preclusion list regulations in this case had no effect on Petitioner’s legal rights before January 25, 2022, the date on which Petitioner was added to CMS’s preclusion list.

The Board’s decision in *Tzeng*, DAB No. 2169, upon which CMS partially relies, is instructive.  *See*CMS Resp. Br. at 12-13.  In *Tzeng*, the Board upheld the application of section 424.535(a)(3) in effect at the time of the 2007 revocation of enrollment, not the regulation in effect at the time of the 1998 conviction for felony tax evasion, rejecting “retroactivity” arguments similar to Petitioner’s arguments and holding that the revocation of enrollment and billing privileges was “wholly prospective.”  *Tzeng* at 12-16.  The revocation of Dr. Tzeng’s billing privileges, the Board determined, did not “invalidate or impose additional requirements regarding payment claims made before its effective date, nor [did] it alter, or have the effect of altering, Dr. Tzeng’s enrollment status in the period between the commission of his felony offense and the revocation’s effective date.”  *Id*. at 13.  Just as revoking Dr. Tzeng’s billing privileges was “wholly prospective,” adding Petitioner to the preclusion list likewise does not pose retroactive implications, as the consequences of placement on the preclusion list are confined to a period from January 25, 2022 through February 3, 2025.

In *Tzeng*, the Board further noted that there were no retroactivity concerns given the “overriding remedial purpose” of section 424.535(a)(3) to safeguard the Medicare program from fraud and abuse, similar to the remedial goal of I.G. exclusions by which the I.G. lawfully could impose exclusion periods longer than the statutory minimum based on past conduct.  *See Tzeng* at 14-16 (discussing *Narendra M. Patel*, DAB No. 1736 (2000), *aff’d*, 319 F.3d 1317 (11th Cir. 2003), *cert. denied*, 539 U.S. 959 (2003)).  As we have discussed earlier, the preclusion list regulations, too, serve a similar important remedial purpose.

To the extent Petitioner raises alternatively any argument or implication that the preclusion list regulations amount to an unconstitutional ex post facto law, that argument has no merit.  *See*RR at14-15.  The Board has addressed such an argument in the context of an I.G. exclusion case.  The Board stated that the Ex Post Facto Clause “protects individuals only from retroactive application of punishments or penal statutes.”  *Dr. Darren James, D.P.M.*, DAB No. 1828, at 13 (2002), *aff’d*, No. 02-3021 (AET) (D.N.J. July 7, 2003).  It “does not protect against the retroactive application of remedial or civil

Page 29

sanctions.”  *Id*. (citations omitted).  As explained previously, the preclusion list regulations are not penal authorities, and the decision to include Petitioner in the preclusion list is a remedial and not punitive action.

The decision to put Petitioner on the preclusion list was lawful and the preclusion list regulations were not applied retroactively.

Conclusion

We affirm the ALJ Decision.

Endnotes

1 Section 1001.2’s definition of the term “*Convicted*” is based on the definition of the term in section 1128(i) of the Act.  *See* 78 Fed. Reg. 25,013, 25,022 (proposed Apr. 29, 2013).  “*Convicted*” is defined to include “[a] judgment of conviction has been entered against an individual or entity by a Federal, State or local court . . .” and “[a] Federal, State or local court has accepted a plea of guilty or *nolo contendere* by an individual or entity.”  *See* paragraphs (a) and (c) under the definition in section 1001.2.

2 CMS published enrollment regulations, to include section 424.530, that took effect on June 20, 2006.  *See* Final Rule, 71 Fed. Reg. 20,754, 20,779 (Apr. 21, 2006).  Section 424.530(a)(3) has been amended since then.  We apply the enrollment regulations in effect when CMS’s contractor issued its initial determination.  *See Arthur L. Jenkins III, M.D. and Jenkins NeuroSpine LLC*, DAB No. 3070, at 1 n.1 (2022); *Gregory J. Frazer, Au.D., Ph.D.*, DAB No. 3038, at 1 n.1 (2021).  Section 424.530(a)(3), as quoted in part here, was in effect on September 21, 2021, when the contractor issued the initial determination from which Petitioner’s appeal arose.

3 The Part 422 and Part 423 regulations the ALJ applied, and which we also apply, went into effect before the contractor issued its 2021 initial determination.

4 The promulgation of preclusion list regulations in Parts 422 and 423 should not be understood to mean that there are two preclusion lists, one for Part C and one for Part D.  As CMS explained, there is one preclusion list.  *See* 83 Fed. Reg. at 16,649 (“There will be only one preclusion list, which both the Part D and [Medicare Advantage] programs will utilize.”).

5 The record evidence concerning the conviction does not expressly state that Petitioner was charged with, and convicted of, a felony offense.  However, Petitioner never disputed the fact of a felony conviction in 2015 and reported the conviction in the 2021 enrollment application filed with the contractor (discussed later).  *See* CMS Ex. 12, at 2-3 (reporting “1 count felony guilty plea” as an “Adverse Action” and stating “July 22, 2015” as the date of that action).  We note, moreover, that under the federal sentencing classification of offenses in 18 U.S.C. § 3559(a), an offense that carries an imprisonment penalty of “less than ten years but five or more years” is a “Class D felony” and an offense that carries an imprisonment penalty of “less than five years but more than one year” is a “Class E felony.”  The plea agreement provides that “[t]he violation of 18 U.S.C. § 1952(a)(3) to which [Petitioner] agrees to plead guilty carries a statutory maximum prison sentence of five years . . . .”  CMS Ex. 5, at 2.  Petitioner, as noted, was sentenced to 21 months of incarceration.

6 The plea agreement reflects that Petitioner took bribes “from October 2005 through April 2013.”  CMS Ex. 5, at 1.  The Information (CMS Ex. 2, at 3) and Judgment in a Criminal Case (CMS Ex. 3), however, indicate that Petitioner participated in the scheme through March, not April, 2013.  This apparent discrepancy concerning the month in which Petitioner’s criminal participation ended has no material bearing on our analysis.

7 The regulation in 42 C.F.R. § 424.535(c) in effect in July 2015 when Novitas revoked Petitioner’s enrollment authorized a re-enrollment bar for a period from one year to three years, depending on the severity of the basis for revocation.  Section 424.535(c) was revised effective November 4, 2019, to permit a re-enrollment bar of up to 20 years.  *See* 84 Fed. Reg. 47,794, 47,855 (Sept. 10, 2019).  Section 424.535(c), as revised in 2019, remains in effect.  We will further address section 424.535(c) as relevant to Petitioner’s arguments later, in our analysis.

8 The ALJ noted the record does not show when these terminations took effect.  ALJ Decision at 6 n.3.  The ALJ noted, however, that Petitioner submitted “photocopies of [Petitioner’s] active . . . medical license and Controlled Dangerous Substance registration . . . .”  *Id*.  Petitioner’s exhibit 6 includes three items:  (1) Petitioner’s medical license/certification issued by the New Jersey Board of Medical Examiners, bearing “VALID” dates “05/17/2021 TO 06/30/2023”; (2) DEA’s Controlled Substance Registration Certificate bearing an issuance date of June 30, 2020 and an expiration date of June 30, 2023; and (3) the Controlled Dangerous Substance Registration certificate, “VALID” for the period “09/18/2020 TO 10/31/2021,” issued by the New Jersey Office of the Attorney General, Division of Consumer Affairs.  (The items were also admitted as CMS exhibit 14, pages 24, 26, and 27.)  We note the submissions but make clear that the reinstatement of Petitioner’s medical license and the status of federal and state Controlled Dangerous Substance registrations are not material to the issues we must resolve.

9 There appears to be an inaccuracy in the ALJ’s finding of facts.  The ALJ found, “On July 22, 2021, Petitioner’s eligibility to participate as a supplier . . . of services in Medicare, Medicaid and all federal health care programs, including his participation in FEHBP, was reinstated by the IG, *the Comptroller*, and OPM.  CMS Ex. 11; P. Exs. 7, 8.”  ALJ Decision at 6 (emphasis added).  The record shows the I.G. reinstated Petitioner’s eligibility to participate in federal health care programs, and OPM terminated debarment from participation in FEHBP.  *See* P. Ex. 7, at 1; P. Ex. 8, at 1; CMS Ex. 11, at 1.  The record does not document the Comptroller’s determination of Petitioner’s eligibility to participate in New Jersey Medicaid or other state health care programs.  In any event, the issue of whether the Comptroller made such a determination is not material to the issues of legality of denial of enrollment or placement of Petitioner on the preclusion list.  The I.G.’s eligibility determination and OPM’s termination of debarment from participation in FEHBP do not undermine the legality of denial of enrollment or the decision to put Petitioner on the preclusion list.

10 On September 19, 2022, the ALJ issued a decision, DAB CR6158, based on the written record, upholding the 2021 denial of Petitioner’s 2021 enrollment application and the placement of Petitioner on the preclusion list.  The ALJ found that Petitioner was convicted on July 22, 2015, and that the last day Petitioner would remain on the preclusion list would be July 22, 2025.  *See* ALJ’s Initial Decision at 5, 8-9, 14 (“Petitioner will be on the preclusion list until July 22, 2025, ten years from the date of [the] felony conviction.”).  Upon request by Petitioner to “correct” the references to the date of Petitioner’s conviction (with no objection by CMS), the ALJ issued an amended decision on October 27, 2022.  In the amended decision, the ALJ changed the date of Petitioner’s conviction from July 22, 2015 to February 4, 2015, and changed Petitioner’s last day on the preclusion list from July 21, 2025 to February 3, 2025.

11 Petitioner asked the ALJ to “correct” the initial decision within the 60-day period for reopening and revising the ALJ’s initial decision.  *See* 42 C.F.R. § 498.100.  We review the ALJ’s amended decision pursuant to authority granted by 42 C.F.R. § 498.102(b)(2).

12 The ALJ Decision incorrectly referred to Wisconsin Physicians Service, rather than Novitas, as the contractor that issued the 2021 initial determination.  ALJ Decision at 6.  This minor factual discrepancy does not affect our analysis.  *Cf. Experts Are Us, Inc.*, DAB No. 2452, at 19 (2012) (acknowledging incorrect finding of fact by ALJ but stating “the ALJ’s mistake is not material to our decision” and upholding CMS’s determination).

13 Throughout the decision, the ALJ cited Board decisions, including *Bussell* and *Hartman*, DAB No. 2564, concerning the revocation of enrollment under section 424.535(a), not the denial of enrollment under section 424.530(a).  The ALJ’s reliance on revocation decisions does not undermine the soundness of the ALJ’s rationale for upholding the denial of enrollment.  As the Board has recognized in prior decisions, sections 424.530(a)(3) and 424.535(a)(3), which have undergone revision over time, are similarly worded and the scheme for denial of enrollment and revocation share core principles.  *See, e.g., Dr. Robert Kanowitz*, DAB No. 2942, at 6-7 (2019) (discussing revocation under section 424.535 and the denial of enrollment under section 424.530, which authorizes “CMS to deny enrollment where the applicant has been convicted of a covered felony ‘within the preceding 10 years,’” and stating that “[t]here is no ambiguity about this language, nor any inconsistency between the two regulations”); *John A. Hartman, D.O.*, DAB No. 2911, at 3, 10, 13 n.14, 17 (2018) (upholding denial of re-enrollment, under section 424.530(a)(3), of the same petitioner whose revocation of enrollment was upheld in DAB No. 2564; stating “the Board’s rationale in *Bussell*is still a valid statement of law”).

14 We are not aware of any appeal of the I.G.’s decision to an ALJ of the Civil Remedies Division.

15 The argument about reopening overlooks the distinctions between “initial determinations” that are within CMS’s purview and those within the I.G.’s purview for possible reopening under section 498.30.  *See* 42 C.F.R. § 498.3(a)(1).  Section 498.3(b) (“Initial determinations by CMS”) includes the determination to deny or revoke enrollment.  *Id*. § 498.3(b)(17)(i).  Section 498.3(c) sets out the three types of “initial determinations by the [I.G.].”  Contrary to Petitioner’s erroneous assumption (*see* RR at 7, 9), the I.G.’s 2016 decision (CMS Ex. 8) is *not* one of the three types listed in section 498.3(c) and, accordingly, would not have been subject to reopening under section 498.30, let alone reviewable under Part 498.  The I.G.’s 2016 decision would have been reviewable under 42 C.F.R. Part 1005, had Petitioner appealed it, which Petitioner apparently did not do.  *See Edwin L. Fuentes*, DAB No. 2988, at 1, 3 (2020) (affirming ALJ decision, which upheld the I.G.’s decision to exclude petitioner under sections 1128(a)(1) and 1128(a)(3) of the Act), *aff’d*, No. 4:20-cv-00026, 2021 WL 4341115 (W.D. Va. Sept. 23, 2021); *Fayad*, DAB No. 2266, at 12 n.9.

16 When the I.G. excludes an individual under section 1128(a) of the Act, the I.G. could impose an exclusion longer than the mandatory minimum five years (*see* Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a)) by applying one or more of the aggravating factors in 42 C.F.R. § 1001.102(b).  *See Kimberly Jones*, DAB No. 3033, at 2 (2021).  The I.G.’s 2016 decision (CMS Ex. 8) does not indicate that the I.G. applied any aggravating factor to augment the five-year period.

17 We recognize that, at bottom, the practical effect of, and the commonality shared by, the I.G exclusion, the denial of enrollment, and placement on the preclusion list are that the affected physician is being denied the ability to participate in and bill Medicare-funded programs.  However, the term “exclusion” should not be used to refer to the denial of enrollment or placement on the preclusion list.  As we have explained, CMS and the I.G. are separate decision-making bodies that derive their authority to make enrollment-related determinations (CMS) and to exclude individuals from participation in federal health care programs (I.G.) from different laws and regulations.  *Dinesh Patel, M.D.*, DAB No. 2551, at 9 (2013); *Fady Fayad, M.D.*, DAB No. 2266, at 12 (2009).

18 The regulation in 42 C.F.R. § 424.530(a)(3)(ii), first promulgated in 2006, was not changed in the 2014 rulemaking (Final Rule, 79 Fed. Reg. 72,500 (Dec. 5. 2014) (effective Feb. 3, 2015)).  *See* 78 Fed. Reg. 25,013, 25,022 (proposed Apr. 29, 2013) (“Existing paragraph (a)(3)(ii) [of section 424.530] would remain intact.”).  The regulation at 42 C.F.R. § 424.530(a)(3)(ii) remains as promulgated in 2006.
  
          /s/
        Michael Cunningham

                      Board Member
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        Kathleen E. Wherthey

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        Susan S. Yim

                      Presiding Board Member Back to top
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