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                              Tri Do, M.D., DAB CR6335 (2023)
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Tri Do, M.D., DAB CR6335 (2023)








  
  
    

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





Tri Do, M.D.
(NPI: 1619930260),
Petitioner,

v.

Centers for Medicare & Medicaid Services,
Respondent.
Docket No. C-23-294Decision No. CR6335August 14, 2023

        
              
    

      DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, Noridian Healthcare Solutions (Noridian), denied the Medicare enrollment application of Petitioner, Tri Do, M.D., pursuant to 42 C.F.R. § 424.530(a)(3) and placed Petitioner on CMS’s preclusion list.  *See also*42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.100(c)(6).  Petitioner challenges both the enrollment denial, and his placement on CMS’s preclusion list.  For the reasons discussed below, I affirm the determination of CMS to deny the enrollment of Petitioner in the Medicare program.  There is also a legal basis for listing Petitioner on CMS’s preclusion list.

I. Background and Procedural History

Petitioner is a physician, and on September 29, 2022, he submitted a Form CMS-855I Medicare enrollment application.  CMS Ex. 4.  In that application, Petitioner disclosed that he had a prior felony conviction within the previous ten years from the date of the application.  *Id.* at 3.  On February 5, 2016, Petitioner had been convicted of violation of

Page 2

California Penal Code § 424(a), misappropriation of public funds by a county officer, a felony.  *See* CMS Ex. 2; *see also* Cal. Penal Code § 424(a); see also Cal. Penal Code § 17(a) (defining felony).  Judgment was entered on May 23, 2016. CMS Ex. 2 at 2.

On October 17, 2022, Noridian issued a notice of initial determination denying Petitioner’s Medicare application, citing 42 C.F.R. § 424.530(a)(3) and referencing Petitioner’s 2016 felony conviction for misappropriation of public funds by a county officer, in violation of California Penal Code § 424(a).  CMS Ex. 5.  Noridian also placed Petitioner on the CMS Preclusion List.  *Id*.  Subsequently, on October 24, 2022, Petitioner requested reconsideration.  CMS Exs. 6 and 7.

On December 21, 2022, CMS denied Petitioner’s request for reconsideration and affirmed the denial of enrollment and placement on the preclusion list.  CMS Ex. 1. Specifically in relation to the denial of enrollment, the CMS hearing officer applied the definition of the word “convicted” in 42 C.F.R. § 1001.2 to conclude that Petitioner had been convicted of a felony offense within ten years of the denial of enrollment.  CMS Ex. 1 at 3.  Further, the CMS hearing officer concluded that Petitioner’s crime of “Misappropriation of Public Funds by a County Officer” was *per se* detrimental to the Medicare program and its beneficiaries under 42 C.F.R. § 424.530(a)(3)(i)(B) as a crime similar to embezzlement.  CMS Ex. 1 at 4.  In addition, the CMS hearing officer separately concluded, based on the facts underlying Petitioner’s felony conviction, that Petitioner’s trustworthiness and willingness to follow rules and regulations were called into question and that, in this way, Petitioner’s felony offense was detrimental to the Medicare program and its beneficiaries.  CMS Ex. 1 at 4.  The CMS hearing officer then also concluded that:

[Petitioner] could easily replicate similar behavior if he is allowed to enroll in the Medicare programs, which represents a significant risk to Medicare Trust Funds.  It necessarily follows that a detriment to Medicare Trust Funds is detrimental to Medicare beneficiaries. While Dr. Do claims he has remained a law-abiding citizen since his felony conviction, and has worked hard to be a productive member of society, this does not negate his felony conviction, nor does it outweigh our determination of detriment to the Medicare program.

CMS Ex. 1 at 4.

Regarding placement of Petitioner on the CMS preclusion list, the CMS hearing officer also concluded that the felony conviction is detrimental to the best interests of the Medicare program after making the following determinations:

Page 3

the offense with which Petitioner was convicted is severe in nature as the underlying conduct of converting money for personal use displays dishonest behavior and a lack of good judgment;
	though the offense concluded several years ago in 2016, the severity of the offense still warrants Petitioner’s placement on the preclusion list; and
	that the Office of the Inspector General (IG), the Office of Personnel Management (OPM), and the California Department of Health Care Services (DHCS) took adverse actions against Petitioner further demonstrate the severity of the offense even though all three had already reinstated Petitioner.CMS Ex. 1. at 5-6.

Petitioner timely requested a hearing (RFH) to dispute the reconsidered determination on February 17, 2023.  DAB E-File Dkt. C-23-294, Doc. No. 1.  The Civil Remedies Division (CRD) acknowledged receipt of the hearing request and issued my standard Pre‐hearing Order (Pre‐hearing Order), which provided instructions and dates for prehearing submissions.  As its prehearing submission, CMS filed a brief (CMS Br.), which included a motion for summary judgment, with 12 marked exhibits (CMS Exs. 1-12).  Petitioner filed his prehearing submission opposing CMS’s motion for summary judgement, consisting of a prehearing brief that also included a motion for summary judgment (P. Br.) and two proposed exhibits (P. Exs. A-B).  CMS declined to file a reply brief.

II. Jurisdiction

I have jurisdiction to decide this case.  42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a), 498.3(b)(17), (20), 498.5(*l*)(2), (n)(2).

III. Issues

Whether CMS had a legitimate basis to deny Petitioner’s Medicare enrollment under 42 C.F.R. § 424.530(a)(3); and

Whether CMS had a legitimate basis to place Petitioner on its preclusion list, as defined at 42 C.F.R. §§ 422.2 and 423.100.

IV. Exhibits and Decision on the Record

As neither party objected to the other party’s proposed exhibits, I admit CMS Exhibits 1-12 and Petitioner’s Exhibits A-B into the record.

There is no need for an evidentiary hearing as neither party proposed any witnesses.  Pre-hearing Order § 5(e)(iv).  I therefore issue this decision based on the written record.  Pre-

Page 4

hearing Order § 13; CRD Procedures § 19(d).  Each party’s motion for summary judgment is therefore denied as moot.

V. Findings of Fact, Conclusions of Law, and Analysis1

**On February 5, 2016, Petitioner was convicted of a felony offense under state law within ten years of the denial of enrollment.****Petitioner’s felony conviction is for an offense that CMS has determined to be *per se* detrimental to the best interests of the Medicare program and its beneficiaries pursuant to 42 C.F.R. § 424.530(a)(3)(i)(B).****CMS had a legitimate basis to deny Petitioner’s Medicare enrollment application under 42 C.F.R. § 424.530(a)(3) due to Petitioner’s 2016 felony conviction of “misappropriation of public funds by a county officer.”**The Social Security Act (Act) directed the Secretary of Health and Human Services (Secretary) to establish by regulation a process for the enrollment of providers and suppliers in the Medicare program.  42 U.S.C. § 1395cc(j).  The Act requires the Secretary to screen applicants for enrollment to determine if they are a risk of fraud, waste, and abuse, which includes a criminal background check.  42 U.S.C. § 1395cc(j)(2).  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).  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, and 424.530.

When dissatisfied with a reconsidered determination under 498.5(*l*)(1), a supplier is entitled to a hearing before an administrative law judge (ALJ) to dispute CMS’s denial of enrollment.  42 C.F.R. §§ 498.5(*l*)(2), 498.3(b)(17).  However, “the right to review . . . CMS’s determination by an [ALJ] serves to determine whether CMS had the authority to [deny or] revoke [the supplier’s] Medicare billing privileges, not to substitute the [ALJ’s] discretion about whether to [deny or] revoke.”  *Letantia Bussell, M.D*., DAB No. 2196 at 13 (2008) (emphasis omitted).  A supplier that is dissatisfied with a subsequent ALJ hearing decision may request Board review and has a right to seek judicial review of the Board’s decision.  42 C.F.R. § 498.5(*l*)(3).

Most relevant to this case, the Act authorizes the Secretary to refuse to enter into a Medicare agreement if a physician or supplier has been convicted of a felony offense that

Page 5

the Secretary has determined is detrimental to the best interests of the program or its beneficiaries:

The Secretary may refuse to enter into an agreement with a physician or supplier under this subsection, or may terminate or refuse to renew such agreement, in the event that such a physician or supplier *has been convicted of a felony under Federal or State law for an offense which the Secretary determines is detrimental to the best interests of the program or program beneficiaries.*

P.L. 105-33 (Aug. 5, 1997), Section 4302; 42 U.S.C. § 1395u(h) (emphasis added).  Congress has also given the Secretary the broad authority to “make and publish such rules and regulations . . . as may be necessary to the efficient administration of the functions with which [he] is charged under the Act.”  42 U.S.C. § 1302(a).  The Secretary implemented this authority by promulgating regulations that provide for the denial of enrollment in the following instances:

The provider, supplier, or any owner, managing employee, managing organization, officer, or director of the provider or supplier was, within the preceding 10 years, convicted (as that term is defined in 42 CFR 1001.2) of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.

42 C.F.R. § 424.530(a)(3).

Therefore, CMS may legitimately deny enrollment of a prospective supplier if the supplier had been: 1) convicted of a felony under federal or state law; 2) within the preceding ten years; 3) that CMS determines to be detrimental to the best interests of the Medicare program and its beneficiaries.

With respect to this last requirement, CMS has explicitly determined that four categories of felony offenses are *per se*detrimental to the best interests of the Medicare program and its beneficiaries, and CMS may deny a physician’s enrollment if the supplier was convicted in the previous 10 years of such a felony.  42 C.F.R. § 424.530(a)(3)(i), 71 Fed. Reg. 20,754, 20,768 (Apr. 21, 2006); *Bussell*, DAB No. 2196 at 9.  One of the *per se*categories includes “Financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was convicted, including guilty pleas . . . .”  42 C.F.R. § 424.530(a)(3)(i)(B).

Petitioner does not dispute that he was convicted of a felony offense within the last 10 years that falls within this category deemed *per se*detrimental to the best interests of the Medicare program and its beneficiaries:

Page 6

Within the CMS Pre-hearing Exchange 3/28/23, CMS counsel enumerated an exhaustive list of financial crimes CMS can/will consider in denying provider/supplier CMS enrollment.  Petitioner concedes the authority granted to CMS governing body under 42 C.F.R. § 424.530(a)(3)(i)(B).  Petitioner however argues that the nature of the financial crime petitioner is convicted of involves [a] research grant that Petitioner (genuinely but ultimately incorrectly) believe[d] was at Petitioner’s discretion to manage and not MediCare/MedCaid billing.  Nonetheless Petitioner concedes that the conviction of said negligence satisfies the condition of financial impropriety stipulated within CMS denial guidelines but respectfully request CMS consider the specific nature of the financial conviction in reinstatement/denial deliberations.

P.Br. at 2.

Rather, Petitioner argues that CMS used its discretion poorly and without sufficient consideration of Petitioner’s actions post-conviction that he argues evidence he is not a risk of future conduct detrimental to the best interest of the Medicare program.  *Id.*at 2-3.  In particular, Petitioner objects to CMS’s conclusion that Petitioner is “prone to committing similar future financial crimes.”  P. Br. at 3; *see*CMS Ex.1 at 4 (“He could easily replicate similar behavior if he is allowed to enroll in the Medicare programs, which represents a significant risk to Medicare Trust Funds.”). Petitioner argues that since his conviction in 2016, he has “worked diligently to rehabilitate [his] medical credentials” which includes his successful completion of a “Practical Medical Ethics and Professionalism” course (P. Ex. A), “work-volunteering” as a clinician and administrator in a variety of clinical offices, and “executing the policies and procedures of varying financial regulatory agencies.”2  P. Br. at 2.  Petitioner states that his California medical license has been fully restored, and he has been “reinstated” into “OIG, OPM, DCHS, and the Medi-Cal provider enrollment programs.”  P. Br. at 1; CMS Exs. 8-12.  Petitioner also cited to a posting from a healthcare advisory and company entitled “Fraud Spotlight: Recidivism & Sentencing in Healthcare Fraud” to show support generally that he is unlikely to commit similar financial crimes in the future because the post states that “seeing a recidivist in a healthcare fraud-related capacity is rare.”  P. Ex. B at 4 (November 3, 2020 website post commenting on DOJ press release and social media postings pertaining to an orthopedic surgeon, Spyros Panos, pleading guilty to charges of wire fraud, health care fraud, and aggravated identity theft).  The post does not otherwise cite to evidence in support of this assertion.

Page 7

Petitioner correctly identified that CMS reasoned, in part, that Petitioner’s Medicare enrollment application warranted denial, because Petitioner could “easily replicate similar behavior if he is allowed to enroll in the Medicare programs, which represents a significant risk to Medicare Trust Funds.”  CMS Ex. 1 at 4.  Inherent in any CMS enrollment denial predicated on 42 C.F.R. § 424.530(a)(3) is concern that an applicant may engage in behavior similar to that which resulted in a felony conviction in the preceding 10 years and, resultantly, cause harm to the Medicare program and its beneficiaries.  I agree with Petitioner that CMS did not provide any evidence or argument to support why it concluded Petitioner might be prone to engage in such conduct in the future though approximately six years has passed since Petitioner’s conviction and the IG approved Petitioner’s request for reinstatement of eligibility to participate as a provider of services covered by Medicare.  *See*CMS Ex. 9.  And it also may be true that there are low recidivism rates among individuals convicted of felonies related to health-care fraud (though the post to which Petitioner included as an exhibit does not cite any support for this conclusion).  *See*P. Ex. B.  I, however, do not have under current law and agency policy the authority to review whether CMS gave proper consideration and weight to relevant factors CMS identified or failed to identify in deciding to exercise its discretion to deny Petitioner’s Medicare enrollment application.

The Board has stated that where CMS has determined that a legal basis for revocation or denial of enrollment exists and it proceeds with denial or revocation as an exercise of its discretion, on appeal, the ALJ may only determine whether CMS has established a legal basis for the action, but not look behind CMS’s exercise of its discretion.  *Eva Orticio Villamor-Goubeaux*, DAB No. 2997 (2020) (internal citations omitted).  If the felony offense upon which the enrollment denial is based is one that CMS has identified in the regulation as categorically detrimental to Medicare, then an ALJ must conclude that the offense is detrimental to Medicare and may not make a conflicting case-specific finding.  *See, e.g., *Cornelius M. Donohue**, *DPM*, DAB No. 2888 at 6 (2018) (rejecting the complaint that CMS failed to make a case-specific determination about whether the supplier’s financial crime was detrimental to Medicare, because financial crimes are detrimental as a matter of law); *John Hartman, D.O.*, DAB No. 2564 at 5 (2014) (holding that “the Board may not evaluate the circumstances of [the supplier’s] offense, or otherwise look behind his conviction, in order to make a conflicting determination about the offense’s actual or potential impact on the Medicare program”); *John A. Hartman, D.O.*, DAB No. 2911 at 14-15 (2018) (holding, in a case involving a section 424.530(a)(3) enrollment denial, that the ALJ was not required to make a case-specific determination about whether the physician’s felony offense was detrimental to Medicare, because the offense was one that fell within one of the categories of crimes that CMS has determined by rulemaking to be detrimental to Medicare).3

Page 8

In instances of *per se*felonies, I do not have the authority to review the enrollment denial to determine whether CMS reasonably concluded that the specific facts and circumstances of the felony are detrimental to the best interests of the Medicare program and its beneficiaries, or review CMS’s decision to exercise its discretion to deny enrollment.  CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.530(a)(3) due to Petitioner’s 2016 felony conviction for misappropriation of public funds by a county officer.  Therefore, I must conclude that the record supports CMS’s discretionary decision to deny Petitioner’s enrollment application under 42 C.F.R. § 424.530(a)(3).

**CMS had a legitimate basis to include Petitioner on its preclusion list, as defined at 42 C.F.R. §§ 422.2 and 423.100.**Effective June 15, 2018, the regulations permitted CMS to put an individual on a list of providers or suppliers who are precluded from reimbursement for health care items or services furnished under a Medicare Advantage benefit or from submitting pharmacy claims for prescription drug coverage under Medicare Part D, known as the CMS preclusion list.  42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6); 83 Fed. Reg. 16,440, 16,641-67 (Apr. 16, 2018).  No payment under Medicare Parts C and D may be made to anyone on the preclusion list.  42 C.F.R. §§ 422.222-.224; 422.504(i)(2)(v); 423.120(c)(6).  Because Petitioner’s felony offense was *per se* detrimental to the Medicare program, CMS considered whether Petitioner should be placed on the Preclusion List.  42 C.F.R. §§ 422.2, 423.100.

Based on its consideration of the regulatory factors set forth in 42 C.F.R. §§ 422.2 and 423.100, CMS had a legitimate basis to uphold Petitioner’s placement on the Preclusion List.  In assessing a placement on the Preclusion List pursuant to 42 C.F.R. §§ 422.2 and 423.100, CMS is required to consider the factors of (1) severity, (2) when the offense occurred, and (3) any other information it deems relevant to its determination of whether Petitioner’s felony is detrimental to the best interests of the Medicare program.  In reviewing CMS’s decision to place a provider or supplier on the preclusion list, an ALJ is not permitted to re-weigh the factors set forth in 42 C.F.R. §§ 422.2 and 423.100.  Where the regulations have granted CMS discretion to determine whether a provider or supplier’s underlying conduct is detrimental to the Medicare program, the ALJ may not substitute their own judgment as to whether CMS properly exercised that discretion.  *Brian K. Ellefsen, D.O.*, DAB No. 2626 at 7 (2015); *see also* *Pa. Physicians, P.C.*, DAB No. 2980 at 13 (2019).

In its reconsidered determination, CMS explicitly weighed the factors at 42 C.F.R. § 424.530(a)(3), observing that Petitioner’s felony conviction for misappropriation of

Page 9

public funds by a county officer is “severe in nature.” CMS Ex. 1 at 5-6.  Petitioner converted money that was intended to be used for cancer research for personal use and the CMS hearing officer concluded that this behavior shows dishonesty and a lack of good judgment.  CMS Ex. 1 at 5-6.  In addressing the second factor, CMS found that although the offense concluded several years ago, the severity of the offense supports Petitioner’s placement on the Preclusion List.  *Id.* Finally, regarding the third factor, CMS noted that payment under the Medicare program relies on the trustworthiness and best judgment of Medicare partners and Petitioner’s felonious behavior indicates that Medicare Trust Funds may be at risk if Petitioner is allowed to participate in the Medicare program.  *Id*.  CMS considered adverse actions that other agencies also took against Petitioner based on his conviction.  *Id*.  CMS rejected Petitioner’s argument that his subsequent reinstatement by the IG, OPM, and the California DHCS should be a sufficient basis for CMS to allow him to participate in the Medicare program.  *Id*.  CMS is correct that the other agency determinations are separate from CMS’s determination and do not bind CMS’s discretionary decision to deny enrollment, but certainly nothing prevents CMS from considering subsequent reinstatement by the above agencies as a factor in support of Petitioner’s enrollment.  CMS instead found that these prior adverse actions demonstrate the severity of Petitioner’s offense.  *Id*.  CMS did not articulate why it viewed the other agencies adverse actions as indicative of the greater severity of Petitioner’s offense as opposed to evidencing the overlapping jurisdiction of the various agencies and a consensus that the nature of Petitioner’s offense warranted some adverse action for a period of time.  Nonetheless, the regulatory requirements for Petitioner’s inclusion on CMS’s preclusion list have been met.  42 C.F.R. § 422.2.

Petitioner does not dispute that he was convicted of a felony within the last 10 years that is *per se* detrimental to the Medicare program and its beneficiaries.  Other than disputing that CMS did not properly consider the nature of his felony offense, the actions that he has taken post-conviction, and other agencies’ reinstatement, Petitioner does not offer any other arguments why he should not be placed on the Preclusion List.

Based on its consideration of the regulatory factors set forth in 42 C.F.R. §§ 422.2 and 423.100, CMS had a legitimate basis to uphold Petitioner’s placement on the Preclusion List.

Page 10

VI. Conclusion

For the foregoing reasons, I affirm CMS’s determination to deny Petitioner’s Medicare enrollment application under 42 C.F.R. § 424.530(a)(3) and to include Petitioner on its preclusion list.

Endnotes

1  My conclusions of law are set forth in bold and followed by pertinent findings of fact and analysis.

2  While Petitioner only provided evidence in support of completion of the medical ethics course, I nonetheless assume that Petitioner also performed the remaining activities described here for purposes of disposition of this case.

3  Section 424.535(a)(3)(ii)(B) provides bases for the revocation of enrollment, and it is identical to 42 C.F.R. § 424.530(a)(3)(i)(B), which applies to the denial of enrollment relevant to this case.  The Board has held that reasoning applicable to § 424(a)(3)(ii)(B) is applicable to the identical provision in § 424.530(a)(3)(i)(B).  *See John A. Hartman, D.O*., DAB No. 2911 at 10-13 (2018).
  
          /s/
        Jacinta L. Alves

                      Administrative Law Judge Back to top
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