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                              Scotty Rose, DAB CR5872 (2021)
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Scotty Rose, DAB CR5872 (2021)








  
  
    

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





Scotty Rose,
(NPI: 1780627885),
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-21-205Decision No. CR5872May 20, 2021

        
              
    

      DECISION

The Centers for Medicare & Medicaid Services (CMS), through its Medicare administrative contractor, Palmetto GBA (Palmetto), revoked the enrollment and billing privileges of Scotty Rose (Petitioner) pursuant to 42 C.F.R. §§ 424.535(a)(3) and (9), based on its determination that he had been convicted of a felony and had not reported the conviction to CMS.  Palmetto also barred Petitioner from re-enrolling in the Medicare Program for three years.

Following the revocation of Petitioner's enrollment, CMS's Provider Enrollment and Oversight Group placed Petitioner on its preclusion list.  *See* 42 C.F.R. §§ 422.2 and 423.100.  Medicare Advantage (Part C) organizations and Part D prescription drug plan sponsors may not make any payment for health care items, services, or drugs that are furnished, ordered, or prescribed by an individual or entity included on the preclusion list.  *See* 42 C.F.R. §§ 422.222 and 423.120(c)(6).

After his re-enrollment bar expired, Petitioner attempted to re-enroll in Medicare, but Palmetto denied the application under 42 C.F.R. § 424.530(a)(3) because of Petitioner's felony conviction and again place Petitioner on the preclusion list.  Petitioner appealed

**Page 2**

the denial of his Medicare enrollment and his placement on CMS's preclusion list.  As explained below, I conclude that CMS had legal bases to deny Petitioner's Medicare re‐enrollment application and to place Petitioner on its preclusion list.

I.  Case Background and Procedural History

*Petitioner was convicted of a felony.*

On December 17, 2014, a grand jury in the Southern District of West Virginia returned an indictment against Petitioner for one felony count of Tampering with a Witness, Victim or an Informant, in violation of 18 U.S.C. § 1512(d)(4) and 18 U.S.C. § 2.1
  CMS Exhibit (Ex.) 1.  The indictment charged as follows:

1.  Federal Correctional Institution Beckley ("FCI Beckley") was a medium security federal correctional institution housing approximately two thousand male inmates in the prison complex and the adjacent minimum security satellite camp.

2.  In August of 2012, the Federal Bureau of Investigation ("FBI") began an investigation of a person known to the grand jury ("target") related to methamphetamine trafficking.  The target was incarcerated in the Pine B – Upper Housing Unit within FCI Beckley.

3.  In furtherance of the investigation, the FBI enlisted the aid of another inmate within the Pine B – Upper Housing Unit.  The inmate was designated as a confidential human source ("CHS") by the FBI.  The CHS was to approach the target and develop information related to the target's criminal acts.

**Page 3**

4.  In furtherance of the investigation, the FBI used a recording device with the CHS.  To ensure secrecy and privacy, the CHS was outfitted with the recording device in the FCI Beckley Health Services Department – a medical clinic within the FCI Beckley Complex.

5.  The CHS was able to speak with the target on multiple occasions in furtherance of the investigation in 2012 and 2013.  The CHS met with the FBI and turned the records of these conversations over to the FBI by way of a Bureau of Prison[s] Counselor.

6.  [Petitioner] worked as a physician's assistant in the FCI Beckley Health Services Department.  As such, he provided general care to and triage of FCI Beckley inmates.

7.  [Petitioner] knew that the FBI was meeting with the CHS and that the CHS was wearing a recording device for the FBI.

8.  On or about February 6, 2013, [Petitioner] met with an inmate known to the grand jury ("Known Inmate") in the FCI Beckley Health Services Department.  [Petitioner] informed the Known Inmate that the CHS was wearing a recording device and otherwise assisting the FBI with an investigation.  [Petitioner] expected the Known Inmate to tell other inmates about the CHS's cooperation with the FBI.

9.  [Petitioner] knew that once other inmates learned that the CHS was working with the FBI, the CHS would fear for his safety due to threats, harassment, or physical harm caused by other inmates.  [Petitioner] also knew the CHS would be forced to transfer from FCI Beckley for the CHS'[s] own safety.

10.   Upon receiving the information that the CHS was working with the FBI and wearing a recording device, the Known Inmate returned to the Pine B [–] Upper Housing Unit and informed other inmates that [the] CHS was an informant working with the FBI and wore a recording device.

11.   Because of the disclosure of the CHS's status, the CHS was repeatedly confronted by other inmates about wearing a recording device and otherwise working with the FBI.  The CHS was forced to stay in a Special Housing Unit within FCI Beckley for his own safety and protection.

12.   As a result of [Petitioner's] disclosing to the Known Inmate [that] the CHS was working with the FBI, the CHS was no longer able to safely

**Page 4**

approach the target in the Pine B [–] Upper Housing Unit.  As such, the FBI's investigation of the target was terminated.

CMS Ex. 1 at 1-3.2

Following a trial in the U.S. District Court for the Southern District of West Virginia, a jury found Petitioner guilty on the single count of the indictment, and the court entered judgment on January 21, 2016.  CMS Ex. 2 at 1; *see also* CMS Ex. 16 at 51-52, 57 (news article included as an exhibit to Petitioner's reconsideration request describing a two-day trial in 2015).  On January 25, 2016, the district judge sentenced Petitioner to 24 months' incarceration followed by one year of supervised release, and to pay a $100 assessment.  CMS Ex. 2 at 1-3, 5.

*CMS revoked Petitioner's Medicare enrollment and placed him on the preclusion list (2016-2019).*

As a physician's assistant, Petitioner participated in the Medicare program as a "supplier" of services.3
  In a notice dated June 7, 2016, Palmetto informed Petitioner that his Medicare enrollment and billing privileges would be revoked pursuant to 42 C.F.R. § 424.535, subsections (a)(3) and (a)(9), based on his felony conviction and his failure to report the conviction to CMS.  CMS Ex. 4 at 1.  The notice stated the revocation was effective January 21, 2016, the date of Petitioner's conviction, and that, effective 30 days after the date of the notice, Petitioner would be barred from re-enrolling in Medicare for three years pursuant to 42 C.F.R. § 424.535(c).  *Id.* at 1-2.

In a notice dated August 1, 2018, CMS notified Petitioner that it was adding him to its preclusion list, effective January 1, 2019, because his enrollment was revoked, he was under a re-enrollment bar, and CMS had determined the conduct that led to the revocation was detrimental to the best interests of the Medicare program.  CMS Ex. 5.  By letter dated August 18, 2018, Petitioner requested to have his "Medicare privileges reinstated."  CMS Ex. 6 at 1.  Petitioner explained that he had not responded earlier to the June 7, 2016 notice of revocation because, among other reasons, he "was incarcerated at the time and had no way of receiving it."  *Id*.

**Page 5**

CMS treated Petitioner's letter as a request for reconsideration of both the revocation of his enrollment and of his placement on the preclusion list.  In a notice dated November 6, 2018, CMS dismissed the reconsideration request as it pertained to Petitioner's revocation.  CMS Ex. 7.  CMS determined that Petitioner did not file the reconsideration request within 60 days of Petitioner's presumed receipt of the June 7, 2016 notice of revocation.  *Id.*  CMS further found that Petitioner failed to show good cause for not filing by the deadline.  *Id.* Separately, by notice dated November 20, 2018, CMS issued a reconsidered determination upholding Petitioner's placement on the preclusion list.  CMS Ex. 8.  The notice specified that Petitioner would remain on the preclusion list until July 6, 2019, the date his re-enrollment bar expired.  *Id.* at 3-4.  As far as the record reveals, Petitioner did not request administrative review of the unfavorable reconsidered determination.

*CMS's contractor denied Petitioner's application to re-enroll in Medicare.*

On or about August 7, 2019, following the expiration of his prior re-enrollment bar, Petitioner applied to re-enroll as a supplier in the Medicare program by filing an enrollment application (form CMS-855I).  CMS Ex. 14 at 11.  Palmetto received the application on August 15, 2019.  *Id.* at 1.4
  By letter dated April 16, 2020, Palmetto denied Petitioner's August 15, 2019 application to re-enroll in Medicare.  CMS Ex. 15.  Relying on Petitioner's January 21, 2016 felony conviction, Palmetto cited 42 C.F.R. § 424.530(a)(3) as grounds for denying the application.  Petitioner, through counsel, requested reconsideration of the denial of his enrollment application.  CMS Ex. 16.  In a reconsidered determination dated October 14, 2020, CMS upheld the denial of Petitioner's August 15, 2019 enrollment application.  CMS Ex. 17.

*CMS placed Petitioner on the preclusion list a second time.*

While Petitioner's re-enrollment application was pending, CMS informed Petitioner, by notice dated January 24, 2020, that it was again placing him on its preclusion list.  CMS Ex. 10.  CMS stated that Petitioner had been placed on the preclusion list due to his conviction, within the previous ten years, of a felony that CMS deemed detrimental to the best interests of the Medicare program.  *Id.* at 1.  The notice specified that Petitioner would remain on the preclusion list until ten years after the date of his conviction.  *Id.*  Petitioner requested reconsideration by letter dated March 19, 2020.  CMS Ex. 11.  Subsequently, both Petitioner and counsel submitted additional materials in support of Petitioner's reconsideration request.  CMS Exs. 12, 13.  In a reconsidered determination dated June 17, 2020, CMS upheld its placement of Petitioner on the preclusion list and specified that preclusion was effective as of the date of the reconsidered redetermination,

**Page 6**

June 17, 2020, and would continue until ten years after the date of Petitioner's conviction.  CMS Ex. 9 at 6.

*Petitioner requested review of CMS's actions.*

On August 3, 2020, Petitioner requested a hearing before an administrative law judge challenging his placement on the preclusion list.5
  The hearing request was docketed as Docket No. C-20-684 and the case was assigned to me.  On August 10, 2020, at my direction, my office acknowledged Petitioner's hearing request and issued my Standing Prehearing Order (Prehearing Order).  On August 24, 2020, CMS filed a motion requesting that I direct Petitioner to file his prehearing exchange first or, alternatively, that I direct Petitioner to supplement his hearing request with a more definitive statement specifying the findings of fact and conclusions of law in the reconsidered determination with which he disagreed.  On September 14, 2020, Petitioner filed a response to CMS's motion, stating that he did not object to filing his prehearing exchange before CMS submitted its exchange.  In the absence of objection from Petitioner, I granted CMS's request and directed Petitioner to file his exchange first.  On October 19, 2020, Petitioner filed his prehearing brief opposing CMS's reconsidered determination to include Petitioner on the preclusion list.  On November 23, 2020, CMS filed its prehearing brief, which included a motion for summary judgment, and 13 proposed exhibits (CMS Exs. 1‐13).  On December 7, 2020, Petitioner filed a response opposing CMS's motion for summary judgment.

On December 4, 2020, Petitioner filed a separate hearing request challenging the denial of his enrollment application.  That case was docketed as C-21-205 and was also assigned to me.  By motion filed December 14, 2020, Petitioner asked that I consolidate the appeals docketed under C-20-684 and C-21-205, stating that the cases involved the same parties and similar issues.  The same day, CMS filed a response stating that it did not object to consolidation.  On December 15, 2020, I issued an order consolidating the two appeals under Docket No. C-21-205 and specifying that my Prehearing Order issued in Docket No. C-21-205 remained in effect.

In response to the Prehearing Order, CMS filed its prehearing brief, which incorporated a motion for summary judgment (CMS Br.), and four additional proposed exhibits (CMS Exs. 14‐17).  CMS did not propose any witnesses.  Petitioner filed a response to

**Page 7**

CMS's prehearing brief and motion for summary judgment (P. Br.).6
  Petitioner did not identify any witnesses or propose any exhibits.  There being no objection from Petitioner, I admit CMS Exs. 1-17 into the record.  Prehearing Order ¶ 7.

As neither party proposed to call any witnesses, I need not convene a hearing to permit cross-examination.  I therefore decide this case on the written record without considering whether the standard for summary judgment is met.  Prehearing Order ¶ 10.  I deny CMS's motion for summary judgment as moot.

II.  Issues

The issues in this case are:

Whether CMS had a legal basis to deny Petitioner's application for Medicare enrollment and billing privileges under 42 C.F.R. § 424.530(a)(3); and

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

III.  Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(17) and (20), 498.5(*l*)(2) and (n)(2);7
*see also* Social Security Act (Act) § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)).

**Page 8**

IV.  Discussion

**A. Statutory and Regulatory Framework**

Petitioner is a supplier of health care services for purposes of the Medicare program.  *See* Act § 1861(d) (42 U.S.C. § 1395x(d)); 42 C.F.R. §§ 400.202 (definition of supplier), 410.74 (requirements for coverage of physician's assistant services).  In order to participate in the Medicare program as a supplier, an individual must meet certain criteria to enroll and receive billing privileges.  42 C.F.R §§ 424.505, 424.510.  CMS may deny a supplier's enrollment for any reason stated in 42 C.F.R § 424.530.

As authorized under sections 1842(h)(8) and 1866(b)(2)(D) of the Act (42 U.S.C. §§ 1395u(h)(8) and 1395cc(b)(2)(D)), CMS may deny a supplier's application for Medicare enrollment and billing privileges if the supplier has been convicted of a felony offense, as described in 42 C.F.R § 424.530(a)(3):

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

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

(A) Felony crimes against persons, such as murder, rape, assault, and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pretrial diversions.
(B) Financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pretrial diversions.
(C) Any felony that placed the Medicare program or its beneficiaries at immediate risk, such as a malpractice suit that results in a conviction of criminal neglect or misconduct.
(D) Any felonies that would result in mandatory exclusion under section 1128(a) of the Act.

(ii)  Denials based on felony convictions are for a period to be determined by the Secretary, 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.

**Page 9**

Furthermore, CMS may place on the preclusion list any "individual or entity, regardless of whether they are or were enrolled in Medicare, [that] 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."  84 Fed. Reg. 15,680, 15,828, 15,840 (April 16, 2019) (to be codified at 42 C.F.R. §§ 422.2, 423.100 (definitions of "Preclusion list") effective January 1, 2020).  Medicare Advantage organizations and Medicare Part D plan sponsors may not provide reimbursement for any items or services furnished by an individual or entity on CMS's preclusion list, or for prescriptions the individuals write.  42 C.F.R. §§ 422.2, 422.222, 422.224, 423.100, and 423.120(c)(6).  In determining whether a felony conviction is detrimental to the best interests of the Medicare program, CMS considers:

(i)  The severity of the offense;
(ii)  When the offense occurred; and
(iii)  Any other information that CMS deems relevant to its determination.

84 Fed. Reg. at 15,828, 15,840.

If CMS places an individual on the preclusion list based on a felony conviction, the individual will remain on the preclusion list for a ten-year period, beginning on the date of the conviction, unless CMS determines that a shorter length of time is warranted.  In making a determination as to whether a shorter term of preclusion is appropriate, CMS takes into account:

(i) The severity of the offense;
(ii) When the offense occurred; and
(iii) Any other information that CMS deems relevant to its determination.

84 Fed. Reg. at 15,832, 15,840-41 (to be codified at 42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C), effective Jan. 1, 2020).

Finally, in the case of preclusion from ordering Medicare Advantage items or services, CMS has the discretion not to include a particular individual or entity on the preclusion list should CMS determine that exceptional circumstances exist regarding beneficiary access to items, services, or drugs.  In making such a determination, CMS considers:

(i) The degree to which beneficiary access to Medicare Advantage items, services, or drugs would be impaired; and
(ii) Any other evidence that CMS deems relevant to its determination.

84 Fed. Reg. at 15,832 (to be codified at 42 C.F.R. § 422.222(a)(6), effective January 1, 2020).

**Page 10**

**B. Findings of Fact, Conclusions of Law, and Analysis**

***1. CMS had a legal basis to deny Petitioner's Medicare enrollment******application pursuant to 42 C.F.R. § 424.530(a)(3) because, within the ten years prior to his application, Petitioner was convicted of a felony offense that CMS has determined to be detrimental to the best interests of the Medicare program and its beneficiaries.***8

CMS may deny a supplier's application to enroll in the Medicare program if, within the preceding ten years, the supplier was convicted of a felony offense that CMS "has determined to be detrimental to the best interests of the program and its beneficiaries."  42 C.F.R. § 424.530(a)(3).  Examples of offenses that are detrimental to the best interests of the Medicare program and for which CMS may deny enrollment, include – but are not limited to – felony crimes against persons, such as murder, rape, assault, and similar crimes; financial crimes such as extortion, embezzlement, income tax evasion, insurance fraud, and similar crimes; felonies that place the Medicare program or its beneficiaries at immediate risk (such as convictions for criminal neglect or misconduct); and felonies that would result in mandatory exclusion under section 1128 of the Act.  42 C.F.R. § 424.530(a)(3)(i)(A)-(D).

In promulgating 42 C.F.R. § 424.530(a)(3), CMS determined that the enumerated crimes are detrimental *per se* to Medicare.  *See Letantia Bussell, M.D.*, DAB No. 2196 at 9 (2008).9
  However, even if Petitioner was not convicted of an enumerated crime, CMS is authorized to determine, on a case-by-case basis, that a particular felony conviction is detrimental to Medicare and its beneficiaries and therefore justifies denying an enrollment application.  *Saeed A. Bajwa, M.D.*, DAB No. 2799 at 10-12 (2017) (42 C.F.R. § 424.535(a)(3)(i) authorizes CMS to determine what felony convictions are a basis for revocation; CMS is not limited to the felonies enumerated as examples).

**Page 11**

The record demonstrates, and Petitioner acknowledges, that he was convicted of a felony within the previous ten years.  P. Br. at 11.  Specifically, on January 21, 2016, Petitioner was convicted of one felony count of Tampering with a Witness, Victim or an Informant in violation of 18 U.S.C. § 1512(d)(4) and 18 U.S.C. § 2.  CMS Ex. 2 at 1.  Further, it is apparent that CMS exercised its discretion to determine that Petitioner's felony conviction, though not specifically listed in 42 C.F.R. § 424.530(a)(3)(i), was nonetheless detrimental to the best interests of the Medicare program.  *See Bajwa*, DAB No. 2799 at 10-11.

In its October 14, 2020 reconsidered determination, CMS stated, in relevant part:

CMS finds [Petitioner's] felony conviction to be detrimental to the best interests of the Medicare program and its beneficiaries based on the specific facts underlying the conviction.  [Petitioner] admitted to witness tampering during a Federal Bureau of Investigation (FBI) examination [sic] during his work as a physician['s] assistant in a correctional institution.  [Petitioner] became aware that the FBI was working with a confidential informant at the institution.  [Petitioner] informed an inmate of a confidential informant's status, and that action led to the termination of an investigation related to methamphetamine trafficking . . . .  [Petitioner's] actions not only negatively impacted an ongoing FBI investigation, but it also placed the confidential informant in danger.  For safety and protection, the confidential informant had to stay in a special unit within the correctional facility.  As a result, [Petitioner] was sentenced to serve 24 months in a federal prison.  The length of [Petitioner's] imprisonment sentence demonstrates the seriousness of the conduct underlying the revocation [sic].  In addition, the conviction itself call[s] into question [Petitioner's] trustworthiness in dealings with the federal government.

CMS finds [Petitioner's] conviction detrimental to the Medicare program and its beneficiaries for several reasons.  Given . . . the way payment is made in the Medicare program, it is vitally important to the integrity of the Trust Funds that our Medicare partners act with honesty and integrity.  [Petitioner's] conviction clearly calls his honesty and integrity into question.  It necessarily follow[s] that any threat to the Trust Funds is a threat to beneficiaries.  Further, [Petitioner] intentionally disclosed the existence of a confidential informant.  This raises concern as to whether he can be counted on to be a reliable Medicare partner who is able and willing to abide by Medicare laws, rules, and program instructions.  Therefore, the denial of [his] Medicare enrollment application under § 424.530(a)(3) is appropriate.

CMS Ex. 17 at 3-4.

**Page 12**

In addition, the reconsidered determination explicitly considered and rejected Petitioner's arguments as to why his conviction should not be viewed as detrimental to Medicare.  Petitioner argued, among other things, that:  1) his conviction does not necessarily prove that the jury found he intended to harass the confidential informant or to interfere with an investigation; 2) the conduct for which he was convicted occurred in 2013, and since that time he has not reoffended and has maintained high moral standards; 3) his licenses to practice as a physician's assistant and to prescribe controlled substances remain in good standing; and 4) members of the community support him and believe him to be of good character.  CMS Ex. 16 at 7-9.  CMS addressed these contentions, as follows:

CMS has considered the conduct that [led] to his felony conviction and has determined the conviction to be detrimental to the program and beneficiaries as indicated above.  The passage of time since his conviction does not change this assessment.  Additionally, [Petitioner] contends that his unrestricted license as a physician['s] assistant in West Virginia and Virginia and his DEA prescription license demonstrates his integrity and trustworthiness.  Other agencies have made decisions regarding [Petitioner's] ability render healthcare services and prescribe drugs just as CMS is also empowered to make a decision concerning his participation in our program.  As we have stated, the conduct underlying his conviction is detrimental to the program and beneficiaries and justifies denial.  He also points out that several individuals have written letters attesting to his character and integrity.  However, this does not change CMS' assessment of his crime.

CMS Ex. 17 at 4.

As I have just described, the record establishes that CMS exercised its discretion under 42 C.F.R. § 424.530(a)(3) to determine that Petitioner's conviction is detrimental to the Medicare program and its beneficiaries.  This is all that is required under the regulation to support the denial of Petitioner's enrollment application.  Importantly, I may not set aside CMS's decision based on my own view as to whether Petitioner's felony conviction is detrimental to the Medicare program and its beneficiaries.10
  *See Robert J. Tomlinson, M.D.* DAB No. 2916 at 8 (2018) (an administrative law judge is not "allowed to review CMS's exercise of discretion to deny [a Medicare enrollment] application or to substitute [his or her] opinion as to whether [an individual] remains a threat to the Medicare program and its beneficiaries based on [a] felony conviction.").  In summary, CMS had a legal basis to deny Petitioner's Medicare enrollment application pursuant to 42 C.F.R. § 424.530(a)(3).

**Page 13**

***2. CMS had a legal basis to add Petitioner to the preclusion list effective June 17, 2020, the date of the reconsidered determination, until January 21, 2026, ten years from the date of Petitioner's felony conviction.***

In addition to establishing a legal basis to deny Petitioner's application to enroll in Medicare, Petitioner's conviction meets the regulatory requirements to include Petitioner on CMS's preclusion list.  84 Fed. Reg. at 15,828, 15,840 (to be codified at 42 C.F.R. §§ 422.2, 423.100).  Petitioner concedes, and the record establishes, that he was convicted of a felony offense within the previous ten years.  CMS Ex. 2; *see also* P. Br. at 11.  Further, CMS determined Petitioner's conviction was detrimental to the best interests of the Medicare program and, in making that determination, considered the factors outlined in  42 C.F.R. §§ 422.2 and 423.100.  In its reconsidered determination, CMS explained:

CMS finds that [Petitioner's] conviction is detrimental to the best interests of the Medicare program based on the facts and circumstances surrounding his conviction[].  [Petitioner] admitted to witness tampering during an FBI investigation.  [Petitioner] informed an inmate of the confidential informant's status and that action led to the termination of the investigation. . . .  [Petitioner's] actions negatively impacted an ongoing FBI investigation regarding methamphetamines.  As a result. [Petitioner] was sentenced to 24 months in a federal prison.  The length of [his] imprisonment sentence demonstrates the severity of his offense.  In addition, the conviction itself call[s] into question [his] trustworthiness in dealings with the federal government.  [Petitioner's] actions are severe and reveal dishonest behavior and a disregard for the rules and regulations of the federal government.  The integrity of the Medicare program is dependent on the trustworthiness of its partners, and [Petitioner's] participation in the Medicare program could significantly affect the integrity of the program.  While the offense occurred several years ago in 2016,[11
] the severity of it, and the fact that it implicates his trustworthiness, indicates to CMS that [Petitioner's] inclusion on the CMS Preclusion List is

**Page 14**

appropriate.  As a result, we find that the felony offense that [Petitioner] was convicted for is detrimental to the best interests of the Medicare program.

CMS Ex. 9 at 5.

As this discussion demonstrates, CMS considered the seriousness of Petitioner's conduct and the degree to which Petitioner's conduct could negatively impact the integrity of the Medicare program.  42 C.F.R. § 422.2; *see also* 42 C.F.R. § 423.100.  In particular, CMS considered the severity of Petitioner's felony offense, when the offense occurred, and other factors such as the impact Petitioner's conduct had on an ongoing FBI investigation and on Petitioner's trustworthiness in dealing with the federal government.  42 C.F.R. §§ 422.2, 423.100.  Moreover, although Petitioner describes his offense as "a single conversation to an inmate for a very short duration" (P. Br. at 17), he does not dispute the factors CMS outlined in its June 17, 2020 reconsidered determination or the central facts charged in the December 17, 2014 indictment (*id* at 5-6 (Petitioner testified at trial he "intentionally told [an] inmate that he needed to stay away from the [FBI informant] because he could be a snitch.")).  Rather, Petitioner disagrees with how CMS evaluated those factors.

As an initial matter, it is not clear to me whether, in reviewing CMS's decision to place a provider or supplier on the preclusion list, I am authorized to evaluate how CMS applied the factors enumerated in 42 C.F.R. §§ 422.2 and 423.100.  As I have described above, appellate decisions of the DAB have concluded that administrative law judges may not substitute their judgment for that of CMS in reviewing whether to deny a supplier's Medicare enrollment application because the conduct underlying a conviction is detrimental to Medicare.  *See Robert J. Tomlinson, M.D.* DAB No. 2916 at 8; *see also Brian K. Ellefsen, DO*, DAB No. 2626 at 7 (2015).  Similar reasoning applies in cases involving enrollment revocations.  *See, e.g., Pa. Physicians, P.C.*, DAB No. 2980 at 13 (2019); *see also Bussell*, DAB No. 2196 at 12-13.  Thus, it is possible to read the preclusion regulations as delegating to CMS unreviewable discretion to determine if a conviction is detrimental to the best interests of the Medicare program.

I need not decide the scope of CMS's discretion in preclusion cases to resolve this case, however.  That is because, even if I were authorized to review CMS's determination that Petitioner's conviction is detrimental to the best interests of the Medicare program, I would not find any error by CMS.  Petitioner's arguments to the contrary do not persuade me otherwise.

Petitioner contends that CMS's determination "is arbitrary and capricious as no consideration was given to the Petitioner's current medical practice nor the patients and area in which he practices."  P. Br. at 11.  Petitioner asserts that he "remains a licensed physician assistant (never having been suspended for his conviction from the practice of

**Page 15**

providing medical care)"; has billing privileges with a number of health insurance programs; and has never "had any of his billing practices questioned or examined for any type of fraud or illegal activity."  P. Br. at 17.  Accepting Petitioner's representations as true, they do not diminish the seriousness of Petitioner's criminal conduct.

The underlying conduct that resulted in Petitioner's conviction amply demonstrates that his actions were detrimental to the best interests of the Medicare program.  By virtue of his position as a healthcare practitioner in a correctional institution, Petitioner was responsible for the care and wellbeing of inmates incarcerated at that facility.  However, when Petitioner learned, through his access to the facility's Health Services Department, that an inmate was cooperating with the FBI, he informed another inmate of that cooperation.  Regardless of Petitioner's personal motivations for doing so, it was eminently foreseeable that his conduct would have at least two serious consequences.

First, the cooperating inmate would be at risk for serious bodily harm or even death at the hands of the inmate with whom Petitioner spoke or of other inmates who would find out second hand.  Indeed, as alleged in the indictment, once Petitioner disclosed the informant's status, the informant was "repeatedly confronted by other inmates" and "was forced to stay in a Special Housing Unit . . . for his own safety and protection."  CMS Ex. 1 at 3.  By, in effect, informing on the informant, Petitioner unjustifiably placed in harm's way a member of the very population he was responsible for protecting.

Second, it was foreseeable that any investigation with which the informant was cooperating would be immediately and severely compromised.  As a consequence of Petitioner's actions, the FBI was forced to end its investigation into the target's role in methamphetamine trafficking.  *Id*.  As such, Petitioner's actions undermined a federal agency's ability to perform its official duties.  Further, I infer that ending the investigation may have increased the availability of highly dangerous illegal drugs to vulnerable individuals inside and outside the correctional institution.  Therefore, Petitioner's actions could have placed in jeopardy the health and safety of any person who purchased or consumed the illegal drugs.  Such a result runs counter to Petitioner's duty as a healthcare professional.

For these reasons alone, CMS could reasonably find that the offense for which Petitioner was convicted was severe and reflects negatively on his trustworthiness.  Additionally, Petitioner was sentenced to 24 months of incarceration, followed by one year of supervised release.  I agree with CMS that the length of Petitioner's sentence is further evidence of the severity of Petitioner's offense.  *See* CMS Ex. 9 at 5.  Finally, both the date of Petitioner's conviction (January 21, 2016) and the date of the conduct that led to his conviction (February 6, 2013) occurred within ten years of the date of CMS's notice placing Petitioner on the preclusion list (January 24, 2020).  Given that the regulations authorize CMS to place an individual on the preclusion list based on a felony conviction occurring within the prior ten years, it follows that conduct occurring within that

**Page 16**

timeframe is not too remote to be considered detrimental to the best interests of the Medicare program.  For all these reasons, CMS was legally authorized to add Petitioner to the preclusion list effective June 17, 2020, the date of the reconsidered determination, until January 21, 2026, ten years from the date of Petitioner's felony conviction.  *See* 84 Fed. Reg. 15,832, 15,840-41 (to be codified at 42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C)).

***3. Petitioner's equitable arguments are not a basis to reverse CMS's decision to deny Petitioner's application to enroll in Medicare or to place him on the preclusion list.***

The main thrust of Petitioner's arguments is that his conduct since his release from prison, his licensure status, the accuracy of his billing, and his maintenance of billing privileges with other health insurance programs demonstrate that he does not pose a risk to the Medicare program or its beneficiaries.  *See, e.g.* P. Br. at 17.  To the contrary, Petitioner contends that denying him enrollment in Medicare and placing him on the preclusion list has the potential to put Medicare beneficiaries at risk because he provides mental and behavioral health services in a severely impoverished rural area in West Virginia where access to such services is critically limited.  *Id.* at 12-17.

However, even accepting these contentions as true, it is well settled that an administrative law judge may not overturn CMS's denial of Medicare enrollment on equitable grounds.  *Dr. Robert Kanowitz*, DAB No. 2942 at 7 (2019).  Indeed, the *Kanowitz* decision considered and rejected similar arguments to Petitioner's:  for example, that Dr. Kanowitz had been reinstated by various insurance companies and the Medicaid program.  DAB No. 2942 at 7.  Further, to the extent Petitioner is arguing that CMS could and should have taken Petitioner's unique circumstances into account in deciding whether to deny his enrollment application, I am also foreclosed from overturning the enrollment denial on that ground.  *City of Sugarland*, DAB No. 2719 at 8 (2016).  Moreover, I see no reason to apply a different rule when CMS has exercised its discretion to place an individual on the preclusion list.

With regard to CMS's decision to place Petitioner on the preclusion list, Petitioner's argument that he provides health care in a severely under-resourced area may be intended to demonstrate "that exceptional circumstances exist regarding beneficiary access to items, services, or drugs" within the meaning of 42 C.F.R. § 422.222(a)(6) (84 Fed. Reg. at 15,832).  The regulation provides that CMS has discretion not to include an individual on the preclusion list if such circumstances exist.  If Petitioner did intend to argue that CMS failed to apply 42 C.F.R. § 422.222(a)(6) in this case, I do not find the argument supports reversal of the decision to include Petitioner on the preclusion list.

First of all, CMS is likely best positioned to assess the need for specific types of medical professionals depending on geographic area and the impact of a national health

**Page 17**

emergency.  Next, I may presume that CMS conducted the required analysis and determined that "exceptional circumstances" did not justify excepting Petitioner from placement on the preclusion list.  *See, e.g., Brian K. Ellefsen*, DAB No. 2626 at 7 (2015) (citing *U.S. Postal Serv. v. Gregory*, 534 U.S. 1, 10 (2001) ("a presumption of regularity attaches to the actions of Government agencies")); *see also U.S. v. Chemical Found., Inc.*, 272 U.S. 1, 1415 (1926) (a "presumption of regularity supports the official acts of public officers," so "in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties").  Finally, nothing in the regulation suggests that CMS's exercise of its discretion to waive (or not to waive) placement on the preclusion list based on beneficiary access issues is reviewable by an administrative law judge.  In another context, an appellate panel of the DAB observed: "Even assuming CMS had discretion to refrain from [taking an official action] in these circumstances, it chose not to do so, and we have no authority to review that choice."  *Sugarland*, DAB No. 2719 at 8.  I find the reasoning of the *Sugarland* decision persuasive authority supporting a conclusion that I may not review CMS's determination declining to apply 42 C.F.R. § 422.222(a)(6) in Petitioner's case.

V.  Conclusion

For the reasons explained above, I affirm that CMS had a legal basis to deny Petitioner's application for Medicare enrollment and billing privileges and to include Petitioner on its preclusion list.


          /s/
        Leslie A. Weyn

                      Administrative Law Judge
      1. 18 U.S.C. § 1512(d)(4) provides that "[w]hoever intentionally harasses another person and thereby hinders, delays, prevents, or dissuades any person from . . . causing a criminal prosecution, or a parole or probation revocation proceeding, to be sought or instituted, or assisting in such prosecution or proceeding . . . or attempts to do so, shall be fined under this title or imprisoned not more than 3 years, or both."
18 U.S.C. § 2 specifies that an individual is punishable as a principal if the individual "commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission" or "willfully causes an act to be done which if directly performed by him or another would be an offense against the United States."
18 U.S.C. § 3559(a)(5) provides that an offense is a Class E felony if the maximum term of imprisonment authorized is less than five years but more than one year. back to note 1
                      2. CMS Exs. 1-13 are located in the Departmental Appeals Board (DAB) Electronic Filing System (E-File) under prior Docket No. C-20-684 (see Docket Entries #9b through #9n). back to note 2
                      3. A "supplier" is "a physician or other practitioner, or an entity other than a provider, that furnishes health care services under Medicare."  42 C.F.R. § 400.202. back to note 3
                      4. Palmetto stamped the application with the Julian calendar date "19227," signifying its receipt on the 227th day of 2019, or August 15, 2019. back to note 4
                      5. Petitioner appears pro se in the present proceedings. back to note 5
                      6. As noted above, the parties also filed briefs under prior Docket No. C-20-684 (see Docket Entries #8, #9, #10 in the DAB E-File for that docket number).  I have reviewed those briefs and considered the arguments therein; however, they are substantially similar to the parties' briefs in Docket No. C‐21‐205 except that the briefs in Docket No. C‐21‐205 also address the denial of Petitioner's enrollment.  Therefore, for simplicity, I cite to the parties' briefs in Docket No. C‐21‐205 when addressing the parties' contentions. back to note 6
                      7. CMS amended 42 C.F.R. part 498 to add sections 498.3(b)(20) and 498.5(n) (authorizing providers and suppliers to appeal their inclusion on the preclusion list) effective June 15, 2018.  83 Fed. Reg. 16,440, 16,757 (Apr. 16, 2018). back to note 7
                      8. My conclusions of law appear as headings in bold italic type. My findings of fact and analysis appear in the supporting text. back to note 8
                      9. The Bussell decision considered grounds for revoking a supplier's Medicare enrollment found at section 424.535(a)(3) of the regulations.  Subsequent decisions have noted that the language of section 424.530(a)(3) (denial) largely parallels that of section 424.535(a)(3) (revocation).  See, e.g., John A. Hartman, D.O., DAB No. 2911 at 13 n.14 (2018).  Therefore, as the appellate panel did in Hartman, I find it appropriate to look to decisions interpreting section 424.535(a)(3) for guidance in interpreting section 424.530(a)(3). back to note 9
                      10. As I explain in more detail in the following section of this decision, even if I were authorized to review CMS's determination, I would not conclude that CMS erred in finding that Petitioner's conviction was detrimental to Medicare and its beneficiaries. back to note 10
                      11. In describing Petitioner's offense as having "occurred several years ago in 2016," CMS apparently conflated the date of Petitioner's conviction, January 21, 2016, with the date on which the conduct that led to the conviction occurred, February 6, 2013.  Compare CMS Ex. 1 at 2, 4 with CMS Ex. 2 at 1.  However, this discrepancy is not significant, as the underlying conduct, like Petitioner's conviction, occurred within the ten years prior to the notice placing Petitioner on the preclusion list. back to note 11 Back to top
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