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                              David Anderson, M.D., DAB CR6242 (2023)
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David Anderson, M.D., DAB CR6242 (2023)








  
  
    

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





David Anderson, M.D.
(NPI: 1629082243; PTAN: WV5971A),
Petitioner,

v.

Centers for Medicare & Medicaid Services,
Respondent.
Docket No. C-20-702Decision No. CR6242February 27, 2023

        
              
    

      DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, Palmetto GBA (Palmetto), revoked the Medicare enrollment and billing privileges of Petitioner, David Anderson, M.D., pursuant to 42 C.F.R. § 424.535(a)(3).  Subsequently, CMS placed Petitioner on its preclusion list.  *See*42 C.F.R. §§ 422.2 and 423.100.  Petitioner challenges both the revocation of his enrollment and billing privileges, and his placement on CMS’s preclusion list.  For the reasons discussed below, I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing, effective April 26, 2018.  There is a basis for listing Petitioner on CMS’s preclusion list.

I.        Procedural History

Petitioner, David Anderson, M.D., is a board-certified emergency medicine physician licensed to practice in West Virginia, and he was the managing member of Cheat Lake Urgent Care.  On April 26, 2018, the Circuit Court of Monongalia County, West Virginia accepted Petitioner’s guilty plea for three felony counts of embezzlement in violation of

**Page 2**

West Virginia Code § 61-3-20.  CMS Ex. 1 at 23-27.  Petitioner was sentenced to probation and ordered to pay restitution and fines.  *Id.*

On March 13, 2019, Petitioner and the West Virginia Board of Medicine entered into a Consent Order, in which the West Virginia Board of Medicine publicly reprimanded Petitioner for unethical and unprofessional conduct related to his embezzlement conviction.  P. Ex. 1 at 1-8.

On March 4, 2020, Palmetto notified Petitioner by letter that it had revoked his Medicare enrollment and billing privileges, effective April 26, 2018.  CMS Ex. 1 at 20-22.  Palmetto explained that Petitioner’s Medicare privileges were being revoked pursuant to 42 C.F.R. § 424.535(a)(3), because of Petitioner’s April 26, 2018 felony conviction for embezzlement.  *Id.* at 20.  Palmetto informed Petitioner that he was being added to the CMS preclusion list pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  *Id.*  Palmetto also informed Petitioner he would be barred from reenrolling in the Medicare program for ten years, effective 30 days from the date postmarked on the letter.  *Id.* at 22.  Petitioner timely filed a request for reconsideration.  *Id.* at 9-19.  On June 17, 2020, CMS issued a reconsidered determination upholding the revocation, reenrollment bar, and inclusion on the CMS preclusion list.  *Id.* at 1-8.  On August 19, 2020, Palmetto notified Petitioner that his reenrollment bar had been reduced from ten years to three.  CMS Ex. 2.

Petitioner timely requested a hearing (Hearing Request) before an administrative law judge (ALJ).  The revocation hearing request was docketed as C-20-702 and ALJ Keith Sickendick was designated to hear and decide this case.  On August 12, 2020, Judge Sickendick issued an Acknowledgment and Pre‐hearing Order (Pre‐hearing Order) in which he instructed the parties to file pre-hearing exchanges.  CMS filed a motion for summary judgment and brief along with six proposed exhibits on September 11, 2020.  CMS filed a revised motion for summary judgment and brief (CMS Br.) and resubmitted two proposed exhibits (CMS Exs. 1-2) on September 14, 2020.  Petitioner filed a brief opposing summary judgment (P. Br.), identified one witness, and offered one proposed exhibit (P. Ex. 1) on October 9, 2020.  CMS filed a notice waiving its reply to Petitioner’s brief opposing summary judgment on November 5, 2020.

On May 14, 2021, this case was reassigned, and I was designated to hear and decide this case.

II.     Jurisdiction

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

**Page 3**

III.     Issues

Whether summary judgment is appropriate;

Whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(3) due to Petitioner’s felony conviction for embezzlement; 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.

IV.     Exhibits and Decision on the Record

Neither party has objected to the exhibits proposed by the opposing party.  I therefore admit CMS Exs. 1-2 and P. Ex. 1 into the record.

Petitioner proposed one witness for the purpose of testifying to “the character of Dr. Anderson and his extremely high quality of care with Medicare and Medicare eligible patients.”  P. Proposed Witness List at 1.  Even if true and accurate, the proposed testimony is not relevant or material to the issues before me in this case.  Testimony of Petitioner’s impeccable character and high quality of care ultimately would not rebut that CMS had established a legal basis for its revocation pursuant to 42 C.F.R. § 424.535(a)(3) and placement of Petitioner on the preclusion list.

CMS did not propose any witnesses.  Consequently, I will not hold an in-person hearing in this matter, and I issue this decision based on the written record.  Civ. Remedies Div. P. § 19(d).

V.      Applicable Law

The Social Security Act (Act) establishes the enrollment process for providers and suppliers participating in Medicare or Medicare related programs.  42 U.S.C. §§ 1302(a), 1395cc(j).  Under the Act, “suppliers” are physicians or other practitioners, “a facility, or other entity (other than a provider of services) that furnishes items or services” under the Medicare provisions of the Act.  42 U.S.C. § 1395x(d).  Providers include hospitals, skilled nursing facilities, and home health agencies.  42 U.S.C. § 1395x(u).  Any physician who participates in the Medicare program is considered a “supplier.”  42 U.S.C. § 1395x(d); 42 C.F.R. § 400.202 (definition of “supplier”).  In this case, Petitioner is considered a “supplier.”

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.

**Page 4**

CMS may revoke a supplier’s Medicare enrollment and billing privileges for any reason stated in 42 C.F.R § 424.535(a), which includes a conviction of a felony offense, as described in 42 C.F.R § 424.535(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.

When revocation is based on a provider or supplier’s felony conviction, the effective date of the revocation is the date of the felony conviction.  42 C.F.R. § 424.535(g).

Additionally, CMS has established a preclusion list comprised of individuals and entities for whom Medicare Advantage plans cannot provide reimbursement for items and

**Page 5**

services they provide, and for prescribers to whom Medicare Part D plans cannot provide reimbursement for any prescriptions the individuals write.  42 C.F.R. §§ 422.222, 423.120(c)(6).  Each of the following three requirements must be met for CMS to include an individual or entity on its preclusion list:

(i)       The individual or entity is currently revoked from Medicare for a reason other than that stated in [42 C.F.R.] § 424.535(a)(3) of this chapter.

(ii)      The individual or entity is currently under a reenrollment bar under [42 C.F.R.] § 424.535(c).

(iii)     CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination . . . CMS considers the following factors:

(A)      The seriousness of the conduct underlying the individual’s or entity’s revocation.

(B)      The degree to which the individual’s or entity’s conduct could affect the integrity of the Medicare program.

(C)      Any other evidence that CMS deems relevant to its determination . . . .

42 C.F.R. §§ 422.2; 423.100 (definitions of *Preclusion List*).

An individual or entity is placed on the preclusion list no sooner than 60 days from the date of the notice of the initial determination to place the individual or entity on the preclusion list, or when a reconsidered determination is issued.  42 C.F.R. §§ 422.222(a)(3)(i), 423.120(c)(6)(v)(C).  Generally, an individual or entity placed on the preclusion list due to a felony conviction remains on the preclusion list until the date 10 years from the date of the felony conviction, unless CMS determines that a shorter length of time is warranted.  42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C) as amended effective January 1, 2020, 84 Fed. Reg. 15,680, 15,832, 15,840-41 (Apr. 16, 2019).  CMS has discretion to determine that a shorter period of exclusion is warranted based on consideration of the severity of the offense, when the offense occurred, and any other information CMS deems relevant.  42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).  CMS also has discretion to not place an individual or entity on the preclusion list, or to remove the individual or entity from the preclusion list if CMS determines exceptional circumstances exist related to Medicare beneficiary access to items, services, or drugs.

**Page 6**

In making the exceptional circumstances determination, CMS considers the degree to which beneficiary access is impaired and any other evidence it deems relevant. 42 C.F.R. §§ 422.222(a)(6), 423.120(c)(6)(vi).

VI.     Findings of Fact, Conclusions of Law, and Analysis

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

**Summary judgment is appropriate with respect to CMS’s revocation of Petitioner’s enrollment and billing privileges.**Summary judgment is appropriate when there is no genuine dispute as to any issue of material fact for adjudication and/or the moving party is entitled to judgment as a matter of law.  In determining whether there are genuine issues of material fact for trial, the ALJ must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party’s favor.  The party requesting summary judgment bears the burden of showing that there are no genuine issues of material fact for trial and/or that it is entitled to judgment as a matter of law.  Generally, the non-movant may not defeat an adequately supported summary judgment motion by relying upon the denials in its pleadings or briefs but must furnish evidence of a dispute concerning a material fact, *i.e*., a fact that would affect the outcome of the case if proven.  *Mission Hosp. Reg’l Med. Ctr.*, DAB No. 2459 at 4 (2012) (and cases cited therein); *Experts Are Us, Inc.*, DAB No. 2452 at 4 (2012) (and cases cited therein); *Senior Rehab. & Skilled Nursing Ctr.*, DAB No. 2300 at 3 (2010) (and cases cited therein); *see also Anderson v. Liberty Lobby, Inc.*, 477 U.S. 242, 248 (1986).

The standard for deciding a case on summary judgment and an ALJ’s decision-making in deciding a summary judgment motion differ from that used in resolving a case after a hearing.  On summary judgment, the ALJ does not make credibility determinations, weigh the evidence, or decide which inferences to draw from the evidence, as would be done when finding facts after a hearing on the record.  *Holy Cross Vill. at Notre Dame, Inc.*, DAB No. 2291 at 5 (2009).  Rather, on summary judgment, the ALJ construes the evidence in the light most favorable to the non-movant and avoids deciding which version of the facts is more likely true.  *Id*.  The Board also has recognized that on summary judgment it is appropriate for the ALJ to consider whether a rational trier of fact could find that the party’s evidence would be sufficient to meet that party’s evidentiary burden.  *Dumas Nursing & Rehab., L.P.*, DAB No. 2347 at 5 (2010).

**a.       Undisputed Facts**

The facts are undisputed, or for purposes of summary judgment, Petitioner’s averred facts are accepted as true and all favorable inferences are drawn in favor of Petitioner.

**Page 7**

On April 26, 2018, Petitioner pleaded guilty to three counts of the felony offense of embezzlement in violation of West Virginia Code § 61-3-20.  CMS Ex. 1 at 23-27.  Petitioner’s guilty plea was accepted, and he was sentenced to probation for five years and ordered to pay restitution and fines and complete community service.  *Id.*

On March 4, 2020, Palmetto notified Petitioner by letter that it had revoked his Medicare enrollment and billing privileges, effective April 26, 2018.  CMS Ex. 1 at 20-22.  Palmetto explained that Petitioner’s Medicare privileges were being revoked pursuant to 42 C.F.R. § 424.535(a)(3), because of Petitioner’s April 26, 2018 felony conviction for embezzlement.  *Id.* at 20.

**b.       Analysis**

The only determination of CMS or its contractor that is subject to my review in this case is the reconsidered determination issued by the CMS hearing officer on June 17, 2020.  42 C.F.R. § 498.5(n)(2); *cf.* *Neb Grp. of Ariz. LLC*, DAB No. 2573 at 7 (2014) (only the reconsidered determination is subject to ALJ and Board review in provider and supplier enrollment cases); *Letantia Bussell, M.D.*, DAB No. 2196 at 13 (2008) (“The ALJ’s review of CMS’s revocation of [Petitioner’s] Medicare billing privileges is thus limited to whether CMS had established a legal basis for its actions.”).

In the reconsidered determination, the CMS hearing officer concluded that there was a basis for revoking Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(3) due to Petitioner’s felony conviction for embezzlement.  The CMS hearing officer determined that Petitioner’s conviction was within 10 years of the date of the revocation, falls within the definition of “Conviction” as stated in § 1001.2, and that embezzlement is one of the crimes listed as *per se*detrimental to the best interests of the Medicare program and its beneficiaries under 42 C.F.R. § 424.535(a)(3)(ii)(B).  CMS Ex. 1 at 2-5.

Viewing the evidence before me in a light most favorable to Petitioner and drawing all inferences in Petitioner’s favor, I conclude that there are no genuine disputes as to any material facts necessary to conclude that CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(3) due to Petitioner’s felony conviction for embezzlement, effective the date of his felony conviction.  CMS is entitled to judgment as a matter of law.  Accordingly, summary judgment is appropriate with respect to the revocation of Petitioner’s Medicare enrollment and billing privileges.

**Page 8**

**There is a basis for adding Petitioner to the CMS preclusion list.**Effective January 1, 2019, CMS implemented a “preclusion list” as part of its effort to “prevent fraud, waste, and abuse, and to protect Medicare enrollees,” particularly with respect to prescription drug abuse.1  To include an individual on its preclusion list, CMS must determine that the individual is currently revoked from Medicare, the individual is currently under a reenrollment bar, and that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  42 C.F.R. §§ 422.2, 423.100.  My review of CMS’s decision to include an individual on its preclusion list is strictly limited to whether there is a basis for adding the individual or entity to the preclusion list.  83 Fed. Reg. 16,440, 16,642-43 (Apr. 16, 2018); 42 C.F.R. §§ 498.3(b)(20), 498.5(n).

On June 17, 2020, the date CMS included Petitioner on its preclusion list, Petitioner had already been revoked from the Medicare program as of April 26, 2018, was subject to a 10-year reenrollment bar,2 and CMS had determined that the underlying conduct that led to Petitioner’s revocation is detrimental to the best interests of the Medicare program.  Embezzlement is a felony offense considered *per se* detrimental to the best interests of the Medicare program as it is specifically identified in the list of felonies at 42 C.F.R § 424.535(a)(3)(ii)(B).  In the revocation analysis portion of the reconsideration request decision, CMS also explained that Petitioner’s actions demonstrate his inability to act with diligence and care of property entrusted to him, because he embezzled funds from a practice that provided health care services to patients.  CMS Ex. 1 at 4.  As a result, CMS argues that the conditions of inclusion on CMS’s preclusion list under 42 C.F.R. §§ 422.2, 423.100 are satisfied.  CMS Br. at 7-8.

Petitioner argues that CMS incorrectly determined his felony conviction is a *per se* violation detrimental to the best interests of the Medicare program and its beneficiaries and that CMS failed to properly consider the mitigating factor that embezzlement is “completely unrelated to the provision of health care to patients or to billing for the same.”  P. Br. at 1, 3-9.  Petitioner characterizes the underlying conduct giving rise to his

**Page 9**

felony conviction for embezzlement as “record keeping [that] was not perfect” with respect to a business disagreement that did not impact patient care.  *Id.* at 2, 4.

Even if true and accurate, Petitioner’s assertions do not counter or rebut CMS’s discretionary legal basis for placing Petitioner on its preclusion list.  Petitioner concedes he pleaded guilty to three counts of felony embezzlement.  P. Br. at 1.  Petitioner admitted at sentencing that his conduct was illegal, that he betrayed his business partners by using funds for personal expenses, that he caused his business partners financial hardship, and that he understood his conduct could impact his ability to practice medicine.  CMS Ex. 1 at 79-86.  Petitioner specifically admitted: “Since I was a founding member of Cheat Lake Urgent Care, and since I was the person who worked the managerial responsibilities, I thought I could borrow money from the account and pay it back in a reasonable period of time and no one would be hurt from that.”  *Id.* at 82-83.  Restitution was unknown at the time of sentencing, but it was estimated to be between $50,000 and $136,180.13.  *Id.* at 87.  Finally, the West Virginia Board of Medicine publicly reprimanded Petitioner, finding that his conduct was unprofessional, unethical, “of a character likely to deceive, defraud or harm the public or any member thereof,” was committed in the course of his practice, and was either calculated to bring or had the effect of bringing his profession into disrepute.  P. Ex. 1 at 3-4.

Even if Petitioner’s patients were not specifically or identifiably harmed by Petitioner’s actions, “CMS has ‘deem[ed] all financial crimes’ to be detrimental to Medicare.”  *Cornelius M. Donohue, DPM*, DAB No. 2888 at 4-5 (2018) (quoting *Stanley Beekman, D.P.M.*, DAB No. 2650 at 7 (2015)).  Here, CMS determined that Petitioner’s conviction was detrimental to the best interests of the Medicare program and its beneficiaries.  CMS Ex. 1 at 4-5.  At the time of the conduct giving rise to the revocation, Petitioner was the managing member of an urgent care practice, which allowed him to take multiple unlawful personal loans from his practice.  CMS Ex. 1 at 79-80, 82-83; P. Br. at 2.  Petitioner acknowledged that he used his position of power to take between tens of thousands to over one hundred thousand dollars from the health care business for his own personal use and to conceal the same.  CMS Ex. 1 at 82-84; P. Br. at 2.  The embezzled funds were not approved by or agreed upon in advance with Petitioner’s business partners.  CMS Ex. 1 at 79-80, 82-83.

I am not authorized to overturn a legally valid agency action based on equitable grounds, or grant equitable relief.  *Wendell Foo, M.D.*, DAB No. 2904 at 25 (2018) (citing *Foot Specialists of Northridge*, DAB No. 2773 at 18 (2017)).  I may only review whether the regulations authorize CMS’s actions.  If CMS establishes a basis for placing Petitioner on the preclusion list, I must uphold the decision.  *See Foo*, DAB No. 2904 at 3; *Wassim Younes, M.D.*, DAB No. 2861 at 8 (2018) (citing *Patrick Brueggeman, D.P.M.*, DAB No. 2725 at 15 (2016)).  Because I have found that there is a basis for revocation, Petitioner is subject to a reenrollment bar, and the felony at issue has been found to be *per se* detrimental to the best interests of the Medicare program, CMS has a basis for adding

**Page 10**

Petitioner to the CMS preclusion list.  42 C.F.R. §§ 422.2, 423.100 (2018); 83 Fed. Reg. 16,440, 16,641-67.

VII.    Conclusion

For the foregoing reasons, I affirm CMS’s determination to revoke Petitioner’s Medicare billing and enrollment privileges under 42 C.F.R. § 424.535(a)(3) and to include Petitioner on its preclusion list.

Endnotes

1  CMS considered requiring Medicare enrollment for all providers and suppliers of Medicare Advantage services and prescribers of Part D drugs, but ultimately opted for a preclusion list instead.  CMS concluded that the burden of requiring Medicare enrollment for hundreds of thousands of additional providers, suppliers, and prescribers would be too great and would threaten beneficiary access to prescriptions and services.  *See*82 Fed. Reg. 56,336, 56,442, 56,448 (Nov. 28, 2017); 83 Fed. Reg. 16,440, 16,646 (Apr. 16, 2018).

2  On August 19, 2020, Palmetto notified Petitioner that his reenrollment bar had been reduced from ten years to three.  CMS Ex. 2.
  
          /s/
        Jacinta L. Alves

                      Administrative Law Judge Back to top
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