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                              Sonjay Fonn, D.O. and Midwest Neurosurgeons, LLC, DAB CR5996 (2021)
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Sonjay Fonn, D.O. and Midwest Neurosurgeons, LLC, DAB CR5996 (2021)








  
  
    

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





Sonjay Fonn, D.O. and Midwest Neurosurgeons, LLC
(NPIs: 1053533919, 1992940407 / PTANS: MA1524001, MA1524)
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-19-1052Decision No. CR5996December 8, 2021

        
              
    

      DECISION

This decision AFFIRMS the revocation of Petitioners’ Medicare enrollment and billing privileges by the Wisconsin Physicians Service Insurance Corporation (WPS), a contractor for the Centers for Medicare & Medicaid (CMS).

I.   Background and Procedural History

On August 22, 2019, Dr. Sonjay Fonn (Dr. Fonn) and his medical practice, Midwestern Neurosurgeons, LLC (MWN) (collectively, Petitioners), through counsel, timely requested a hearing before an Administrative Law Judge (ALJ) to contest the revocation of their Medicare enrollment and billing privileges.  On September 5, 2019, at Judge Leslie Weyn’s direction, the Civil Remedies Division (CRD) issued an acknowledgement letter and Judge Weyn’s standing prehearing order (Standing Order), which set forth a schedule for briefing and submitting supporting evidence and other procedural requirements.  The case was transferred to the undersigned on May 14, 2021.  For purposes of this case, I adopt Judge Weyn’s Standing Order.

Page 2

On October 10, 2019, CMS filed a Motion for Summary Judgment and supporting memorandum and brief (CMS Br.), along with 12 exhibits (CMS Exs. 1-12) and a statement indicating that the agency does not intend to call witnesses if should this matter proceed to a hearing.

On November 14, 2019, Petitioners filed a Motion for Summary Judgment and supporting memorandum and response, a declaration from Dr. Fonn, and 1 exhibit (P. Ex. 1).  Petitioners’ Exhibit 1 consists of Petitioners’ Request for Hearing (RFH) and 21 exhibits that were previously filed.  Petitioners also filed a statement indicating that Dr. Fonn would be called as a witness should this case proceed to a hearing.

Neither party filed objections to the other party’s exhibits, and CMS did not request cross-examination of Petitioners’ witness.  Because CMS did not request cross-examination of Petitioners’ witness, for whom written testimony has been submitted, no hearing is necessary, and this matter will be decided based upon the written record.  Standing Order ¶¶ 7, 9, 10; Civil Remedies Procedures ¶ 19(d).  Because the matter will be resolved based on the written record, the parties’ motions for summary judgment are moot.  Absent objection, CMS Exs. 1-12, P. Ex. 1, and Dr. Fonn’s Declaration (Fonn Decl.) are all admitted into evidence.

II.   Jurisdiction

This tribunal has the authority to hear and decide this matter.  42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a), 498.1(g), 498.3(b)(17), 498.5(*l*)(2).

III.   Issue

The issue to be decided is whether CMS had a legitimate basis to revoke Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(4).

IV.   Findings of Fact

The following facts are undisputed.

Dr. Fonn is a physician who was licensed to practice medicine in Illinois and Missouri and is the owner of Midwest Neurosurgeons, LLC.  Dr. Fonn currently practices in Cape Girardeau, Missouri where he treats patients with chronic neurological issues.  He performs both surgical and small neurological procedures.  P. Br. at 2.

On July 23, 2018, the Department of Financial and Professional Regulation (DFPR) of the State of Illinois filed a complaint against Dr. Fonn’s Illinois Physician and Surgeon License (medical license), alleging multiple violations of the Illinois Medical Practice Act.  The complaint was based on allegations that Dr. Fonn submitted false claims to

Page 3

Medicare and Medicaid programs in violation of the federal Anti-Kickback Statute.  Dr. Fonn denied the allegations.  CMS. Ex. 2 at 1-2.

On September 25, 2018, Dr. Fonn was found liable for submitting false claims to the Medicare and Medicaid programs in the United States District Court, Eastern District of Missouri.  CMS Ex. 2 at 2.

On September 26, 2018, CMS notified Dr. Fonn that he was required to revalidate his Medicare enrollment record by December 31, 2018.  CMS Ex. 1.1

On October 25, 2018, Dr. Fonn entered into a consent order with DFPR.  As a term of the consent order, Dr. Fonn agreed to place his Illinois Physician and Surgeon License in permanent inactive status.  At the time of the consent order, Dr. Fonn was licensed to practice medicine in the State of Illinois but had not practiced there in three years and had no intention of returning to practice in that state.   CMS Ex. 2.2

The Consent Order went into full effect on October 25, 2018.  The parties agreed that the order was a “formal disciplinary action reportable to all relevant authorities and entities responsible for the licensing and regulation of healthcare providers.”  CMS Ex. 2 at 3.

On December 19, 2018, Dr. Fonn responded to the CMS revalidation request with a signed and certified CMS-855I enrollment application for himself and a signed and certified CMS‐855B on behalf of MWN.  CMS Exs. 3, 4.

Both the CMS-855I and CMS-855B enrollment applications request that the applicant disclose any final adverse actions and any exclusions, revocations, or suspensions of a license to provide healthcare.  On both applications, Dr. Fonn marked that he had a final adverse legal history to report and noted “see attached sheet.”  The attached sheets were Notices of Suspension for Medicare Payments issued on November 23, 2015, December 23, 2015, and December 6, 2017.  Dr. Fonn signed each application certifying that the information included in the application was “true, correct, and complete.”  He did not

Page 4

report the Consent Order on either application, nor did he report that his Illinois medical license was placed in permanent inactive status.  CMS Ex. 3 at 13-14, 26-27, 29-36; CMS Ex. 4 at 13-14, 28, 38-45.

On January 22, 2019, WPS, a CMS Medicare contractor, notified Dr. Fonn and MWN that the Medicare enrollment applications were rejected and that their Medicare enrollment and billing privileges were revoked for certifying false or misleading statements under 42 C.F.R. § 424.535(a)(4).  The letter to Dr. Fonn stated that CMS revoked Dr. Fonn’s privileges because he did not identify “[a] license surrender while a disciplinary proceeding was pending before a state licensing authority [which] is listed [as] an adverse legal action that requires reporting on the 855I application.”  CMS Ex. 5 at 1.  The letter to MWN similarly stated that MWN had failed to report Dr. Fonn’s voluntary surrender of his license during a pending disciplinary proceeding before a state licensing authority, which was “an adverse legal action that requires reporting on the 855B application.”  CMS Ex. 5 at 3.  The letter to MWN identified Dr. Fonn “as the sole owner on Midwest Neurosurgeons LLC’s 855 enrollment record.”  CMS Ex. 5 at 3.

WPS imposed a three-year re-enrollment bar in each case, beginning 30 days after the postmark date of the letters.  CMS Ex. 5 at 2, 4.

On March 15, 2019, Dr. Fonn and MWN, through counsel, submitted requests for reconsideration of the enrollment denials.  CMS Ex. 7 at 1, 9.

On June 28, 2019, CMS issued unfavorable reconsideration decisions in both cases.  CMS Ex. 7 at 1-8, 9-16.  In each case, the revocation of privileges was effective February 21, 2019.  CMS Ex. 5 at 1, 3.

V.   Legal Authorities

The Social Security Act (the 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, Dr. Fonn is considered a “supplier.”

A provider or supplier must be enrolled in the Medicare program in order to receive payment for covered items or services from either Medicare (in the case of an assigned claim) or a Medicare beneficiary.  Once enrolled, the provider or supplier receives billing privileges and is issued a valid billing number effective for the date a claim was

Page 5

submitted for an item that was furnished or a service that was rendered.  42 C.F.R. § 424.505.

The regulations provide that CMS may revoke the enrollment for several reasons, including when a provider or supplier certifies “as ‘true’ misleading or false information on the enrollment application to be enrolled or maintain enrollment in the Medicare program.”  42 C.F.R. § 424.535(a)(4).  Revocation bars the affected supplier from participating in the Medicare program from the effective date of the revocation until the end of the reenrollment bar.  Unless otherwise specified, revocations become effective 30 days after CMS, or the CMS contractor, mails notice of its determination to the provider or supplier.  42 C.F.R. § 424.535(g).

VI.   Analysis and Conclusions of Law3

**A. *Petitioners certified as true, false and misleading information concerning Dr. Fonn’s Illinois medical license, which was placed in permanent, inactive status as the result of the Illinois licensing disciplinary proceeding.  This certification provides a basis for revocation under 42 C.F.R. § 424.535(a)(4).***

***1. Dr. Fonn certified the contents of the forms CMS-855I and CMS‐855B as true, accurate, and complete.***

Regulations allow CMS to revoke a Medicare supplier’s Medicare enrollment and billing privileges for providing false or misleading enrollment information, as follows:

(a)  *Reasons for revocation*.  CMS may revoke a currently enrolled [supplier’s] Medicare enrollment and any corresponding [supplier] agreement for the following reasons:

* * * * *

(4) *False or Misleading Information*.  The [supplier] certified as “true” misleading or false information on the enrollment application to be enrolled or maintain enrollment in the Medicare program.

42 C.F.R. § 424.535(a)(4).

The CMS-855I and CMS-855B forms each contain Dr. Fonn’s signature, dated December 19, 2018, beneath the Certification Statements in Section 15.  CMS Ex. 3 at

Page 6

26-27; CMS Ex. 4 at 28.  Section 15 of Dr. Fonn’s CMS-855I provides, in relevant part: “I, the undersigned, certify to the following:  1.  I have read the contents of this application, and the information contained herein is true, correct, and complete.  If I become aware that any information in this application is not true, correct, or complete, I agree to notify the Medicare [contractor] of this fact . . . .”  CMS Ex. 3 at 26.  Similarly, Section 15 of MWN’s CMS-855B states that Dr. Fonn has “read the contents of this application,” certifies that the information is “true, correct, and complete,” and states that Dr. Fonn will notify the Medicare contractor of any information that “is not true, correct, or complete.”  CMS Ex. 4 at 28.

***2. The forms CMS-855I and CMS-855B do not disclose Dr. Fonn’s Illinois state licensing proceedings or that his medical license was placed into permanent inactive status to resolve that disciplinary proceeding.***

The CMS-855I and CMS-855B forms require providers and suppliers to provide information on any final adverse legal actions, “such as convictions, exclusions, revocations, and suspensions.”  The forms state that “all applicable final adverse legal actions must be reported, regardless of whether any records were expunged or any appeals are pending.”  The forms further state that providers and suppliers must report “[a]ny revocation or suspension of a license to provide health care by any State licensing authority.  This includes the surrender of such a license while a formal disciplinary proceeding [is] pending before a State licensing authority.”  CMS Ex. 3 at 13; CMS Ex. 4 at 13.

On both forms, Dr. Fonn indicated that there was a final adverse legal action history and reported three events concerning the suspension of Medicare payments that occurred in 2015 and 2017.  CMS Ex. 3 at 14, 29-36; CMS Ex. 4 at 14, 38-45.  Dr. Fonn did not report the Consent Order, nor did he report that his Illinois medical license was placed in permanent inactive status.

***3. Dr. Fonn’s placement of his Illinois medical license into permanent inactive status as a condition of the Consent Agreement constitutes a “surrender” of his medical license and provides a basis for revocation under 42 C.F.R. § 424.535(a)(4).***

In order to determine if CMS has established a lawful basis for the revocation of Petitioners’ billing privileges, I must determine whether the placement of Dr. Fonn’s Illinois medical license in permanent inactive status constituted a conviction, exclusion, revocation or surrender of his license.  The parties do not assert that a conviction, exclusion, or revocation took place.  However, the parties differ on whether the placement of Dr. Fonn’s Illinois medical license in permanent inactive status constitutes a surrender.  Petitioners argue that because Dr. Fonn voluntarily placed his Illinois medical license in permanent inactive status, it does not constitute a conviction, exclusion,

Page 7

revocation, or surrender and did not have to be reported on the CMS-855I and CMS‐855B forms.  P. Br. at 2, 5-8.  CMS argues that Dr. Fonn placing his license in permanent inactive status is substantially the same as surrendering a license.  CMS Br. at 5-8.

In determining whether Dr. Fonn should have reported the change in status of his Illinois medical license, it is important to consider the purpose of the enrollment applications. The standard enrollment application is an important tool for verifying the professional integrity and qualifications of physicians and other suppliers seeking to participate in Medicare.  42 C.F.R. § 424.502 (defining “enrollment” as the “process” for establishing a supplier’s “eligibility to submit claims for Medicare-covered items and services”); *William Garner*, *M.D.*, DAB No. 3026 at 10-11 (2020) (citing *Dennis *McGinty**, *PT*, DAB No. 2838 at 10 (2017) (noting that the “central purpose of the enrollment provisions is to protect Medicare beneficiaries and Trust Funds from fraudulent, untrustworthy and abusive providers and suppliers” (internal quotation marks omitted)).  Consequently, a supplier’s legal obligation to provide “[c]omplete, accurate, and truthful responses” (42 C.F.R. § 424.510(d)(2)(i)) – and to do so “on the applicable enrollment application” (*42 C.F.R.*§ 424.510(a)(1)) – is no mere formality, but a substantive legal obligation intended to strengthen CMS’s ability to protect Medicare and its beneficiaries.  71 Fed. Reg. 20,754, 20,758 (2006) (explaining that the enrollment revalidation process ensures not only that CMS has “complete and current information” on Medicare suppliers and providers, but also “further ensures that Medicare beneficiaries are receiving services furnished only by legitimate providers and suppliers, and strengthens [CMS’s] ability to protect the Medicare Trust Funds”); *see Garner*, DAB No. 3026 at 9.

Here, the State of Illinois DFPR filed a complaint against Dr. Fonn, based on multiple violations of the Illinois Medical Practice Act, which Dr. Fonn denied.  While the DFPR was pending, Dr. Fonn was found liable in the U.S. District Court for the Eastern District of Missouri for “submitting false claims to Medicare/Medicaid because the claims were the results of kickbacks that violated the federal Anti‐Kickback Statute.”  CMS Ex. 2 at 1-2.  This resulted in Dr. Fonn entering into a consent order and placing his Illinois medical license in “permanent inactive status” to avoid further disciplinary action.  CMS Ex. 2 at 3.  This is precisely the type of information that CMS seeks for applicants to report on enrollment applications.

The remaining question is whether placing his Illinois medical license in permanent inactive status due to a pending disciplinary matter constituted a surrender of Dr. Fonn’s medical license.  It is undisputed that the relevant CMS regulations do not define the term surrender.  Petitioners argue that because CMS regulations do not define the word surrender, if it is considered a surrender, then CMS did not put the public on notice and Dr. Fonn should not be held accountable.  P. Br. at 2, 5-9.  When a word is undefined in the Act or regulations, Departmental Appeals Board decisions have utilized the “common and ordinary meaning of the word . . . .”  *Robert C. Hartnett*, DAB No. 2740 at 9 n.7

Page 8

(2016).  Surrender is defined as “to yield to the power, control, or possession of another upon compulsion or demand” and “to give up completely or agree to forgo especially in favor of another.”  http://www.merriam-webster.com/dictionary/surrender (last visited November 30, 2021).

In this case, Dr. Fonn yielded his license to the Illinois medical board in response to a pending complaint that may have otherwise resulted in disciplinary action.  Petitioners argue that Dr. Fonn voluntarily placed his Illinois medical license in permanent inactive status, which is not the same as surrendering the license.  However, whether the action was done voluntarily or not, it still constitutes a surrender.4
  Petitioners’ argument ignores the circumstances regarding the placement of his medical license in inactive status.  Though Dr. Fonn had not practiced in Illinois for several years, he only placed the license in inactive status due to the pending disciplinary investigation.

Petitioners also argue that because CMS regulations do not define the word surrender, Dr. Fonn could not have known that the action against his license was a reportable event.  P. Br. at 5.  However, the Consent Order, signed by Dr. Fonn, states: “Respondent agrees that this Order is a formal disciplinary action reportable to all relevant authorities and entities responsible for licensing and regulations of healthcare providers.”  CMS Ex. 2 at 3.  Despite that language, Petitioners still failed to report the action on the enrollment applications.  In addition, per the regulations, a “final adverse action” includes a “[s]uspension or revocation of a license to provide health care by a State licensing authority.”  42 C.F.R. § 424.502.  Petitioners argue that Dr. Fonn’s action is not considered a surrender because the State of Illinois lists ‘permanent inactive status’ and ‘suspensions’ in different categories.  P. Br. at 7—8.  However, the categorization given by the state is not controlling in this matter.  Petitioners’ argument would defeat the purpose of the Act and the regulations by allowing suppliers to avoid reporting

Page 9

suspensions and revocations by simply renaming the action.  *Cooper*, DAB No. 1534 (“carefully worded consent agreements” as means for practitioner to attempt to “evade the consequences of a disciplinary proceeding” although practitioner has “effectively give[n] up the practitioner’s right to practice in a state . . . .”).

Here, I find that Dr. Fonn yielded his medical license to DFPR in order to avoid further disciplinary action.  Whether one uses the term “surrendered” or “permanent inactive status,” it has the same effect in this case, particularly because the action was taken as a direct result of a disciplinary matter.  I find that Dr. Fonn placing his license in permanent inactive status, as part of a Consent Order to avoid disciplinary action, constituted a surrender of his Illinois medical license.  And because Dr. Fonn surrendered his medical license, the information should have been reported on the enrollment forms.

**B.*Petitioners’ intent is irrelevant to determining whether CMS has the authority to revoke program participation.***

Dr. Fonn argues that he did not intend to provide false or misleading information to CMS, evidenced by the submission of information regarding previous adverse actions.  P. Br. at 13.  However, Dr. Fonn’s intent, or lack thereof, is not relevant in determining whether CMS rightfully revoked Petitioners’ program participation.  The Departmental Appeals Board has ruled that section 42 C.F.R. § 424. 535(a)(4) “does not require proof that [the applicant] subjectively intended to provide false information, only proof that he *in fact provided*misleading or false information that he certified as true.”  *Sandra E. Johnson, CRNA*, DAB No. 2708 at 15 (2016) (quoting *Mark Koch, D.O.*, DAB No. 2610 at 4-5 (2014) (emphasis in original)).  Regardless of the intent of the supplier, CMS has the authority to revoke a supplier’s Medicare enrollment and billing privileges when the supplier certifies as true information on the enrollment application that is false or misleading.  Though Dr. Fonn may not have intended to provide misleading or false information to CMS, he in fact did so by failing to report the Consent Order and change in his Illinois medical license status on the CMS-855I and CMS-855B enrollment applications.

VII.   Conclusion

Based on the evidence set forth, I find that CMS has established a legal basis for the revocation of Petitioners’ Medicare enrollment and billing privileges.  I therefore affirm the revocation of Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(4).


          /s/
        Tannisha D. Bell

                      Administrative Law Judge
      1. The record does not contain a revalidation request to MWN, but Dr. Fonn and MWN both subsequently submitted CMS enrollment applications, each with certifications signed by Dr. Fonn on December 19, 2018.  CMS Ex. 3 at 27; CMS Ex. 4 at 28. back to note 1
                      2. The record contains Illinois DFPR records showing Dr. Fonn’s medical license on “permanent inactive” status, with “discipline start date” October 25, 2018, “for multiple violations of Illinois Medical Practice Act arising out of submission of false claims to Medicare/Medicaid.”  P. Ex. 1 at 158.  The record also contains National Practitioner Data Base records showing Dr. Fonn’s license on “permanent inactive status” based on insurance fraud and multiple violations of the Illinois Medical Practice Act.  P. Ex. 1 at 164-65. back to note 2
                      3. My findings of fact and conclusions of law are set forth in bold and italicized headings below. back to note 3
                      4. This result is consistent with long-standing agency policy, as reflected in prior and subsequent administrative adjudication and manual authority.  See, e.g., William. J. Cooper, M.D., DAB No. 1534 (1995) (surrender of right to practice medicine at all meets definitions of revocation or surrender for program exclusion); Medicare Program Integrity Manual (CMS Pub. 100-08) (MPIM), Ch. 10 § 10.3.1.C.1.b.viii (effective Nov. 13, 2020) (contractor reviews CMS-855I application to determine whether “practitioner had [his] medical license revoked, suspended, or inactive (due to . . . voluntary surrender of license), or otherwise lost his or her license . . . .”) (emphasis added); MPIM Ch. 10, § 10.6.1.9.R.1.a (effective May 27, 2021) (contractor reviews state licensing board information each month to determine whether enrolled practitioners “[h]ad their medical license revoked, suspended or inactivated (due to . . . voluntary surrender of license)” or “[o]therwise lost their medical license” and “no longer have a valid medical license”).  The MPIM can be found at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS019033 (last visited November 30, 2021). back to note 4 Back to top
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