Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Robert F. Tzeng, M.D., )
) Date: September 27, 2007

Petitioner, )
)

“Vv. ) Docket No. C-07-324

) Decision No. CR1665
Centers for Medicare & Medicaid )
Services. )
a )

DECISION

l affirm the determination of the Medicare Part B Hearing Officer (Hearing Officer) to
uphold the revocation by the Medicare Part B Carrier, National Heritage Insurance
Company (NHIC or Medicare Carrier) of Petitioner’s Medicare provider identification
number (PIN) effective February 17, 2007. I find the Hearing Officer correctly
determined that Petitioner was convicted within the past 10 years of a felony that the
Centers for Medicare & Medicaid Services (CMS) has determined to be detrimental to the
best interests of the Medicare program.

I. Applicable Law and Regulations

Section 1842(h)(8) of the Social Security Act (Act), grants the Secretary of the
Department of Health and Human Services (Secretary), discretion to “refuse to enter into
an agreement... or... terminate or refuse to renew such agreement” with a physician or
supplier that “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.”
2

Section 1866(b)(2)(D) of the Act provides that upon reasonable notice to a provider, the
Secretary may, at his discretion, terminate a provider’s agreement after it has been
“ascertained that the provider 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.”

CMS may revoke the Medicare billing privileges of a provider or supplier who has,
within the past 10 years preceding enrollment or revalidation of enrollment, been
convicted of a felony that CMS has determined to be detrimental to the best interests of
the Medicare program and its beneficiaries. 42 C.F.R. §§ 424.535(a) and 424.535(a)(3).

CMS has determined that a felony conviction for income tax evasion is detrimental to the
est interests of the Medicare program and its beneficiaries. 42 C.F.R. § 424.535

(a)(3)@B).

Section 1866(j)(2) of the Act, 42 U.S.C § 1395cc(j)(2), gives providers and suppliers the
right to appeal certain determinations involving enrollment, including the revocation of
illing privileges, using the procedures that apply under section 1866(h)(1)(A) of the Act.
These procedures are set out at 42 C.F.R. Part 498, et. seq., and provide for hearings by
Administrative Law Judges (ALJs) and review of ALJ decisions by the Departmental
Appeals Board (Board).

n provider appeals under 42 C.F.R. Part 498, the Board has determined that CMS must
make a prima facie case that an entity has failed to comply substantially with federal
requirements. See MediSource Corporation, DAB No. 2011 (2006). “Prima facie”
means that the evidence is “[s]ufficient to establish a fact or raise a presumption unless
disproved or rebutted.” Rosalyn L. Olian, DAB CR1472, at 2 (2006), quoting Black’s
Law Dictionary 1228 (8th ed. 2004); see also Hillman Rehabilitation Center, DAB No.
1611, at 8 (1997), aff'd, Hillman Rehabilitation Ctr. v. U.S. Dep’t. of Health and Human
Services, No. 98-3789 (GEB) (D.N.J. May 13, 1999). To prevail, the entity must
overcome CMS’s showing by a preponderance of the evidence. Batavia Nursing and
Convalescent Center, DAB No. 1904 (2004), aff'd, Batavia Nursing and Convalescent
Center v. Thompson, 129 Fed. Appx.187 (6th Cir. 2005); Emerald Oaks, DAB No. 1800
(2001); Cross Creek Health Care Center, DAB No. 1665 (1998).

If. Summary Judgment

On May 21, 2007, CMS submitted a motion for summary judgment and brief (CMS Br.)
accompanied by three exhibits, identified as CMS Exs. 1-3. I received CMS’s exhibits
into evidence without objection. Petitioner submitted a response brief (P. Br.)
3

accompanied by one exhibit, identified as P. Ex. 1, on June 21, 2007. I received this
exhibit into evidence without objection. CMS submitted a reply brief (CMS Reply), on
July 5, 2007.

Summary judgment is generally appropriate when the record reveals that no genuine
dispute exists as to any material fact and the undisputed facts clearly demonstrate that one
party is entitled to judgment as a matter of law. Residence at Kensington Place, DAB
No. 1963 (2005); White Lake Family Medicine, P.C., DAB No. 1951 (2004). Here, the
parties do not disagree concerning the material facts of the case. Their disagreement lies
in the application of the law to the facts. A dispute between the parties over the correct
conclusion to be drawn from undisputed facts is not an impediment to the entry of
summary judgment, and in truth may be understood as the precise procedural context in
which summary disposition is most appropriate. In fact, during a prehearing conference
held on April 19, 2007, the parties agreed that an in-person hearing was not necessary,
and that a decision may be issued based on the written submissions of the parties.

II. Undisputed Material Facts

1. Petitioner was convicted in United States District Court for the Central District of
California on February 4, 1998, of one count of a violation of 26 U.S.C. § 7201, income
tax evasion, a felony.

2. By letter dated January 18, 2007, Petitioner was notified by the NHIC that, based on
his felony conviction, his Medicare Provider Identification Number (PIN) would be
revoked effective February 17, 2007.

3. On January 21, 2007, Petitioner timely requested an on-the-record reconsideration of
the revocation.

4. The Hearing Officer upheld the revocation and issued a decision on March 9, 2007.

5. On March 20, 2007, Petitioner timely filed a request for a hearing before an ALJ of the
Civil Remedies Division, Departmental Appeals Board.

6. Petitioner is a medical doctor licensed to practice medicine in the State of California,
and was a physician with Medicare billing privileges pursuant to PIN A39498.
IV. Issues

A. Whether there is a basis for the Medicare Carrier’s revocation of Petitioner’s
PIN, and

B. Whether CMS’s regulation that allows for the revocation of Medicare billing
privileges of a provider or supplier who has, within the past 10 years, been
convicted of a felony that CMS has determined to be detrimental to the best
interests of the Medicare program and its beneficiaries, may be applied to
Petitioner.

V. Findings of Fact, Conclusions of Law, and Discussion
A. The Carrier had a basis for the revocation of Petitioner’s PIN.

Section 1842(h)(8) of the Act provides that “[t]he Secretary may refuse to enter into an
agreement with a physician or supplier . . . or may terminate or refuse to renew such
agreement” with a physician or supplier that “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.” Pursuant to this statutory
provision, the Secretary promulgated new regulations, effective June 20, 2006, which
revised the Medicare provider and supplier enrollment requirements that affected all
providers that billed the Medicare program and desired to maintain Medicare billing
privileges. Requirements for Providers and Suppliers To Establish and Maintain
Medicare Enrollment, 71 Fed. Reg. 20,754 (April 21, 2006). These new rules
consolidated various Medicare regulations that were dispersed throughout the Code of
Federal Regulations and grouped them in a new Subpart, Subpart P, 42 C.F.R. § 424.500,
et. seq. The purpose of the new regulatory amendments is to ensure that all Medicare
providers and suppliers are qualified to provide healthcare services and to prevent
unqualified, fraudulent, or excluded providers from providing Medicare covered items
and services. Thus, all providers and suppliers, including those enrolled in the Medicare
program at the time of the effective date of the amendments, were required to either
complete and submit an enrollment application or revalidate their existing enrollment
information. See 42 C.F.R. § 424.500.

42 C.F.R. §§ 424.535(a) and 424.535(a)(3) provide that CMS may revoke the Medicare
billing privileges of a provider or supplier who has, within the 10 years preceding
enrollment or revalidation of enrollment, been convicted of a felony that CMS has
determined to be detrimental to the best interests of the Medicare program and its
beneficiaries.
5

CMS has determined that a felony conviction for income tax evasion is detrimental to the
est interests of the Medicare program and its beneficiaries. 42 C.F.R. § 424.535

(a)(3)@B).

Petitioner was convicted of an income tax evasion felony in United States District Court
for the Central District of California on February 4, 1998.

By letter dated January 18, 2007, and pursuant to the regulatory amendments that became
effective June 20, 2006, Petitioner was notified by the Medicare Carrier that his PIN
would be revoked effective February 17, 2007.

find that the Medicare Carrier had a basis for the revocation of Petitioner’s PIN.

B. CMS’s regulation that allows for the revocation of Medicare billing
privileges of a provider or supplier who has, within the past 10 years, been
convicted of a felony that CMS has determined to be detrimental to the best
interests of the Medicare program and its beneficiaries, may be applied to
Petitioner.

Petitioner contends that the revocation of his Medicare billing privileges based on a 1998
felony conviction constitutes an impermissible retroactive application of the regulation.
P. Br. at 3-7. Specifically, he argues that a provision is found to be retroactive when it

“ “takes away or impairs vested rights acquired under existing laws, or creates a new
obligation, imposes a new duty, or attaches a new disability, in respect to transactions or
considerations already past....’” P. Br. at 4 (quoting INS v. St. Cyr, 533 U.S. 289, 321
(2001)) (citations omitted); Kankamalage v. INS, 335 F.3d 858, 862 (9" Cir. 2003)
(emphasis added). Petitioner adds that “the decision as to whether a retroactive effect
exists should be informed by familiar considerations of fair notice, reasonable reliance,
and settled expectations.” P. Br. at 4-5 (citing Landgraf v. USI Film Products, 511 U.S.
244, 270 (1994); St. Cyr at 321.)

Whereas CMS argues that Petitioner’s challenge goes to the validity of the regulation
(CMS Br. at 5), Petitioner maintains that its challenge is not to the validity of the
regulation, but rather to the application of the regulation to his conviction. P. Br. at 3 n.1.
Of course, the reason why the Medicare Carrier applied the regulation to Petitioner is
because he was convicted of a felony within the past 10 years preceding enrollment or
revalidation of enrollment, a felony that CMS has determined to be detrimental to the best
interests of the Medicare program and its beneficiaries, i.e., income tax evasion.
Consequently, the language content of the regulation is essential to Petitioner’s argument.
6

In order for me to conclude that the regulation should not apply to Petitioner, I would
have to find that CMS exceeded its delegated legislative authority to promulgate
regulations. That is something that is beyond the scope of the matters upon which I am
empowered to rule.

Notwithstanding the above, Petitioner’s retroactivity argument is misplaced.

Although Petitioner concedes that statutory authority to terminate a provider agreement
had existed for some time prior to the promulgation of the regulation here under
consideration,’ he contends that no regulation or statute had previously established that
income tax evasion should be included in the list of felonies that could result in the loss of
billing privileges. Thus, Petitioner, citing the retroactivity analysis of Landgraf, posits
that the test to determine whether or not a statute or regulation has an impermissible
retroactive effect rests on two considerations. First, it must be determined whether or not
a statute or regulation clearly expresses that it is to be applied retroactively. Secondly,
argues Petitioner, it must be determined whether the statute or regulation in question
““attaches new legal consequences to events completed before its enactment.’” P. Br. at 4
(quoting Landgraf at 270).

The regulation at 42 C.F.R. § 424.535(a)(3)(i)(B) implements the statutory provision at
section 1842(h)(8) of the Act. Section 1842(h)(8) of the Act was enacted as part of the
Balanced Budget Act of 1997, which predates Petitioner’s 1998 felony conviction.
Section 1842(h)(8) of the Act grants the Secretary discretion to refuse to enter into an
agreement, or to terminate or refuse to renew an agreement, with a physician or supplier
that “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.” Because Section 1842(h)(8) was already in effect at the time of
Petitioner’s 1998 felony conviction, it has therefore not been applied retroactively. It is
not relevant to Petitioner’s appeal that the Secretary established in 2006 that income tax
evasion is an offense that is detrimental to the best interests of the Medicare program or
program beneficiaries.

' Section 1842(h)(8) of the Act was enacted as part of the Balanced Budget Act of
1997.
7

t has been established that a Medicare provider agreement is subject to change or
modification, and bestows upon a participating physician a privilege, and not a vested or
proprietary right. The law and regulations are clear that CMS may suspend, revoke, or
modify the agreement as is necessary for the benefit of the Medicare program and its
eneficiaries.

n Cervoni v. Sec’y of Health, Educ. and Welfare, 581 F.2d 1010 (1* Cir. 1978), a
physician brought suit seeking judicial review of an administrative determination by the
Secretary of Health, Education and Welfare rejecting his claim that his services as a
ospital-based pathologist should be reimbursed under Part B of the Medicare Act for
physicians’ services, rather than under Part A for hospital services.

n its holding, the U.S. Court of Appeals for the first Circuit held that:

The Medicare Part B program is nothing more than a
governmental insurance program for the aged. As such the
real parties in interest are the beneficiaries; physicians are
parties in interest only as assignees of the beneficiaries.

ae

[P]hysicians do not have a protectable property interest in
their continuing eligibility to bill for reimbursement under
Part B. If services rendered by a physician are disentitled
from Part B eligibility, the physician can either not perform
the services or bill the patient directly.

ae

The mere fact that, at the start of Medicare, Dr. Cervoni was
paid under Part B did not create a valid expectation that he
could continue to be reimbursed under Part B. Since
reimbursement through Part B was a creature of the Medicare
statute and regulations, the regulations and interpretations of
them could be expected to be modified by Congress or by
HEW. As stated by the Supreme Court:

To engraft upon the Social Security system a concept of
“accrued property rights” would deprive it of the flexibility
and boldness in adjustment to ever-changing conditions which
8

it demands. It was doubtless out of an awareness of the need
for such flexibility that Congress included in the original Act,
and has since retained, a clause expressly reserving to it “(t)he
right to alter, amend, or repeal any provision” of the Act.

§ 1104, 49 Stat. 648, 42 U.S.C. § 1304. (citation omitted)
Flemming v. Nestor, 363 U.S. 603, 610-11, 80 S.Ct. 1367,
1372-74, 4 L.Ed.2d 1435 (1960).

Cervoni, 581 F.2d at 1018-19.

It is, therefore, transparent that the interests of participating physicians are not the
overarching concern of the Medicare program and its regulations. The record does not
reflect the particulars of Petitioner’s tax evasion conviction, but he engaged in a financial
crime, and under 42 C.F.R. §§ 424.535(a) and 424.535(a)(3), this is a sufficient basis for
CMS to conclude that such conduct would make him untrustworthy, and would place
Medicare funds at risk. This is particularly disturbing because tax evaders who are
reimbursed by the federal government place an added burden on the average American
taxpayer, who would have to pay more taxes to make up for the shortfall.

In view of the foregoing, I find that the Medicare Carrier properly applied the regulations
to revoke Petitioner’s Medicare billing privileges.

VI. Conclusion

Having determined that, as a matter of law, Petitioner is without a right to the relief he
seeks, I affirm the determination of the Hearing Officer to uphold the revocation by the
Medicare Carrier of Petitioner’s Medicare PIN.

/s/
José A. Anglada
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Mark C. Sorensen, M.D., ) Date: September 26, 2007

)
Petitioner, )
)

-Vv.- ) Docket No. C-07-402

) Decision No. CR1664
The Inspector General. )
)

DECISION

This matter is before me in review of the determination by the Inspector General (I.G.) to
exclude Petitioner pro se Mark C. Sorensen, M.D., from participation in Medicare,
Medicaid, and all other federal health care programs. The I.G. relies on the discretionary
authority to do so conveyed to him by section 1128(b)(4)(A) of the Social Security Act
(Act), 42 U.S.C. § 1320a-7(b)(4)(A). The predicate for the I.G.’s action is the suspension
of Petitioner’s license to practice medicine in Pennsylvania. The I.G. has filed a Motion
for Summary Affirmance.

The undisputed material facts in this case support the I.G.’s imposition of the exclusion.
The I.G. has set the period of exclusion to be concurrent with the period during which
Petitioner’s license to practice medicine in Pennsylvania remains suspended, the
minimum period of exclusion required by law. For those reasons, I grant the I.G.’s
Motion for Summary Affirmance.
I. Procedural Background

Petitioner pro se Mark C. Sorensen, M.D., was licensed to practice medicine in the
Commonwealth of Pennsylvania in 1986. Between April 27, 2004 and March 2, 2006, a
formal disciplinary proceeding against Petitioner was pending before the State Board of
Medicine of the Commonwealth of Pennsylvania, and that disciplinary proceeding
concerned Petitioner’s professional competence and professional performance.

On March 2, 2006, the State Board of Medicine of the Commonwealth of Pennsylvania
found Petitioner subject to disciplinary action because of his inability “to practice the
profession with reasonable skill and safety to patients by reason of illness, addiction to
drugs or alcohol,” and entered its Final Adjudication and Order suspending Petitioner’s
license to practice medicine in Pennsylvania for a period of at least five years.

On February 28, 2007 the LG. notified Petitioner that he was to be excluded from
participation in Medicare, Medicaid, and all other federal health care programs until he
should regain his license to practice medicine in Pennsylvania, based on the authority set
out in section 1128(b)(4) of the Act. Petitioner perfected his appeal of the L.G.’s action
by his pro se letter of April 23, 2007.

I held the prehearing conference required by 42 C.F.R. § 1005.6(a) on June 6, 2007. The
Order of that date summarized the discussions held in the conference and contemplated
that this case could be resolved by summary disposition on the parties’ briefs and
documentary exhibits. The cycle of briefing and this record closed for purposes of 42
C.F.R. § 1005.20(c) on September 10, 2007, under the circumstances set out in the Order
of June 6, 2007.

The evidentiary record on which I decide this case contains 26 exhibits. With his Motion
for Summary Affirmance and his Brief in Support of that Motion (1.G. Br.), the I.G. has
proffered I.G.’s Exhibits 1-9 (1.G. Exs. 1-9). Petitioner has not objected to the admission
of these exhibits, and so all are admitted as designated. Petitioner has proffered
Petitioner’s Exhibits 1-14 (P. Exs. 1-14), and all are admitted as designated in the absence
of objection from the I.G. In addition, Petitioner attached two documents to his Answer
Brief (P. Ans. Br.), marked P Attachments | and 2 (P. Atts. 1-2), and one document to his
Response Brief (P. Resp. Br.), marked P Attachment 3 (P. Att. 3). I have redesignated
these as Petitioner’s Exhibits 15, 16, and 17 (P. Exs. 15, 16, 17), respectively, and they
are admitted with those designations.
II. Issues

The issues before me are limited to those noted at 42 C.F.R. § 1001.2007(a)(1). In the
specific context of this record, they are:

1. Whether the I.G. has a basis for excluding Petitioner from participating
in Medicare, Medicaid, and all other federal health care programs pursuant
to section 1128(b)(4)(A) of the Act; and

2. Whether the length of the exclusion is unreasonable.

I resolve these issues in favor of the I.G.’s position. Section 1128(b)(4)(A) of the Act
supports Petitioner’s exclusion from all federal health care programs, for his license to
practice medicine in Pennsylvania has been suspended for reasons bearing on his
professional competence and professional performance. Petitioner’s exclusion during the
period that his license to practice medicine in Pennsylvania remains suspended is the
minimum period established by section 1128(c)(3)(E) of the Act, 42 U.S.C. § 1320a-
7(c)(3)(E), and is therefore reasonable as a matter of law.

Ill. Controlling Statutes and Regulations

Section 1128(b)(4)(A) of the Act, 42 U.S.C. § 1320a-7(b)(4)(A), authorizes the exclusion
from participation in Medicare, Medicaid, and all other federal health care programs of
any individual or entity “whose license to provide health care has been revoked or
suspended by any State licensing authority . . . for reasons bearing on the individual’s or
entity’s professional competence, professional performance, or financial integrity.” The
terms of section 1128(b)(4)(A) are restated in similar regulatory language at 42 C.F.R.

§ 1001.501(a)(1).

The terms of 42 C.F.R. § 1001.2007(d) provide that in exclusion appeals in this forum:

When the exclusion is based on the existence of a criminal conviction or a
civil judgment imposing liability by (a) Federal, State or local court, a
determination by another Government agency, or any other prior
determination where the facts were adjudicated and a final decision was
made, the basis for the underlying conviction, civil judgment, or
determination is not reviewable and the individual or entity may not
collaterally attack it either on substantive or procedural grounds in this
appeal.
4

An exclusion based on section 1128(b)(4)(A) of the Act is discretionary. If the
LG. exercises his discretion to proceed with the sanction, then the mandatory
minimum period of exclusion to be imposed under section 1128(b)(4)(A) of the
Act “shall not be less than the period during which the individual’s or entity’s
license to provide health care is revoked, suspended, or surrendered...” Act,
section 1128(c)(3)(E), 42 U.S.C. § 1320a-7(c)(3)(E). Regulatory language at 42
C.F.R. § 1001.501(b)(1) affirms the statutory provision.

IV. Findings and Conclusions
I find and conclude as follows:

1. Between April 27, 2004 and March 2, 2006, a formal disciplinary proceeding
against Petitioner pro se Mark C. Sorensen, M.D., was pending before the State
Board of Medicine of the Commonwealth of Pennsylvania. I.G. Exs. 2, 3.

2. The disciplinary proceeding described above in Finding 1 concerned Petitioner’s
professional competence and professional performance. I.G. Exs. 2, 3.

3. On March 2, 2006, at the conclusion of the disciplinary proceeding described

above in Findings 1 and 2, the State Board of Medicine of the Commonwealth of
Pennsylvania found Petitioner subject to disciplinary action because of his inability
“to practice the profession with reasonable skill and safety to patients by reason of
illness, addiction to drugs or alcohol.” I.G. Ex. 3, at 6.

4. On March 2, 2006, the State Board of Medicine of the Commonwealth of
Pennsylvania entered its Final Adjudication and Order suspending Petitioner’s
license to practice medicine in Pennsylvania for a period of at least five years, for
reasons bearing on his professional competence and professional performance.
.G. Ex. 3, at 11.

5. On February 28, 2007 the LG. notified Petitioner that he was to be excluded from
participation in Medicare, Medicaid, and all other federal health care programs
until he should regain his license to practice as a medical doctor in Pennsylvania,
ased on the authority set out in section 1128(b)(4) of the Act. I.G. Ex. 1.

6. On April 23, 2007, Petitioner perfected this appeal from the I.G.’s action by filing
a timely hearing request.
5

Because Petitioner’s license to practice medicine in Pennsylvania was suspended

for reasons bearing on his professional competence and professional performance,
as set out in Findings 1-4 above, a basis exists for the I.G.’s exercise of his

ction 1128(b)(4)(A) of the Act, to exclude

Petitioner from participation in Medicare, Medicaid, and all other federal health

7.
discretionary authority, pursuant to se
care programs.

8.
in Pennsylvania remains suspended is
and is therefore as a matter of law not
42 C.F.R. § 1001.501(b)(1).

9.

appropriate in this matter. Michael J.

The exclusion of Petitioner during the period that his license to practice medicine

for the minimum period prescribed by law
unreasonable. Act, section 1128(c)(3)(E);

There are no remaining disputed issues of material fact and summary disposition is

Rosen, M.D., DAB No. 2096 (2007); Thelma

Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

There are two essential elements necessary to support an exclusion base
1128(b)(4)(A) of the Act. First, the I.G. must prove that the license to pr

of the individual to be excluded has been rev
authority. Second, the I.G. must prove that t!
reasons bearing on the individual’s professio
or financial integrity. Leonard R. Friedman,
DeVol, Ph.D., DAB CR1652 (2007); Sherry
Rodney, DAB CR1332 (2005); Edmund B. E.
Marcos U. Ramos, M.D., DAB CR788 (200
(2001).

Petitioner does not deny that his license has
Board of Medicine characterized the reasons

on section
‘ovide health care
oked or suspended by a state licensing

e license was revoked or suspended for

nal competence, professional performance,
M.D., DAB No. 1281 (1991); Thomas 1.

J. Cross, DAB CR1575 (2007); Michele R.
isnaugle, D.O., DAB CR1010 (2003);

); Allison Purtell, M.D., DAB CR781

een suspended, and does no
for its action as bearing on

t deny that the
is professional

competence and professional performance. P. Ans. Br. at 5. His defense to the proposed
exclusion is based on the alleged unfairness of the State Board of Medicine’s action and

the alleged unsoundness of its findings and c
apparent concessions, the IG’s evidence esta
Petitioner’s license to practice medicine was
on March 2, 2006, and it was suspended on t
frequent lapses into substance abuse and add

onclusions. But regardless of Petitioner’s
lishes both essential elements conclusively:
suspended by the State Board of Medicine
e explicit basis of proven examples of his
iction. I.G. Exs. 2,3. The State Board of

Medicine expressly concluded that Petitioner “is unable to practice the profession with
reasonable skill and safety to patients by reason of illness, addiction to drugs or alcohol.”
6

LG. Ex. 3, at 6. Moreover, Petitioner’s state-court challenge to the suspension of his
license was rejected in the Commonwealth Court of Pennsylvania and in the Pennsylvania
Supreme Court. I.G. Exs. 7, 8, and 9. The I.G.’s evidence establishes both essential
elements.

Petitioner’s briefing consistently argues a single theme: that the proceedings against him
before the State Board of Medicine reached a flawed, incorrect result because of
inaccurate, misunderstood, or disregarded evidence, and because of unfair procedures
that, he asserts, deprived him of certain rights. But the components of that theme all share
this characteristic: they all constitute collateral attacks on the State Board of Medicine’s
action, and the settled rule is that such collateral attacks on the soundness or the validity
of a state action are impermissible in this forum. Judy Pederson Rogers and William
Ernest Rogers, DAB No. 2009; Hassan M. Ibrahim, M.D., DAB No. 1613 (1997);
George Iturralde, M.D., DAB No. 1374; Olufemi Okonuren, M.D., DAB No. 1319.
There is little more to be said: the cases are in perfect harmony with the controlling
regulation, 42 C.F.R. § 1001.2007(d).

Two variations on Petitioner’s main theme require brief additional mention. The first
variation is developed from the allegedly-unfair nature of the proceedings: Petitioner
argues that:

The U. S. Constitution’s Fifth and Fourteenth Amendments guarantee
Petitioner due process. Petitioner has been denied due process by Board
Counsel’s deliberate (fraudulent) and extraordinary withholding of appeal
right information.

P. Resp. Br. at 3.

am unable to observe a serious Fifth or Fourteenth Amendment argument in that
statement, particularly since Petitioner has no constitutionally-protected property interest
in participation in the Medicare and Medicaid programs. Kahn v. Inspector General, 848
F. Supp. 432 (S.D.N.Y. 1994); Hillman Rehabilitation Center, DAB No. 1611 (1997);
Michael J. Rosen, M.D., DAB CR1566 (2007); Edmund B. Eisnaugle, D.O., DAB
CR1010; Morton Markoff, D.O., DAB CR538 (1998). But if Petitioner has a
constitutional argument, it must be raised in another forum. I simply cannot entertain it.
Michael J. Rosen, M.D., DAB No. 2096, n. 10; Keith Michael Everman, D.C., DAB No.
880 (2003); Susan Malady, R.N., DAB No. 1816 (2002).

7

The second variation on Petitioner’s main theme is more subtle. He begins, as before,
with the assertion that the disciplinary proceedings were unfair and reached an incorrect
result. He then posits that the concept of “discretionary exclusion” embodied in section
1128(b) of the Act obliges the I.G. to exercise his discretion by conducting what would
amount to a de novo review of the evidentiary and procedural soundness of the State
Board of Medicine’s decision. P. Ans. Br. at 4-5; P. Resp. Br. at 3-4. But, as the
Departmental Appeals Board recently reminded litigants in this forum, the I.G.’s exercise
of section 1128(b) exclusionary discretion is embodied in the decision to exclude, and is
made manifest in the notice-of-exclusion letter that appears in this record as I.G. Ex. 1.
Michael J. Rosen, M.D., DAB No. 2096. The LG. is not obliged to explain or justify his
decision. He need only defend its legal sufficiency and factual predicates within the
narrow limits of 42 C.F.R. § 1001.2007(a)(1). And once the I.G. has proven that there is
that nexus of fact and law by which Petitioner became subject to exclusion, the ALJ is
without jurisdiction to evaluate on any basis whatsoever the propriety of the L.G.’s
exercise of discretion in deciding to proceed with imposition of the exclusion. Michael J.
Rosen, M.D., DAB No. 2096; Keith Michael Everman, D.C., DAB No. 1880 (2003);
Tracey Gates, R.N., DAB No. 1768 (2001); Wayne E. Imber, M.D., DAB CR661 (2000),
aff'd, DAB No. 1740 (2000); see also 42 C.F.R. § 1005.4(c)(5).

Section 1128(c)(3)(E) of the Act mandates that any period of exclusion based on section
1128(b)(4) must not be less than the period during which the individual’s or entity’s
license to provide health care is revoked, suspended, or surrendered. Thus, where the I.G.
is authorized to impose an exclusion pursuant to section 1128(b)(4), that exclusion is
reasonable as a matter of law if it is concurrent with the period during which the
individual’s license to provide health care is revoked, suspended, or surrendered. Tracey
Gates, R.N., DAB No. 1768 (2001); Julia Maria Nash, DAB CR1277 (2005); Maureen
Felker, DAB CR1110 (2003); April Ann May, P.A., DAB CR1089 (2003); Djuana
Matthews Beruk, D.D.S., DAB CR950 (2002). That is the period of exclusion the I.G.
proposes in this case, and it is reasonable ipso jure.

Summary disposition in a case such as this is appropriate when there are no disputed
issues of material fact and when the undisputed facts, clear and not subject to conflicting
interpretation, demonstrate that one party is entitled to judgment as a matter of law.
Michael J. Rosen, M.D., DAB No. 2096; Thelma Walley, DAB No. 1367. Summary
disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). This forum looks to
FED. R. CIV. P. 56 for guidance in applying that regulation. Robert C. Greenwood, DAB
No. 1423 (1993). The material facts in this case are undisputed, clear, and unambiguous,
and support summary disposition as a matter of law. This Decision issues accordingly.
VI. Conclusion

For the reasons set out above, the I.G.’s Motion for Summary Affirmance should be, and
itis, GRANTED. The I.G.’s exclusion of Petitioner pro se Mark C. Sorensen, M.D.,
from participation in Medicare, Medicaid, and all other federal health care programs is
SUSTAINED, pursuant to the terms of section 1128(b)(4)(A) of the Act, 42 U.S.C.

§ 1320a-7(b)(4)(A). That exclusion remains in effect, by operation of section
1128(c)(3)(E) of the Act, 42 U.S.C. § 1320a-7(c)(3)(E), while his license to practice
medicine in Pennsylvania remains suspended.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Donna J. Mitchell, ) Date: September 26, 2007

)
Petitioner, )
)

-Vv.- ) Docket No. C-07-489

) Decision No. CR1662
Centers for Medicare & Medicaid )
Services. )
)

DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS), as
was affirmed on reconsideration, to deny the request of Petitioner, Donna J. Mitchell, to
participate in the Medicare program.

I. Background

In July 2006 Petitioner, a nurse practitioner, applied to participate in the Medicare
program. CMS determined to deny the application. Petitioner requested reconsideration
and reconsideration was denied on March 30, 2007. She then requested a hearing and the
case was assigned to me for a hearing and a decision.

I held a pre-hearing conference by telephone and issued a pre-hearing order in which I
directed the parties to file written exchanges including proposed exhibits and briefs. I
advised them that either had the option to request a hearing in person. I told the parties
that I would grant a request for an in-person hearing based on a proffer of relevant
testimony that did not duplicate an exhibit.
2

CMS filed a brief and 11 proposed exhibits which it identified as CMS Ex. 1 - CMS Ex.
11. Petitioner filed a letter and one proposed exhibit, an April 11, 2007 letter signed by
Scott T. Hedges, M.D., which she did not identify with an exhibit number but which I
identify as P. Ex. 1. Neither Petitioner nor CMS requested that I convene an in-person
hearing.’ I receive into the record CMS Ex. 1 - CMS Ex. 11 and P. Ex. 1.

II. Issue, findings of fact and conclusions of law
A. Issue

The issue in this case is whether CMS is authorized to deny Petitioner’s application for
provider enrollment.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law to support my decision in this case. I set
forth each Finding below as a separate heading.

1. CMS has discretion to deny provider enrollment or revalidation to any
provider or supplier who was convicted, within the 10 years preceding the
date of application for enrollment or revalidation, of a felony offense that
CMS determines to be detrimental to the best interests of Medicare and its
beneficiaries. I have no authority to question CMS’s exercise of
discretion in such a case.

Regulations governing enrollment or revalidation by a provider or a supplier grant CMS
discretionary authority to deny enrollment or revalidation to any provider or supplier who
has been convicted of a felony offense within the 10 years preceding the date of
application for enrollment or revalidation where CMS determines the offense to be
detrimental to the best interests of Medicare and its beneficiaries. 42 C.F.R. §
424.530(a)(3). A subsection of this regulation specifically defines a felony conviction
falling within those described in section 1128 of the Social Security Act (Act) as a basis
for denial of provider enrollment or revalidation. 42 C.F.R. § 424.530(a)(3)(i)(D).

' CMS styled its brief as a motion for summary disposition. I find it unnecessary
to decide whether the criteria for summary disposition are present in this case inasmuch
as neither party has requested that I receive evidence in person.
3

On its face the regulation gives CMS the discretion to determine which convictions will
be the basis for denying enrollment or revalidation. I have no authority to look behind
CMS’s exercise of discretion and to substitute my judgment for that of CMS. I cannot, on
my own, decide whether an offense is detrimental to the best interest of Medicare and its
beneficiaries. Therefore, I must sustain CMS’s determination (and the reconsideration
determination) if I conclude that Petitioner was convicted of a felony within the 10 years
preceding the date of her application and CMS exercised its discretion, based on that
conviction, to deny enrollment to Petitioner.

2. Petitioner was convicted of a felony within 10 years of the date of her
application for provider enrollment.

There is no dispute that on December 7, 1999 Petitioner entered a guilty plea to three
criminal charges that had been filed against her by the State of Kentucky. CMS Ex. 2, at
1. Her convictions included convictions on two counts for making a false statement
regarding a prescription and a conviction on one count of forgery of a prescription. Jd.
Under Kentucky law, these crimes all were felonies as of the date of Petitioner’s
conviction. Ky. Rev. Stat. Ann. § 218A.140 (1990), as amended by 2007 Ky Acts Ch.
124 (SB 88); Ky. Rev. Stat. Ann. § 218A.282 (1998).

Petitioner’s convictions were not only of felonies but they included a conviction for a
felony that is described at section 1128(a)(4) of the Act. This section mandates exclusion
from Medicare and other federally financed health care programs of any individual who is
convicted of a felony occurring after August 21, 1996 “relating to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance.” Act,
section 1128(a)(4). Petitioner admits that in 1999 she wrote a prescription for Ritalin for
a patient and signed a physician’s name to the prescription. CMS Ex. 5, at 1. Ritalin is a
Schedule II controlled substance. CMS Ex. 3, at 1; CMS Ex. 5, at 1.

3. CMS has discretion to deny enrollment to Petitioner inasmuch as she
was convicted of a felony within the 10 years preceding the date of her
application for enrollment.

The fact that Petitioner was convicted of felonies within 10 years of the date of her
application for enrollment is, on its face, sufficient to sustain CMS’s determination to
deny her enrollment application. As I discuss above, at Finding 1, I have no authority to
question CMS’s exercise of discretion to deny Petitioner enrollment if, in fact, Petitioner
was convicted of a felony or felonies within the 10 years preceding the date of her
application and CMS exercises its discretion, based on the conviction, to deny Petitioner
enrollment.
4

Moreover, Petitioner was convicted not only of a felony but of a felony that is described
specifically at 42 C.F.R. 424.530(a)(3)(i)(D) as being one for which CMS will deny
enrollment if the conviction for that felony was entered within the 10 years preceding the
application for enrollment. Consequently, CMS not only had the broad discretion to deny
Petitioner’s application based on her felony conviction but it could also do so based on
explicit regulatory authority.

Petitioner argues that her conviction was a consequence of poor judgment on her part,
motivated by her good faith desire to serve her patients. She avers that she was not
attempting to commit fraud or to make a misrepresentation when she signed prescriptions
without authority but, rather, was simply trying to get necessary medication to a patient. I
ave no reason to doubt Petitioner’s sincerity and good faith. Her argument is
sympathetic. However, I must sustain CMS’s determination here because it — and not I —
as the discretionary authority to deny Petitioner provider enrollment as a consequence of
er conviction.

/s/
Steven T. Kessel
Administrative Law Judge