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

John DeCerce, M.D.,
(PTANs: 27276X, 27276Z),

Petitioner,
v.
Centers for Medicare & Medicaid Services
Docket No. C-16-236
Decision No. CR4568
Date: April 4, 2016
DECISION

I grant summary judgment in favor of the Centers for Medicare & Medicaid Services
(CMS) sustaining the determination of its contractor to revoke the Medicare enrollment
and billing privileges of Petitioner, John DeCerce, M.D., for a period of three years. The
undisputed material facts establish that Petitioner submitted, or allowed to be submitted
on his behalf, multiple claims for Medicare reimbursement for beneficiaries who were
deceased on the dates for which services allegedly were performed. 42 C.F.R.
§ 424.535(a)(8).
I. Background
On August 24, 2015, a Medicare contractor notified Petitioner that his Medicare
enrollment and billing privileges were being revoked for a three-year period. Petitioner

requested reconsideration and, on November 23, 2015, CMS upheld the revocation
determination. Petitioner then requested a hearing.'

' Petitioner contends that there were other actions by CMS or its contractor besides those
that I have described which prejudiced him and interfered with his ability to practice.
Petitioner describes these other actions as “due process violations.” Petitioner’s Pre-
hearing brief at 2-3, 12-13. I do not address these arguments or the alleged actions by
CMS or its contractor because I have no authority to address them. None of them appear
CMS moved for summary judgment. It filed 13 exhibits, identified as CMS Ex. 1-CMS
Ex. 13, in support of its motion. Petitioner opposed the motion and also cross-moved for
summary judgment. He filed five exhibits, identified as P. Ex. 1-P. Ex. 5, in support of
his cross-motion and opposition to CMS’s motion. I receive all of these exhibits into the
record for purposes of deciding the parties’ motions.

IL. Issue, Findings of Fact and Conclusions of Law
A. Issue

The issue is whether the undisputed material facts establish that CMS is authorized to
revoke Petitioner’s participation in Medicare and his Medicare billing privileges pursuant
to the authority of 42 C.F.R. § 424.535(a)(8).

B. Findings of Fact and Conclusions of Law

CMS may revoke a provider or a supplier’s Medicare enrollment and billing privileges
where:

The provider or supplier submits a claim or claims for services that could
not have been furnished to a specific individual on the date of service.
These instances include but are not limited to situations where the
beneficiary is deceased... .

42 CFR. § 424.535(a)(8).

The meaning of this regulation is plain and not susceptible to interpretation. CMS has the
authority to revoke the Medicare participation and billing privileges of a provider or
supplier who submits or causes to be submitted any claim for a service ostensibly
provided to a beneficiary on a date when the beneficiary is deceased. The regulation does
not distinguish between fraud and simple error; intent is not an element of the
regulation’s criteria for revocation. Howard B. Reife, DAB No. 2527 at 5 (2013), Louis
J. Gaefke, DAB No. 2554 at 7-8 (2013).

Although the regulation could be applied strictly to authorize revocation for any claim
filed for services allegedly rendered at the time that a beneficiary is deceased, the
Secretary granted CMS discretion to exercise a small amount of leeway in order to
forgive a possible random claims filing error. The preamble to the regulation suggests
that revocation would be in order where the evidence “demonstrates multiple instances, at
least three, where abusive billing practices have taken place.” 73 Fed. Reg. 36,448,

to rise to the level of a determination that gives hearing rights to Petitioner and Petitioner
has cited to no authority that would empower me to address Petitioner’s arguments.
36,455 (June 27, 2008). That language suggests that CMS may cut some slack to a
provider or supplier where it determines that one or two claims are simple error. Nothing
in the preamble, however, states that CMS must do so. The preamble doesn’t undercut
the plain language of the regulation. CMS always has the authority to revoke even if
there is only one instance in which a provider or a supplier submits a claim for a service
allegedly rendered to a beneficiary on a date when that beneficiary is deceased. It may
do so without regard for the underlying reason for the false claim. Fraud is not a criterion
of the regulatory authority to revoke.

The undisputed material facts establish that CMS has more than ample grounds to revoke
Petitioner’s participation and billing privileges. Petitioner submitted claims, or claims
were submitted on Petitioner’s behalf, for 35 services allegedly rendered to eight
individual beneficiaries who were, in fact, deceased on the alleged service dates. CMS
Ex. 4 at 1-3, 6-18, 21-24, 27-29, 32-33, 36-43, 46, 49, 52-53; CMS Ex. 12 at 99 6, 11, 14-
15. As I discuss above, submitting or causing to be submitted any of these claims would
be a sufficient basis for revocation. In this case, however, there were multiple instances
of such claims submitted over a period of about two years and eight months, from July
2011 through April 2014. CMS Ex. 4 at 1-3. That is far more than is necessary to justify
revocation, even if CMS exercises the discretionary leeway granted by the preamble to
the regulation. There certainly are “three or more instances” present here of claims of
services allegedly rendered to persons who were deceased on the service dates.

Petitioner does not assert that any of the claims were for services that were provided to
beneficiaries who were alive on the alleged service dates. Rather, he makes a series of
arguments that seek to hold him harmless despite the fact that he submitted or caused to
be submitted claims for services allegedly provided to individuals who were, in fact,
deceased. I find these arguments to be without merit.

First, Petitioner argues that there is a culpability standard in the regulation. He contends
that the regulation is not aimed at mere mistakes but that it allows for revocation only
where there is something more than that, consisting of “abusive claims.” Petitioner never
defines what he thinks is an “abusive claim” but it is apparent from his argument that he
believes that it comprises more than simple negligence or human error.

Petitioner hinges his argument on the fact that the term “abusive claim” is used in the
preamble to 42 C.F.R. § 424.535(a)(8) as a general descriptor of the types of claims for
which revocation is justified. I disagree with Petitioner’s assertion that CMS must look
for something more than mistake in justifying revocation. The preamble doesn’t define
the term “abusive claim.” More importantly, there is absolutely nothing in the preamble
to suggest that something more than error is a necessary prerequisite for revocation. As I
ave stated, the preamble grants discretion to CMS not to revoke if CMS determines that
a provider has committed only one or two mistakes in submitting claims. It does not
mandate CMS to make culpability findings nor does it even require an extensive pattern

of false claims. Applying the preamble’s language, at the least, CMS may revoke where
there are more than two claims that are simply erroneous. Furthermore, CMS may rely
on the plain regulatory language to justify its actions. And, that language allows for
revocation if there is even a single claim for a service allegedly rendered to a beneficiary
who is deceased on the alleged service date, without regard to the provider’s intent.

Petitioner contends that certain of the claims were either the product of simple human
error by Petitioner’s staff or, perhaps, some strange byproduct of the operations of a
computerized billing system. I find these arguments to be irrelevant. The regulation
makes Petitioner as responsible for staff error or even computer error as he would be for
is personal decisions. His motive for filing a claim is irrelevant here. CMS has to prove
neither negligence nor fraud.”

Petitioner argues also that, with respect to four of the eight deceased beneficiaries, claims
were submitted by a third party — a medical practice with which Petitioner was associated
nown as the “Sleep Medicine Center” — without Petitioner’s authorization or even
nowledge. He contends that he should be held harmless for any of these claims, even
though they were false, inasmuch as he did not personally authorize that the individual
claims be submitted. Petitioner acknowledges that he executed an assignment of benefits
form 855R in which he reassigned his Medicare billing privileges to the third party.

CMS Ex. 5 at 11-16. In Petitioner’s eyes, reassigning benefits does not make him liable
for actions by the third party. Thus, he contends, he did not authorize that entity to file
any of the claims that were false.*

> Petitioner seems to argue at times that he actually provided the services to the deceased
beneficiaries. For example, he states: “It is not disputed that all services provided for...
a beneficiary] were covered services that were appropriately provided by . . . [Petitioner]
to a live beneficiary.” Petitioner’s Pre-hearing brief at 6. However, he provides no
citation for this assertion nor does he explain it. It is unclear to me whether Petitioner
contends that he actually provided services to the beneficiary, but simply misstated the
date of the services on his reimbursement claim. In any event, Petitioner has not offered
proof for this assertion and, moreover, it is irrelevant, because the claim that he submitted
was for a service that he did not perform — a service allegedly provided on a date when
the beneficiary was deceased.

* Petitioner also contends that in two cases there is a genuine dispute as to whether there
were billing errors. He asserts that in these instances, his own computer records show
that services were billed appropriately even if CMS’s records show otherwise. That may
be true, but what matters for regulatory purposes is the claim that CMS receives from a
provider or supplier. In this instance there is no dispute that CMS received claims for
alleged services provided after the beneficiaries were deceased. But, even if that were
not the case, Petitioner’s argument applies to only a small subset of the total universe of
claims that he submitted that did contravene the regulation.
I find that argument to be unpersuasive. It is not necessary that I find that Petitioner
authorized the third party to file false claims or that he even knew that it was doing so. In
executing an assignment of benefits Petitioner authorized the third party to collect
payments for services that he performed as the third party’s employee. He remained as
responsible for the accuracy of any of the claims submitted by the third party as if he had
personally submitted them. The preamble to the regulation makes it plain that a provider
or a supplier is responsible for any claim that is submitted on his or her behalf.
“[{P]roviders and suppliers are responsible for the claims they submit or claims submitted
on their behalf.” 73 Fed. Reg. 36,448, 36,455 (June 27, 2008), (emphasis added).

Petitioner also characterizes the claims at issue as merely isolated events, not connected,
and therefore, no basis for revocation. He asserts that no pattern can be found in these
claims. I find this argument to be meritless for two reasons. First, there is a pattern to
Petitioner’s claims. He submitted or caused to be submitted multiple claims for
individual beneficiaries who were deceased. There were a total of eight deceased
beneficiaries on whose accounts Petitioner submitted or caused to be submitted 35
claims. Second, the regulation does not distinguish between isolated claims and claims
that are linked by common factors. The preamble speaks of a pattern of abusive claims
being a basis for revocation, but, and as I have explained, the preamble does not constrain
CMS’s authority or its discretion. Moreover, the use of the term “pattern” in the
preamble is linked only to the quantity of claims that a provider submits that fall within
regulatory criteria. Three or more of such claims is defined to be a pattern. The
preamble doesn’t require that the claims be linked by a plan or a conspiracy in order to
comprise a pattern if there are three or more of them.

CMS imposed on Petitioner a three-year Medicare re-enrollment bar beginning on the
effective date of the revocation. That is not a reviewable determination and I have no
authority to decide whether a three-year bar is reasonable in this case. A determination to
revoke a provider or a supplier’s participation in Medicare is reviewable and there is a
right to a hearing to challenge that determination. 42 C.F.R. § 498.3(b)(17). But, the
regulations do not afford providers or suppliers the authority to challenge the length of a
re-enrollment bar. See id. I note, however, that CMS is authorized to bar a provider or a
supplier’s participation and billing privileges for up to three years where grounds for
revocation exist. 42 C.F.R. § 424.535(c).

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Russell L. Reitz, M.D.,
(NPI No. 1902882194,
PTAN No. 103464)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-4211
Decision No. CR4566

Date: April 1, 2016

DECISION

Wisconsin Physicians Service Insurance Corporation (WPS or “the contractor”), an
administrative contractor acting on behalf of the Centers for Medicare & Medicaid
Services (CMS), revoked the Medicare enrollment and billing privileges of Petitioner,
Russell L. Reitz, M.D., effective April 30, 2009. The revocation was based on
Petitioner’s felony conviction for aggravated battery and his failure to timely report the
felony conviction. For the reasons stated below, I affirm CMS’s revocation of
Petitioner’s Medicare enrollment and billing privileges.

I. Background and Procedural History

Petitioner, a radiation oncologist who was also the owner of the Central Kansas Cancer
Institute (CKCI), was enrolled as a supplier in the Medicare program. On April 30,
2009, Petitioner was convicted of aggravated felony battery, a level VII offense against a
person, pursuant to Kan. Stat. Ann. § “21-3414(1)(A)(c),” stemming from a May 17,
2008 incident.! CMS Exhibit (Ex.) 5. Petitioner described that the conviction resulted
from an “incident with another male [his] ex-wife was dating.” Petitioner Exhibit (P.
Ex.) 5 at 17. Petitioner further acknowledged that “[t]he battery resulted from an
altercation with another man in a personal matter involving this man’s relationship with
[h]is ex-wife.” P. Ex. 6 at 3. The District Court of Riley County, Kansas (District
Court) imposed a 12-month prison sentence that was suspended, and 24 months of
probation with supervision administered by Community Corrections. CMS Ex. 5 at 2. In
September 2010, despite the opposition of the State of Kansas, the District Court granted

' While both parties discussed that Petitioner had been convicted of a felony offense,
neither party submitted any documentation regarding the conviction or the date thereof.
In response to a March 10, 2015 Order, CMS filed a copy of the Kansas Sentencing
Guidelines Journal Entry of Judgment (“judgment of conviction”). See CMS Ex. 5.
CMS states in its brief that Petitioner violated section 21-5413(b)(1) of the Kansas Code.
CMS Br. at 1. However, Chapter 21 of the Kansas Code, “Crimes and Punishments,”
was re-codified following Petitioner’s April 30, 2009 conviction, and the offense CMS
identified under section 21-5413(b)(1) did not exist in the Kansas Code at the time of
Petitioner’s conviction. Furthermore, the judgment of conviction, apparently
erroneously, shows that Petitioner’s felony offense was in violation of “section 21-
3414(1)(A)(c).” CMS Ex. 5 at 1. This specific section does not appear in the earlier
version of the Kansas Code, and it appears that the judgment of conviction contains a
typographical error in its citation to the applicable code section for the conviction. See
Kan. Stat. Ann. § 21-3414(a) (2007). Subsection (a)(1) of Section 21-3414, in effect at
the time of Petitioner’s conviction, stated that aggravated battery is: (A) Intentionally
causing great bodily harm to another person or disfigurement of another person; or (B)
intentionally causing bodily harm to another person with a deadly weapon, or in any
manner whereby great bodily harm, disfigurement, or death can be inflicted; or (C)
intentionally causing physical contact with another person when done in a rude, insulting
or angry manner with a deadly weapon, or in any manner whereby great bodily harm,
disfigurement or death can be inflicted. CMS, without any citation to evidence, argues
that Petitioner’s offense was “in a manner whereby great bodily harm, disfigurement or
death can be inflicted.” CMS Br. at 1. Based on Petitioner’s conviction of a level VII,
person felony, only subsections (B) or (C) could be applicable. CMS Ex. 5 at 1; Kan.
Stat. Ann. § 21-3414(a)(1)(C) and (b) (2007). The offense under subsection (C) does not
necessarily require that the offense was committed in such a manner as described by
CMS; rather, an offense under subsection (C) could involve “physical contact with
another person when done in a rude, insulting or angry manner with a deadly weapon or
in any manner whereby great bodily harm, disfigurement, or death can be inflicted.”
Kan. Stat. Ann. § 21-3414(a)(1)(C) (emphasis added).

Petitioner’s motion for early termination of probation. P. Ex. 5 at 2-12. Petitioner’s
medical license was suspended by the Kansas State Board of Healing Arts, the state
medical board, for approximately one year and his license was reinstated on October 23,
2010. P. Ex. 4 at 3.

In May 2011, CKCI submitted an Electronic Funds Transfer (EFT) Authorization
Agreement to WPS. P. Ex. 7 at 5-6. In correspondence dated May 17, 2011, the
contractor informed CKCI that in order for it to process the EFT Authorization
Agreement, CKCI needed to provide a tax document from the Internal Revenue Service
that verified its legal business name and also submit specified portions of the CMS
application Form CMS-855] in order “to update [its] Organizational [National Provider
Identifier].” P. Ex. 7 at 7. WPS informed CKCI that if WPS did not receive the
requested documentation by June 16, 2011, WPS would not be able to process the EFT
Authorization Agreement and CKCI would be subject to revalidation procedures.” P. Ex.
Tat 7.

CKCI submitted the requested information on June 14, 2011. P. Ex. 7 at 8-23. However,
it appears that some of the documents were submitted in July 2011, as one set of
documents bears a June 11, 2011 date, whereas another set of documents bears a July 6,
2011 date. P. Ex. 7 at 22, 23. Along those lines, the record contains portions of two
different Form CMS-855lIs, including two unique versions of both Section 3 (Final
Adverse Actions/Convictions) and Section 15 (Certification Statement). P. Ex. 7 at 16-
17, 22-23. One version of Section 3 indicates that Petitioner had final adverse actions of
“Agg Battery Level VII” on April 27, 2009 and “License Temp. Suspension” on October
16, 2009. P. Ex. 7 at 16. This version of the form indicated the “resolution” was that
probation ended on September 10, 2010, and that “suspension and probation” of
Petitioner’s medical license had ended on October 18, 2010. P. Ex. 7 at 16. This version
of Section 3 directed CMS to “see attached documents.” P. Ex. 7 at 16. The second
version of Section 3 lists a final adverse action of “Level 7 Agg Battery,” with a listed
resolution of “probation ended 10/10.” P. Ex. 7 at 17. With respect to Petitioner’s
medical license, the second version of the form indicates “suspension KS license” and
does not provide the date or any response in the section corresponding to “resolution.”

P. Ex. 7 at 17. The second version of Section 3 does not indicate that any documents had
been appended to the form. P. Ex. 7 at 17.

> The contractor requested that CKCI submit portions of the enrollment application but
did not conduct a revalidation at that time. See 42 C.F.R. § 424.515(d)(1) (noting that
CMS has the right to perform off-cycle revalidations in addition to regular 5-year
revalidations and may request that a provider or supplier recertify the accuracy of the
enrollment information when warranted).
WPS approved CKCI’s EFT Authorization Agreement on July 26, 2011, at which time it
notified CKCI that it had “approved [its] CMS-855 application to change [its] Medicare
enrollment information.” P. Ex. 7 at 2. The letter specified that the updated information
consisted of “[s]ignature verification for EFT & Updated NPI to PECOS.” P. Ex. 7 at 2.
The letter did not indicate that the contractor had revalidated CKCI’s enrollment or had
updated any information regarding final adverse actions. P. Ex. 7 at 2-3. The
contractor’s letter also informed CKCI that in order to maintain active enrollment in the
Medicare program, it needed to submit updates and changes to its enrollment
information, including reporting “final adverse legal actions, such as felony convictions”
within specified timelines. P. Ex. 7 at 2-3.

On or about April 28, 2015, CKCI submitted a revalidation application to WPS. CMS
Ex. 4. In that application, CKCI reported that its owner, Petitioner, had a final adverse
action of “unrelated felony conviction” on April 30, 2009, and that the resolution was a
“12 mo. sentence suspended.” CMS Ex. 4 at 14. With respect to the Kansas Board of
Healing Arts, the application listed a final adverse action of “unrelated felony conviction”
and that Petitioner’s license had been suspended and reinstated. CMS Ex. 4 at 14.

After receiving CKCI’s revalidation application, WPS sent Petitioner a notice on July 22,
2015 informing CKCI that its Medicare enrollment and billing privileges were being
revoked, effective April 30, 2009. CMS Ex. 1. WPS provided the following explanation
in its letter:*

42 CFR § 424.535(a)(3) - Felonies

The state of Kansas found you guilty of aggravated battery in a
manner whereby great bodily harm, disfigurement, or death can be
inflicted, a Level VII, person felony on April 30, 2009.

42 CFR § 424.535[(a)(9)] — Failure to Report Changes

Failure to report guilty plea within 30 days of the reportable event.

> Ina separate action, WPS revoked CKCI’s Medicare enrollment and billing privileges.
CKCI submitted a request for hearing, and that case was also assigned to me under a
separate docket number, C-15-4210. In that decision, I affirmed CMS’s revocation of
Petitioner’s Medicare enrollment and billing privileges, effective April 30, 2009, based
on Petitioner’s felony conviction for aggravated battery.
CMS Ex. | at 1 (emphasis in original). The effective date of the revocation was April 30,
2009, and Petitioner was informed that the contractor had established a re-enrollment bar
for a period of three years, effective 30 days from the postmark date of the letter. CMS
Ex. | at 1-2.

In a letter dated September 1, 2015, Petitioner requested reconsideration of the July 22,
2015 determination. CMS Ex. 2. In his request for reconsideration, Petitioner did not
deny that he had been convicted of a felony against a person, nor did he assert that he had
notified CMS or the contractor within 30 days of his conviction. CMS Ex. 2 at 1-4.

In a September 10, 2015 reconsidered determination, WPS informed Petitioner that his

Medicare enrollment had been revoked pursuant to 42 C.F.R. § 424.535(a)(3) and (a)(9)
based on having a felony conviction that “CMS has determined to be detrimental to the
best interests of the program and its beneficiaries” and for his failure to report the
conviction within 30 days. CMS Ex. 3 at 1-2. The letter notified Petitioner that he may
request further review by an administrative law judge. CMS Ex. 3 at 3.

Petitioner, through his current counsel, filed a request for hearing on September 16, 2015,
which the Civil Remedies Division received on September 21, 2015. On October 8,
2015, I issued an Acknowledgment and Pre-Hearing Order (Order) directing the parties
to file pre-hearing exchanges, consisting of a brief by CMS and a response brief by
Petitioner, along with supporting evidence, in accordance with specific requirements and
leadlines.

CMS filed a pre-hearing brief and motion for summary judgment, along with four
exhibits (CMS Exs. 1-4). Petitioner submitted a pre-hearing brief (P. Br.) and six
exhibits. (P. Exs. 1-6). After both parties filed pre-hearing briefs, Petitioner filed an
additional exhibit (P. Ex. 7) and a supplemental brief (P. Supp. Br.) addressing that
exhibit. CMS did not object to P. Ex. 7 or otherwise respond to Petitioner’s supplemental
brief. In response to a March 10, 2016 Order, CMS submitted one additional exhibit,
CMS Ex. 5, without objection. I admit the briefs, along with CMS Exs. 1-5 and P. Exs.
1-7, into the record.

Petitioner has submitted his own written direct testimony. P. Ex. 6 at 2-5; see Order { 8.
However, CMS has not requested the opportunity to cross-examine Petitioner. Order 4 9.
Consequently, there are no witnesses for the parties to cross-examine at a live hearing.
Order | 9-10. The record is closed, and the case is ready for a decision on the merits.*

As an in-person hearing to cross-examine witnesses is not necessary, it is unnecessary
to further address CMS’s motion for summary disposition.
IL. Issues

Whether CMS has a legal basis to revoke Petitioner’s Medicare enrollment pursuant to 42
C.F.R. § 424.535(a)(3) or (a)(9) based on his April 30, 2009 felony conviction and failure
to comply with reporting requirements.

Il. Jurisdiction

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

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

As a physician, Petitioner is a “supplier” for purposes of the Medicare program. See

42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(1). In
order to participate in the Medicare program, a supplier must meet certain criteria to
enroll and receive billing privileges. 42 C.F.R. §§ 424.505, 424.510. CMS may revoke a
supplier’s enrollment and billing privileges for any reason stated in 42 C.F.R.

§ 424.535(a).

CMS may revoke a supplier’s enrollment based on the existence of a felony conviction,
as set forth in 42 C.F.R. § 424.535(a)(3), which currently provides:

(3) Felonies. (i) 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.

(ii) Offenses include, but are not limited in scope or severity to—

oe

(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.

CMS also may revoke a supplier’s Medicare enrollment and billing privileges based on
the supplier’s failure to timely report a final adverse action, as is set forth in 42 C.F.R.
§ 424.535(a)(9):

> My numbered findings of fact and conclusions of law are set forth in italics and bold
font.
(9) Failure to report. The provider or supplier did not comply with the
reporting requirements specified in §424.516(d)(1)(ii) and (iii) of this
subpart.

Pursuant to 42 C.F.R. § 424.516(d)(1)(ii), physicians must report “[a]ny adverse
legal action” within 30 days of the reportable event, and 42 C.F.R. § 424.502
(Definitions) lists a conviction of a felony offense as defined in section
424.535(a)(3)(i) within the last 10 years preceding enrollment, revalidation, or re-
enrollment as a final adverse action.

I. A jury in Riley County, Kansas, convicted Petitioner of one count of
aggravated battery, a level VII felony, on April 30, 2009.

2. Petitioner’s felony conviction is for a crime against a person pursuant to
42 C.F.R. § 424.535(a)(3).

3. An offense listed in 42 C.F.R. § 424.535(a)(3) has been determined by CMS
to be per se detrimental to the best interests of the Medicare program and its
beneficiaries.

Petitioner does not dispute that he was found guilty of felony aggravated battery.° In his
brief, Petitioner acknowledges that his “grounds for appeal are limited,” in that “it must
be conclusively presumed that the state felony conviction was detrimental to the best
interests of the Medicare Program because the Secretary has decreed that a felony
conviction for assault (which is obviously similar to battery) is always detrimental to the
best interests of the Medicare Program and its beneficiaries.” P. Br. at 3. Thus,
Petitioner has conceded that his felony conviction for aggravated battery is a basis for the
revocation of his enrollment pursuant to section 424.535(a)(3).’

° The maximum period of incarceration for a level VII, person felony at the time of
Petitioner’s conviction was 34 months, making it a felony offense. Kan. Stat. Ann.

§ 21-4704 (sentencing grid); see 18 U.S.C. § 3559 (classifying an offense punishable by
less than five years but more than one year of incarceration as a Class E felony).

T Section 424.535(a)(3), as it was in effect at the time of Petitioner’s felony conviction,
indicated that revocation of enrollment and billing privileges is warranted if the
“provider, supplier, or any owner of the provider or supplier, within 10 years preceding
enrollment or revalidation of enrollment, was convicted of a Federal or State felony
offense that CMS has determined to be detrimental to the best interests of the program
and its beneficiaries.” The current version of section 424.535(a)(3), which became
effective on February 3, 2015, states that revocation of enrollment and billing privileges
is warranted if 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
Petitioner argues that his felony conviction had nothing to do with the practice of
medicine or any government or other health care program or beneficiary, and did not
involve dishonesty or fraud. P. Br. at 3. Yet, Petitioner recognizes that his felony
offense warrants revocation of enrollment, and that “the Administrative Law Judge is
presumably bound” by section 424.535(a)(3). P. Br. at 3-4.

Pursuant to subsection 424.535(a)(3)(ii)(A), CMS explicitly has determined that four
categories of felony offenses are per se detrimental to the best interests of the Medicare
program and its beneficiaries, and it has determined that one of those four categories
involves “[f]elony crimes against persons, such as murder, rape, assault, and other similar
crimes.” 42 C.F.R. § 424.535(a)(3)(ii)(A) (emphasis added). CMS may revoke a
supplier’s billing privileges and supplier agreement if the supplier was convicted in the
previous 10 years. 42 C.F.R. § 424.535(a)(3)(i). The offense of felony aggravated
battery is a felony crime against a person under the regulation. See 42 C.F.R.

§ 424.535(a)(3)(ii)(A). The list of examples in subsection (A), which is preceded by the
phrase “such as” and clearly indicates non-exclusivity, points to examples of felony
crimes against persons. For purposes of subsection (A), Petitioner need only have
committed a felony crime against a person; in this instance, a jury determined that he
committed felony aggravated battery against another person.* Kan. Stat. Ann. § 21-
3414(a)(1) (2007).

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.” See
79 Fed. Reg. 72500, 72532 (Dec. 5, 2014).

® Petitioner does not dispute that his crime of aggravated battery was a felony crime
against a person as contemplated by 42 C.F.R. § 424.535(a)(3)(i(A). Section
424.535(a)(3)(ii)(A) lists the criminal offense of “assault” as a representative felony
offense against a person. At the time of Petitioner’s offense, Kansas Law defined
aggravated assault, which is the felonious level of assault in Kansas, as “intentionally
placing another person in reasonable apprehension of immediate bodily harm” that is
committed with a deadly weapon, while disguised in any manner designed to conceal
identity, or with intent to commit a felony. Kan. Stat. Ann. §§ 21-4308 and 21-3410
(2007). A conviction for aggravated assault thereby would not necessarily have involved
any physical contact between an offender and his or her victim. Kan. Stat. Ann.

§ 21-3410 (2007). However, a level VII, person offense of aggravated battery would
involve, at a minimum, that the offender intentionally caused physical contact with a
deadly weapon or in a manner whereby great bodily harm, disfigurement or death could
be inflicted. Kan. Stat. Ann. §§ 21-3414(a)(1)(B), (C) and 21-3414(b) (2007). Based on
the elements of each offense, I agree with Petitioner that the two offenses are similar. See
P. Br. at 3.
4. CMS has the statutory and regulatory authority to revoke Petitioner’s
Medicare enrollment and billing privileges.

Petitioner argues that “the absence of statutory authority dooms the sanction.” P. Br. at 4.
He further argues that the Secretary of the Department of Health and Human Services
(Secretary) lacked the authority to promulgate the regulation in question. P. Br. at 6. In
arguing that the Secretary lacked the authority to promulgate the pertinent regulation,
Petitioner contends that Section 4302 of the Balanced Budget Act of 1997, P.L. 105-33
(August 5, 1997), which was codified in part at 42 U.S.C. § 1395(b)(2)(D), set forth
specific procedures for the Secretary to follow when revoking provider agreements,
stating:

Section 4302 gives the Secretary the authority to refuse to enter into a
provider agreement or to terminate a provider agreement in the event [the]
physician or others have been convicted of a felony which the Secretary
determines is detrimental to the best interest of the Medicare Program or
beneficiaries. The provision is codified at 42 U.S.C. § 1395cc(b)(2)(D),
which specifies that the Secretary may refuse to enter into an agreement, or
upon notice to the public and the provider, terminate such an agreement
after the Secretary has ascertained that the provider has been convicted of a
felony which the Secretary determines to be detrimental to the program or
program beneficiaries.

P. Br. at 6. Petitioner further argues that 42 U.S.C. § 1395cce(b)(2)(D) requires the
Secretary to give pre-revocation notice to the public and the provider, and that CMS erred
by not giving any pre-revocation notice in his case. P. Br. at 6. Additionally, Petitioner
argues that the revocation of his enrollment agreement and billing privileges should have
been prospective, rather than retroactive to the date of the felony conviction. P. Br. at 6-
7.

Petitioner identifies no authority stating that an administrative law judge has the authority
to essentially invalidate a regulation. In fact, Petitioner concedes that I am “presumably
bound” by section 424.535(a). P. Br. at 4. Iam indeed bound by all applicable
regulations and “may not invalidate either a law or regulation on any ground.”).

See, e.g., 1866I1CPayday.com, L.L.C., DAB No. 2289 at 14 (2009).

Moreover, Petitioner fails to appreciate that when Congress addressed the Secretary’s
authority to refuse to enter into Medicare agreements with individuals or entities
convicted of felonies, it amended two separate sections of the Social Security Act.
Petitioner contends that the portions of section 424.535 that pertain to him are not an
authorized rulemaking implementing 42 U.S.C. § 1395ce(b)(2)(d). It is noteworthy that
section 1395cc(b)(2)(d) applies only to “Agreements with Providers of Services;
10

Enrollment Processes.” Congress defined the term “provider of services” to mean “a
hospital, critical access hospital, skilling nursing facility, comprehensive outpatient
rehabilitation facility, home health agency, hospice program, or, for purposes of section
1814(h) and section 1835(e), a fund.” 42 U.S.C. § 1395x(u). As noted above, Petitioner
is not a provider of services as defined by the statute, but is a supplier of services. See 42
C.F.R. § 400.202 (providing definitions of both “provider” and supplier’); 42 U.S.C.

§ 1395x(d) (defining “supplier” as a “physician or other practitioner, a facility or other
entity (other than a provider of services) that furnishes items or services under this
subchapter”). Section 4302 of the Balanced Budget Act of 1997, however, also provided
for the Secretary to revise section 424.535(a)(3) to apply to suppliers, such as Petitioner,
by adding the following sentence to 42 U.S.C. § 1395u(h):

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

P.L. 105-33, Section 4302; 42 U.S.C. 1395u(h) (emphasis added). Thus, the plain
language of 42 U.S.C. 1395u(h) gives the Secretary the authority to terminate a Medicare
agreement if a physician or supplier has been convicted of a felony offense that the
Secretary has determined is detrimental to the best interests of the program or its
beneficiaries. 42 U.S.C. § 1395u(h). Furthermore, Congress has given the Secretary the
broad authority to “make and publish such rules and regulations . . . . as may be necessary
to the efficient administration of the functions with which [she] is charged under the
Act.” 42 U.S.C. § 1302(a). Petitioner has not identified any language in section 424.535
pertaining to his revocation, as a supplier, that is inconsistent with the Social Security
Act.

5. Petitioner did not inform CMS within 30 days of his April 30, 2009 felony
conviction.’

The regulations at 42 C.F.R. § 424.516(d)(1)(ii) require that physicians report, within 30
days, any adverse legal action to their Medicare contractor. Failure to timely report an
adverse legal action subjects a physician to revocation of his or her Medicare billing
privileges. 42 C.F.R. § 424.535(a)(9). Petitioner does not contend that he informed WPS
of his felony conviction within 30 days of April 30, 2009.

° [recognize that Petitioner’s felony conviction in the preceding 10 years, alone, is a
sufficient basis for CMS to have revoked his Medicare enrollment and billing privileges.
11

The evidence indicates that Petitioner first notified the contactor of his felony conviction
in June 2011, and that he gave notice of the conviction incidentally, when he responded
to the contractor’s request for additional documentation in connection with CKCI’s
submission of an EFT agreement in April 2011. P. Ex. 7 at 16-17. In April 2011, more
than two years after Petitioner’s felony conviction, CKCI submitted a Form CMS-588,
which is an EFT Authorization Agreement. P. Ex. 7 at 5-6. Shortly thereafter, WPS
requested, inter alia, that CKCI “complete Sections 1, 2A, 3, 13, and 15 of the CMS 8551
application “to update [its] Organizational [National Provider Identifier].” P. Ex. 7 at 7.
CKCI submitted the requested information in June 2011, at which time it included
information about Petitioner’s April 2009 felony conviction. P. Ex. 7 at 8-23. WPS, in
July 2011, approved CKCI’s EFT Authorization Agreement. P. Ex. 7 at 2-3. At that
time, WPS notified CKCI that its enrollment change had been approved and that the
updated information included “[s]ignature verification for EFT & [u]pdated NPI to
PECOS.” P. Ex. 7 at 2. Contrary to Petitioner’s argument, the contractor did not purport
to be rendering an “initial determination” that “approved CKCI’s enrollment in the
Medicare Program effective June 11, 2011.” P. Supp. Br. at 3; P. Ex. 7 at 2. Rather, the
contractor had approved CKCI’s May 2011 EFT Authorization Agreement. P. Ex. 7 at 2-
3.

Petitioner cannot escape responsibility for his failure to report his conviction within 30
days of his conviction, and his argument that his conviction was reported elsewhere, such
as by his licensing board and the National Practitioner Data Bank, is unavailing. P. Br. at
7-8. Petitioner is responsible for knowing the rules pertaining to Medicare suppliers.
“Petitioner’s pleas of ignorance [to the reporting requirement] are no defense. The
regulation places the burden upon the Medicare participant to report ‘[a]ny adverse legal
action.” 42 C.F.R. § 424.516(d)(1)(ii). There are no exceptions to the requirement to
report.” Phyllis Barson, M.D., DAB CR2510 at 7 (2012). Section 424.516(d)(1)(ii)
requires Petitioner to have reported any adverse legal action, even if it is not a final
adverse action. Akram A. Ismail, DAB No. 2429 at 10-11 (2011). Therefore, I conclude
that Petitioner failed to notify WPS of an adverse legal action within 30 days as required,
and that this failure serves as a legitimate basis to revoke his Medicare billing privileges.

6. The applicable regulations control the effective date of the revocation.

The regulation at 42 C.F.R. § 424.535(g) states that when a revocation is based on a
felony conviction, the revocation of the supplier’s billing privileges is effective as of the
date of the felony conviction. Thus, pursuant to the controlling regulation, Petitioner’s
revocation became effective on April 30, 2009, the date of his conviction.

7, Petitioner’s request for a subpoena is denied because Petitioner has not
identified any documents to be produced pursuant to 42 C.F.R.
§ 498.58(c) (3).
12

Petitioner submitted a request for a subpoena (P. Sub. Req.) on January 29, 2016, and
CMS filed an objection to that request on February 18, 2016 (CMS Objection). Petitioner
requested that I issue a subpoena for WPS to produce “any and all records in WPS’
possession containing disclosure of the April 2009 conviction of Dr. Reitz.” P. Sub. Req.
at 1. Petitioner adds that “as is the case with the recently revealed July 26, 2011 initial
determination by WPS, there are similar earlier determinations and disclosure [sic].”

P. Sub. Req. at 2.

CMS stated in its objection that Petitioner is seeking a subpoena for a “fishing
expedition” and asserted that “CMS states there are no documents earlier than June 11,
2011.” CMS Objection at 1-2.

Petitioner, in his brief, subpoena request, and written direct testimony, does not ever
allege that he notified CMS within 30 days of his felony conviction, nor does he identify
any specific document that would show that he provided timely notice of his felony
conviction. P. Br., P. Sub. Req., and P. Ex. 6 at 2-5. In fact, Petitioner states in his
written direct testimony, under the penalty of perjury, that he believed that because his
conviction had been reported to the National Practitioner Data Bank, that “further
reporting was not required.” P. Ex. 6 at 3. Likewise, in his brief, Petitioner asserted that
“it is important to emphasize that Dr. Reitz will testify that he was not aware of the
requirement to report the conviction directly to the Medicare contractor after his
conviction.”!° P. Br. at 7. Petitioner added that “[h]e did not become aware of that
responsibility until April 2015 at which time he reported the conviction in CKCI’s
enrollment application.” P. Br. at 7. Petitioner contended that his conviction had been
reported to the National Practitioner Data Bank “as long ago as October 23, 2009,” and
that “CMS contractors are charged with notice of such public data.”!! P. Br. at 7.

According to 42 C.F.R. § 498.58(c)(3), a subpoena request must identify the “documents
to be produced” and “[s]pecify the pertinent facts the party expects to establish by the
witnesses or documents, and indicate why those facts could not be established without
use of a subpoena.” Petitioner has not asserted that there is a document in existence
showing that he notified CMS or its contractor of his felony conviction within 30 days of
the conviction; in fact, his statements have been to the contrary. Furthermore, Petitioner
has not demonstrated that the facts he seeks to prove could not be established without the
issuance of a subpoena. Petitioner’s counsel, in his February 1, 2016 affidavit (Hooper

'° ‘The fact that Petitioner only reported his conviction in response to the contractor’s
May 2011 request for additional documentation supports this statement. P. Ex. 7 at 7.

'! Even assuming arguendo that such an October 23, 2009 National Practitioner Data
Bank report could serve as notification to CMS of a felony conviction, a proposition with
which I disagree, such notice on October 23, 2009 would be well beyond the 30-day
notice requirement set forth in 42 C.F.R. §§ 424.516(d)(1)(ii) and 424.535(a)(9).
13

Affidavit), explained that the contractor willingly provided him with a copy of the
complete July 26, 2011 letter (see P. Ex. 7 at 2-4), along with additional documents
pertaining to the July 26, 2011 letter, on the same day that counsel requested those
documents on January 25, 2016. Hooper Affidavit at 2. Furthermore, Petitioner’s
counsel has indicated that CMS counsel “had no objection” to him “contacting CMS for
the full letter” contained at P. Ex. 7 at 2-4. Hooper Affidavit at 2.

Not only has Petitioner not identified the specific document or documents that he is
seeking from the issuance of a subpoena, but he has not asserted that any such document
has ever existed. Petitioner is unquestionably in the best position to know if he informed
CMS or its contractor of his felony conviction within 30 days of his felony conviction,
and he has not actually asserted that he provided notice within 30 days of his felony
conviction. Petitioner has not shown that the information he is seeking from these
documents, even if they were to actually exist (and in contradiction of his previous
statements that such documents were never created), can only be obtained through the use
of a subpoena. Petitioner’s request for a subpoena is therefore denied.

V. Conclusion

For the reasons explained above, I affirm CMS’s determination revoking Petitioner’s
Medicare enrollment and billing privileges effective April 30, 2009.

/s/
Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Bledsoe Family Medicine,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-2324
Decision No. CR4564

Date: March 30, 2016

DECISION

Palmetto GBA, an administrative contractor for the Centers for Medicare & Medicaid
Services (CMS), revoked the Medicare enrollment and billing privileges of Petitioner,
Bledsoe Family Medicine, on the basis that Petitioner’s owner had been convicted of a
felony offense within the preceding 10 years to Petitioner’s Medicare enrollment.
Palmetto GBA affirmed the revocation in its reconsidered determination. Petitioner
appealed. CMS now moves for summary judgment. I find that the material facts
surrounding Petitioner’s owner’s felony conviction are undisputed and that CMS had a
basis for the revocation. Therefore, I grant summary judgment in favor of CMS.

I. Case Background and Procedural History

Petitioner’s owner, Horace Bledsoe, M.D., is a physician licensed to practice medicine in
South Carolina. CMS Exhibit (Ex.) 8 at 1. On July 22, 2009, a grand jury indicted Dr.
Bledsoe and a co-defendant on three felony counts of acquiring and obtaining
testosterone, a Schedule III controlled substance, by misrepresentation, fraud, deception
and subterfuge, on or about October 2, 2008, December 26, 2008, and February 4, 2009,
in violation of 21 U.S.C. § 843(a)(3). CMS Ex. 4 at 5-6. On October 15, 2009, before
the U.S. District Court for the District of South Carolina, Dr. Bledsoe pled guilty to
Count | of the Indictment, Obtaining Testosterone by Fraud, a felony offense, in
violation of 21 U.S.C. § 843(a)(3). CMS Br. at 2; P. Response at 1; see also CMS Exs. 1
at 1; 2 at 1. On December 17, 2009, the District Court entered a judgment of conviction
against Dr. Bledsoe based on his guilty plea, dismissed Counts 2 and 3, assessed him
$100, and sentenced him to probation for three years. CMS Ex. 4 at 1-4.

On January 10, 2010, Dr. Bledsoe submitted a CMS-855B application to enroll Bledsoe
Family Medicine, in the Medicare program as a single specialty clinic family practice.
CMS Ex. 5 at 3, 7. Although Dr. Bledsoe, as Petitioner’s owner, was required to report
is felony offense because it had occurred within the 10 years preceding his enrollment of
Bledsoe Family Medicine, LLC, the application CMS presents does not show Petitioner
did so. Jd. at 6 (showing “No” was checked under section 3, final adverse action history,
for Petitioner’s CMS- 855B application submitted by Dr. Bledsoe); 9 (showing “No” was
checked for final adverse history under section 5 of Petitioner’s CMS-855B submitted by
Dr. Bledsoe). Dr. Bledsoe signed the CMS-855B enrollment application as Petitioner’s
authorized official, certifying that the information was “true, correct, and complete.” Jd.
at 11.

Dr. Bledsoe then submitted a CMS-855R reassignment of benefits application on
February 17, 2010, reassigning his benefits to Petitioner. CMS Ex. 6 at 7,9. With the
CMS-855R submission, Dr. Bledsoe attached a letter from his attorney dated January 10,
2010, and addressed to Palmetto GBA. The letter stated that Dr. Bledsoe had been
convicted of a felony offense related to fraudulently obtaining and administering
testosterone on himself, a medical assistant and several patients. CMS Ex. 6 at 16-18.
Palmetto GBA received the letter on February 17, 2010. Jd. By letter dated July 22,
2010, Palmetto GBA approved Bledsoe Family Medicine’s enrollment application in the
Medicare program, effective January 18, 2010. CMS Ex. 3 at 4-5.

On October 1, 2010, Dr. Bledsoe filed a CMS-855I application to report a change in
address for his practice, Bledsoe Family Medicine. CMS Ex. 7 at 5. However, Dr.
Bledsoe did not disclose his 2009 felony conviction on the CMS-855I application. CMS
Ex. 7 at 4 (“No” was checked for final adverse history including any conviction. Dr.
Bledsoe signed the certification statement in section 15 of the application on October 1,
2010.). Id. at 8.

On January 22, 2015, Palmetto GBA, notified Petitioner that its Medicare billing
privileges were being revoked effective October 15, 2009. The letter also advised
Petitioner that a three-year re-enrollment bar was being imposed. CMS Ex. 2. The notice
letter cited 42 C.F.R. § 424.535(a)(3) as the basis for the revocation and 42 C.F.R. §
424.535(c) as the basis for the re-enrollment bar. Jd. Specifically, the notice letter stated
that due to Dr. Bledsoe’s October 15, 2009 conviction and the fact that Dr. Bledsoe was
listed as a “5% or more owner and as an authorized official of Bledsoe Family
Medicine,” Petitioner’s Medicare enrollment and billing privileges were being revoked.
Id. at 1.
Petitioner requested reconsideration, and on March 3, 2015, the CMS Center for Program
Integrity, Provider Enrollment Operations Group upheld Petitioner’s revocation based on
42 C.F.R. § 424.535(a)(3) due to Dr. Bledsoe’s guilty plea to one felony count of
Obtaining Testosterone by Fraud. The letter stated further that “the reason for revocation
is for the existence of the guilty plea and there is no evidence to correct this deficiency.”
CMS Ex. | at 1-2.

Petitioner timely requested a hearing (RFH) before an Administrative Law Judge (ALJ).
The case was assigned to me for hearing and decision, and I issued an Acknowledgment
and Pre-Hearing Order (Pre-Hearing Order) to the parties. In accordance with the terms
of the Pre-Hearing Order, CMS submitted its motion for summary judgment and
supporting brief (CMS Br.), and CMS Exs. 1-9. After reviewing CMS’s exchange,
Petitioner filed a response opposing the CMS motion for summary judgment (P.
Response), and P. Exs. 1- 20. Absent objections, I enter all proposed exhibits into the
record.

IL. Discussion
A. Issues
1. Whether summary judgment is appropriate; and

2. Whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing
privileges.

B. Findings of Fact and Conclusions of Law
I. Summary judgment in favor of CMS is appropriate.

Summary judgment is appropriate if “the record shows that there is no genuine issue as to
any material fact, and the moving party is entitled to judgment as a matter of law.”
Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The moving party must show that there are no genuine issues of material fact requiring an
evidentiary hearing and that it is entitled to judgment as a matter of law. Jd. If the
moving party meets its initial burden, the non-moving party must “come forward with
“specific facts showing that there is a genuine issue for trial... .”” Matsushita Elec.
Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986). “To defeat an adequately
supported summary judgment motion, the non-moving party may not rely on the denials
in its pleadings or briefs, but must furnish evidence of a dispute concerning a material
fact, a fact that, if proven, would affect the outcome of the case under governing law. ”
Senior Rehab., DAB No. 2300, at 3. To determine whether there are genuine issues of
material fact for hearing, an ALJ must view the evidence in the light most favorable to
the non-moving party, drawing all reasonable inferences in that party’s favor. Id.

Here, CMS moved for summary judgment and provided documentary evidence that
sufficiently establishes the material facts of the case. CMS Br. at 1; CMS Exs. 1-9. CMS
proffered documentary evidence showing that Dr. Bledsoe pled guilty to and was
convicted of a felony that CMS has determined is detrimental to the best interests of the
Medicare program and its beneficiaries. CMS Ex. 4.

Petitioner does not dispute that Dr. Bledsoe pled guilty to the felony offense of acquiring
and obtaining Testosterone, a Schedule III controlled substance, by misrepresentation,
fraud, deception and subterfuge. See RFH at 2; P. Response at 1. Petitioner claims there
are material issues in dispute that would preclude summary judgment, mainly that CMS
ad actual knowledge of Dr. Bledsoe’s conviction in March 2010 when it approved
Petitioner to participate in the Medicare program and that CMS allowed Petitioner to bill
Medicare for services rendered from July 18, 2010, through January 22, 2015, before
revoking Petitioner’s enrollment based on Dr. Bledsoe’s felony conviction retroactive to
October 15, 2009. According to Petitioner, CMS’s actions were arbitrary, capricious,
unreasonable and an abuse of CMS’s discretion. P. Response at 1-6. However, I find
Petitioner’s arguments do not raise any genuine issue of disputed material fact. The only
issue I need to resolve in this case is a matter of law, which as discussed below, I must
decide in CMS’s favor.

2. Petitioner does not dispute that Dr. Bledsoe pled guilty to a felony
offense for obtaining testosterone by fraud, and that his conviction was
within ten years of Petitioner submitting its CMS-855B Medicare
enrollment application.

Petitioner does not dispute that Dr. Bledsoe pled guilty to a felony in October 2009, and
on December 17, 2009, the U.S. District Court for the District of South Carolina entered
judgment of conviction against Dr. Bledsoe based on his guilty plea of Obtaining
Testosterone by Fraud in violation of 21 U.S.C. § 843(a)(3). See CMS Ex. 4 at 1-4.
Petitioner also does not dispute that Dr. Bledsoe’s guilty plea and conviction occurred
within the 10 years preceding Petitioner’s filing of its CMS-855B Medicare enrollment
application. Dr. Bledsoe, on behalf of Petitioner, submitted a CMS-855B enrollment
application on January 10, 2010, in order to enroll Petitioner in the Medicare program.
CMS Ex. 5 at 3, 7. Because Dr. Bledsoe was convicted of a felony offense on December
17, 2009, and sought enrollment for Petitioner on January 10, 2010, Dr. Bledsoe’s guilty
plea and conviction fell within the ten years preceding Petitioner’s submission of its
January 10, 2010 Medicare enrollment application.
3. CMS was authorized to revoke Petitioner’s enrollment under 42
CF.R. § 424.535(a)(3)based on Dr. Bledsoe’s felony conviction.

CMS may revoke a currently enrolled provider or supplier’s Medicare billing privileges
and any corresponding provider agreement or supplier agreement for several enumerated
reasons, including:

(3) Felonies. The provider, supplier, or any owner of the provider or
supplier, within the 10 years preceding enrollment or revalidation of
enrollment, was convicted of a Federal or State felony offense that CMS
has determined to be detrimental to the best interests of the [Medicare]
program and its beneficiaries.

(i) Offenses include—

oe OR

(D) Any felonies that would result in mandatory exclusion
under section 1128(a) of the Act.

42 C.F.R. § 424.535(a)(3)(i)(D); see also Social Security Act (Act) § 1842(h)(8)
(authorizing the Secretary of Health and Human Services to revoke the enrollment of a
physician or supplier convicted of a federal or state felony offense the Secretary
“determines is detrimental to the best interests of the program or program beneficiaries”).
After CMS revokes a provider’s or supplier’s billing privileges, the provider or supplier
cannot participate in Medicare from the effective date of the revocation until the end of
the re-enrollment bar. The re-enrollment bar must last for a minimum of one year but
cannot exceed three years. 42 C.F.R. § 424.535(c).

The regulation at 42 C.F.R. § 424.535(a)(3)(i) gives examples of certain offenses CMS
‘as already determined to be detrimental to the Medicare program. Any offense that
would result in mandatory exclusion under section 1128(a) of the Act is one such
example. 42 C.F.R. § 424.535(a)(3)(i)(D). It is well settled that felony convictions
related to the unlawful prescription or dispensing of a controlled substance justify
mandatory exclusion pursuant to section 1128(a)(4) of the Act. Dr. Bledsoe’s conviction
for Obtaining Testosterone by Fraud is a type of an offense that falls squarely within the
scope of an 1128(a)(4) mandatory exclusion. See, e.g., Nenice Marie Andrews, DAB No.
2656 (2015); Shaikh M. Hasan, M.D., DAB No. 2648 (2015). Therefore, CMS has
determined that Dr. Bledsoe’s offense is detrimental to the Medicare program and its
beneficiaries.

Here, Dr. Bledsoe was listed as a 5% or more owner and as an authorized official of
Bledsoe Family Medicine. CMS Ex. | at 1. Because Dr. Bledsoe owned Bledsoe Family

Medicine, CMS has a basis to revoke Bledsoe Family Medicine’s enrollment under 42
C.F.R. § 424.535(a)(3) based on Dr. Bledsoe’s felony conviction. Dinesh Patel, DAB
No. 2551, at 5 (2013); Fady Fayad, M.D., DAB No. 2266, at 7 (2009), aff'd, 803 F.
Supp. 2d 699 (E.D. Mich. 2011); Abdul Razzaque Ahmed, M.D., DAB No. 2261, at 19
(2009), aff'd, 710 F. Supp. 2d 167 (D. Mass. 2010).

Petitioner argues that CMS took five years to exercise its discretionary authority to
revoke Petitioner’s billing privileges. P. Response at 4. Petitioner argues that in the
interim, even though CMS had full knowledge of Dr. Bledsoe’s 2009 felony conviction,
CMS allowed Dr. Bledsoe to provide services to Medicare beneficiaries and allowed
Petitioner to bill Medicare for these services. Jd. Petitioner also argues that CMS’s delay
in exercising its discretionary authority to revoke Petitioner’s billing privileges
retroactive to 2009 has resulted in a considerable overpayment for Petitioner. Jd. at 3.
Petitioner argues that CMS’s actions are “unconscionable and inequitable,” and an abuse
of CMS’s discretionary authority. Jd. at 5-6. Petitioner claims that Medicare is
demanding recoupment in excess of three hundred thousand dollars and that CMS’s
actions are in violation of the Fifth Amendment and that CMS should be equitably
estopped. Id. at 6-9.

However, my review authority is limited to reviewing initial determinations “to deny or
revoke a provider or supplier’s Medicare enrollment in accordance with .. . § 424.535.”
42 C.F.R. § 498.3(b)(17). I may only review whether CMS has established a legal basis
for its determination to revoke Petitioner’s enrollment. Letantia Bussell, M.D., DAB No.
2196, at 12-13 (2008) (concluding that an ALJ review of revocation of enrollment for
felony offenses under section 1842(h) of the Act is “limited to whether CMS had
established a legal basis for its actions.”). Recoupment of payments to providers and
suppliers and the collection and compromise of overpayments is regulated by 42 C.F.R.
pt. 405, subpt. C. The review of the alleged overpayments is not a matter within my
jurisdiction. Review of alleged overpayments and their collection is governed by 42
C.F.R. pt. 405 subpts. H and I. I also do not have the ability to consider retroactive
payment consequences that CMS takes into consideration when exercising its discretion.
Lorrie Laurel, DAB No. 2524, at 7-8 (2013).

Where CMS proves that Petitioner was convicted of an offense applicable to 42 C.F.R.
§ 424.535(a)(3)(i)(D), I must sustain the revocation. I must do so “regardless of other
factors, such as the scope or seriousness of the supplier’s criminal conduct and the
potential impact of revocation on Medicare beneficiaries that CMS might reasonably
have weighed in exercising its discretion.” Fady Fayad, M.D., DAB No. 2266, at 16
(2009), aff'd, 803 F. Supp. 2d 699 (E.D. Mich. 2011).

As for Petitioner’s request for equitable relief, I have no authority to grant equitable
relief. US Ultrasound, DAB No. 2302, at 8 (2010) (“[nJeither the ALJ nor the Board is
authorized to provide equitable relief by reimbursing or enrolling a supplier who does not
meet statutory or regulatory requirements.”). I am also required to follow the Act and
regulations and have no authority to declare statutes or regulations invalid.
1866I1CPayday.com, L.L.C., DAB No. 2289, at 14 (2009) (“[a]n ALJ is bound by
applicable laws and regulations and may not invalidate either a law or regulation on any
ground.”).

III. Conclusion

Based upon the undisputed facts, CMS was authorized under 42 C.F.R. § 424.535(a)(3)
to revoke Petitioner’s billing privileges and I am required to sustain CMS’s
determination. Petitioner is barred from re-enrolling in the Medicare program for three
years from the date of the revocation. Petitioner must submit a new enrollment
application after the termination of the enrollment bar in order to request re-enrollment.
42 CFR. § 424.535(d)(1).

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Horace Bledsoe, M.D.
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-2325
Decision No. CR4563

Date: March 30, 2016

DECISION

Palmetto GBA, an administrative contractor for the Centers for Medicare & Medicaid
Services (CMS) revoked the Medicare enrollment and billing privileges of Horace
Bledsoe, M.D., Petitioner, on the basis of a felony conviction. Palmetto GBA affirmed
the revocation in a reconsidered determination. Petitioner appealed. CMS now moves
for summary judgment. I find that the material facts surrounding Petitioner’s conviction
are undisputed and that CMS had a basis for the revocation. Therefore, I grant summary
judgment in favor of CMS.

I. Case Background and Procedural History

Petitioner is a physician licensed to practice medicine in South Carolina. CMS Exhibit
(Ex.) 7 at 1. On July 22, 2009, a grand jury indicted Petitioner and a co-defendant on
three counts of acquiring and obtaining testosterone, a Schedule III controlled substance,
by misrepresentation, fraud, deception and subterfuge, on or about October 2, 2008,
December 26, 2008 and February 4, 2009, in violation of 21 U.S.C. § 843(a)(3). CMS
Ex. 4 at 5-6. On October 15, 2009, before the U.S. District Court for the District of South
Carolina, Petitioner pled guilty to Count 1 of the Indictment, Obtaining Testosterone by
Fraud, a felony offense, in violation of 21 U.S.C. § 843(a)(3). CMS Br. at 2; P. Response
at 1; see also CMS Ex. 4 at 1, 5. On December 17, 2009, the District Court entered
judgment of conviction against Petitioner based on his guilty plea, dismissed Counts 2
and 3, assessed Petitioner $100, and sentenced him to probation for three years. CMS
Ex. 4 at 1-4.

On January 10, 2010, Petitioner submitted a CMS-855B application to enroll his
company, Bledsoe Family Medicine, LLC in the Medicare program as a single specialty
clinic family practice. CMS Ex. 5 at 3, 7. Petitioner was required to report his felony
offense on this application because he is an owner of the practice and the conviction
occurred within the last 10 years. Yet, the application CMS presents does not show
Petitioner did so. Jd. at 6 (showing Petitioner checked “No” to final adverse action
history under section 3 of the CMS-855B he submitted), 9 (showing Petitioner checked
“No” to final adverse history under section 5 of the CMS-855B he submitted). Petitioner
signed the CMS-855B enrollment application as the authorized official, certifying that the
information was “true, correct, and complete.” /d. at 11.

Petitioner then submitted a CMS-855R application to reassign his benefits to Bledsoe
Family Medicine, LLC on February 17, 2010. CMS acknowledges that with the CMS-
855R submission, Petitioner’s attorney attached a letter stating that Petitioner had been
convicted of a felony offense related to fraudulently obtaining and administering
testosterone on himself, a medical assistant, and several patients. CMS Br. at 2; P.
response at 7-8; P. Ex. 17.

By letter dated July 22, 2010, Palmetto GBA approved Bledsoe Family Medicine, LLC’s
enrollment application in the Medicare program, effective January 18, 2010. CMS Ex. 3
at 4-5.

On October 1, 2010, Petitioner filed a CMS-855I application to report a change in
address for his practice, Bledsoe Family Medicine, LLC. CMS Ex. 6 at 5. However,
Petitioner did not disclose his 2009 felony conviction on the CMS-855] application. Jd.
at 4 (checking “No” for final adverse history including conviction). Petitioner signed the
certification statement in section 15 of the application on October 1, 2010. Jd. at 8.

On January 22, 2015, Palmetto GBA notified Petitioner that his Medicare billing
privileges were being revoked effective October 15, 2009. The letter also advised
Petitioner that a three-year re-enrollment bar was being imposed. CMS Ex. 2. The notice
letter cited 42 C.F.R. § 424.535(a)(3) as the basis for the revocation and 42 C.F.R.

§ 424.535(c) as the basis for the re-enrollment bar. Jd. Specifically, the notice letter
stated that due to Petitioner’s felony conviction, his Medicare privileges were being
revoked. Jd. The letter also stated that Petitioner was listed as a “5% or more owner and
as an authorized official of Bledsoe Family Medicine.” Id.

Petitioner requested reconsideration, and on March 3, 2015, the CMS Center for Program
Integrity, Provider Enrollment Operations Group, upheld the revocation based on 42
C.F.R. § 424.535(a)(3), stating that “the reason for revocation is for the existence of the
guilty plea and there is no evidence to correct this deficiency.” CMS Ex. | at 1-2.

Petitioner timely requested a hearing (RFH) before an Administrative Law Judge (ALJ).
The case was assigned to me for hearing and decision and I issued an Acknowledgment
and Pre-Hearing Order (Pre-Hearing Order) to the parties. In accordance with the terms
of the Pre-Hearing Order, CMS submitted its motion for summary judgment and
supporting brief (CMS Br.), and CMS Exs. 1-7. After reviewing CMS’s exchange,
Petitioner filed a response opposing the CMS motion for summary judgment (P.
Response), and P. Exs. 1- 20. Absent objections, I enter all proposed exhibits into the
record.

IL. Discussion
A. Issues
1. Whether summary judgment is appropriate; and

2. Whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing
privileges.

B. Findings of Fact and Conclusions of Law
1. Summary judgment in favor of CMS is appropriate.

Summary judgment is appropriate if “the record shows that there is no genuine issue as to
any material fact, and the moving party is entitled to judgment as a matter of law.”
Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The moving party must show that there are no genuine issues of material fact requiring an
evidentiary hearing and that it is entitled to judgment as a matter of law. Jd. If the
moving party meets its initial burden, the non-moving party must “come forward with
“specific facts showing that there is a genuine issue for trial... .”” Matsushita Elec.
Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986). “To defeat an adequately
supported summary judgment motion, the non-moving party may not rely on the denials
in its pleadings or briefs, but must furnish evidence of a dispute concerning a material
fact, a fact that, if proven, would affect the outcome of the case under governing law.”
Senior Rehab., DAB No. 2300, at 3. To determine whether there are genuine issues of
material fact for hearing, an ALJ must view the evidence in the light most favorable to
the non-moving party, drawing all reasonable inferences in that party’s favor. Id.

Here, CMS moved for summary judgment and provided documentary evidence that
sufficiently establishes the material facts of the case. CMS Br. at 1; CMS Exs. 1-7.
CMS proffered documentary evidence showing Petitioner pled guilty to and was
convicted of a felony that CMS has determined is detrimental to the best interests of the
Medicare program and its beneficiaries. CMS Ex. 4.

Petitioner does not dispute that he pled guilty to the felony offense of acquiring an
obtaining testosterone, a Schedule III controlled substance, by misrepresentation, fraud,
deception and subterfuge. See RFH at 2; P. Response at 1. Petitioner claims there are
material issues in dispute that would preclude summary judgment, mainly that CMS had
actual knowledge of Petitioner’s conviction in March 2010 when it approved Petitioner to
participate in the Medicare program, and CMS nonetheless allowed Petitioner to bill
Medicare for services rendered from July 18, 2010 through January 22, 2015 before
revoking Petitioner’s enrollment based on the felony conviction, retroactive to October
15, 2009. According to Petitioner, CMS’s actions were arbitrary, capricious,
unreasonable and an abuse of CMS’s discretion. P. Response at 1-6. However, I find
Petitioner’s arguments do not raise any genuine issue of disputed material fact that I may
address. The only issue I need to resolve in this case is a matter of law, which as
discussed below, I must decide in CMS’s favor.

2. Petitioner does not dispute that he pled guilty to a felony offense for
obtaining testosterone by fraud, and his conviction was within ten years
of his filing of a CMS-855B Medicare enrollment application.

Petitioner does not dispute that he pled guilty to a felony charge in October 2009, and on
December 17, 2009, the U.S. District Court for the District of South Carolina entered
judgment of conviction against Petitioner based on his guilty plea of Obtaining
Testosterone by Fraud in violation of 21 U.S.C. § 843(a)(3). See CMS Ex. 4 at 1-4.
Petitioner also does not dispute that his guilty plea and conviction occurred within the 10
years preceding his filing of the CMS-855B Medicare enrollment form. Petitioner
submitted a CMS-855B enrollment application on January 10, 2010 in order to enroll
Bledsoe Family Medicine, LLC, owned in part or whole by Petitioner, in the Medicare
program. CMS Ex. 5 at 3, 7. Because Petitioner was convicted of a felony offense on
December 17, 2009, and sought enrollment for Bledsoe Family Medicine, LLC on
January 10, 2010, his guilty plea fell within the 10 years preceding his submission of the
Medicare enrollment application.

3. CMS was authorized to revoke Petitioner’s enrollment under
42 C.F.R. § 424.535(a)(3).

CMS may revoke a currently enrolled provider or supplier’s Medicare billing privileges
and any corresponding provider agreement or supplier agreement for several enumerated
reasons, including:
(3) Felonies. The provider, supplier, or any owner of the provider or
supplier, within the 10 years preceding enrollment or revalidation of
enrollment, was convicted of a Federal or State felony offense that CMS
has determined to be detrimental to the best interests of the [Medicare]
program and its beneficiaries.

(i) Offenses include—

oe OR

(D) Any felonies that would result in mandatory exclusion
under section 1128(a) of the Act.

42 C.F.R. § 424.535(a)(3)(i)(D); see also Social Security Act (Act) § 1842(h)(8)
(authorizing the Secretary of Health and Human Services to revoke the enrollment of a
physician or supplier convicted of a federal or state felony offense the Secretary
“determines is detrimental to the best interests of the program or program beneficiaries”).
After CMS revokes provider or supplier billing privileges, the provider or supplier cannot
participate in Medicare from the effective date of the revocation until the end of the re-
enrollment bar. The re-enrollment bar must last for a minimum of one year but cannot
exceed three years. 42 C.F.R. § 424.535(c).

The regulation at 42 C.F.R. § 424.535(a)(3)(i) gives examples of certain offenses CMS
‘as already determined to be detrimental to the Medicare program. Any offense that
would result in mandatory exclusion under section 1128(a) of the Act is one such
example. 42 C.F.R. § 424.535(a)(3)(i)(D). It is well settled that felony convictions
related to the unlawful prescription or dispensing of a controlled substance justify
mandatory exclusion pursuant to section 1128(a)(4) of the Act. Petitioner’s conviction
for Obtaining Testosterone by Fraud is a type of an offense that falls squarely within the
scope of an 1128(a)(4) mandatory exclusion. See, e.g., Nenice Marie Andrews, DAB No.
2656 (2015), Shaikh M. Hasan, M.D., DAB No. 2648 (2015). Therefore, CMS had
already determined that Petitioner's offense is detrimental to the Medicare program and
its beneficiaries. Because Petitioner’s conviction was within 10 years preceding
enrollment, CMS was authorized to revoke Petitioner’s enrollment under section
424.535(a)(3), effective the date of his conviction. 42 C.F.R. § 424.535(g).

Petitioner argues that CMS took five years to exercise its discretionary authority to
revoke Petitioner’s billing privileges. P. Response at 4. Petitioner argues that in the
interim, even though CMS had full knowledge of Petitioner’s 2009 felony conviction,
CMS allowed Petitioner to provide services to Medicare beneficiaries and then bill
Medicare for these services. /d. Petitioner argues that CMS’s delay in exercising its
discretionary authority to revoke Petitioner’s billing privileges retroactive to 2009 has
resulted in a considerable overpayment for Petitioner. /d. at 3. Petitioner argues that
CMS’s actions are “unconscionable and inequitable,” and an abuse of CMS’s
discretionary authority. Jd. at 5-6. Petitioner argues that Medicare is demanding
recoupment in excess of three hundred thousand dollars, that CMS’s actions are in
violation of the Fifth Amendment, and that CMS should be equitably estopped. Jd. at 6-
9.

However, my review authority is limited to reviewing initial determinations “to deny or
revoke a provider or supplier’s Medicare enrollment in accordance with . . . § 424.535.”
42 C.F.R. § 498.3(b)(17). I may only review whether CMS has established a legal basis
for its determination to revoke Petitioner’s enrollment. Letantia Bussell, M.D., DAB No.
2196, at 12-13 (2008) (concluding that an ALJ review of revocation of enrollment for
felony offenses under section 1842(h) of the Act is “limited to whether CMS had
established a legal basis for its actions.”). Recoupment of payments to providers and
suppliers and the collection and compromise of overpayments is regulated by 42 C.F.R.
pt. 405, subpt. C. Review of alleged overpayments is not a matter within my
jurisdiction. Review of alleged overpayments and their collection is governed by

42 C.F.R. pt. 405 subpts. H and I. I also do not have the ability to consider retroactive
payment consequences that CMS takes into consideration when exercising its discretion.
Lorrie Laurel, DAB No. 2524, at 7-8 (2013).

Where CMS proves that Petitioner was convicted of an offense applicable to 42 C.F.R.
§ 424.535(a)(3)(i)(D), I must sustain the revocation. I must do so “regardless of other
factors, such as the scope or seriousness of the supplier’s criminal conduct and the
potential impact of revocation on Medicare beneficiaries that CMS might reasonably
ave weighed in exercising its discretion.” Fady Fayad, M.D., DAB No. 2266, at 16
(2009), aff'd, 803 F. Supp. 2d 699 (E.D. Mich. 2011).

As for Petitioner’s request for equitable relief, I have no authority to grant equitable
relief. US Ultrasound, DAB No. 2302 at 8 (2010) (“[nJeither the ALJ nor the Board is
authorized to provide equitable relief by reimbursing or enrolling a supplier who does not
meet statutory or regulatory requirements.”). I am also required to follow the Act and

regulations and have no authority to declare statutes or regulations invalid.
1866I1CPayday.com, L.L.C., DAB No. 2289, at 14 (2009) (“[a]n ALJ is bound by
applicable laws and regulations and may not invalidate either a law or regulation on any

ground.”).

III. Conclusion

Based upon the undisputed facts, CMS was authorized under 42 C.F.R. § 424.535(a)(3)
to revoke Petitioner’s billing privileges and I am required to sustain CMS’s
determination. Petitioner is barred from re-enrolling in the Medicare program for three
years from the date of the revocation. Petitioner must submit a new enrollment
application after the termination of the enrollment bar in order to request re-enrollment.

42 CFR. § 424.535(d)(1).

/s/
Joseph Grow
Administrative Law Judge