Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Josh Hill, P.A.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-4205
Decision No. CR4526

Date: February 9, 2016

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its administrative
contractor, CGS Administrators, LLC (CGS), denied the enrollment application that
Petitioner, Josh Hill, P.A. (herein “Petitioner”) submitted in February 2015. CGS’s
denial of enrollment was based on Petitioner’s felony convictions that arose from a
domestic violence incident in which he pointed a loaded firearm at several people.
Petitioner timely requested a hearing before an administrative law judge (ALJ). For the
reasons stated below, I affirm CMS’s denial of Petitioner’s enrollment application on this
basis.

I. Background and Procedural History

Petitioner is a physician’s assistant who reported on his Medicare enrollment application
that he is licensed to practice in Kentucky. CMS Exhibit (Ex.) 2 at 2. According to a
May 13, 2009, Florence Police Department Uniform Citation (herein “police report”),
Petitioner was arrested that same evening on charges of burglary in the first degree,
wanton endangerment in the first degree, and assault in the fourth degree with minor
injury. The police report documents that the following events transpired that evening at
the residence of Petitioner’s ex-wife:
[Petitioner] went to his ex-wife’s residence to discuss a relationship she
was having with another man. When he arrived at the residence the victim
opened the door and [Petitioner] entered the house. He grabbed the victim
and threw her to the floor, causing minor injuries. He got on top of the
victim with his hands around her neck and started to choke her. The victim
started yelling for help. At this time, [Petitioner] went back out to his
vehicle and retrieved a loaded semi-automatic handgun. He came back into
the house and brandished the weapon. At this time he pointed the gun at
three separate individuals. !

CMS Ex. 4 at 7. In testimony before the State Medical Board of Ohio, Petitioner
reported that “he cannot remember engaging in the conduct described in the police
report” and that “he had blacked out because of rage.”* CMS Ex. 4 at 38. He testified
that he had a permit to carry the handgun that was used to commit the offense, and that
his ex-wife and her mother and boyfriend, along with three children, were in the house
during the incident. CMS Ex. 4 at 38.

On January 6, 2010, Petitioner pleaded guilty to the following offenses: one count of
burglary in the third degree pursuant to the Kentucky Revised Statutes (K.R.S.)

§ 511.040, which is a Class D felony punishable by one to five years of incarceration;
three counts of wanton endangerment in the first degree pursuant to K.R.S. § 508.060,
which is a Class D felony with each count punishable by one to five years of
incarceration; and assault in the fourth degree pursuant to K.R.S. § 508.030, which is a
class A misdemeanor punishable by up to one year of incarceration. CMS Ex. 4 at 8.
Based on Petitioner’s guilty plea, the Commonwealth of Kentucky Unified Court, Boone
Circuit Court, entered a judgment of guilt on January 16, 2010. CMS Ex. 4 at 8-9. Ina

' This summary is contained in the section of the police report entitled “Charges and
Post-Arrest Complaint.” CMS discussed this excerpt in its brief, and Petitioner did not
dispute CMS’s summary of the incident. Petitioner, in his testimony before the State
Medical Board of Ohio, stated that “he does not deny” that he engaged in the conduct
discussed in the police report. CMS Ex. 4 at 38.

> Petitioner listed only his eligibility to practice in Kentucky on his enrollment
application. The State Medical Board of Ohio stated that it “would be well justified in
permanently revoking [Petitioner’s] certificate,” but ultimately determined that
Petitioner’s license would be suspended indefinitely, but for a minimum period of twelve
months, and ordered that he complete numerous requirements prior to reinstatement of
his license. CMS Ex. 4 at 27-52. The Kentucky Board of Medical Licensure took no
action against Petitioner’s physician’s assistant license. CMS Ex. 4 at 18.
separate order, the Boone Circuit Court granted a motion for pretrial diversion for a Class
D felony and imposed numerous requirements for Petitioner’s participation in the pretrial
diversion program; the order directed that if Petitioner completed the pretrial diversion
program, the charges would be “designated as dismissed-diverted” and that Petitioner
could petition for expungement of his record. CMS Ex. 4 at 11. The pretrial diversion
order directed that Petitioner could have no contact with the four individuals named in the
order and that he must “remain in intensive counseling.” Additionally, the order directed
that Petitioner “shall serve 365 days in jail.” At the time of the medical board
proceedings, Petitioner was serving his 365-day prison sentence in Burlington, Kentucky,
and was allowed to leave his place of confinement for work release for up to 12 hours
each day, six days per week. CMS Ex. 4 at 39. Petitioner acknowledged in his testimony
that if he violated his probation, he would go to prison “for at least five years.” CMS Ex.
4 at 40.

On March 21, 2013, the Boone Circuit Court determined that Petitioner had satisfactorily
completed the terms of his diversion agreement and ordered and adjudged that
Petitioner’s diversion was dismissed. CMS Ex. 4 at 14. The following month, in April
2013, the Commonwealth of Kentucky Court of Justice ordered that Petitioner’s offenses
were dismissed with prejudice and that the offenses were expunged from court records.
CMS Ex. 4 at 15. The expungement order directed that Petitioner “shall not have to
disclose the fact of the record or any matter relating to it on an application for
employment, credit, or other purpose.” CMS Ex 4 at 15.

On or about February 20, 2015, Petitioner submitted a Medicare enrollment application,
at which time he indicated that he had a final adverse legal action taken by the State
Medical Board of Ohio as a result of a “Domestic Altercation.”? CMS Ex. 2 at 3, 8.

On March 3, 2015, CGS requested that Petitioner re-submit his application in order to
document separately each final adverse action. In addition, CGS requested copies of
relevant records pertaining to the final adverse actions. CMS Ex. 3 at 1. Petitioner
submitted documentation on March 4, 2015. CMS Ex. 4 at 1-52. On March 26, 2015,
CGS issued an initial determination in which it denied Petitioner’s application, explaining

> T observe that Petitioner’s statement that was appended to the application contains an
error and an omission. Petitioner reported that he “pled guilty to a felony and several
misdemeanors with a 5 year probation sentence.” As previously discussed, Petitioner
pleaded guilty to four felonies and a misdemeanor. Petitioner, while he correctly
reported that he was sentenced to a period of probation, omitted any reference to the fact
that he had served one year in prison for the offenses.
that he was within 10 years of his 2010 felony conviction. CMS Ex. | at 4.4 Petitioner,
through counsel, requested reconsideration in May 2015, arguing that the convictions
were expunged and that his record “no longer contains a felony conviction.” Petitioner
argued that CMS is “an agency of the federal government” and “is required to give full
faith and credit to the decision of the Boone Circuit Court to completely dismiss and
expunge [Petitioner’s] prior offenses and may not act contrary to the Court’s order that
said offenses shall be deemed never to have occurred.” CMS Ex. 5 at 2. Ina July 29,
2015 letter, CGS denied Petitioner’s request for reconsideration, again explaining that
Petitioner was within 10 years of his 2010 felony conviction. CMS Ex. | at 1.

Petitioner, through his current counsel, filed a request for hearing (RFH) on September
29, 2015. On October 1, 2015, I issued an Acknowledgement 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 deadlines.

CMS filed a Pre-Hearing Brief and Motion for Summary Disposition’ (CMS Br.), along
with five exhibits (CMS Exs. 1-5). Petitioner submitted a pre-hearing brief (P. Br.) and
three exhibits (P. Exs. 1-3). Although my Order did not direct that the parties could file
briefs other than an opening brief and a response brief, CMS filed a reply brief (CMS
Reply). I afforded Petitioner an opportunity to respond to CMS’s reply brief, and he
declined to file a sur-reply. I admit the briefs, along with CMS Exs. 1-5 and P. Exs. 1-3,
into the record.

Petitioner has submitted his own written direct testimony. P. Ex. 3. However, CMS has
not requested the opportunity to cross-examine Petitioner. CMS. Reply; Order § 8.
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.

IL. Issue
Whether CMS has a legitimate basis to deny Petitioner’s enrollment application seeking

billing privileges under 42 C.F.R. § 424.530(a)(3) based on Petitioner’s October 2010
felony conviction.

* This document was also submitted as P. Ex. 2.
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. Jurisdiction

I have jurisdiction to decide this issue. 42 C.F.R. §§ 498.3(b)(17), 498.5(1)(2); see also
42 U.S.C. § 1395cc(j)(8).

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

As a physician’s assistant, Petitioner is a supplier of health care services for purposes of
the Medicare program. See 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202, 410.20(b)(1).
In order to participate in the Medicare program as a supplier, an individual must meet
certain criteria to enroll and receive billing privileges. 42 C.F.R. §§ 424.505, 424.510.
CMS may deny a supplier’s enrollment for any reason stated in, inter alia, 42 C.F.R.

§ 424.530.

A supplier’s enrollment application for Medicare billing privileges can be denied based
on the existence of a felony conviction, as is set forth in 42 C.F.R. § 424.530(a)(3):

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

(i) Offenses include, but are not limited in scope and severity to—

sete

(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.

42 CFR. § 424.530(a)(3).

Suppliers of health care services who have been denied enrollment have a statutory right
to a hearing to dispute the denial. 42 U.S.C. § 1395cc(j)(8). A supplier who has been
denied enrollment has a right to an ALJ hearing and Departmental Appeals Board (DAB)
review of the denial of its enrollment in the Medicare program. 42 C.F.R.

§§ 498.3(b)(17), 498.5(/)(2)-(3). An ALJ may review CMS’s exercise of its discretion to

° My findings of fact and conclusions of law are in bold and italics.
deny enrollment based on a determination that a felony offense committed by a supplier
is detrimental to the best interests of the program and its beneficiaries. See Fady Fayad,
M.D., DAB No. 2266 at 16 (2009), aff'd, Fayad v. Sebelius, 803 F.Supp. 2d. 699, 704
(E.D. Mich. 2011).

I. On or about January 6, 2010, Petitioner pleaded guilty to one felony count of
burglary in the third degree and three felony counts of wanton
endangerment in the first degree.

2. Petitioner was convicted of four separate felony offenses for purposes of 42
CF.R. § 424.530(a)(3).

3. Petitioner’s felony convictions are for “crimes against persons” as
enumerated in 42 C.F.R. § 424.530(a)(3)(i)(A).

According to K.R.S. § 511.040, “a person is guilty of burglary in the third degree when,
with the intent to commit a crime, he knowingly enters or remains unlawfully in a
building.” K.R.S. § 511.040(1). Third degree burglary is a Class D felony under
Kentucky law. K.R.S. § 511.040(2). Pursuant to K.R.S. § 508.060, wanton
endangerment in the first degree occurs “when, under circumstances manifesting extreme
indifference to the value of human life, [a person] wantonly engages in conduct which
creates a substantial danger of death or serious physical injury to another person. K.R.S.
§ 508.060(2). A conviction for wanton endangerment in the first degree is a Class D
felony under Kentucky law. K.R.S. § 508.060(2). A Class D felony, under Kentucky
law, is punishable by “not less than one (1) year nor more than five (5) years” of
imprisonment.” K.R.S. § 532.060(2)(d). While Petitioner minimizes the severity of his
actions in his brief and highlights that he “was placed on non-reporting status by his
parole officer within six months,” he omits any reference to the fact that he served a full
year in prison, which is a significant period of incarceration considering that he was
referred into a pretrial diversion program. CMS Ex. 4 at 11.

Petitioner, in his brief, makes the preposterous assertion that he “was arrested in May
2009 following a brief and non-violent dispute with his ex-wife regarding the equal
custody of their children.” P. Br. at 6 (emphasis added). Petitioner seemingly forgets
that he pleaded guilty to assaulting his ex-wife during that incident, which was described
in the police report as him putting his hands around her neck and choking her after
throwing her to the floor. CMS Ex. 4 at 7, 8. The police report also documents that
Petitioner had a “loaded semi-automatic handgun” and “pointed the gun at three separate
individuals.” CMS Ex. 4 at 7. Furthermore, while Petitioner may feel that pointing a
loaded firearm at three individuals is not a violent act or a crime against persons, I
entirely disagree. There were three individual victims of his actions on May 13, 2009;
three people faced a man, who by his own admission “had blacked out because of rage”
(CMS Ex. 4 at 38), and each almost certainly feared that Petitioner would squeeze the
trigger of the loaded handgun. Petitioner’s assertion that the incident was “non-violent”
is patently wrong.

Pursuant to subsection (A), CMS has determined that offenses involving “[f]elony crimes
against persons, such as murder, rape, assault, and other similar crimes” warrant a denial
of enrollment for a period of 10 years from the date of the conviction. 42 C.F.R.

§ 424.530(a)(3)(i)(A) (emphasis added). While Petitioner contends that his offenses were
“non-violent” and that “[t]his instance cannot possibly be categorized as the type of
offense for which CMS bars a Medicare application,” he is certainly mistaken. P. Br. at
6. Subsection (A) pertains to “crimes against persons.” 42 C.F.R. § 424.530(a)(3)(i)(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, he committed four felony offenses against three
persons.’ Petitioner argues that his actions are not tantamount to the enumerated
examples, which he notes include assault. However, he fails to recognize that the felony
crimes listed are not all-inclusive. Rather, they are examples of felonious crimes against
persons. Furthermore, he fails to appreciate that his crimes were not victimless; rather,
three separate people were victimized by his pointing of a loaded firearm at them and his
felonious entry into the home with the “intent to commit a crime.” K.R.S. § 511.040.
Although Petitioner argues that a crime such as assault is of greater severity than the act
committed, he is once again mistaken. Petitioner “wantonly engage[d] in conduct [that
created] a substantial danger of death or serious physical injury to another person.”

7 While CMS’s brief focuses on Petitioner’s actions in pointing a loaded firearm at the
individuals and the resulting felony convictions as constituting the crimes against
persons, I also note that the offense of felony burglary can likewise be considered a
violent crime against a person. The evidence shows that Petitioner’s act of felony
burglary was committed when he entered his ex-wife’s home while carrying a loaded
semi-automatic handgun. The Supreme Court has discussed that burglary is a violent
crime, particularly when a weapon is involved. See James v. United States, 550 U.S. 192
(2007); Taylor v. United States, 495 U.S. 575 (1990). Lalso observe that the definition of
“violent felony” in Title 18 of the United States Code includes “burglary.” 18 U.S.C.

§ 924(e)(2)(B)(ii).
K.R.S. § 508.060; see CMS Ex. 4 at 8.8 Even with a referral to pre-trial diversion, he
nonetheless served one year in prison for his crimes against these three individuals and it
is unquestionable that the offenses to which he pleaded guilty were felony crimes against
persons as set forth in subsection (A).

4. Even though Petitioner’s convictions were expunged by the Kentucky court
system, CMS correctly considered them to be convictions for purposes of
denying enrollment in the Medicare program.

Petitioner argues that CMS erred by determining that he had felony convictions. He
argues that because the convictions were expunged by the Kentucky Court of Justice
(CMS Ex. 4 at 15), CMS is bound by Kentucky law and that “the proceedings in the
matter ‘were deemed never to have occurred.’” P. Br. at 5 (citing K.R.S. § 431.076(5)).

A conviction, for purposes of 42 C.F.R. § 424.530(a)(3), is defined by 42 C.F.R.
§ 1001.2. “Convicted” is defined as the following:

(a) A judgment of conviction has been entered against an individual or entity by a
Federal, State, or local court, regardless of whether:

ORK

(2) The judgment of conviction or other record relating to the criminal
conduct has been expunged or otherwise been removed.

42 C.F.R. § 1001.2. The DAB has previously acknowledged that the definition of
conviction used by CMS may be different than under states’ laws. In a case involving
exclusions from participation in federal health care programs under section 1128 of the
Act, which uses the same definition in 42 C.F.R. § 1001.2, the DAB explained that the
term “conviction” includes “diverted, deferred and expunged convictions” without regard
to whether state law treats such actions as a conviction.” Henry L. Gupton, DAB No.
2058 at 8 (2007). In Gupton, the DAB further explained that “the rationale for the

® Interestingly, the offense of wanton endangerment in the first degree is included in the
same chapter, Chapter 508, of the Kentucky Revised Statutes that also contains the
assault offenses. The lowest felony level of assault, assault in the third degree, is a Class
D felony. K.R.S. § 508.025. The elements for assault in the third degree include that a
person “[rJecklessly, with a deadly weapon or dangerous instrument, or intentionally
causes or attempts to cause physical injury.” Based on the elements of the offense of
assault, a person can be convicted of felony assault in Kentucky even if no actual
physical injury is inflicted.
different meanings of ‘conviction’ for state criminal law versus federal exclusion law
purposes follows from the distinct goals involved in the two systems, and that the federal
goal of protecting the public fisc and the beneficiaries of federal health care program is
not necessarily the same as the goals of state criminal justice systems.” Jd.

Petitioner contends that “clearly both the Kentucky court system and the Kentucky Board
of Medical Licensure feel that [Petitioner] poses no threat to the general public or
potential patients, as they have granted him, respectively, a complete expungement of his
records and licensure as a physician assistant.”® P. Br. at 7. Petitioner further argues that
is parole status demonstrated that “he was neither a threat to his own children or the
general public,” and his relationship with his ex-wife is “a very positive one.” P. Br. at 6.

As explained above, the purposes for a ten-year prohibition of enrollment in the Medicare
program, and the resulting denial of billing privileges, are not necessarily the same as the
purposes of the criminal justice system and a medical licensing board. In this case, while
the Kentucky Board of Medical Licensure took no action against Petitioner’s license, it is
clear that the Ohio Medical Board suspended Petitioner “indefinitely” and even explained
that it “would be well justified in permanently revoking his certificate.” CMS Ex. 4 at
43,44. This case illustrates that based on identical facts but different state laws, policies,
and adjudicators, one medical board, but not another, may decide to suspend a medical
license, and likewise one state, but not another, may grant expungement of a felony
criminal conviction. CMS’s regulations provide clear and consistent guidance regarding
the treatment of felony convictions, regardless of the jurisdiction where they occur. In
fact, CMS addressed this issue during the rulemaking process for the current version of
42 C.F.R. § 424.530(a)(3), as reported in the Federal Register:

Comment: A commenter contended that our proposed expansions of

§§ 424.530(a)(3) and 424.535(a)(3) violate the principles of federalism
established in Executive Order 13132 3(b), 3(c) and 3(d) and diminishes the
role of state licensing boards across the country. The commenter requested
that CMS furnish justification for expanding the role of the federal
government into matters best resolved by state licensing boards.

Response: We disagree with the commenter. As mentioned earlier, section
4302 of the BBA [Balanced Budget Act] (which amended section 1866 of
the Act) gave CMS broad authority to refuse to enter into Medicare
agreements with individuals or entities convicted of felonies that the

° T observe that the parties have not submitted documentation addressing whether
Petitioner’s license has been reinstated by the State Medical Board of Ohio, and
Petitioner does not address the current status of this license in his brief.
10

Secretary determines to be detrimental to the best interests of the program
or program beneficiaries. Additionally, our changes to §§ 424.530(a)(3) and
424.535(a)(3) in no way impair or infringe upon a state licensing agency's
ability to take or not take action on a provider’s licensure status in the event
of a criminal conviction. Such a decision will—as it should—remain within
the purview of the state.

79 Fed.Reg. at 72500, 72510-11 (Dec. 5, 2014).

While I recognize that Petitioner’s conviction was expunged after he completed the
rigorous requirements of the pretrial diversion program, including serving a year in
prison, the determination by the Kentucky criminal justice system that his conviction has
been expunged does not dictate that an agency of the federal government must ignore his
felonious and violent conduct in the preceding ten years. While the expungement
essentially erases the state’s legal determination that Petitioner committed the felonies
described herein, the expungement does not show that the felonious acts never occurred.
Unlike the mercy shown to Petitioner by the criminal justice system, CMS’s regulations
mandate a denial of enrollment in such an instance and do not afford CMS any discretion.
42 C.F.R. §§ 424.530(a)(3)(i)(A) and 1001.2. CMS’s goals include protecting its
beneficiaries, and CMS has determined that certain offenses, even if diverted or
expunged by the criminal justice system, are nonetheless per se detrimental to the
Medicare program and its beneficiaries. 42 C.F.R. §§ 424.530(a)(3)(i) and 1001.2; see
Gupton, supra. While the Commonwealth of Kentucky’s laws allow someone who was
convicted of acts involving “extreme indifference to the value of human life” to have his
convictions expunged, CMS is not required to afford that same individual the privilege of
billing Medicare for treating its beneficiaries until at least 10 years have passed from the
date of the conviction.

5. An offense listed in 42 C.F.R. § 424.530(a)(3)(i)(A) has been determined by
CMS to be per se detrimental to the best interests of the Medicare program or
its beneficiaries.

The current version of this regulation has been in effect since February 3, 2015. 42
C.F.R. § 424.530(a)(3); see 79 Fed. Reg. 72500. In subsections (A) through (D), the
regulation provides a list of the types of felony offenses that CMS considers to be
detrimental to the best interests of the program and its beneficiaries, and the
aforementioned subsection (A) addresses adjudicated felony crimes against persons. 42
C.F.R. §§ 424.530(a)(3)(i)(A)-(D). Subsection (A) specifies that felony crimes against
persons are considered, per se, to be detrimental to the best interests of the program and
its beneficiaries. The DAB has held that CMS “may revoke .. . a supplier’s billing
privileges based solely on a qualifying felony conviction without regard to equitable or
other factors.” Stanley Beekman, D.P.M., DAB No. 2650 at 3 (2015). The DAB has also
explained that CMS may revoke billing privileges “based solely on a qualifying felony
11

conviction” it has determined in a regulation to be detrimental to the best interests of the
Medicare program and its beneficiaries. See Fady Fayad, M.D., DAB No. 2266 at 15.
Although these earlier DAB cases focused on revocation of enrollment pursuant to a
parallel regulation, 42 C.F.R. § 424.535(a)(3), the DAB recently extended this analysis to
enrollment denial cases adjudicated under 42 C.F.R. § 424.530(a)(3). Brian K. Ellefsen,
D.O., DAB No. 2626 at 9 (2015).

As previously discussed, Petitioner’s felony offense is a crime against a person. In its
proposed rule addressing the intended revision of 42 C.F.R. § 424.530(a)(3), CMS
explained that it would “modify the list of felonies in each section such that any felony
conviction—including guilty pleas and adjudicated pretrial diversions—that we have
determined to be detrimental to the best interests of the Medicare program and its
beneficiaries would constitute a basis for denial or revocation.” 78 Fed. Reg. 25021
(April 9, 2013) (emphasis added). CMS further stated that this amendment “would give
us the discretion to deny or revoke enrollment based on any felony conviction that we
believe to be detrimental to the best interests of Medicare and its beneficiaries.” Id.

The DAB, in addressing the prior version of the regulation which was substantively
similar, upheld CMS’s rulemaking authority to determine that certain offenses are
considered to be per se detrimental to the best interests of the Medicare program and its
beneficiaries. See Fayad, Ellefsen, Gupton, supra.

6. CMS properly denied Petitioner’s enrollment in the Medicare program
because a felony offense against a person is per se detrimental to the best
interests of the Medicare program.

Petitioner committed four felony offenses on May 13, 2009. He pleaded guilty to felony
burglary in the third degree and admitted that he knowingly entered a building with the
intent to commit a crime. CMS Ex. 4 at 8; see K.R.S. § 511.040. The evidence shows
that at the time he committed the burglary, there were six people in the building, a
residence, and he brandished a loaded firearm. CMS Ex. 4 at 7. Petitioner also pleaded
guilty to felony wanton endangerment in the first degree, in that he pointed a loaded
firearm at three individuals, admitting that the offense occurred in “circumstances
manifesting extreme indifference to the value of human life . . . . [and] create[d]
substantial danger of death or serious physical injury to human life.” CMS Ex. 4 at 7, 8;
see K.R.S. § 508.060. These were felony crimes against persons, and CMS has
determined that such offenses, per se, warrant the denial of enrollment in the Medicare
program for a period of ten years from the date of conviction. 42 C.F.R. § 424.530(a)(3).
CMS properly denied Petitioner’s enrollment application.
12

V. Conclusion

I affirm CMS’s denial of Petitioner’s enrollment application for Medicare billing
privileges.

/s/
Leslie C. Rogall
Administrative Law Judge


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

Spyros N. Panos, M.D.
(OI File No. 2-11-40573-9),

Petitioner,
v.

The Inspector General,
U.S. Department of Health and Human Services.

Docket No. C-15-3051
Decision No. CR4525
Date: February 8, 2016

DECISION

Petitioner, Spyros N. Panos, M.D., is excluded from participating in Medicare, Medicaid,

and all

ederal health care programs pursuant to sections 1128(a)(1) and (a)(3) of the

Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1), (a)(3)), effective May 20, 2015.
Petitioner’s exclusion for five years is required by section 1128(c)(3)(B) of the Act

(42U.S

.C. § 1320a-7(c)(3)(B)). An additional period of exclusion of 20 years, for a total

exclusion of 25 years,' is not unreasonable based upon four aggravating factors

establis

I. Background

The Ins;

notifies

ed in this case and the absence of any mitigating factors.

pector General (I.G.) of the U.S. Department of Health and Human Services
Petitioner by letter dated April 30, 2015, that he was being excluded from

' Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after
the period of exclusion expires. Reinstatement is not automatic upon completion of the
minimum period of exclusion.
participation in Medicare, Medicaid, and all federal health care programs for a minimum
period of 25 years. The LG. advised Petitioner that he was being excluded pursuant to
sections 1128(a)(1) and (a)(3) of the Act based on his conviction in the United States
District Court of the Southern District of New York (District Court), of a criminal offense
related to the delivery of an item or service under Medicare or a state health care program
and also related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other
financial misconduct in connection with the delivery of a health care item or service, or
with respect to any omission in a health care program (other than Medicare and a state
ealth care program) operated by or financed in whole or in part by any federal, state, or
local government entity. I.G. Exhibit (Ex.) 1.

Petitioner, through counsel, timely requested a hearing by letter dated June 25, 2015
(RFH). The case was assigned to me on July 17, 2015 to hear and decide. A prehearing
conference was convened by telephone on August 20, 2015, the substance of which is
memorialized in my order dated the same day. On September 9, 2015, Petitioner filed a
written notice waiving an oral hearing. On September 21, 2015, the I.G. filed a motion
for summary judgment, a brief in support of summary judgment (1.G. Br.), as well as I.G.
exhibits | through 16. Petitioner filed a brief in opposition (P. Br.) on December 7, 2015.
Petitioner also filed his 12-page affidavit (P. Aff.) attached to the brief. The LG. filed a
reply brief (I.G. Reply) on December 22, 2015. Petitioner did not object to any of the
1.G.’s offered exhibits nor did the I.G. object to my consideration of Petitioner’s affidavit.
Thus, .G. Exs. 1 through 16 and Petitioner’s affidavit are admitted as evidence.

IL. Discussion
A. Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s rights to a
hearing by an administrative law judge (ALJ) and judicial review of the final action of
the Secretary of Health and Human Services (the Secretary).

Pursuant to section 1128(a) of the Act, the Secretary must exclude from participation in
any federal health care program any individual convicted under federal or state law of,
among other things: a criminal offense related to the delivery of an item or service under
Medicare or a state health care program; or a criminal offense consisting of a felony
relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other
financial misconduct in connection with the delivery of a health care item or service, or
with respect to any act or omission in a health care program operated by or financed in
whole or in part by any federal, state, or local government agency other than Medicare or
a state health care program. Act § 1128(a)(1), (a)(3). The Secretary has promulgated
regulations implementing these provisions of the Act. 42 C.F.R. § 1001.101(a), (c).”

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section
1128(a) of the Act will be for a period of not less than five years. 42 C.F.R.

§ 1001.102(a). The Secretary has published regulations that establish aggravating factors
that the I.G. may consider to extend the period of exclusion beyond the minimum five-
year period, as well as mitigating factors that may be considered only if the minimum
five-year period is extended. 42 C.F.R. § 1001.102(b), (c).

The standard of proof is a preponderance of the evidence, and there may be no collateral
attack of the conviction that provides the basis of the exclusion. 42 C.F.R.
§ 1001.2007(c), (d). Petitioner bears the burden of proof and the burden of persuasion on
any affirmative defenses or mitigating factors, and the I.G. bears the burden on all other
issues. 42 C.F.R. § 1005.15(b).
B. Issues
The Secretary has by regulation limited my scope of review to two issues:
Whether there is a basis for the imposition of the exclusion; and
Whether the length of the exclusion is unreasonable.
42 CFR. § 1001.2007(a)(1).

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

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

1. Petitioner’s request for hearing was timely, and I have jurisdiction.

2. Petitioner’s exclusion is required by sections 1128(a)(1) and (a)(3) of
the Act.

> Citations are to the 2014 revision of the Code of Federal Regulations (C.F.R.), unless
otherwise stated.
There is no dispute that Petitioner timely filed his request for hearing on June 25, 2015,
and that I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005.
Petitioner waived appearance at an oral hearing, electing to proceed on the documentary
evidence and written argument. 42 C.F.R. § 1005.6(b)(5). The LG. did not request that
I convene an oral hearing. Accordingly, it is not necessary to follow summary judgment
procedures and I proceed to a decision on the merits.

Petitioner does not dispute that there is a basis for his exclusion pursuant to sections
1128(a)(1) and (a)(3) of the Act. Petitioner is clear that he challenges only the
reasonableness of the 25-year exclusion. RFH; P. Br. at 1. Petitioner does not dispute
that he pled guilty to one count of health care fraud, in violation of 18 U.S.C. §§ 2 and
1347. Petitioner signed a plea agreement in which he acknowledged that he was pleading
guilty to the charged offense because he committed the acts alleged in the criminal
information. I.G. Ex. 9 at 4. Petitioner cannot now deny that by his guilty plea he
admitted that from about 2006 through July 2011, he submitted and caused to be
submitted false and fraudulent claims for surgical procedures to various health insurance
providers including Medicare, the New York State Insurance Fund, and other private
ealth insurers, which included false information concerning the surgical procedures
performed. I.G. Ex. 4 at 4-5. Among the false representations that Petitioner admitted
that he made or caused to be made to health insurance providers were that open surgeries
ad been performed when the procedures were done arthroscopically, that certain surgical
techniques and procedures were performed when Petitioner did not actually perform
them, and that loose bodies in excess of a certain size were removed when no loose
bodies were removed or those that were removed were smaller than the thresholds for
payment by the health insurance providers. I.G. Ex. 4 at 4. Petitioner also admitted by
pleading guilty to the single count charged in the criminal information that as of
December 2010, he tried to conceal his fraudulent activity by claiming the false claims
were the result of mere clerical errors. He also admitted that his fraud resulted in the loss
of over $2,500,000 from health insurance providers. I.G. Ex. 4 at 4.

The L.G. cites sections 1128(a)(1) and (a)(3) of the Act as the basis for Petitioner’s
mandatory exclusion. The statute provides in relevant part:

(a) MANDATORY EXCLUSION. - The Secretary shall
exclude the following individuals and entities from
participation in any Federal health care program (as defined
in section 1128B(f)):

(1) Conviction of program-related crimes. — Any individual
or entity that has been convicted of a criminal offense related
to the delivery of an item or service under title XVIII or under
any State health care program.
oR KK

(3) Felony conviction relating to health care fraud. — Any
individual or entity that has been convicted for an offense
which occurred after the date of the enactment of the Health
Insurance Portability and Accountability Act of 1996, under
Federal or State law, in connection with the delivery of a
health care item or service or with respect to any act or
omission in a health care program (other than those
specifically described in paragraph (1)) operated by or
financed in whole or in part by any Federal, State, or local
government agency, of a criminal offense consisting of a
felony relating to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct.

Act § 1128(a)(1), (a)(3).

For an exclusion pursuant to section 1128(a)(1), the plain language of the Act requires
that the Secretary exclude from participation in Medicare, Medicaid, and all federal
health care programs any individual or entity: (1) convicted of a criminal offense; (2)
where the offense is related to the delivery of an item or service; and (3) the delivery of
the item or service was under Medicare or a state health care program. Petitioner does
not dispute that he was convicted within the meaning of section 1128(i) of the Act when
the District Court accepted his guilty plea to one count of health care fraud and entered
judgment on March 7, 2014. 1.G. Ex. 11 at 1; P. Aff. §§ 25-26. Pursuant to section
1128(i) of the Act, an individual is “convicted” of a criminal offense when, among other
things, a plea of guilty has been accepted in a federal, state, or local court. Act

§ 1128(4)(3). Petitioner pled guilty to submitting false and fraudulent claims for payment
to Medicare and New York’s Medicaid program, as well as to private health insurance
companies. I.G. Ex. 4; LG. Ex. 11. Petitioner’s submission to Medicare of fraudulent
claims for payment is undeniably related to the delivery of a health care item or service
under the Medicare program. Payment for services allegedly provided is related to the
delivery of those services because payment is “inextricably intertwined” and “necessarily
follows” from the delivery of services. Jack W. Greene, DAB No. 1078 at 7-8 (1989).
Petitioner does not dispute this. P. Aff. § 2. Accordingly, all three elements of section
1128(a)(1) of the Act are met, and there is a basis for Petitioner’s exclusion under that
section.

For an exclusion pursuant to section 1128(a)(3), the plain language of the Act requires
that the Secretary exclude an individual or entity: (1) convicted of an offense under
federal or state law; (2) the offense occurred after August 21, 1996 (the date of enactment
of the Health Insurance Portability and Accountability Act of 1996); (3) the offense was
committed in connection with the delivery of a health care item or service, or with respect
to any act or omission in a health care program (other than Medicare or Medicaid)
operated by or financed in whole or in part by any federal, state, or local government
agency; (4) the criminal offense was a felony; and (5) the offense was related to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.
As noted above, Petitioner does not dispute that he was convicted of a felony offense
under federal law within the meaning of section 1128(i) of the Act when his guilty plea
was accepted and judgment entered on March 7, 2014. Petitioner does not dispute that
the offense for which he was convicted was committed after August 21, 1996. Petitioner
was convicted of a criminal offense that directly involved fraud because it consisted of
the submission of false or fraudulent claims for payment to non-governmental health
insurance providers, and was therefore in connection with the delivery of health care
items and services. I.G. Ex. 4 at 3-5. The payment for services that a physician provides
is rationally linked to the actual delivery of those services. Indeed, Petitioner does not
dispute this causal connection or that he was convicted of a felony offense that involved
fraud. I.G. Ex. 4 at 3-5; P. Aff. § 2, 35. Accordingly, all of the necessary elements of
section 1128(a)(3) of the Act are met, and there is a basis for Petitioner’s exclusion under
that section as well.

3. Pursuant to section 1128(c)(3)(B) of the Act, the minimum period of
exclusion under section 1128(a) is five years.

I have concluded that a basis exists to exclude Petitioner pursuant to sections 1128(a)(1)
and (a)(3) of the Act. Therefore, the I.G. must exclude Petitioner for a minimum period
of five years pursuant to section 1128(c)(3)(B) of the Act. The I.G. has no discretion to
impose a lesser period and I may not reduce the period of exclusion below five years.
The remaining issue is whether it is unreasonable to extend Petitioner’s exclusion by an
additional 20 years.

My determination of whether the exclusionary period in this case is unreasonable turns
on whether: (1) the I.G. has proven that there are aggravating factors; (2) Petitioner has
proven that there are mitigating factors the I.G. failed to consider or that the I.G.
considered an aggravating factor that does not exist; and (3) the period of exclusion is
within a reasonable range.

4. Four aggravating factors are present that justify extending the
minimum period of exclusion to 25 years.

The L.G. notified Petitioner that four aggravating factors are present in this case that
justify an exclusion of more than five years: (1) the acts resulting in Petitioner’s
conviction caused, or were intended to cause, a loss of $5,000 or more to a government
program or entity as shown by the District Court’s restitution order of $2,658,544.11
against Petitioner; (2) the acts resulting in Petitioner’s conviction occurred over a period
of one year or more, as Petitioner admitted in his guilty plea that his criminal conduct
occurred from 2006 through July 2011; (3) the sentence imposed by the court included
incarceration of 54 months; and (4) Petitioner has been subject to an adverse action by a
federal, state, or local government agency or board, and the adverse action is based on the
same set of circumstances that served as the basis for the imposition of the exclusion
because he was excluded from the New York Medicaid program as a result of his
conviction and Petitioner surrendered his New York medical license to resolve
disciplinary actions related to the underlying criminal conduct. I.G. Ex. 1 at 2. The
aggravating factors that the I.G. cites are four aggravating factors recognized by the
regulations that may serve as a basis for the I.G. to extend the period of exclusion.

42 C-F.R. § 1001.102(b)(1), (b)(2), (b)(5), (b)(9).

Petitioner admitted as part of his plea agreement to defrauding at least $2,500,000 from
health insurers including Medicare and the New York Medicaid program. I.G. Ex. 9 at 2.
The District Court entered a restitution order of $2,658,544.11 against Petitioner. I.G.
Ex. 12 at 1. There can be no question that based on the amount of loss to which
Petitioner admitted and the restitution ordered, Petitioner’s criminal conduct caused
losses to Medicare and Medicaid substantially above $5,000. Petitioner argues that he
has already made full restitution. P. Aff. 2. Payment of restitution, however, does not
negate the presence of this clearly established aggravating factor. The regulation notes
that the “entire amount of financial loss to such programs or entities . . . will be
considered regardless of whether full or partial restitution has been made.” 42 C.F.R.

§ 1001.102(b)(1) (emphasis added). Therefore, it is irrelevant in this exclusion action
whether Petitioner has made full restitution. The aggravating factor has been established
based on Petitioner’s admission in his guilty plea and the court’s restitution order.

Petitioner pled guilty to engaging in a scheme to defraud Medicare and other health
insurance providers during the period of 2006 through July 2011. I.G. Ex. 4 at 4; LG.
Ex. 9 at 1. The facts Petitioner admitted by pleading guilty clearly demonstrate that his
criminal conduct lasted one year or more. Petitioner now argues that his role in the
scheme to defraud health insurers lasted only two years rather than the five-and-a-half
years the I.G. cites. P. Br. at 1; P. Aff. 2, 19, 35. However, Petitioner cannot attempt
to re-litigate the facts of his underlying criminal conduct to which he has already pled
guilty. The regulations strictly prohibit such a collateral attack. 42 C.F.R.

§ 1001.2007(d). Even if I considered Petitioner’s argument, his plea agreement, in which
he acknowledged he was pleading guilty because he was actually guilty of the offense
alleged (I.G. Ex. 9 at 4), bears substantially more weight than his unsupported claim that
he was not involved in the criminal scheme for as long as he previously admitted.
Moreover, Petitioner is not disputing the presence of the aggravating factor, just the
overall severity of that factor. He indeed concedes that his criminal conduct lasted at
least two years, which is sufficient to establish the presence of the aggravating factor.
42 CFR. § 1001.102(b)(2).
Petitioner does not dispute that he was sentenced to imprisonment for a period of 54
months. I.G. Ex. 11 at 2. Based on the evidence before me, I conclude the third
aggravating factor cited by the LG. is established. 42 C.F.R. § 1001.102(b)(5).

Petitioner also does not dispute that as a result of his conviction the New York Office of
the Medicaid Inspector General excluded him from participation in the New York
Medicaid program. I.G. Ex. 13. Petitioner does not dispute that he surrendered his
medical license to the New York State Board for Professional Medical Conduct after he
ad been charged with professional misconduct and he acknowledged that he could not
successfully defend at least one of the misconduct allegations. I.G. Ex. 2, I.G. Ex. 5.
Petitioner was therefore subject to two adverse actions taken by two separate boards that
were based on the same set of circumstances that are the basis for Petitioner’s exclusion.’
Accordingly, the evidence before me establishes the fourth aggravating factor cited by
the LG. 42 C.F.R. § 1001.102(b)(9).

I conclude that the LG. established four aggravating factors, and the I.G. was authorized
by the Secretary to rely upon these factors as a basis for extending Petitioner’s exclusion
by 20 years.

5. Petitioner has not proven by a preponderance of the evidence any
mitigating factors established by regulation.

If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) justify an
exclusion of longer than five years, then mitigating factors may be considered as a basis
for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).
The only authorized mitigating factors that I may consider are listed in 42 C.F.R.

§ 1001.102(c):

(1) The individual or entity was convicted of 3 or fewer
misdemeanor offenses, and the entire amount of financial loss
(both actual loss and intended loss) to Medicare or any other
Federal, State or local governmental health care program due

> The L.G. submitted evidence that the Virginia Department of Health Professions
suspended Petitioner’s medical license in that state as a result of the surrender of his New
York medical license. I.G. Ex. 16. The I.G. also submitted evidence that Petitioner
surrendered his licenses in Connecticut and Pennsylvania. I.G. Exs. 14-15. However, the
actions by the Virginia, Connecticut, and Pennsylvania licensing authorities are not cited
by the I.G. as aggravating. LG. Br. at 15; 1G. Ex. 1 at 2.
to the acts that resulted in the conviction, and similar acts, is
less than $1,500;

(2) The record in the criminal proceedings, including
sentencing documents, demonstrates that the court determined
that the individual had a mental, emotional or physical
condition before or during the commission of the offense that
reduced the individual’s culpability; or

(3) The individual’s or entity’s cooperation with Federal or
State officials resulted in —

(i) Others being convicted or excluded from Medicare,
Medicaid and all other Federal health care programs,

(ii) Additional cases being investigated or reports
being issued by the appropriate law enforcement
agency identifying program vulnerabilities or
weaknesses, or

(iii) The imposition against anyone of a civil money
penalty or assessment under part 1003 of this chapter.

Petitioner has the burden to prove by a preponderance of the evidence that there is a
mitigating factor for me to consider. 42 C.F.R. § 1005.15(b)(1).

Petitioner argues there are two mitigating factors that the I.G. did not consider when
increasing the period of his exclusion: first, Petitioner was suffering from alcoholism and
depression and had bladder cancer at the time of the underlying scheme to defraud; and
second, he provided information to the government about the underlying scheme to
defraud, which “helped secure a $5,000,000 civil forfeiture settlement” against his former
employer. P. Br. at 1; P. Aff. 2, 24. The fact that Petitioner was suffering from
alcoholism and depression as well as bladder cancer at the time he participated in the
underlying scheme to defraud Medicare and other health insurance providers is, by itself,
not a mitigating factor in this case. For me to consider Petitioner’s conditions as a
“mental, emotional, or physical condition,” the record from the criminal proceedings
must demonstrate that the District Court determined such a condition to exist and that it
reduced Petitioner’s overall culpability. 42 C.F.R. § 1001.102(c)(2). There is no
evidence that the District Court made such a determination. In fact, the plea agreement
that Petitioner signed discusses his culpability with regard to the “offense level” for the
Sentencing Guidelines, but does not reference Petitioner’s alcoholism, depression, or
bladder cancer. It appears from the language of the plea agreement that neither the
government nor Petitioner considered his conditions to reduce his culpability at the time

10

of his guilty plea or sentencing. 1.G. Ex. 9. The regulation does not allow me to consider
any of Petitioner’s medical conditions that he raised for the first time in this forum.
Therefore, Petitioner has not established the presence of this mitigating factor.

In addition, simply providing information to the government about a scheme to defraud
that the government is already investigating is not the type of “cooperation” recognized
as a mitigating factor by the regulation. 42 C.F.R. § 1001.102(c)(3). Petitioner has not
presented any evidence that his alleged “cooperation” had any of the results described in
the regulation. Aside from Petitioner’s claim that his assistance resulted in a civil
forfeiture action against his former employer, there is no actual evidence in the record
that supports this assertion. Even if there was supporting evidence, a civil forfeiture
action, presumably taken pursuant to 18 U.S.C. § 981 et segq., is not a “civil money
penalty or assessment under part 1003,” and therefore not a mitigating factor in this case.
42 C.F.R. § 1001.102(c)(3). Petitioner has not established the presence of this mitigating
factor.

Accordingly, I conclude that Petitioner has failed to establish any mitigating factor that
I am permitted to consider to reduce the period of his exclusion.

6. Exclusion for 25 years is not unreasonable in this case.

The applicable regulation broadly states that the ALJ must determine whether the length
of exclusion imposed is “unreasonable.” 42 C.F.R. § 1001.2007(a)(1). The Board,
however, has made clear that the role of the ALJ in exclusion cases is to conduct a

de novo review of the facts related to the basis for the exclusion and the existence of
aggravating and mitigating factors identified at 42 C.F.R. § 1001.102 and to determine
whether the period of exclusion imposed by the I.G. falls within a reasonable range. Juan
De Leon, Jr., DAB No. 2533 at 3 (2013); Craig Richard Wilder, M.D., DAB No. 2416 at
8 (2011); Joann Fletcher Cash, DAB No. 1725 at 17, n.9 (2000). The Board has
explained that, in determining whether a period of exclusion is “unreasonable,” the ALJ
is to consider whether such period falls “within a reasonable range.” Cash, DAB No.
1725 at 17, n.9. The Board cautions that whether the ALJ thinks the period of exclusion
too long or too short is not the issue. The ALJ may not substitute his or her judgment for
that of the I.G. and may only change the period of exclusion in limited circumstances.

In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the I.G.
considers an aggravating factor to extend the period of exclusion and that factor is not
later shown to exist on appeal, or if the I.G. fails to consider a mitigating factor that is
shown to exist, then the ALJ may make a decision as to the appropriate extension of the
period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842
(2002), the Board suggests that, when it is found that an aggravating factor considered by
the I.G. is not proved before the ALJ, then some downward adjustment of the period of
exclusion should be expected absent some circumstances that indicate no such adjustment
11

is appropriate. Thus, the Board has by these various prior decisions significantly limited
my authority under the applicable regulation to judge the reasonableness of the period of
exclusion.

In this case, after de novo review, I have concluded that a basis for exclusion exists and
that the evidence establishes the four aggravating factors that the I.G. relied on to impose
the 25-year exclusion. Petitioner has not established that the I.G. failed to consider any
mitigating factor or considered an aggravating factor that did not exist. I conclude that a
period of exclusion of 25 years is in a reasonable range and not unreasonable considering
the existence of four aggravating factors and the absence of any mitigating factors. No
basis exists for me to reassess the period of exclusion.

III. Conclusion

For all of the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all other federal health care programs for a minimum of 25 years, effective
May 20, 2015.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Norman Johnson, M.D.

Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-15-3708
Decision No. CR4524
Date: February 8, 2016
DECISION

The Medicare enrollment and billing privileges of Petitioner, Norman Johnson, M.D., are
revoked pursuant to 42 C.F.R. § 424.535(a)(3),| effective February 17, 2015.

I. Background

Noridian Healthcare Solutions (Noridian), the Medicare administrative contractor for the
Centers for Medicare & Medicaid Services (CMS), notified Petitioner by letter dated
February 17, 2015, that his Medicare enrollment and billing privileges were revoked
effective February 17, 2015. Noridian stated that revocation was pursuant to 42 C.F.R.

§ 424.535(a)(3), based on Petitioner’s November 3, 2008 felony convictions for failing to
file state income tax returns. Noridian also notified Petitioner that he was subject to a
three-year bar to re-enrollment effective February 17, 2015, pursuant to 42 C.F.R.

§ 424.535(c). CMS Exhibit (Ex.) 1.

' References are to the 2014 revision of the Code of Federal Regulations (C.F.R.), the
revision in effect at the time of the initial determination in this case, unless otherwise
stated.
Petitioner requested reconsideration of the initial determination to revoke his Medicare
enrollment and billing privileges on April 16, 2015. CMS Exs. 3, 4. On June 10, 2015,
Noridian upheld the revocation on reconsideration, also citing 42 C.F.R. § 424.535(a)(3)
as the basis for revoking Petitioner’s Medicare enrollment and billing privileges. CMS
Ex. 7.

On August 7, 2015, Petitioner timely filed a request for hearing (RFH) before an
administrative law judge (ALJ). On August 17, 2015, the case was assigned to me for
earing and decision, and an Acknowledgement and Prehearing Order (Prehearing Order)
was issued at my direction.

On September 16, 2015, CMS filed a combined prehearing brief and motion for summary
judgment (CMS Br.) with CMS Exs. | through 7. On November 16, 2015, Petitioner
filed a combined prehearing brief and opposition to CMS’s motion for summary
judgment (P. Br.), and a witness and exhibit list. Petitioner listed himself as a witness.
Petitioner attached Petitioner’s exhibit (P. Ex.) 1 to his declaration. P. Ex. 1 is a copy of
the first page of the initial determination to revoke dated February 17, 2015, mailed to
Petitioner at a different address than appears on the copy of the initial determination
marked as CMS Ex. 1. I treat Petitioner’s declaration and the copy of the February 17,
2015 letter attached as P. Ex. 1. Petitioner also filed on November 16, 2015, a motion to
remand this case to CMS or Noridian pursuant to 42 C.F.R. § 498.56(d). Petitioner
attached to his motion for remand his declaration and fifteen letters from individuals
attesting to Petitioner’s good character. Petitioner filed a “Notice of Errata” on
November 17, 2015, to correct an omission from his motion to remand.

On December 1, 2015, CMS filed a reply brief (CMS Reply). Rather than file a separate
opposition to Petitioner’s motion to remand, CMS opposed the motion in its reply brief.
CMS Reply at 2. CMS objected to my consideration of the additional documents
Petitioner submitted with his request for remand claiming that Petitioner had failed to
show good cause for submitting new documentary evidence for the first time at the ALJ
level.

Petitioner’s motion for remand is denied. Pursuant to 42 C.F.R. § 498.56(d), I may
remand a case to CMS to consider new issues and, if appropriate, a new determination.
Pursuant to 42 C.F.R. § 498.78, I may also remand if CMS requests. CMS opposes
remand and Petitioner has not identified new issues that CMS should have the
opportunity to address. The gist of the motion to remand is Petitioner wants CMS to
consider additional mitigating evidence. However, Petitioner points to no legal
requirement for CMS to consider mitigating evidence related to revocation and CMS
resists the motion for remand, clearly indicating remand to CMS would be futile.
On January 26 and 27, 2016, Petitioner filed a motion for leave to file a sur-reply; a sur-
reply (P. Sur-reply); an amended list of exhibits and witnesses; and additional exhibits
marked as P. Exs. 8 through 30.” The sur-reply is accepted.

The parties have not objected to my consideration of CMS Exs. | through 7 and P. Ex. 1
(Petitioner’s Declaration and the attached letter) and they are admitted as evidence. P.
Exs. 8 through 30 are not admitted as evidence and not considered. P. Exs. 8 through 26
are letters of recommendation, endorsement, or other laudatory comments, and P. Ex. 27
is a certificate of recognition. The issue before me is whether or not there is a basis to
revoke Petitioner’s enrollment and billing privileges. 42 C.F.R. § 498.5(1)(1)-(2). P. Exs.
8 through 27 are not relevant to the issue before me and not admissible as evidence
because they do not have a tendency to make a fact at issue before me more or less
probable. Fed. R. Evid. 401. I may only admit evidence that is relevant and material. 42
C.F.R. § 498.60(b)(1). P. Ex. 28 is a document dated January 4, 2016, which purports to
reflect Petitioner’s various addresses on file with the Medical Board of California. This
document is relevant to an argument raised by Petitioner and I consider it relevant for that
reason. P. Ex. 28 is admitted. P. Ex. 29 is a copy of a Health Resources and Services
Administration webpage that indicates that Big Bear Lake, California is a Primary Care
Health Professional and Mental Health Professional Shortage Area. P. Ex. 29 is not
relevant to the issue before me, that is, whether or not there is a basis for revocation of
Petitioner’s Medicare enrollment and billing privileges. P. Ex. 30 includes at pages 1 and
2 another copy of the letter attached to Petitioner’s declaration that I have admitted as P.
Ex. 1. P. Ex. 30 also includes at pages 3 and 4, a letter from Desert Valley Hospital dated
March 10, 2015, ending his hospital privileges; and a letter from Desert Valley Medical
Group dated March 10, 2015, ending his affiliation with that physician practice group. P.
Ex. 30, pages | and 2 are relevant and admitted. P. Ex. 30, pages 3 and 4 are not relevant
and not admitted. P. Ex. 30, page 5 is Petitioner’s attestation and it is admitted as
relevant as a statement of Petitioner.

> Petitioner previously filed P. Ex. 1. There is no record of Petitioner filing exhibits
marked P. Exs. 2 through 7. Petitioner began numbering the new exhibits he offered with
his sur-reply as P. Ex. 8, apparently due to misunderstanding the Civil Remedies Division
Procedures (CRDP) and Prehearing Order. However, there is little risk for confusion
based on the incorrectly numbered exhibits. Therefore, P. Exs. 8 through 30 were not
rejected for failure to conform to the requirements for marking exhibits under the
Prehearing Order and the CRDP.
IL. Discussion
A. Applicable Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. Administration of the Part B program is through contractors, such as
Noridian. Act § 1842(a) (42 U.S.C. § 1395u(a)). Payment under the program for
services rendered to Medicare-eligible beneficiaries may only be made to eligible
providers of services and suppliers.? Act §§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1)
(42 U.S.C. § 1395(u)(h)(1)). Petitioner, a physician, is a supplier.

The Act requires the Secretary of Health and Human Services (Secretary) to issue
regulations that establish a process for the enrollment in Medicare of providers and
suppliers, including the right to a hearing and judicial review of certain enrollment
determinations, such as revocation of enrollment and billing privileges. Act § 1866(j)
(42 U.S.C. § 1395cc(j)). Pursuant to 42 C.F.R. § 424.505, a supplier such as Petitioner
must be enrolled in the Medicare program and be issued a billing number to have billing
privileges and to be eligible to receive payment for services rendered to a Medicare-
eligible beneficiary.

The Secretary has delegated the authority to revoke enrollment and billing privileges to
CMS. 42 C.F.R. § 424.535. CMS or its Medicare contractor may revoke an enrolled
supplier’s Medicare enrollment and billing privileges and supplier agreement for any of
the reasons listed in 42 C.F.R. § 424.535. In this case, CMS revoked Petitioner’s
Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(3), which
provides in pertinent part:

(a) Reasons for revocation. CMS may revoke a currently
enrolled provider or supplier’s Medicare billing privileges

> A “supplier” furnishes services under Medicare and includes physicians or other
practitioners and facilities that are not included within the definition of the phrase
“provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider of services,”
commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled
nursing facilities, comprehensive outpatient rehabilitation facilities, home health
agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C.

§ 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act. Act § 1861(u) (42 U.S.C.

§ 1395x(u)). The distinction between providers and suppliers is important because they
are treated differently under the Act for some purposes.
and any corresponding provider agreement or supplier
agreement for the following reasons:

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(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 program and its
beneficiaries.

(i) Offenses include —

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(B) Financial crimes, such as extortion, embezzlement,
income tax evasion, insurance fraud and other similar
crimes for which the individual was convicted,
including guilty pleas and adjudicated pretrial
diversions.

42 CFR. § 424.535(a)(3)(i)(B); Act § 1866(b)(2)(D).

The effective date of the revocation is controlled by 42 C.F.R. § 424.535(g). The
regulation provides that when revocation is based on a felony conviction, the effective
date of revocation is the date of the conviction. 42 C.F.R. § 424.535(g). In this case,
CMS, through its contractor Noridian, exercised discretion and determined that the
effective date of revocation of Petitioner’s Medicare enrollment and billing privileges
should be the date of the notice of the revocation, that is, February 17, 2015. I will not
disturb the exercise of discretion by CMS. When a supplier’s Medicare enrollment and
billing privileges are revoked, the supplier is barred from re-enrolling in the Medicare
program for one to three years. 42 C.F.R. § 424.535(c). In this case, CMS determined
that a three-year bar was appropriate. The regulations grant no right to review of the
determination of the duration of the bar. 42 C.F.R. § 424.545.

A supplier whose enrollment and billing privileges have been revoked may request
reconsideration and review as provided by 42 C.F.R. pt. 498. 42 C.F.R. § 424.545(a). A
supplier submits a written request for reconsideration to CMS or its contractor. 42 C.F.R.
§ 498.22(a). CMS or its contractor must give notice of its reconsidered determination to
the supplier, giving the reasons for its determination, specifying the conditions or
requirements the supplier failed to meet, and advising of the right to an ALJ hearing.

42 C.F.R. § 498.25. If the decision on reconsideration is unfavorable to the supplier, the

supplier has the right to request a hearing by an ALJ and further review by the
Departmental Appeals Board (the Board). Act § 1866(j)(8) (42 U.S.C. § 1395cec(j)(8));
42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5. A hearing on the record, also known as an
oral hearing, is required under the Act. Crestview Parke Care Ctr. v. Thompson, 373
F.3d 743, 748-51 (6th Cir. 2004). The supplier bears the burden to demonstrate that it
meets enrollment requirements with documents and records. 42 C.F.R. § 424.545(c).

B. Issues
Whether summary judgment is appropriate; and

Whether there was a basis for the revocation of Petitioner’s billing
privileges and enrollment in Medicare.

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

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

1. Summary judgment is appropriate.

CMS requested summary judgment. As noted above, a supplier whose enrollment has
been revoked has a right to a hearing and judicial review, and a hearing on the record is
required under the Act. Act §§ 205(b), 1866 (h)(1), (j); 42 C.F.R. §§ 498.3(b)(1), (5), (6),
(8), (15), (17), 498.5; Crestview, 373 F.3d at 748-51. A party may waive appearance at
an oral hearing but must do so affirmatively in writing. 42 C.F.R. § 498.66. In this case,
Petitioner has not waived the right to oral hearing or otherwise consented to a decision
based only upon the documentary evidence or pleadings. Accordingly, disposition on the
written record alone is not permissible, unless CMS’s motion for summary judgment has
merit.

Summary judgment is not automatic upon request but is limited to certain specific
conditions. The Secretary’s regulations at 42 C.F.R. pt. 498 that establish the procedure
to be followed in adjudicating Petitioner’s case do not establish a summary judgment
procedure or recognize such a procedure. However, the Board has long accepted that
summary judgment is an acceptable procedural device in cases adjudicated pursuant to 42
C.F.R. pt. 498. See, e.g., Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009);
Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No.
1628 at 3 (1997). The Board also has recognized that the Federal Rules of Civil
Procedure do not apply in administrative adjudications such as this, but the Board has
accepted that Fed. R. Civ. Pro. 56 and related cases provide useful guidance for
determining whether summary judgment is appropriate. Furthermore, a summary
judgment procedure was adopted as a matter of judicial economy within my authority to
regulate the course of proceedings and made available to the parties in the litigation of
this case by my Prehearing Order. The parties were given notice by the Prehearing Order
that summary judgment is an available procedural device and that the law as it has
developed related to Fed. R. Civ. Pro. 56 will be applied.

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

The standard for deciding a case on summary judgment and an ALJ’s decision-making in
deciding a summary judgment motion differ from that used in resolving a case after a
hearing. On summary judgment, the ALJ does not make credibility determinations,
weigh the evidence, or decide which inferences to draw from the evidence, as would be
done when finding facts after a hearing on the record. Rather, on summary judgment, the
ALJ construes the evidence in a light most favorable to the non-movant and avoids
deciding which version of the facts is more likely true. Holy Cross Vill. at Notre Dame,
Inc., DAB No. 2291 at 5 (2009). The Board also has recognized that on summary
judgment it is appropriate for the ALJ to consider whether a rational trier of fact could
find that the party’s evidence would be sufficient to meet that party’s evidentiary burden.
Dumas Nursing & Rehab., L.P., DAB No. 2347 at 5 (2010). The Secretary has not
provided in 42 C.F.R. pt. 498 for the allocation of the burden of persuasion or the
quantum of evidence required to satisfy the burden. However, the Board has provided
some persuasive analysis regarding the allocation of the burden of persuasion in cases
subject to 42 C.F.R. pt. 498. Batavia Nursing & Convalescent Ctr., DAB No. 1904
(2004), aff'd, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 Fed. App’x 181
(6th Cir. 2005).

Viewing the evidence before me in a light most favorable to Petitioner and drawing all
inferences in Petitioner’s favor, I conclude that there are no genuine disputes as to any
material facts pertinent to revocation under 42 C.F.R. § 424.535(a)(3) that require a
hearing in this case. The issues in this case raised by Petitioner related to revocation
under 42 C.F.R. § 424.535(a)(3) must be resolved against him as a matter of law. The
undisputed evidence shows that there is a basis for revocation of Petitioner’s Medicare
enrollment and billing privileges. Accordingly, summary judgment is appropriate.

2. Petitioner was convicted of felony offenses.

3. The Secretary has determined and provided by regulation that
financial crimes such as income tax evasion or similar crimes are
detrimental to the Medicare program or its beneficiaries. 42 C.F.R.
§ 424.535(a)(3)(i)(B).

4. Petitioner was convicted of failing to file income tax returns, which
is a financial crime within the meaning of 42 C.F.R. §
424.535(a)(3)(i)(B).

5. There is a basis for revocation of Petitioner’s enrollment in
Medicare and his billing privileges pursuant to 42 C.F.R.
§ 424.535(a)(3).

6. Petitioner received adequate notice of the revocation of his
Medicare enrollment and billing privileges.

7. The issue for hearing and decision is whether there is a basis for
revocation of Petitioner’s Medicare enrollment and billing privileges
and, if there is a basis for revocation, my jurisdiction does not extend
to review of whether CMS properly exercised its discretion to revoke
Petitioner’s Medicare enrollment and billing privileges.

8. Ihave no authority to review CMS’s determination to impose a
three-year bar on Petitioner’s Medicare re-enrollment.

9. Petitioner’s Medicare enrollment and billing privileges are revoked
effective February 17, 2015.

a. Facts

The following facts are undisputed. On November 3, 2008, Petitioner entered pleas of no
contest to three felony counts of failure to file state income tax returns in violation of
California law, in the Superior Court of the State of California, County of San Bernardino
(the state court). Petitioner was convicted on each of the counts. CMS presented no
record of the conviction which occurred in November 2008, but Petitioner has not
disputed the allegation that he was, in fact, convicted in 2008 as alleged by CMS. CMS
Ex. 3; P. Br. at 6, P. Sur-reply at 3; P. Ex. 1.
On April 16, 2015, the state court granted Petitioner’s motion to reduce the three felony
counts to misdemeanors on condition that he show proof of payment of restitution in
excess of $61,500 by May 11, 2015. CMS Ex. 2. On May 11, 2015, the state court
granted Petitioner’s motion to set aside the convictions; ordered that pleas of not guilty be
entered; and dismissed the case pursuant to California Penal Code §§ 1203.4, 1203.4a,
and 1203.41. CMS Ex. 5.

b. Analysis

Petitioner does not dispute that in November 2008, within ten years of the revocation
action, he was convicted in state court of three felony counts of failure to file state
income tax returns. P. Ex. | at 2-3. Petitioner does not deny that his conviction in 2008
is a financial crime of the type that the Secretary has determined to be detrimental to the
Medicare program or its beneficiaries within the meaning of 42 C.F.R.

§ 424.535(a)(3)(i)(B). P. Sur-reply at 3. Accordingly, I conclude that there is a basis for
revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42
C.F.R. § 424.535(a)(3)(i)(B). Pursuant to 42 C.F.R. § 424.535(g), the effective date of
revocation is generally 30 days after CMS or its contractor mails notice of its
determination to revoke. However, when the basis for revocation is a felony conviction,
such as this case, revocation is effective the date of the felony conviction. In November
2008, when Petitioner was convicted, the regulation then in effect provided that
“[rJevocation becomes effective within 30 days of the initial revocation notification.” 42
C.F.R. § 424.535(g) (2008). Although generally the regulations in effect at the time of
action by CMS or its contractor should control, I conclude that CMS and its contractor
properly exercised discretion to make the revocation in this case effective the date of the
notification of the initial determination to revoke, rather than the date of Petitioner’s
conviction. Retroactively revoking Petitioner’s Medicare enrollment and billing
privileges back to November 2008, going back nearly seven years, had the potential for
creating possible significant liability for any Medicare claims paid to or on Petitioner’s
behalf during the period November 2008 and February 17, 2015. I will not review nor
upset the exercise of CMS discretion to apply its regulations in an equitable fashion as it
as in this case. Accordingly, the date of revocation of Petitioner’s Medicare enrollment
and billing privileges is February 17, 2015, as determined by CMS and its contractor. I
note that Petitioner does not specifically challenge the effective date determination.

Petitioner argues as his defense in this case that his felony convictions were subsequently
reduced to misdemeanors by the state court, which also set aside the convictions, and
dismissed the case. Petitioner argues that the state court action effectively deprives CMS
of the legal basis for revocation of his Medicare enrollment and billing privileges.
Petitioner also argues that his case was dismissed pursuant to California Penal Code

§ 1203.4, which states, in relevant part, that upon dismissal, “[the defendant] shall
thereafter be released from all penalties and disabilities resulting from the offense of
which he or she has been convicted ....” P. Br. at 6. The gist of Petitioner’s argument

10

is that the California state law bars CMS from using the prior convictions against
Petitioner as a basis for revocation. Petitioner further argues that, even if I conclude that
CMS is authorized to revoke his Medicare billing privileges based on his felony
convictions, I should consider the fact that the charges were reduced and then dismissed
as mitigating circumstances. P. Br. at 6.

Petitioner’s argument regarding his felony convictions is without merit. There is no
dispute that Petitioner was convicted of felony financial crimes similar to tax evasion in
November 2008. There is no dispute that Petitioner’s felony convictions clearly satisfy
the requirements of 42 C.F.R. § 424.535(a)(3)(B). The fact that in 2015, the state court
reduced Petitioner’s felony convictions to misdemeanors and then dismissed the charges
does not change the fact that he was originally convicted of three felony counts of failure
to file income tax returns. In this proceeding, it is federal law — not state law — that
governs whether a supplier has been “convicted” of an offense, as that term is used in 42
C.F.R. § 424.535(a)(3). John Hartman, D.O., DAB No. 2564 at 3 (2014). The fact that
the California state court had the authority to revisit felony convictions entered nearly
seven years earlier, does not change the fact that Petitioner was, in fact, lawfully
convicted under California law. Petitioner points to no authority for the proposition that
CMS is bound to follow California law and treat Petitioner’s felony convictions in 2008
as being vacated or otherwise nullified by subsequent state court action under a provision
of state law.

In mandating the exclusion of providers and suppliers from participation in Medicare and
other federal and state healthcare programs for certain federal and state convictions,
Congress has specifically defined “conviction” to include situations “when a plea of
guilty or nolo contendere by the individual . . . has been accepted by a Federal, State, or
local court” or when the individual has “entered into participation in a first offender,
deferred adjudication, or other program or arrangement where judgment of conviction has
been withheld.” 42 U.S.C. § 1320a-7(i)(3)-(4); Act § 1128(i)(3)-(4).* In the exclusion
case, Henry L. Gupton, DAB No. 2058 (2007), the Board stated that it is “well
established” that the term “conviction” under the Act includes “diverted, deferred and

* Revocation and exclusion are two separate and distinct administrative actions enforced
by two different agencies within the U.S. Department of Health & Human Services
(HHS). Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 13 (2009), aff'd, 710 F. Supp.
2d 167 (D. Mass. 2010). The Secretary delegated the authority to impose a mandatory
exclusion under section 1128 of the Act to the HHS Inspector General, who administers
that program pursuant to 42 C.F.R. pts. 1001 and 1005. The Secretary delegated the
authority for revoking a provider’s or supplier’s Medicare enrollment and billing
privileges to CMS in 42 C.F.R. pt. 424.
11

expunged convictions regardless of whether state law treats such actions as a conviction.”
Gupton, DAB No. 2058 at 8. The Board in Gupton explained that the “rationale for the
different meanings of ‘conviction’ for state criminal law versus federal exclusion law
purposes follows from the distinct goals involved.” Jd. at 7. The Board stated that while
the goals of criminal law generally include punishment, rehabilitation, and deterrence,
exclusions “are civil sanctions, designed to protect the beneficiaries of health care
programs and the federal fisc ....” Jd. The Board explained further, “‘in the effort to
protect both beneficiaries and funds, Congress could logically conclude that it was better
to exclude providers whose involvement in the criminal system raised serious concerns
about their integrity and trustworthiness, even if they were not subjected to criminal
sanctions for reasons of state policy.” Jd. at 7-8. The Board’s analysis in Gupton applies
equally in this case. The purposes of the revocation authority, protecting beneficiaries
and the Medicare trust fund, is served by treating Petitioner’s conviction of felony
offenses as a basis for revocation, rather than permitting Petitioner to avoid revocation
based on a state court determination to expunge or otherwise mitigate the effect of the
state court convictions. Lorrie Laurel, P.T., DAB No. 2524 at 5 (2013). I do not mean to
suggest that when a state court conviction is reversed and set aside on appeal that the
original conviction nevertheless would be a basis for revocation or exclusion but those
are not the facts in this case.

I am also not persuaded by Petitioner’s argument that the state court action reducing and
dismissing the criminal charges should be viewed as a mitigating circumstance.
Petitioner cites no authority in support of this argument. There is nothing in the Act or
regulations requiring CMS or its contractor to consider mitigating factors or evidence
other than the nature of Petitioner’s convictions in determining whether to revoke
enrollment. Act § 1866(j)(8); 42 C.F.R. § 424.535(a)(3). I conclude for the same reason
that I may not consider the numerous letters of recommendation and endorsements or
favorable comments Petitioner submitted for my consideration, and for that reason they
were not admitted as evidence. There is no regulatory or statutory requirement for CMS
or its contractor to consider mitigating evidence when determining whether to revoke. In
this case, Petitioner did submit such evidence and CMS actively resisted remand to
consider the information. Before me, Petitioner’s evidence offered in mitigation is
simply irrelevant to the issue of whether or not CMS or its contractor had a basis for
revocation.

Petitioner argues that the notice of the initial determination to revoke was defective. P.
Br. at 1-2; P. Sur-reply at 1-6. The regulations that govern revocation do not prescribe
the content of the notice of the initial determination to revoke Medicare enrollment and
billing privileges. 42 C.F.R. pt. 424. However, 42 C.F.R. § 498.20(a), which applies,
provides that CMS, or in this case its contractor, mails notice of the initial determination
to the affected party and the notice must set forth the basis for the determination, the
effect of the determination, and the right to request reconsideration or a hearing, as
applicable. The notice of reconsidered determination must also be sent by CMS or its
12

contractor, state the reasons for the determination, state the legal requirements the
affected party failed to meet, and advise the affected party of the right to a hearing. 42
C.F.R. § 498.25(a). In this case, the notice of initial determination stated that Petitioner’s
Medicare privileges were being revoked effective February 17, 2015, cited the legal and
factual basis, advised Petitioner of the right to request reconsideration, and to submit
additional information with the request for reconsideration. The notice also advised
Petitioner of the three-year re-enrollment bar. CMS Ex. 1. The notice of the
reconsidered determination dated June 10, 2015, advised Petitioner that revocation of
Medicare privileges was upheld, the reasons for the revocation, the legal basis for the
revocation, and that he had the right to request review. CMS Ex. 7. Petitioner thereafter
timely requested a hearing before an ALJ. My review reveals that the notices of initial
and reconsidered determination satisfied regulatory requirements. Any lack of clarity in
the notices was not prejudicial as Petitioner has effectively exercised the rights related to
review available to him under the Act and regulations. Petitioner’s argument that he did
not receive the notice of initial determination directly from the CMS contractor does not
reflect any error on the part of the CMS contractor or any prejudice to Petitioner as he
timely exercised his right to request reconsideration. ° P. Br. at 3-4; P. Sur-reply at 5.
Petitioner’s argument that he was not clear on what material could be submitted on
reconsideration is without merit. The regulations governing the reconsideration process
are publicly available and Petitioner was represented by counsel. Further, even accepting
that he received the second page of the initial determination late, that page contained an
invitation for Petitioner to call with any questions, a toll-free number to call, and the
hours during which to call. CMS Ex. | at 2. Petitioner does not offer evidence that he or
counsel called to request clarification or an extension of time to request reconsideration
based on his late receipt of the notice of initial determination.

The Act and regulations accord Petitioner a right to notice and the opportunity to have the
decision to revoke his enrollment and billing privileges reconsidered and then
administratively reviewed by an ALJ, the Board, and the courts. Act § 1866(j)(8) (42
U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5, 498.22(a), and
498.25. Petitioner was notified of the revocation; he exercised his right to

> The record reflects that Noridian sent two notice letters to Petitioner on February 17,
2015, at two different mailing addresses. Noridian sent one notice to Petitioner’s former
employer, Bear Mountain Family Medicine (CMS Ex. 1), and another notice to his
employer, Desert Valley Hospital (P. Ex. 1). CMS Ex. | contains the following mailing
address: “Norman E Johnson MD; Bear Mountain Family Medicine; 41949 Big Bear
Blvd; Big Bear Lake, CA 92315-6865.” CMS Ex. 1. P. Ex. 1 contains the following
mailing address: “Norman E Johnson MD; Desert Valley Med Group; 16850 Bear
Valley Rd; Victorville, CA 92395.” P. Ex. 1. The two letters are identical in all other
respects.
13

reconsideration; he has received de novo review by an ALJ; and there is no real dispute
that there is a factual and legal basis for revocation of his enrollment pursuant to 42
C.F.R. § 424.535(a)(3). Petitioner has received the process due him under the Act and
the Secretary’s regulations.

Petitioner argues that Noridian failed to exercise discretion not to revoke Petitioner’s
Medicare enrollment and billing privileges and, therefore, it is not clear officials at
Noridian understood that they had discretion not to revoke in this case. I have concluded
that there was a basis for revocation. Noridian issued an initial determination to revoke
Petitioner’s enrollment and billing privileges. A Noridian hearing officer subsequently
upheld the revocation on reconsideration. Petitioner requested my de novo review and
CMS has advocated before me that there was a proper exercise of discretion to revoke
Petitioner’s enrollment and billing privileges. Given the facts, whether or not Noridian
understood its discretion is not relevant. CMS, which is fully appraised of the facts
including the evidence in mitigation offered by Petitioner, has elected to proceed with the
revocation. There is no question that CMS could have at any time during the course of
this proceeding reopened and revised the reconsidered determination and withdrawn the
revocation. 42 C.F.R. § 498.30. CMS did not choose to do so. It is CMS’s exercise of
discretion at this stage, not the contractor’s, that is at issue.

Further, I have no authority to review the exercise of discretion by CMS or its contractor
to revoke where there is a basis for revocation. Abdul Razzaque Ahmed, M.D., DAB No.
2261 at 19 (2009), aff'd, Ahmed v. Sebelius, 710 F.Supp.2d 167 (D. Mass. 2010). The
scope of my authority is limited to determining whether there is a legal basis for
revocation of Petitioner’s Medicare enrollment and billing privileges. Jd. I have
concluded that there is a basis for CMS to revoke Petitioner’s Medicare enrollment and
billing privileges pursuant to 42 C.F.R. § 424.535(a)(3). Thus, a regulatory basis for
revocation exists.

Petitioner asserts that because of the revocation, he was terminated by his employer and
is suffering difficult personal and professional circumstances. Petitioner also argues that
the area in which he practices has a shortage of health care professionals and the loss of
his health care services would cause a hardship to Medicare patients. P. Ex. 1; P. Br. at
6-7; P. Sur-reply at 2, 3, 6-7. In pointing out that he practices in an underserved area,
Petitioner appears to suggest that his situation may warrant a waiver of his revocation.
However, Petitioner points to no statutory or regulatory authority for granting a waiver of
a revocation.

To the extent that Petitioner’s other assertions may be construed as a request for equitable
relief, I have no authority to grant equitable relief. US Ultrasound, DAB No. 2302 at 8
(2010) (“Neither 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.”). Furthermore, I am bound to follow the Act and regulations, and I have
14

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

Petitioner challenges the duration of his three-year re-enrollment bar, arguing that it is “a
potentially career-ending punishment.” He points out that “[i]t is being imposed nearly
eight years after the conviction, during which time [he] continued to be a Medicare
provider without having any of [his] practices questioned by CMS.” P. Ex. 1; P. Sur-
reply at 3, 7.

Under the regulations, the re-enrollment bar after a revocation is a minimum of one year
and a maximum of three years. 42 C.F.R. § 424.535(c). There is no statutory or
regulatory language establishing a right to review of the duration of the re-enrollment bar
CMS imposes. Act § 1866(j)(8); 42 C.F.R. §§ 424.535(c); 424.545; 498.3(b); and 498.5.
The Board has held that the duration of a revoked supplier’s re-enrollment bar is not an
appealable initial determination listed in 42 C.F.R. § 498.3(b), and thus, is not subject to
ALJ review. Vijendra Dave, DAB No. 2672 at 11 (2016).

Finally, the nearly seven-year delay by CMS in taking the revocation action against
Petitioner is not a basis for me to reverse the revocation or reduce the three-year re-
enrollment bar. CMS revoked Petitioner’s billing privileges pursuant to 42 C.F.R.

§ 424.535(a)(3), which authorizes it to act within 10 years of a felony conviction. 42
C.F.R. § 424.535(a)(3). Here, Petitioner was convicted in November 2008, and CMS
revoked his billing privileges within 10 years of that conviction. Petitioner has identified
no statute of limitations that legally bars the revocation, even when so delayed, or any
other legal basis for me to invalidate the revocation action.

III. Conclusion

For the foregoing reasons, I conclude that Petitioner’s Medicare enrollment and billing
privileges are properly revoked pursuant to 42 C.F.R. § 424.535(a)(3), effective February
17, 2015.

/s/
Keith W. Sickendick
Administrative Law Judge