Ethan E. Bickelhaupt, M.D., DAB CR5349 (2019)

DECISION

Petitioner, Ethan E. Bickelhaupt, M.D., is a psychiatrist, who practices in the State of Kansas.  He participated in the Medicare program until September 20, 2011, when the Inspector General for the Department of Health and Human Services (IG) excluded him from participating in federal health care programs.  The IG took this action because Petitioner Bickelhaupt was convicted of felony offenses related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  Petitioner recently applied for re-enrollment in the program but, because of his felony conviction, and because he did not report that conviction on his Medicare application, the Centers for Medicare & Medicaid Services (CMS) denied him re-enrollment.  Petitioner now appeals the denial. 

I find that CMS is authorized to deny Petitioner Bickelhaupt’s re-enrollment application because, within the ten years preceding his filing, he was convicted of felonies that CMS reasonably determined are detrimental to the best interests of the Medicare program and its beneficiaries.  I therefore affirm CMS’s determination.

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Background

By letter dated August 6, 2018, the Medicare contractor, Wisconsin Physicians Service Insurance Corporation, denied Petitioner Bickelhaupt’s application for enrollment in the Medicare program.  CMS Exhibit (Ex.) 2.  The contractor based its denial on 42 C.F.R. § 424.530(a)(3) and 424.530(a)(4) and cited two factors:  1) Petitioner was convicted of two drug-related felonies; and 2) he did not specifically disclose those convictions on his application.  CMS Ex. 2 at 1. 

Petitioner requested reconsideration.  In a reconsidered determination, dated November 1, 2018, a CMS hearing officer upheld the denial, concluding that:

• Petitioner was convicted of felony offenses that CMS determined are “detrimental to the best interests of the Medicare program and its beneficiaries”; and
• On his application for re-enrollment, Petitioner certified, as true, information that was, in fact, misleading or false, in that he failed to disclose all final adverse legal actions imposed against him, specifically, his felony convictions.

CMS Ex. 4. Petitioner appealed, and that appeal is now before me.

CMS moves for summary judgment.  CMS proposes no witnesses.  Petitioner lists two witnesses:  himself and the CMS hearing officer who decided the reconsidered determination.  CMS has not asked to cross-examine Petitioner.  See Acknowledgment and Pre-hearing Order at 5 (¶ 9).  For reasons discussed below, I have denied Petitioner’s request that I subpoena the CMS hearing officer.  Because there are no witnesses to be further examined or cross-examined, an in-person hearing would serve no purpose.  See Acknowledgment and Pre-hearing Order at 5-6 (¶¶ 8, 9, 10).  The matter may therefore be decided based on the written record, without considering whether the standards for summary judgment are satisfied.1

CMS has submitted its motion and brief (CMS Br.), along with six exhibits (CMS Exs. 1-6).  Although given ample opportunity to do so, Petitioner did not respond to CMS’s motion and brief, but has submitted four exhibits (P. Exs. 1-4).  In the absence of any other objections, I admit into evidence CMS Exs. 1-6 and P. Exs. 1-4.

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Discussion

Petitioner’s subpoena request.  Petitioner asked that I subpoena the CMS hearing officer so that he can question her about “what, if any, steps CMS undertook in making a ‘case by case determination’ regarding whether Petitioner’s conviction provided a legal basis to deny his enrollment application.”  Petitioner’s Request for Issuance of a Subpoena at 3 (¶ 12).  CMS opposes my issuing the subpoena.

I deny Petitioner’s request for two reasons:  1) the testimony he seeks is irrelevant; and 2) CMS’s deliberative processes are privileged.

I may issue a subpoena if it is reasonably necessary “for the full presentation of a case.”  42 C.F.R. § 498.58(a).  I receive into evidence witness testimony that is relevant and material.  42 C.F.R. § 498.60(b).  Here, my review is limited to whether CMS had the authority to deny Petitioner’s enrollment.  If so, I must affirm the denial; I may not review the processes by which CMS exercised its discretion to deny enrollment.  See discussion, below.  The hearing officer’s testimony is therefore irrelevant.

Moreover, because I review this matter de novo, the process by which CMS arrived at its conclusions is irrelevant.  See Fady Fayad, M.D., DAB No. 2266 at 11-12 (2009) (holding that the de novo proceeding before an ALJ cured alleged deficiencies of the reconsidered determination), aff’d, Fayad v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011); accord Heckler v. Campbell, 461 U.S. 458, 462 n.6 (1983) (holding that hearings held pursuant to section 205(b) of the Social Security Act are de novo).

In any event, the testimony sought is privileged. Petitioner is not entitled to discover an agency’s (or a hearing officer’s) internal deliberations.

CMS may deny Petitioner enrollment in the Medicare program because, within the last ten years, he was convicted of felonies that CMS reasonably finds detrimental to the best interests of the Medicare program and its beneficiaries. 42 C.F.R. § 424.530(a)(3).2

Statute and regulations. CMS may deny a provider’s or supplier’s enrollment in the Medicare program if, within the preceding ten years, he was convicted of a felony offense that CMS “has determined to be detrimental to the best interests of the program and its beneficiaries.”  42 C.F.R. § 424.530(a)(3); see also Act §§ 1842(h)(8) (authorizing the Secretary to deny enrollment to a physician who has been convicted of a felony offense that the Secretary has determined is “detrimental to the best interests of the program or program beneficiaries”) and 1866(b)(2)(D) (authorizing the Secretary to deny enrollment

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after he ascertains that the provider has been convicted of a felony that he “determines is detrimental to the best interests of the program or program beneficiaries”).

Offenses for which billing privileges may be denied include – but are not limited to –financial crimes such as extortion, embezzlement, income tax evasion, insurance fraud, and similar crimes; a felony that places the Medicare program or its beneficiaries at immediate risk (such as malpractice); and “[a]ny felonies that would result in mandatory exclusion under section 1128(a) of the Act.”  42 C.F.R. § 424.530(a)(3)(i)(B), (C), (D).  Section 1128 crimes include:  program-related crimes; crimes related to the neglect or abuse of patients in connection with the delivery of a health care item or service; crimes relating to health care fraud; and crimes relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  See 42 C.F.R. § 1001.101.

Petitioner’s felony offenses.  On September 2, 2010, Petitioner Bickelhaupt was convicted on two felony counts:  1) of knowingly and intentionally distributing and dispensing a controlled substance, outside the scope of professional practice and for no legitimate medical purpose, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C); and 2) acquiring or obtaining a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge, in violation of 21 U.S.C. § 843(a)(3) and (d).  CMS Ex. 3; P. Ex. 4 at 1-2 (Bickelhaupt Dec. ¶¶ 6, 7); see Ethan Edwin Bickelhaupt, M.D., DAB CR2554 (2012), aff’d, DAB No. 2480 (2012).

Because of these convictions, the Inspector General for the U.S. Department of Health and Human Services (IG) excluded him from participating in all federal health care programs for a minimum period of five years.  P. Ex. 2; P. Ex. 4 at 3 (Bickelhaupt Decl. ¶¶ 13, 14).  Section 1128(a)(4) of the Act mandates that the IG exclude from program participation any individual or entity convicted of a felony “relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  See 42 C.F.R. § 1001.101(d).

The five years passed, and Petitioner requested reinstatement.  In a letter dated October 18, 2016, the IG approved his request and recommended that he contact his Medicare contractor to determine his options for participating in the program.  P. Ex. 1. 

Petitioner’s re-enrollment application.  In an application filed on July 18, 2018, Petitioner applied for re-enrollment in the Medicare program.  CMS Ex. 1.  He disclosed his exclusion (writing “OIG Sanctioned”), but did not mention his felony convictions.  CMS Ex. 1 at 3. 

Pointing to the IG’s approval of his reinstatement request, his ongoing sobriety, his personal accomplishments, his employer’s and patients’ need for his services, and his

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generally good character, Petitioner maintains that his Medicare enrollment should be allowed and that CMS abused its discretion in denying it.  CMS Exs. 3, 5, 6; P. Exs. 1, 3.

Exclusion under section 1128 and denial of enrollment under 42 C.F.R. § 424.530 (as authorized by sections 1842(h)(8) and 1866(b)(2)(D) of the Act) are separate and distinct enforcement tools, each with its own requirements and consequences.  See Fayad, DAB No. 2266 at 12, citing Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 13 (2009).  That the IG may have imposed a minimum period of exclusion does not preclude CMS from making its own, independent determination regarding a supplier’s re-enrollment.  Indeed, the statute and regulations mandate that it do so. 

My review authority here is limited.  I may determine whether the regulatory elements required for denial of enrollment under section 424.530(a) are present, and, if the record establishes that they are, I must affirm.  John A. Hartman, D.O., DAB No. 2911 at 17 (2018); Douglas Bradley, M.D., DAB No. 2663 at 6-7, 13-14 (2015) and cases cited therein.  By regulation, Petitioner’s felony offenses are detrimental to the best interests of the program and its beneficiaries.  Not only did he abuse his position as a psychiatrist, authorized to prescribe controlled substances, to obtain drugs for himself, his crimes subjected him to exclusion under section 1128(a).  See Bickelhaupt, DAB CR2554 at 5.  Because Petitioner’s conviction was among those specifically enumerated in section 424.530(a)(3), CMS may deny his Medicare enrollment without regard to equitable or other factors.  See Fayad, DAB No. 2266 at 15-17.

Thus, CMS justifiably determined that Petitioner was convicted of felonies detrimental to the best interests of the Medicare program and its beneficiaries and may deny his enrollment in the Medicare program.  Because this, by itself, justifies the denial of enrollment, I need not consider whether Petitioner also filed a misleading enrollment application (although he unquestionably did not reveal his felony convictions).

Conclusion

CMS may deny Petitioner Bickelhaupt’s Medicare enrollment application because he was convicted of felonies that CMS reasonably determined are detrimental to the best interests of the Medicare program and its beneficiaries.  I therefore affirm CMS’s determination.

• 1. That I decide this case based on the written record does not mean that Petitioner has not had a hearing. Courts recognize that, although a case may be decided on summary judgment or based on the written record, the administrative law judge, by considering the evidence and applying the law, has granted the petitioner a hearing, as required by sections 205(b) and 1866(h) of the Social Security Act (Act). See CNG Transmission Corp. v. FERC, 40 F.3d 1289, 1293 (D.C. Cir. 1994) (holding that a “paper hearing” satisfies statutory requirements for “notice and opportunity for hearing.”).
• 2. I make this one finding of fact/conclusion of law to support my decision.