Mark Abramovich, M.D., DAB CR5484 (2019)

DECISION

Petitioner’s Medicare enrollment and billing privileges were revoked effective July 1, 2017.  Thereafter, the Centers for Medicare & Medicaid Services (CMS) placed Petitioner on its preclusion list, effective January 1, 2019, for the duration of the period that coincided with his reenrollment bar, based on its determination that the underlying conduct that led to Petitioner’s revocation was detrimental to the best interests of the Medicare program.  For the reasons stated below, I affirm CMS’s placement of Petitioner on the preclusion list.

I. Background and Procedural History

Petitioner, a physician, was enrolled as a supplier in the Medicare program.  CMS Exhibit (Ex.) 1 at 1; see Petitioner Brief (P. Br.) at 1 (reporting Petitioner is a general practitioner who is licensed to practice medicine in Kentucky).  On June 1, 2017, CGS Administrators, LLC (CGS), a Medicare administrative contractor, revoked the Medicare enrollment and billing privileges of Petitioner pursuant to 42 C.F.R. § 424.535(a)(12), effective July 1, 2017, based on his termination from the Kentucky Medicaid program.

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CMS Ex. 1 at 1.  At that time, CGS established a reenrollment bar for a period of two years, effective July 1, 2017.  CMS Ex. 1 at 2.

The letter notifying Petitioner of his revocation referenced a February 24, 2017 letter from the Kentucky Medicaid program. CMS Ex. 1 at 1. That letter explained that Petitioner’s Kentucky Medicaid provider agreement had been terminated “for violations of the Medicaid Provider Agreement.” CMS Ex. 3 at 2. Specifically, the Kentucky Medicaid program explained that the Kentucky Board of Medical Licensure (Medical Board) had issued an “Agreed Order”1 on December 5, 2016, “restricting or limiting [his] license” based on “Stipulations of Fact” that Petitioner had “engaged in conduct which violates the provisions of KRS 311-595 (9), as illustrated by KRS 311.597(3) and (4)- and KRS 311.595(10) and (13).”  CMS Ex. 3 at 1.

A “Second Amended Agreed Order”2 dated December 5, 2016, which was jointly executed by the Medical Board and Petitioner, included the following block quotation in the section pertaining to stipulations of fact:

The [Medical] Board consultant also found that [Petitioner] also committed a serious act or pattern of acts which under the attendant circumstances would be deemed to be gross negligence, in the way that controlled drugs were being prescribed in a family practice; by not maintaining medical records on patients being prescribed controlled drugs; by giving pre-signed prescription blanks to staff; by not closely monitoring nurse practitioners, nurses, and medical staff working in the office; not running [Kentucky All Schedule Prescription Electronic Reporting] reports or obtaining

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drug screens on all patients receiving prescriptions for controlled drugs; by allowing a nurse practitioner to call in phentermine for personal use; by not ensuring that a medical chart was being documented on phentermine being supplied to him by his staff; by not providing adequate leadership and guidance to nurse practitioners, nurses, and medical staff in his office; and by prescribing testosterone products for “office use” in violation of KRS 219A.180(3)(b).

CMS Ex. 3 at 6.  The Second Amended Agreed Order also discussed, in its stipulations of fact, that, in January 2015, an employee of Petitioner’s reported that Petitioner “was continuing to sign blank controlled substance prescriptions,” even though ongoing restrictions had already been imposed against Petitioner’s medical license with respect to his prescription of controlled substances. CMS Ex. 3 at 8-9; see CMS Ex. 3 at 29-32.

On August 1, 2018, CMS’s Provider Enrollment and Oversight Group issued an initial determination in which it informed Petitioner of the following:

You are being added to the CMS preclusion list effective January 1, 2019, because your Medicare billing privileges have previously been revoked and you are currently under a reenrollment bar. CMS has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program. This action is taken pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).

During the time period that your name will be included on the preclusion list as listed above, any claims you submit for health care items or services furnished under a Medicare Advantage (MA) benefit may be denied. Additionally, any pharmacy claims submitted for Medicare Part D drugs that you prescribe may be rejected or denied. This means that your patients may not be able to receive coverage of their prescriptions using their Part D benefit at the pharmacy.

CMS Ex. 2 at 1.

In a request for reconsideration dated September 27, 2018, Petitioner, through counsel, stated:

[Petitioner] disputes the propriety of his placement on the Preclusion list for at least three reasons. First, placing [Petitioner] on the Preclusion list for conduct that occurred prior to June 15, 2018, is improper. Second, even if the Preclusion List may apply retroactively, CMS has not proven that [Petitioner] meets all of the regulatory requirements for placement on same. 

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Finally, CMS has violated [Petitioner’s] due process rights by inadequately explaining how it “has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.”

CMS Ex. 4 at 1.  Petitioner submitted a supporting memorandum in which he contended that he should not have been placed on the preclusion list for conduct that occurred prior to June 15, 2018, and that he was not under a reenrollment bar as of August 1, 2018, and could therefore not be placed on the preclusion list.  CMS Ex. 4.

On January 2, 2019, the Provider Enrollment and Oversight Group issued a reconsidered determination in which it upheld Petitioner’s placement on the preclusion list, explaining that Petitioner’s “underlying conduct that led to [his] revocation . . . is extremely serious,” and he “negligently overprescribed dangerous controlled substances with disregard for safety, and as a result his Kentucky Medicaid agreement was terminated.”  CMS Ex. 5 at 4.  The letter also explained that Petitioner’s “conduct demonstrated a flagrant disregard for standards of medical practice, laws, and patient safety,” stating that “[s]uch conduct imperils the integrity of the Medicare program, and as such, is a detriment to the Medicare program.”  CMS Ex. 5 at 4. Despite Petitioner’s previous unsupported claim that he was subject to a one-year reenrollment bar (CMS Ex. 4 at 7-8), the letter reminded Petitioner that the revocation notice had informed him that he was under a two-year reenrollment bar, effective July 1, 2017.  CMS Ex. 5 at 2, 4.  The letter also explained that Petitioner’s inclusion on the preclusion list was “prospective” and that, as evidenced by his ability to seek reconsideration, he had been afforded due process.  CMS Ex. 5 at 4-5.

Petitioner filed a timely request for an administrative law judge (ALJ) hearing that the Civil Remedies Division received on February 28, 2019. On March 5, 2019, the Civil Remedies Division issued my standing pre-hearing order (Pre-Hearing Order).  CMS filed a combined pre-hearing brief and motion for summary judgment (CMS Br.), along with seven exhibits (CMS Exs. 1-7). Petitioner submitted a response to CMS’s motion for summary judgment and cross-motion for summary judgment, along with six exhibits (P. Exs. 1-6). CMS filed a response in opposition to Petitioner’s cross-motion.  As neither party has objected to any of the proposed exhibits, I admit all submitted exhibits.

Neither party has submitted written direct testimony, and it is therefore unnecessary to convene a hearing for the purpose of cross-examination of any witnesses. See Pre-Hearing Order, §§ 12-14. The record is closed, and the case is ready for a decision on the merits.3

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II. Issue

Whether CMS has a legitimate basis to place Petitioner on the preclusion list.  42 C.F.R. §§ 422.2 and 423.100.

III. Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(20), 498.5(n)(2); see also 42 U.S.C. § 1395cc(j)(8).

IV. Findings of Fact, Conclusions of Law, and Analysis4

Petitioner is a “supplier” for purposes of the Medicare program.  See 42 U.S.C. § 1395x(d); 42 C.F.R. § 400.202 (definition of supplier).  In order to participate in the Medicare program, a supplier must meet certain criteria to enroll and receive billing privileges.  42 C.F.R. §§ 424.505, 424.510.  CMS may revoke a supplier’s enrollment and billing privileges for any reason stated in 42 C.F.R. § 424.535(a); specifically, and as relevant here, CMS may revoke the enrollment of a supplier who has been terminated from a state Medicaid program. 42 C.F.R. § 424.535(a)(12). After a supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred from reenrolling in the Medicare program for one to three years.  42 C.F.R. § 424.535(c).

On July 22, 2016, the Comprehensive Addiction and Recovery Act of 2016 (CARA) was enacted, and its stated purpose was to “authorize the Attorney General and Secretary of Health and Human Services to award grants to address the prescription opioid abuse and heroin use crisis, and for other purposes.” Pub. L. No. 114-198, 130 Stat. 695 (2016).  Section 704 of the CARA called on the Secretary of the Department of Health and Human Services (Secretary) to establish a program to prevent prescription drug abuse under Medicare Parts C and D. 130 Stat. at 742-52.  Among other things, Section 704 amended the Social Security Act (42 U.S.C. § 1395w-10(c)) to require the Secretary to implement a drug management program to limit access to controlled substances for at-risk Medicare beneficiaries.  Id. at 742-48.  Section 704(g) of the CARA directed the Secretary to promulgate regulations implementing the provisions of that section of the act.  Id. at 751-52.  Section 704(g)(1) directed that “amendments made by this section shall apply to prescription drug plans . . . for plan years beginning on or after July 1, 2019.”  Id. at 751.  Additionally, Section 704(b)(2) of the CARA specifically amended the Social Security Act, at 42 U.S.C. § 1395w-104(c), to add a provision for a “utilization management tool to prevent drug abuse,” and required that the Secretary conduct a “[r]etrospective utilization review to identify . . . providers of services or suppliers that

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may facilitate the abuse or diversion of frequently abused drugs by beneficiaries.”  Id. at 748.

CMS proposed rulemaking to implement the CARA on November 28, 2017.  82 Fed. Reg. 56,336.  As relevant here, CMS proposed that an MA organization may not make payment for an item or service that is furnished by an individual or entity on a newly established preclusion list, and likewise, that a Part D plan sponsor must reject pharmacy claims for Part D drugs if the prescriber is on the same preclusion list.  Id. at 56,340.  CMS explained that individuals, entities, and prescribers would be placed on the preclusion list if certain requirements were all met, to include having engaged in conduct that is detrimental to the best interests of the Medicare program and its beneficiaries.  Id.  CMS “note[d] also that [its] proposal is of particular importance when considering the current nationwide opioid crisis” and that “the inclusion of problematic prescribers on the preclusion list could reduce the amount of opioids that are improperly or unnecessarily prescribed by persons who pose a heightened risk to the Part D program and Medicare beneficiaries.”  Id. at 56,444.  With respect to the Part C program, CMS remarked that “we believe that an appropriate balance can be achieved between this program integrity objective and the desire to reduce the burden on the provider and supplier communities” and “propose[d] to utilize the same ‘preclusion list’ concept in MA that we are proposing for Part D . . . .”  Id. at 56,448.  CMS further remarked that “[w]e believe this approach would allow us to concentrate our efforts on preventing MA payment for items and services furnished by providers and suppliers that could pose an elevated risk to Medicare beneficiaries and the Trust Funds, an approach, as previously mentioned, similar to the risk-based process in § 424.518.”  Id.  In its final rule, CMS established a January 1, 2019 effective date for the preclusion list, which is consistent with the CARA’s mandate.  83 Fed. Reg. 16,440 (Apr. 16, 2018).

Through its rulemaking, CMS established a single list of individuals and entities for whom MA plans cannot provide reimbursement for items and services they provide, and for prescribers to whom Medicare Part D plans cannot provide reimbursement for any prescriptions the individuals write.  42 C.F.R. §§ 422.222 and 423.120(c)(6).  In order for CMS to include an individual, entity, or prescriber on its preclusion list, all of the following three requirements must be met:

(i) The [individual, entity, or prescriber] is currently revoked from Medicare under [42 C.F.R.] § 424.535.

(ii) The [individual, entity, or prescriber] is currently under a reenrollment bar under [42 C.F.R] § 424.535(c).

(iii) CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination under this paragraph . . . , CMS considers the following factors:

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(A) The seriousness of the conduct underlying the . . . revocation.

(B) The degree to which the . . . conduct could affect the integrity of the [Medicare/Part D] program.

(C) Any other evidence that CMS deems relevant to its determination . . . .

42 C.F.R. §§ 422.2 and 423.100.

1. Petitioner was terminated from the Kentucky Medicaid program effective December 5, 2016. 

2. In conjunction with multi-year proceedings in which Petitioner’s license to practice medicine was restricted, to include for a more than one-year period prohibiting him from prescribing and dispensing controlled substances, Petitioner stipulated that he had provided blank pre-signed prescription slips for use by others and did not maintain records or order urine drug screens for patients who were prescribed controlled substances.

3. Based on his termination from the Kentucky Medicaid program, Petitioner’s Medicare enrollment was revoked effective July 1, 2017.

4. In conjunction with the revocation of Petitioner’s Medicare enrollment, CMS imposed a two-year reenrollment bar, effective July 1, 2017.

5. CMS determined that the conduct underlying Petitioner’s Medicare revocation was detrimental to the best interests of the Medicare program. 

6. CMS had a legitimate basis to add Petitioner to its preclusion list, effective January 1, 2019.

CMS revoked Petitioner’s Medicare enrollment effective July 1, 2017, and at that time, it imposed a two-year reenrollment bar.  CMS Ex. 1.  Petitioner did not appeal this determination, and it is final and not subject to review.  Therefore, pursuant to 42 C.F.R. §§ 422.2 and 423.100, Petitioner’s Medicare enrollment and billing privileges were revoked and he was subject to a reenrollment bar through July 1, 2019.  As such, the first two requirements for inclusion on the preclusion list are met.  42 C.F.R. §§ 422.2, 423.100.

As for the third requirement listed in 42 C.F.R. §§ 422.2 and 423.100, CMS determined that Petitioner’s conduct underlying his revocation was detrimental to the best interests of the Medicare program.  CMS Exs. 2 at 1; 5 at 4.  The CMS hearing officer provided the following discussion in the reconsidered determination:

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[Petitioner]’s Kentucky Medicaid agreement was terminated as a result of the restrictions on his medical license, which he agreed to with the [Medical Board].  [Petitioner] entered into three agreed orders as a result of his conduct of overprescribing controlled substances and stimulants. He not only overprescribed to patients, but also to Kentucky All Schedule Prescription Electronic Reporting (KASPER) delegates and their family members. He provided blank, pre-signed prescription slips for his advance practice registered nurse (APRN) who used them to prescribe to her husband and children, among others.

The [Medical Board] consultant who investigated [Petitioner]’s conduct found him to be grossly negligent in the manner in which he prescribed drugs in a family practice.  [Petitioner] was found to have done the following:

He failed to keep proper logs on medications prescribed, specifically controlled substances prescribed to patients; he overprescribed Schedule II controlled substances and stimulants to patients; he failed to run a KASPER, Kentucky All Schedule Prescription Electronic Reporting, reports or conduct urine drug screenings on patients for whom he prescribed controlled substances; and he failed to ensure medical charts were . . . documenting phentermine being supplied to his staff (see Exhibit 1).

The underlying conduct that led to [Petitioner]’s revocation, under § 424.535(a)(12), is extremely serious.  He negligently overprescribed dangerous controlled substances with disregard for safety, and as a result his Kentucky Medicaid agreement was terminated.  His conduct demonstrated a flagrant disregard for standards of medical practice, laws, and patient safety.  Such conduct imperils the integrity of the Medicare program, and as such is a detriment to the Medicare program.

CMS Ex. 5 at 4.  With respect to the third element, that Petitioner’s underlying conduct was detrimental to the best interests of the Medicare program and its beneficiaries, Petitioner does not dispute this determination and, therefore, concedes that this requirement is met.  Further, I agree with CMS that Petitioner’s “grossly negligent” prescribing practices, which was the conduct that led to his revocation, was detrimental to the best interests of the Medicare program and its beneficiaries. In fact, Petitioner’s conduct is exactly the type of conduct that CMS sought to address through its creation of a preclusion list in response to Congress’s directive to implement a program to prevent prescription drug abuse under Medicare Parts C and D.  See 82 Fed. Reg. at 56,444 (noting that the preclusion list “could reduce the amount of opioids that are improperly or

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unnecessarily prescribed by persons who pose a heightened risk to the Part D program and Medicare beneficiaries”).

Rather than arguing that his placement on the preclusion list is not warranted based on any of the three of the requirements listed in sections 422.2 and 423.100, Petitioner argues that CMS violated his due process rights by failing to provide adequate reasons for placing him on the preclusion list when it issued the initial determination on August 1, 2018.  P. Br. at 7-9; see CMS Ex. 2. However, CMS plainly explained that it had determined that “the underlying conduct that led to [his] revocation is detrimental to the best interests of the Medicare program” (CMS Ex. 2 at 1), and Petitioner does not identify any requirement in either section 422.2 or 423.100 requiring CMS to include a threshold level of detail in an initial determination, particularly when the conduct is so plainly detrimental to the best interests of the Medicare program and its beneficiaries (involving the negligent prescribing of controlled substances resulting in three separate consent orders, significant restrictions on Petitioner’s medical license, and leading to termination of a state Medicaid provider agreement).5 But assuming, for the sake of this discussion, that it was not plainly apparent to Petitioner why his underlying conduct was detrimental to the best interests of the Medicare program and its beneficiaries, CMS provided substantial detail regarding this prong in its reconsidered determination, and Petitioner had the benefit of this explanation when he filed his request for hearing.  CMS Ex. 5 at 4; see 42 C.F.R. § 498.3(b)(20).  In fact, CMS simply stated the obvious when it explained that Petitioner’s underlying conduct was “extremely serious” because he “negligently overprescribed dangerous controlled substances with disregard for safety.”  CMS Ex. 5 at 4.  To the extent that Petitioner argues that he was denied due process because he somehow did not know that his conduct could be detrimental to the best interests of the Medicare program and its beneficiaries, he displays a lack of recognition of the gravity of his misconduct or its potential contribution to the very opioid crisis that CMS is attempting to combat through its preclusion list.  Petitioner has not shown any error by CMS, much less a prejudicial error.6 Petitioner “demonstrated a flagrant disregard for standards of medical practice, laws, and patient safety,” and the fact that his conduct “imperil[ed] the integrity of the Medicare program” is plainly evident.  CMS Ex. 5 at 4.

Finally, Petitioner contends that his placement on the preclusion list had an impermissible retroactive effect.  P. Br. at 3-6.  Petitioner argues that his enrollment was “revoked effective July 1, 2017, based upon conduct that occurred even earlier,” and that “Federal law makes it clear that [he] may not be placed on the Preclusion List for events that

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occurred before the Preclusion List’s effective date of June 15, 2018.”  P. Br. at 4.  Petitioner argues that the preclusion list was “not in effect at the time of the conduct underlying this matter.”  P. Br. at 4.  Petitioner contends that his placement on the preclusion list “increased his liability for past conduct and attaches new legal consequences to events completed before the enactment of 42 [C.F.R.] § 422.2.”  P. Br. at 6.  First, I note that I am not empowered to reverse Petitioner’s placement on the preclusion list on this basis, as an ALJ “is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground . . . .”.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009).  As such, my review is limited to whether the aforementioned three requirements for inclusion on the preclusion list are met pursuant to 42 C.F.R. §§ 422.2 and 423.100.  Nonetheless, I note that even if placement on the preclusion list had a retroactive effect, which I do not find, Congress contemplated that the Secretary’s promulgated regulations would have retroactive implications; in fact, Section 704(b) of the CARA required the Secretary to develop a tool to identify “providers of services or suppliers that may facilitate the abuse or diversion of frequently abused drugs by beneficiaries.”  130 Stat. 695, 748 (2016).  It would make little sense for Congress, which had passed the CARA with the specific goal of combatting the opioid crisis, to require the Secretary to develop means to identify problematic providers and suppliers (based on their past conduct) without implementing the means to address providers and suppliers such as Petitioner who are irresponsible prescribers of controlled substances.  See, e.g., Landgraf v. USI Film Prods., 511 U.S. 244, 270 (1994) (presumption that statutes do not apply retroactively unless Congress made clear its intent); Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (“a statutory grant of legislative rulemaking authority, will not, as a general matter, be understood” to authorize retroactive rulemaking unless provided by Congress).

V.  Conclusion

For the reasons explained above, I affirm CMS’s determination placing Petitioner on the preclusion list.

• 1. The Kentucky Medicaid program’s reference to an “Agreed Order” is to a “Second Amended Agreed Order,” which Petitioner jointly executed with the Medical Board in November 2016 that allowed him to resume prescribing and dispensing controlled substances under a restricted and limited medical license. CMS Ex. 3 at 3-13. The Medical Board filed this document on December 5, 2016. CMS Ex. 3 at 3.
• 2. Petitioner initially executed an “Agreed Order of Indefinite Restriction” in July 2014, at which time he agreed to restrictions on his ability to prescribe controlled substances. CMS Ex. 3 at 24-32. After Petitioner did not comply with the requirements of the Agreed Order of Indefinite Restriction, he entered into an “Amended Agreed Order of Indefinite Restriction” in July 2015, at which time his medical license was restricted such that he was no longer authorized to prescribe or dispense controlled substances. CMS Ex. 3 at 14-23. “After a year passed and [Petitioner] maintained compliance with the Amended Agreed Order of Indefinite Restriction, the Medical Board chose to allow [Petitioner] to resume the prescribing and dispensing of controlled substances pursuant to the terms and condition[s] set forth in [the] Second Amended Agreed Order.” CMS Ex. 3 at 9.
• 3. Because the parties have not identified any witnesses and a hearing is unnecessary, I need not address whether summary judgment is appropriate.
• 4. My numbered findings of fact and conclusions of law are set forth in italics and bold font.
• 5. I note that Petitioner, through counsel, argued in his request for reconsideration that he should not have been added to the preclusion list based solely on his mistaken belief that he was subject to only a one-year revocation bar. CMS Ex. 4 at 7-8; see CMS Ex. 1 at 2.
• 6. In fact, in his brief Petitioner does not dispute that any of the three requirements for placement on the preclusion list are met.