Lilia Gorovits, M.D., DAB CR5936 (2021)

DECISION

For the third time, Petitioner, Lilia Gorovits, M.D., challenges a federal determination that precludes her from participating in the Medicare program.  She is a physician, licensed to practice in Pennsylvania, who was convicted of obstructing a criminal investigation of health care offenses – a felony.  Based on that conviction, the Inspector General (IG) for the Department of Health and Human Services excluded her from participating in federal health care programs.  Following her period of exclusion, the IG reinstated her Medicare eligibility.  However, the Centers for Medicare and Medicaid Services (CMS) then revoked her Medicare enrollment and imposed a three-year re-enrollment bar.  Petitioner unsuccessfully appealed both determinations.  

Petitioner recently applied to reenroll in the Medicare program but, because of her felony conviction, CMS has denied her application and placed her on the Medicare “Preclusion List.”  Petitioner now challenges these actions.  

I find that CMS is authorized to deny Petitioner Gorovits’s enrollment application and to place her on the Preclusion List because, within the ten years preceding her filing the application, she was convicted of a felony that CMS reasonably determined is detrimental 

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to the best interests of the Medicare program and its beneficiaries. I therefore affirm CMS’s determinations.

Background

By letter dated October 19, 2020, the Medicare contractor, Novitas Solutions, denied Petitioner Gorovits’s application for enrollment in the Medicare program.  CMS Ex. 4 at 5-7.  The contractor based its denial on 42 C.F.R. § 424.530(a)(3), citing Petitioner’s March 11, 2016 felony conviction for obstruction of criminal investigations of health care offenses.  The letter explained that CMS determined that Petitioner’s felony conviction is detrimental to the best interests of the Medicare program and its beneficiaries.  The letter further advised Petitioner that, pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6), she would be placed on the CMS Preclusion List because, within the preceding ten years, she had been convicted of a felony that CMS deems detrimental to the best interests of the Medicare program.  CMS Ex. 4 at 5-6.

Petitioner requested reconsideration.  CMS Ex. 2.  In a reconsidered determination, dated February 26, 2021, a CMS hearing officer upheld CMS’s determination.  The hearing officer concluded that the enrollment denial was appropriate because, within the preceding ten years, Petitioner was convicted of a felony offense that CMS determined is “detrimental to the best interests of the Medicare program and its beneficiaries.”  She also concluded that Petitioner’s conviction “forms an appropriate basis for Petitioner’s inclusion on the CMS Preclusion List.”  CMS Ex. 1.  

Petitioner appealed.

The parties have filed cross-motions for summary judgment.  CMS proposes no witnesses.  Petitioner lists one witness, herself, and provides her written declaration.  However, CMS has not asked to cross-examine her.  See Acknowledgement and Pre-hearing Order at 5 (¶ 9).  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

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CMS has submitted its motion and brief (CMS Br.), along with ten exhibits (CMS Exs. 1-10).  Petitioner has submitted her own motion and brief with ten exhibits (P. Exs. A-J).  In the absence of any other objections, I admit into evidence CMS Exs. 1-10 and P. Exs. A-J.

Discussion

CMS may deny Petitioner enrollment in the Medicare program and may include her on the CMS Preclusion List because, within the ten years preceding her enrollment application, she was convicted of a felony 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

The Medicare Program.  The Medicare program, Title XVIII of the Social Security Act (Act), is a federally-subsidized insurance program that provides health care benefits to the elderly, disabled, and those suffering from end stage renal disease.  Medicare is divided into four parts:  

• Part A is the hospital insurance program.  It covers hospital services, post-hospital extended care, home health, and hospice care.  Act § 1811 (42 U.S.C. § 1395c);
• Part B, which is voluntary, is the supplementary medical insurance program, covering physician, home health, hospice, and other services.  Act § 1832 (42 U.S.C. § 1395k);
• Part C is the Medicare Advantage program, which allows its participants to enroll in “Medicare + Choice” plans, managed by organizations, such as health maintenance organizations, that receive a fixed payment for each enrollee.  Act § 1851 (42 U.S.C. § 1395w-21); and 
• Part D is the voluntary prescription drug benefit program.  Act § 1860D (42 U.S.C. § 1395w-101). 

The Medicare program is administered by CMS, acting on behalf of the Secretary of Health and Human Services.  CMS contracts with Medicare administrative contractors, who process and pay reimbursement claims and perform other duties necessary to carry out program purposes.  Act § 1842 (42 U.S.C. § 1395u). Contractors pay claims to “providers” (Part A) and “suppliers” (Part B). Physicians, such as Petitioner, may participate in the program as “suppliers” of services; however, they must enroll in the program in order to receive Medicare payments.  Act §§ 1861(d), (q), (r) (42 U.S.C. §§ 1395x(d), (q), (r)); 42 C.F.R. §§ 400.202; 424.505.

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Enrollment denial.  CMS may deny a provider’s or supplier’s enrollment in the Medicare program if, within the preceding ten years, she 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) and 1866(b)(2)(D).  

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 felonies “outlined in section 1128 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 healthcare item or service; crimes relating to health care fraud; crimes relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance; and convictions relating to the obstruction of an investigation or audit.  See 42 C.F.R. §§ 1001.101, 1001.301.

So long as the regulatory elements required for denial of enrollment under section 424.530(a) are present, 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. 

The Preclusion List.  Effective January 1, 2019, CMS implemented a “preclusion list” as part of its effort to “prevent fraud, waste, and abuse, and to protect Medicare enrollees,” particularly with respect to prescription drug abuse.3   Pursuant to 42 C.F.R. § 422.2 (Part C) and 42 C.F.R. § 423.100 (Part D), CMS’s “preclusion list” includes (in relevant part) individuals, entities, and prescribers that have, within the previous ten years, been convicted of a felony under federal or state law that CMS deems detrimental to the best interests of the Medicare program.  Factors CMS considers in making its determination include:  the severity of the offense; when the offense occurred; and any other information that CMS deems relevant to its determination.  42 C.F.R. §§ 422.2; 423.100 (definition of “Preclusion List.”).

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Petitioner’s felony offense.  On March 11, 2016, Petitioner Gorovits was convicted of one felony count of obstruction of criminal investigations of health care offenses, in violation of 18 U.S.C. § 1518.  CMS Ex. 9 at 5-15; see Lilia Gorovits, M.D., DAB CR4825 at 3 (2017); Lilia Gorovits, M.D., P.C., DAB No. 2985 (2020), aff’d Gorovits v. Becerra, No. 20-1850, slip op. (E.D. Pa. 2021).

The IG exclusion.  Based on her felony conviction, the IG excluded Petitioner from participating in all federal health care programs for a period of two years pursuant to section 1128(b)(2) of the Act.  CMS Ex. 3 at 24-25; P. Ex. E at 1-2.  Section 1128(b)(2) allows the IG to exclude from program participation “[a]ny individual or entity that has been convicted, under Federal or State law, in connection with the interference with or obstruction of any investigation” into any criminal “offense described in § 1001.101 [mandatory exclusions] or § 1001.201 [permissive exclusions].”  42 C.F.R. § 1001.301(a); see also Act §§ 1128(a), (b).  Criminal offenses described in section 1001.101, which echoes section 1128(a) of the Act, include those 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.  42 C.F.R. § 1001.101(c)(1).  

Petitioner appealed the exclusion, and, in a decision dated April 11, 2017, an administrative law judge affirmed the two-year exclusion.  Lilia Gorovits, M.D., DAB CR4825.  Petitioner did not further appeal, so that decision is final and binding.  42 C.F.R. § 1005.20(d).  

Two years passed, and Petitioner requested reinstatement.  In a letter dated March 7, 2019, the IG approved her request and recommended that she contact her Medicare contractor to determine her options for participating in the program.  P. Ex. E at 3.

The CMS revocation.  Contrary to regulatory requirements, Petitioner Gorovits did not notify CMS that she had been convicted or excluded.  Gorovits v. Becerra, No. 20-1850 at 3; see 42 C.F.R. § 424.516(d)(1)(ii) (requiring Medicare physicians to notify their Medicare contractors, within 30 days, of any adverse legal action).  After the Medicare contractor learned of the exclusion, it revoked Petitioner’s Medicare enrollment, retroactive to March 11, 2016, the date of her conviction, as authorized by 42 C.F.R. § 424.535(g), ultimately basing the revocation on:

• 42 C.F.R. § 424.535(a)(2), which authorizes revocation when a supplier has been excluded from health care programs under section 1128 of the Act; 
• 42 C.F.R. § 424.535(a)(9), which authorizes revocation for failing to report an IG exclusion; and 
• 42 C.F.R. § 424.535(a)(3), which authorizes revocation when, within the preceding ten years, a supplier has been convicted of a felony offense that CMS 

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“has determined to be detrimental to the best interests of the program and its beneficiaries.”

CMS also imposed a three-year reenrollment bar, which is authorized by 42 C.F.R. § 424.535(c).  CMS Ex. 3 at 29-30; CMS Ex. 5; CMS Ex. 7 at 2, 4-5; P. Ex. F; Gorovits v. Becerra, No. 20-1850 at 4.  

Petitioner appealed.  In a series of decisions, an administrative law judge, the Departmental Appeals Board, and the Federal District Court for the Eastern District of Pennsylvania upheld the revocation. Lilia Gorovits, M.D., P.C., DAB CR5076 (2018); Lilia Gorovits, M.D., P.C., DAB No. 2985 (2020); Gorovits v. Becerra, No. 20-1850.

Petitioner’s reenrollment application.  In an application filed on September 21, 2020, Petitioner applied for reenrollment in the Medicare program.  CMS Ex. 3 at 120-127.  She disclosed her felony conviction, her exclusion, suspension of her Medical license (since reinstated), and the revocation. CMS Ex. 3 at 123.

That, within the preceding ten years, Petitioner was convicted of a felony that CMS determined is detrimental to the best interests of the Medicare program and its beneficiaries has already been finally determined.  As CMS points out, although different regulations govern (42 C.F.R. § 424.530(a)(3) governs denial of enrollment; 42 C.F.R. § 424.535(a)(3) governs revocation of enrollment), the same standard – that, within the preceding ten years, she was convicted of a felony offense that CMS “has determined to be detrimental to the best interests of the program and its beneficiaries” – applies to an enrollment revocation and to the denial of enrollment.  CMS Br. at 8 n.1. 

Thus, for the same reasons the Departmental Appeals Board and the District Court affirmed CMS’s determination to revoke Petitioner’s Medicare enrollment, I affirm CMS’s determination to deny her reenrollment. For the same reasons the Board and the District Court rejected Petitioner’s arguments that her conviction did not meet the “detrimental standard,” I reject those arguments. 

In its opinion, the District Court set forth the facts underlying Petitioner’s felony conviction and CMS’s determination to revoke her Medicare billing privileges:  

From 2002 to 2008, Petitioner Gorovits referred patients to Home Care Hospice to receive end-of-life care.  While her patients were receiving the hospice care, she conducted home visits.  Home Care paid her $100 per visit, totaling approximately $9,000 over six years.  Gorovits v. Becerra, No. 20-1850 at 2 (CMS Ex. 8 at 2).  

In May 2011, responding to questions from federal investigators, Petitioner falsely denied receiving any payments from Home Care.  Because she lied to federal investigators, she was charged with obstruction of a criminal investigation of health care offenses, in

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violation of 18 USC § 1518.  Id.  She pleaded guilty to the charge, admitting that she had lied in order “to mislead federal criminal investigators who were examining the practice of [a hospice] paying kickbacks to medical professionals, including herself, for referrals of Medicare and Medicaid eligible patients for hospice care services.”  Id. at 3 (CMS Ex. 8 at 3) (quoting guilty plea agreement) (emphasis added).

In upholding CMS’s determination to revoke Petitioner’s billing privileges, the Court noted that, although the regulation lists enumerated crimes that meet the definition of “detrimental to the interests of Medicare” (murder, rape, financial crimes), that list is not exclusive or limited.  CMS has broad discretion in determining what crimes are sufficiently detrimental to Medicare and its beneficiaries.  Gorovits v. Becerra, No. 20-1850 at 7-8, 9-10 (CMS Ex. 8 at 7-8, 9-10) (citing Sunsites-Pearce Fire Dist. v. Azar, 2020 WL 3971401 at 8 (D. Ariz. 2020)); see Gorovits, DAB No. 2985 at 10-11 (CMS Ex. 7 at 10-11).

As the Court noted, Petitioner’s conviction “was not merely for obstructing an investigation,” it was for obstructing an investigation into healthcare offenses, specifically, anti-kickback violations.  Petitioner’s conduct undermined trust in the Medicare program, which relies on the veracity and compliance of its providers.  She lied to federal investigators who were trying to determine the extent of anti-kickback violations and lied regarding her own criminal behavior.  Gorovits v. Becerra, No. 20-1850 at 8 (CMS Ex. 8 at 8); see Gorovits, DAB No. 2985 at 12-13 (CMS Ex. 7 at 12-13); CMS Ex. 9 at 50-51.  The Court concluded that “[b]ecause the underlying facts of [Petitioner’s] conviction” include “her deceit to federal investigators about her own receipt of kickbacks, the determination that [her] conviction was detrimental to the best interests of the Medicare program and its beneficiaries was supported by substantial evidence.”  Gorovits v. Becerra, No. 20-1850 at 8-9 (CMS Ex. 8 at 8-9); see Gorovits, DAB No. 2985 at 12-13 (CMS Ex. 7 at 12-13).  

The Court also pointed out that Petitioner’s offense supported a permissive exclusion from the Medicare program, under section 1128(b)(2) of the Act.  “Even as only a permissive exclusion, the fact that [Petitioner’s] offense resulted in her exclusion from Medicare is a relevant fact as to whether her billing privileges should also be revoked because of her conviction.”  Gorovits v. Becerra, No. 20-1850 at 10 (CMS Ex. 8 at 10).  

Thus, CMS justifiably determined that, within the ten years preceding her enrollment application, Petitioner was convicted of a felony detrimental to the best interests of the Medicare program and its beneficiaries and, based on this determination, may deny her enrollment in the Medicare program.  

For similar reasons, CMS justifiably placed Petitioner on the Preclusion List.  Although Petitioner claims that she understands the severity of her offense, at the same time, she attempts to trivialize it, arguing that it was “not nearly as severe” as other offenses.  P. 

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Br. at 9-10.  Petitioner seems to concede that accepting kickbacks is a severe offense, but claims that the record does not reflect that she illegally received kickbacks.  P. Br. at 10.  This is not so.  Although she was not convicted under the Anti-Kickback statute, in pleading guilty to obstruction, she admitted that she had “falsely denied being offered money from [Home Care] and falsely denied receiving money from [Home Care] to refer Medicare and Medicaid beneficiary patients to [Home Care] for hospice services.”  CMS Ex. 9 at 4-5 (emphasis added).  Further, as the District Court pointed out, in her plea agreement, she admitted that Home Care paid “kickbacks to medical professionals, including herself, for referrals of Medicare and Medicaid eligible patients for hospice services.”  CMS Ex. 9 at 10 (emphasis added); see CMS Ex. 8 at 3; see CMS Ex. 9 at 26 (per prosecutor:  “the offense conduct in this case involved the defendant accepting kickback payments in exchange for referrals to Home Care Hospice.”); id. at 28 (defense adopting “everything [the prosecutor] said.”).

No doubt many crimes are more severe than Petitioner’s, but the regulations do not limit the Preclusion List to those convicted of the most heinous offenses.  The critical question is whether the crime is deemed detrimental to the best interests of the Medicare program and its beneficiaries.  As the above discussion establishes, Petitioner’s offense was seriously detrimental.  The Sentencing judge said as much when he imposed Petitioner’s sentence:  

This was a cesspool of corruption.  And not only those folks who were indicted, but many who came here to testify and were at the periphery of the fraud, knew about it, accepted it, participated in it and went along with it.

It also betrayed the trust that is vested in all of those who perform services and then bill the Government. And as it is too obvious . . . the fraud committed in this case significantly undermined the public’s trust and respect in an important public service, so we have to take that into account

CMS Ex. 9 at 50-51.

Petitioner also points out that her crime occurred a long time ago, and, in determining whether to add someone to the preclusion list, CMS must consider when the offense occurred.  P. Br. at 9.  This is true. However, because her conviction occurred less than five years prior to her placement on the Preclusion List, CMS’s action is well within the ten-year regulatory time period.  And, given the seriousness of her misconduct – that she betrayed the trust vested in her – CMS could reasonably determine that its detrimental effects on the program and its beneficiaries outweigh any remoteness in time.  CMS is therefore authorized to place Petitioner on the Medicare Preclusion List. 

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Finally, I have no authority to review Petitioner’s constitutional challenges, nor to grant equitable relief. Funmilola Mary Taiwo, DAB No. 2995 at 9-10 (2020); W. Scott Harkonen, M.D., DAB No. 2485 at 22 (2012); Salvacion Lee, M.D., DAB No. 1850 (2002).

Conclusion

CMS is authorized to deny Petitioner Gorovits’s enrollment application and to place her on the Preclusion List because, within the ten years preceding her filing the application, she was convicted of a felony that CMS reasonably determined is detrimental to the best interests of the Medicare program and its beneficiaries.  I therefore affirm CMS’s determinations.

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. 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.”).
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2. I make this one finding of fact/conclusion of law.
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3. Apparently, CMS considered requiring Medicare enrollment for all providers and suppliers of Medicare Advantage services and subscribers of Part D drugs but, ultimately, opted for a preclusion list instead. CMS concluded that the burden of requiring Medicare enrollment for hundreds of thousands of additional providers, suppliers, and prescribers would be too great and would threaten beneficiary access to prescriptions and services. See 82 Fed. Reg. at 56442, 56448 (November 28, 2017); 83 Fed. Reg. 16646 (April 16, 2018).
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