Robert J. Aquino, M.D., DAB CR5620 (2020)

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, National Government Services (NGS), denied the July 2019 application of Petitioner, Robert J. Aquino, M.D., to enroll in the Medicare program based on his May 2012 felony conviction for conspiracy to commit bribery.  CMS upheld the determination.  I affirm the denial of Petitioner's enrollment application.

I.  Background and Procedural History

Petitioner is a family medicine physician who practices in New York.  CMS Ex. 4 at 2-3.  On May 1, 2012, Petitioner was convicted, based on a guilty plea, for his role in a conspiracy to bribe a New York state senator, as charged in Count 4 of a federal

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indictment.  CMS Ex. 9 at 2, 8, 18-21.1  Petitioner's sentence included four months of incarceration.  CMS Ex. 9 at 3.

At the time of Petitioner's conviction, he had been enrolled as a supplier in the Medicare program.  In April 2016, NGS revoked Petitioner's Medicare enrollment and billing privileges, pursuant to, inter alia, 42 C.F.R. § 424.535(a)(3), based on his felony conviction.  CMS Ex. 13 at 1.

In a decision issued on August 4, 2017, Administrative Law Judge (ALJ) Scott Anderson upheld Petitioner's revocation pursuant to 42 C.F.R. § 424.535(a)(3).  Robert J. Aquino, M.D., DAB No. CR4910 (2017); see CMS Ex. 6.  Judge Anderson explained that Petitioner "was convicted of the felony offense within the preceding 10 years."  Id. at 6; CMS Ex. 6 at 6.  Judge Anderson also explained the following:

Petitioner does not dispute that he was convicted of the felony of conspiracy to commit bribery.  Further, the conspiracy involved bribing an elected official to improperly influence New York State to permit Parkway Hospital to remain open.  It is significant that Petitioner purchased Parkway Hospital and that Petitioner considered his ownership of the hospital to be "proprietary."  It is immaterial that the bribed official was unsuccessful and "Dr. Aquino did not ultimately gain as a result of the payments to Adex."  Petitioner paid money to an elected official expecting that his business would remain open despite the findings of a state commission to close it.  Thus, this conviction constitutes a financial crime within the meaning of section 424.535(a)(3)(ii)(B).

Id. at 7; CMS Ex. 6 at 7 (internal citations omitted).  Judge Anderson also determined that "Petitioner was convicted of a felony detrimental to the best interests of the Medicare program and its beneficiaries."  Id. at 6; CMS Ex. 6 at 6.  Petitioner did not appeal this decision.

On July 10, 2019, Petitioner submitted an application to re-enroll in the Medicare program (CMS Ex. 10), and a corrected version of that application on July 22, 2019.  CMS Ex. 4.  NGS issued an initial determination on September 18, 2019, in which it denied Petitioner's enrollment application pursuant to 42 C.F.R. § 424.530(a)(3), based on his May 2012 felony conviction.  CMS Ex. 3 at 1.

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Petitioner submitted a combined corrective action plan and request for reconsideration that was received on October 15, 2019.  CMS Ex. 2; see CMS Ex. 1 at 1 (CMS's report of the date of receipt).  Petitioner reported that he "is no longer on the sanctions lists" and that his three-year re-enrollment bar was no longer in effect.  CMS Ex. 2 at 2-3.  However, Petitioner did not otherwise allege that CMS had misapplied 42 C.F.R. § 424.530(a)(3) when it denied his enrollment application.  CMS Ex. 2 at 2-3.  Petitioner submitted additional correspondence via email between October 20 and 29, 2019.  CMS Ex. 8.

On December 4, 2019, CMS's Provider Enrollment & Oversight Group issued a reconsidered determination in which it upheld the denial of Petitioner's enrollment application pursuant to 42 C.F.R. § 424.530(a)(3).  CMS Ex. 1 at 1.  CMS explained:

Under 42 C.F.R. § 424.530(a)(3), CMS may deny a provider or supplier's enrollment into the Medicare program if the provider or supplier was, within the preceding 10 years, convicted of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.  Certain financial crimes are enumerated as per se detrimental to the best interests of the Medicare program and its beneficiaries under § 424.530(a)(3)(i)(B), including, but not limited to extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was convicted . . .  Section 424.530(a)(3)(i) specifically states that CMS's authority is not limited in scope or severity to the listed crimes, and thus CMS finds that Dr. Aquino's May 1, 2012 felony conviction for conspiracy to commit bribery is akin to the enumerated crimes referenced in § 424.530(a)(3)(i)(B).

In addition, CMS finds that Dr. Aquino's felony conviction is detrimental to the best interests of the Medicare program and its beneficiaries based on the facts and circumstances surrounding his conviction.  Dr. Aquino's felony conviction involves him conspiring with others to bribe an elected official to allow Parkway Hospital (owned by Dr. Aquino at the time), to remain open by paying or causing to be paid, upwards of $20,000 into bank accounts established for the benefit of the elected official . . . The conduct occurred from 2006 through 2011.  The elected official, Senator Carl Kruger, advocated on behalf of Parkway Hospital with an official in the New York State executive branch with oversight responsibilities for New York hospitals. Dr. Aquino's conduct calls into question his integrity, his ability and willingness to abide by the rule of law, as well as does it reflect negatively on his ethics and professionalism as a physician.  Payment under the Medicare program is made for claims submitted in a manner that relies upon the trustworthiness and best judgment of our Medicare partners.  Dr.

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Aquino's felony conviction indicates to CMS that Trust Funds may be at risk if Dr. Aquino participates in the Medicare program, even if he is not directly involved in billing.  It necessarily follows that risk to the Trust Funds is a detriment to beneficiaries.  Therefore, CMS finds that Dr. Aquino's felony conviction is detrimental to the best interests of the Medicare program and its beneficiaries.  For the reasons stated above, CMS finds that the denial of Dr. Aquino's Medicare enrollment under 42 C.F.R. § 424.530(a)(3) is appropriate.

CMS Ex. 1 at 2-3 (internal citation omitted).

Petitioner, through counsel, filed a request for hearing on February 4, 2020.  The following day, the Civil Remedies Division acknowledged receipt of Petitioner's request for hearing and issued my Standing Pre-Hearing Order (Pre-Hearing Order).  The Pre-Hearing Order directed 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 combined brief and motion for summary judgment (CMS Br.), along with fifteen proposed exhibits (CMS Exs. 1-15).  Petitioner submitted a pre-hearing brief in opposition to the motion for summary judgment (P. Br.) and one proposed exhibit.2  In the absence of any objections, I admit CMS Exs. 1-15 and P. Ex. 1 into the evidentiary record.

Neither party has submitted the sworn and written direct testimony of any witnesses; therefore, a hearing is unnecessary for the purpose of cross-examination of any witnesses.  Pre-Hearing Order §§ 12-14.  Because an in-person hearing is unnecessary, I need not rule on CMS's motion for summary judgment.  I issue this decision on the merits.

II.  Issue

Whether CMS has a legitimate basis to deny Petitioner's Medicare enrollment application pursuant to 42 C.F.R. § 424.530(a)(3) based on his May 2012 felony conviction for conspiracy to commit bribery.

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III.  Jurisdiction

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

IV.  Findings of Fact, Conclusions of Law, and Analysis3

As a physician, 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).

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 [C.F.R. §] 1001.2) of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.

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

*  *  *

(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 C.F.R. § 424.530(a)(3)(i)(B).

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).  CMS may exercise its discretion to deny enrollment when it determines that a felony offense committed by a

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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 sub nom. Fayad v. Sebelius, 803 F.Supp. 2d. 699, 704 (E.D. Mich. 2011).  A supplier who has been denied enrollment has a right to an ALJ hearing and Departmental Appeals Board (DAB) review.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2)-(3).

1. On May 1, 2012, a federal judge imposed judgment based on Petitioner's guilty plea to the offense of conspiracy to commit bribery.

2. On April 29, 2016, Petitioner's enrollment in the Medicare program was revoked based on his criminal conviction, and an ALJ upheld that determination in August 2017.

3. Petitioner applied to re-enroll in the Medicare program in July 2019.

4. Petitioner's May 2012 conviction is for a felony offense.

5. Petitioner's conviction occurred within the 10 years preceding his July 2019 enrollment application.

6. Petitioner's felony offense of conspiracy to commit bribery is a financial crime.

7. CMS has determined that felony financial crimes are detrimental to the best interests of the Medicare program and its beneficiaries.

8. NGS and CMS had a legitimate basis to deny Petitioner's enrollment application pursuant to 42 C.F.R. § 424.530(a)(3)(i)(B) because he has a felony conviction for a financial crime within the 10 years preceding the submission of his enrollment application.

Petitioner was convicted of conspiracy to commit bribery of an elected official, which is a federal felony offense.  CMS Ex. 9 at 2; see CMS Ex. 9 at 18-21 (Count 4 of the indictment).  The indictment charged that Petitioner "caused Parkway Hospital to pay $20,000" as a bribe to a state senator.  CMS Ex. 9 at 21.  Petitioner's criminal conduct of conspiracy to commit bribery involved his payment of money to influence an elected official.  Petitioner does not dispute that his criminal offense is a financial crime.  P. Br. at 2.

Petitioner argues that his crime is not detrimental to the best interests of the Medicare program and its beneficiaries.  P. Br. at 2 ("When examining the totality of the present situation with the novel coronavirus pandemic ("COVID-19") and Dr. Aquino's ability to help with the same, as well as the circumstances behind the Conviction, it is clear that

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[Petitioner's] reenrollment would not be detrimental to the best interests of the Medicare program, and, more importantly, its beneficiaries — Dr. Aquino's patients, whom [sic] desperately request his assistance during these troubling times.").  However, the DAB, in the context of a revocation, has explained that "if the felony offense on which the revocation is based is similar to one of the financial crimes named in section 424.535(a)(3)(ii)(B), then that offense is necessarily one that CMS has determined to be detrimental to Medicare, and the revocation must be upheld (assuming that all other regulatory conditions for revocation are met)."  Cornelius M. Donohue, DPM, DAB No. 2888 at 5 (2018).  Citing Letantia Bussell, M.D., DAB No. 2196 at 9-10 (2008), the Board has explained, also in the context of  42 C.F.R. § 424.535(a)(3)(ii)(B),4 that "the categories of offenses such as 'financial crimes' are those that CMS has determined by rulemaking to be detrimental to the Medicare program as a matter of law."  Michael Scott Edwards, OD, & M. Scott Edwards, OD, PA, DAB No. 2975 at 9 (2019).  There is no doubt that a conspiracy to commit bribery, in which money was paid to influence an elected official, is a financial crime as contemplated by section 424.530(a)(3)(i)(B).  See, e.g., Francis J. Cinelli, Sr., D.O., DAB No. 2834 at 8 (2017) ("CMS may revoke Medicare billing privileges under the authority of section 424.535(a)(3) based on any financial crime, regardless of whether it is one of the crimes enumerated in the regulation's illustrative list of financial crimes.") (internal citations omitted and emphasis in original).

Further, section 424.530(a)(3)(i)(B) does not afford an ALJ the discretion to reverse CMS's determination in such an instance.  Petitioner is correct that the application of section 424.530(a)(3) is "permissive" (P. Br. at 4); however, the discretion is solely with CMS, and not the ALJ or the DAB.  See Pa. Physicians, P.C., DAB No. 2980 at 6 (2019) (stating that CMS is not required "to weigh circumstances besides the timing and nature of a felony conviction (such as the supplier's good behavior during a post-conviction period of enrollment) in deciding whether to revoke a supplier's billing privileges."); see also Robert J. Tomlinson, M.D., DAB No. 2916 at 5 (2018) ("So long as an ALJ finds that CMS has shown that one of the regulatory bases for denying a supplier's Medicare enrollment application set out in the reconsideration determination exists, the ALJ (and the [DAB] on appeal) may not refuse to apply the regulation and must uphold the denial.").  The DAB has further explained that the "authority to balance equitable considerations with risks to the program and beneficiaries rests with CMS, while [the DAB's] role is to evaluate if CMS's action is legally authorized."  John A. Hartman, D.O., DAB No. 2911 at 21 (2018).   Even if I were to agree that Petitioner's services as a physician are needed during the COVID-19 pandemic, I am not empowered to reverse CMS's determination; the discretion to deny enrollment pursuant to section 424.530(a)(3)

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rests with CMS and not with me.  See Stephen White, M.D., DAB No. 2912 at 14 (2018) ("Where CMS is legally authorized to deny an enrollment application, an ALJ cannot substitute his or her discretion for that of CMS (or CMS's contractor) in determining whether, under the circumstances, denial is appropriate."); see also Dr. Robert Kanowitz, DAB No. 2942 at 6 (2019).  Petitioner has a felony criminal conviction for a financial crime that is detrimental to the best interests of the Medicare program and its beneficiaries, and that conviction is within the 10 years preceding his enrollment application.  Therefore, CMS had a legitimate basis, pursuant to 42 C.F.R. § 424.530(a)(3)(i)(B), to deny his enrollment application.

V.  Conclusion

I affirm CMS's denial of Petitioner's enrollment application.

• 1. Pursuant to 18 U.S.C. § 371 (conspiracy to commit offense or to defraud the United States), Count 4 is a felony offense because the maximum period of incarceration is five years.  See 18 U.S.C. § 3559(a) (classifying felonies as offenses punishable by more than one year of incarceration).
• 2. Petitioner disregarded the directives in section 9 of the Pre-Hearing Order regarding the designation and marking of exhibits.  I re-designate Petitioner's sole exhibit as P. Ex. 1.
• 3. My findings of fact and conclusions of law are in bold and italics.
• 4. The DAB's analysis is applicable to both enrollment denial and enrollment revocation cases under sections 424.530 and 424.535.  See, e.g., Brian K. Ellefsen, DO, DAB No. 2626 at 9-10 (2015).