Sidharth Handa, DAB CR5311 (2019)

DECISION

I sustain the determination of a Medicare contractor, as affirmed upon reconsideration, to deny Medicare enrollment as a physician supplier to Petitioner, Sidharth Handa, M.D.

I. Background

The Centers for Medicare & Medicaid Services (CMS) moved for summary judgment, filing a brief and seven exhibits that it identified as CMS Ex. 1-CMS Ex. 7.  Petitioner opposed the motion and filed three exhibits that it identified as P. Ex. 1-P. Ex. 3.

It is unnecessary that I decide whether the traditional criteria for summary judgment are met here.  In my initial acknowledgment and pre-hearing order, I directed the parties to file the proposed testimony of any witness either as a sworn affidavit or as a declaration made under penalty of perjury.  Acknowledgment and Pre-Hearing Order, February 13, 2019, at ¶ 8.  CMS did not file any witness statements.  Petitioner filed his own statement but did not file it under oath or penalty of perjury as my order directed.  See P. Ex. 1.  I do not accept that statement as testimony.  I have considered it as argument in the nature of a

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supplement to Petitioner’s brief.1   Because that statement is not evidentiary, it does not trigger any requirement to convene an in-person hearing.  Consequently, I decide this case based on the exhibits submitted by the parties.  I receive CMS Ex. 1-CMS Ex. 7.  I receive P. Ex. 2 and P. Ex. 3.2

II. Issue, Findings of Fact and Conclusions of Law

A. Issue

The issue is whether CMS has the authority to deny Petitioner enrollment as a physician supplier in the Medicare program.

B. Findings of Fact and Conclusions of Law

CMS asserts that 42 C.F.R. § 424.530(a)(3) authorizes it to deny Medicare enrollment to Petitioner.  That section allows CMS to deny enrollment to any individual who was convicted, within the preceding 10 years, of a federal or state felony that CMS determines is detrimental to the best interests of the Medicare program.  42 C.F.R. § 424.530(a)(3)(i).  The regulation lists a number of examples of the types of felonies that may justify denying enrollment.  These include financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud, and other similar crimes.  42 C.F.R. § 424.530(a)(3)(i)(B).  Also included are felonies that would require mandatory exclusion under section 1128(a) of the Social Security Act.  42 C.F.R. § 424.530(a)(3)(i)(D).  Under section 1128(a)(4) of the Act, exclusion is mandatory for anyone “convicted for an offense which occurred after [August 21, 1996], under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  The regulation makes it plain, however, that these examples do not limit CMS’s discretion to determine that a felony conviction is detrimental to Medicare’s best interests, even if that conviction is not encompassed by one of the examples.  The regulation explicitly provides that CMS’s authority is not limited by the scope and severity of the listed examples.  42 C.F.R. § 424.530(a)(3)(i).

In 2011, Petitioner was convicted of federal felonies consisting of:  soliciting $1.3 million in bribes from contractors involved in United States-funded reconstruction

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efforts in Afghanistan and conspiring to traffic heroin from Southeast Asia.  CMS Ex. 1 at 1; CMS Ex. 2 at 16-25.  He was initially sentenced to serve 120 months in federal prison for his crimes.  CMS Ex. 1 at 2.  A court subsequently reduced that sentence to 42 months based on Petitioner’s cooperation with prosecutors.  CMS Ex. 3.

After his release from prison, Petitioner completed medical school.  He applied for Medicare enrollment as a physician supplier.  CMS Ex. 5.  On July 9, 2018, a Medicare contractor denied Petitioner’s application based on his felony convictions.  CMS Ex. 6.  Petitioner requested reconsideration.  CMS Ex. 4.  The contractor’s determination to deny enrollment was upheld on reconsideration.  CMS Ex. 7 at 6.

CMS and its contractor plainly have authority to deny enrollment to Petitioner.  He was convicted of federal felonies within the 10 years prior to his applying for Medicare enrollment.  42 C.F.R. § 424.530(a)(3)(i) authorizes CMS or one of its contractors to determine that Petitioner’s enrollment is not in the best interest of the Medicare program, given his felony convictions, as the contractor did in this case.

Petitioner asserts that CMS or its contractor lacks authority to deny enrollment because the felonies of which Petitioner was convicted are not among those specifically described by the regulation.  It is true that Petitioner’s convictions are not for felonies that the regulation describes specifically.  However, as I have stated, the regulation cites certain felonies as examples only.  CMS or one of its contractors has discretion to deny enrollment if they, in their discretion, determine that a conviction of any felony establishes that enrollment would not be in Medicare’s best interests.  Here, the contractor exercised the discretion granted to it.

Furthermore, Petitioner’s conviction for the felony of soliciting bribes is similar in nature to a felony described in the examples cited in the regulation.  These similarities are ample justification for the contractor’s exercise of discretion in this case.  Soliciting a bribe is similar to extortion.  In both instances, the perpetrator attempts unlawfully to compel a third party to pay for something that is within the perpetrator’s possession or authority.  In the instance of bribery, the perpetrator threatens to withhold necessary approval or assent unless the third party pays him or her.  In the case of extortion, the perpetrator threatens to release damaging information that is within the perpetrator’s control unless the third party pays him or her.

Petitioner’s conviction for felony conspiracy to traffic heroin also is similar in nature to a separate felony described in the examples cited in the regulation,

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further justifying the contractor’s exercise of discretion.  The conspiracy in which Petitioner participated amounted to a conspiracy to distribute heroin, a controlled substance.  Such a conspiracy clearly relates to the unlawful distribution of a controlled substance; Petitioner’s goal in participating in the scheme was to obtain payment in connection with the distribution of a controlled substance.  CMS Ex. 2 at 23.  Indeed, the factual basis for Petitioner’s guilty plea, facts to which Petitioner stipulated, states that, as part of the conspiracy, Petitioner and his confederates “discussed the distribution of heroin,” with one of his confederates agreeing with a confidential government witness “that one kilogram of heroin would be distributed in exchange for $30,000.00 in United States Currency.”  CMS Ex. 2 at 23, 25.

Petitioner argues that felony conspiracy to traffic heroin “is not a controlled substances violation and therefore does not fall under §[ ]1128(a) as a mandatory exclusion” because it “is more appropriately classified as conspiracy rather than a controlled-substance violation.”  Petitioner’s Prehearing Brief and Response to CMS’ Motion for Summary Judgment at 6.  He also notes that he was “never in possession of or attempted to acquire possession of controlled substances.”  Id.  Petitioner’s argument misses the point of section 1128(a)(4).  That section requires only that a felony conviction “relat[e] to,” among other things, “the unlawful . . . distribution . . . of a controlled substance,” not that it in fact involve distribution of a controlled substance.  Conspiracy to traffic heroin is related to the unlawful distribution of heroin, as I have already explained, regardless of whether heroin changed hands or whether Petitioner was in possession or sought personally to possess the controlled substance.

Petitioner offers what he characterizes as mitigating facts that he asserts proves that the contractor acted arbitrarily.  He contends that he committed his crimes at least partly because he suffered from post-traumatic stress disorder caused by his experiences on the battlefields of Afghanistan.  He asserts that he is rehabilitated and that his rehabilitation renders his past behavior irrelevant to his current qualifications for Medicare enrollment.

I do not have the authority to address this argument.  As I have stated, the regulations give CMS and its contractors discretion to determine whether a past conviction is grounds for disqualifying an applicant for participation.  I am not empowered to second-guess CMS or its contractors where they have exercised their discretion, as is the case here.  Norman Johnson,DAB No. 2779 at 10, 17-18 (2017).  I note that in this case Petitioner made the same arguments to the contractor in his request for reconsideration as he makes here.  CMS considered

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those arguments but concluded that denial of enrollment was appropriate.  That conclusion clearly fell within CMS’s discretion.

1. However, and as I explain below, I do not have the authority to render a decision based on the arguments that Petitioner raises in his statement.
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2. P. Ex. 2 duplicates CMS Ex. 3. P. Ex. 3 is a letter from a third party that Petitioner also filed with his request for reconsideration of the contractor’s initial determination.
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