Timothy Hubbard, D.O. and Shorewood Family Medical Clinic, S.C., DAB CR6057 (2022)

DECISION

Respondent, the Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, National Government Services (NGS), revoked the Medicare enrollment and billing privileges of Petitioners, Timothy Hubbard, D.O. and Shorewood Family Medical Clinic, S.C., pursuant to 42 C.F.R. § 424.535(a)(3).  CMS subsequently placed Petitioners on its preclusion list.  See 42 C.F.R. §§ 422.2, 423.100.  Petitioners challenge both the revocation of their enrollment and billing privileges and their placement on CMS’s preclusion list.  For the reasons discussed below, I affirm CMS’s revocation and preclusion actions against Petitioners.

I.   Background

Petitioner, Timothy Hubbard, D.O., is a board-certified physician licensed to practice in Wisconsin and the sole owner of Petitioner, Shorewood Family Medical Clinic, S.C.  On February 1, 2008, the U.S. District Court for the Eastern District of Wisconsin (district court) accepted Petitioner Hubbard’s guilty plea for a single count of structuring transactions to evade reporting requirements in violation of 31 U.S.C. §§ 5313(a) and 5324.  CMS Ex. 1, 2-5.  The district court sentenced Petitioner Hubbard to a sentence of probation and ordered him to pay restitution and fines.  Id.

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On April 16, 2012, Petitioner Hubbard submitted an application to revalidate himself and Petitioner Shorewood as suppliers in the Medicare program.  CMS Ex. 3.  In Section 3 of the application, entitled “FINAL ADVERSE LEGAL ACTIONS/CONVICTIONS,” Petitioner Hubbard answered “No” in response to the question “Have you, under any current or former name or business identity, ever had a final adverse legal action listed on page 12 of this application imposed against you?”  Id. at 26.  Petitioner Hubbard made no mention of his 2008 felony conviction for financial crimes.1   Petitioner Hubbard signed the certification statement attesting to the accuracy of the information provided in the application.  Id. at 86-87.  

On May 4, 2012, Wisconsin Physicians Service Insurance Corporation (WPS), CMS’s contractor at the time, approved Petitioners’ revalidation applications for enrollment.  CMS Ex. 3 at 7-11. 

On June 10, 2016, NGS notified Petitioners it had revoked their Medicare enrollment and billing privileges, effective May 1, 2012.  CMS Exs. 4, 5.  NGS explained it revoked Petitioners’ Medicare privileges pursuant to 42 C.F.R. § 424.535(a)(3) because of Petitioner Hubbard’s February 1, 2008 felony conviction for financial crimes.  CMS Ex. 4 at 1; CMS Ex. 5 at 1.  NGS also revoked Petitioner Hubbard’s Medicare privileges pursuant to 42 C.F.R. § 424.535(a)(4) because he provided false or misleading information on his revalidation enrollment application by failing to report an adverse legal action against him.  CMS Ex. 5 at 1.  NGS informed Petitioners that because the date of Petitioner Hubbard’s felony conviction preceded their enrollment date, their revocation was effective as of the date of their first enrollment.  CMS Ex. 4 at 1; CMS Ex. 5 at 1.  NGS also informed Petitioners they would be barred from re-enrolling in the Medicare program for three years.  CMS Exs. 4 at 2, 5 at 2.  Petitioners timely requested reconsideration.  CMS Ex. 6.  On August 5, 2016, NGS issued a reconsidered determination affirming its revocation action and the three-year re-enrollment bar.  CMS Ex. 7.

Petitioners timely requested a hearing before an Administrative Law Judge (ALJ) in the Civil Remedies Division and ALJ Scott Anderson was designated to hear and decide that case, docketed as C-17-10.  On October 13, 2016, Judge Anderson issued an Acknowledgment and Pre‑hearing Order (Pre‑hearing Order) setting forth deadlines for the parties to submit arguments and proposed exhibits.  CMS filed a motion for summary judgment and brief (CMS Br.), as well as seven proposed exhibits (CMS Exs. 1-7), on November 16, 2016.  Petitioners filed a brief opposing summary judgment (P. Br.),

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identified one witness, and offered seven proposed exhibits (P. Exs. 1-7) on December 22, 2016. 

On August 25, 2017, I was designated to hear and decide C-17-10.  On August 1, 2018, CMS notified Petitioners they would be added to CMS’s preclusion list effective January 1, 2019.  CMS Exs. 8, 9.  Petitioners sought reconsideration of that action.  CMS Ex. 10.  On December 20, 2018, CMS upheld its determination to place Petitioners on the preclusion list.  CMS Exs. 11, 12.

On February 1, 2019, Petitioners filed a request for hearing with respect to CMS’s December 20, 2018 reconsidered determination to preclude them.  I was designated to hear and decide that matter, docketed as C-19-478.  On March 18, 2019, I issued an Acknowledgment and Order (Pre-hearing Order) consolidating Petitioners’ appeals under Docket No. C‑19‑478.  I permitted the parties to submit supplemental briefs and accompanying exhibits on the issue of CMS’s preclusion list decisions.

CMS filed a supplemental brief in support of its motion for summary judgment (CMS Supp. Br.) and proposed five additional exhibits (CMS Exs. 8-12) on February 22, 2019, and resubmitted the exhibits on April 28, 2019.  Petitioner filed a supplemental brief (P. Supp. Br.) on June 5, 2019.

II.   Admission of Exhibits and Decision on the Record

Neither party has objected to exhibits proposed by the opposing party.  I therefore admit CMS Exhibits 1 through 12 and Petitioner Exhibits 1 through 7 into the record.  Petitioner identified one witness and offered his written direct testimony.  CMS did not request to cross-examine Petitioner’s witness.  Consequently, I will not hold an in-person hearing in this matter and issue this decision based on the written record.2   Civ. Remedies Div. P. § 19(d). 

III.   Issues

Whether CMS had a legitimate basis to revoke Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(3);

Whether CMS had a legitimate basis to revoke Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(4) for submitting false or misleading information on the revalidation enrollment application; and

Whether CMS had a legitimate basis to place Petitioners on its preclusion list.

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IV.   Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(17), (20), 498.5(l)(2), (n)(2); see also 42 U.S.C. § 1395cc(j)(8).

V.   Findings of Fact, Conclusions of Law, and Analysis

A.  Applicable Law

Petitioners are suppliers of health care services for purposes of the Medicare program:  Dr. Hubbard is a physician identified as the sole owner of Shorewood Family Medical Clinic, S.C., an entity that furnishes health care services.  See 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20 (definition of physicians’ services), 498.2.  To participate in the Medicare program as a supplier, an individual or entity must meet certain criteria to enroll and receive billing privileges.  42 C.F.R §§ 424.505, 424.510. 

To maintain Medicare billing privileges, suppliers must revalidate their enrollment information at least every five years; however, CMS may require revalidation at any time.  42 C.F.R. § 424.515.  When CMS notifies a supplier to revalidate, that supplier must submit the appropriate enrollment application, accurate information, and supporting documents within 60 calendar days of CMS’s notification.  42 C.F.R. § 424.515(a)(2). 

CMS may revoke a supplier’s Medicare enrollment and billing privileges for any of the bases stated in 42 C.F.R § 424.535(a), which include: 

(3) Felonies.

(i) 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.

(ii) 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

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individual was convicted, including guilty pleas and adjudicated pretrial diversions.

* * * *

(4) False or misleading information.  The provider or supplier certified as “true” misleading or false information on the enrollment application to be enrolled or maintain enrollment in the Medicare program.  (Offenders may be subject to either fines or imprisonment, or both, in accordance with current law and regulations.)

42 C.F.R. §§ 424.535(a)(3)-(4). 

To place an individual or entity on its preclusion list, CMS must establish each of the following three requirements have been met: 

(i) The individual or entity is currently revoked from Medicare for a reason other than that stated in [42 C.F.R. §] 424.535(a)(3) of this chapter.

(ii) The individual or entity is currently under a re-enrollment 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. . .CMS considers the following factors: 

(A) The seriousness of the conduct underlying the individual’s or entity’s revocation.

(B) The degree to which the individual’s or entity’s conduct could affect the integrity of the Medicare program.

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

42 C.F.R. § 422.2, Preclusion list; see also 42 C.F.R. § 423.100.

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B.  CMS had a valid basis to revoke Petitioner Hubbard’s Medicare enrollment and billing privileges because he was convicted of a felony financial crime within the 10 years preceding the revalidation enrollment application and because he submitted false or misleading information in his revalidation enrollment application.  

The relevant facts are not in dispute.  On February 1, 2008, Petitioner Hubbard pleaded guilty in district court to a single count of structuring transactions to evade reporting requirements in violation of 31 U.S.C. §§ 5313(a) and 5324.  CMS Ex. 1, 2-5.  The revalidation enrollment application he completed in April 2012 explicitly asked whether any final adverse actions3 had been imposed “under any current or former name or business identity.”  CMS Ex. 3 at 25-26.  The application specified that guilty pleas constituted a type of final adverse action.  Id. at 25.  Petitioner Hubbard responded “No” to this question.  Id. at 26.  Petitioner Hubbard then certified that the information he had provided was true.  CMS Ex. 3 at 86-87; 42 C.F.R. §§ 424.510(d)(2)(i), (d)(3). 

Petitioners now argue Petitioner Hubbard’s 2008 conviction was not a sufficiently “similar crime” to extortion, embezzlement, income tax evasion, or insurance fraud to trigger his obligation to report it to CMS during revalidation.  P. Br. at 9-11; C-17-10 Req. for Hearing at 4-5.  Specifically, they assert that “[w]hile. . .the applicable regulation provides a non-exhaustive list of examples of offenses that would constitute a financial crime, the reporting requirements extend only to those offenses ‘similar’ to the financial crimes specifically identified.”  P. Br. at 10. 

Petitioners otherwise argue that Petitioner Hubbard completed the application in good faith and did not intentionally provide false information on their applications.  Id. at 11.  They point out that Petitioner Hubbard sought assistance from CMS’s administrative contractor to help him determine his reporting requirements, but the contractor refused and instructed him to complete the application to the best of his ability.  P. Br. at 6, 11.  Petitioners argue that “[t]he only reason Dr. Hubbard did not report to CMS was due to the application language, which was limited in scope and did not require same,” and “[i]t would be illogical for Dr. Hubbard to verbally disclose his felony plea to a [Medicare contractor] representative if he was deliberately attempting to hide such information.”  P. Supp. Br. at 9-10.  

Petitioners’ arguments are without merit.  Their claim that the obligation to report criminal offenses is limited to either the financial crimes enumerated at 42 C.F.R.

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§ 424.535(a)(3)(ii)(B) or crimes similar to those enumerated offenses has been roundly rejected on numerous occasions by the Departmental Appeals Board.  Stanley Beekman, D.P.M., DAB No. 2650 at 7 (2015) (“CMS may revoke Medicare billing privileges under the authority of section 424.535(a)(3) based on any financial crime, regardless of whether the supplier’s particular financial crime is specified in the regulation’s illustrative list of financial crimes.”), citing Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 10 (2009), aff”d, Ahmed v. Sebelius, 710 F. Supp.2d 167 (D. Mass. 2010) (“even if Petitioner’s felony offense was not similar to one of the crimes named in the regulation, CMS would not necessarily be precluded from finding that it was a financial crime.”); Fady Fayad, M.D., DAB No. 2266 at 8 (2009), aff’d, Fayad v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011) (“section 424.535(a)(3)(i) is reasonably read as setting out a non-exhaustive list of crimes that may constitute a basis for revocation.”). 

Therefore, the only question is whether Petitioner Hubbard’s criminal offense was similar to any financial crime, including those enumerated at 42 C.F.R. § 424.535(a)(3)(ii)(B).  There is sufficient evidence before me to conclude his 2008 conviction was sufficiently similar to a financial crime to trigger Petitioners’ reporting obligation during revalidation.  Petitioner Hubbard’s offense of conviction involved hiding over $140,000 from his wife in a divorce proceeding by depositing cashed-out paychecks from his practice, Petitioner Shorewood, into a bank account in $9,000 increments to avoid bank reporting requirements between 1999 and 2001.  CMS Ex. 2 at 1-3; P. Ex. 3 at 1. 

CMS’s reconsidered determinations explain that Petitioner Hubbard’s offense of conviction was similar to the crimes of extortion, embezzlement, income tax evasion, and insurance fraud because Petitioner Hubbard’s conduct involved “deceiving the Federal Government for personal monetary gain.”  CMS Ex. 11 at 5; CMS Ex. 12 at 4-5.  CMS similarly argues now that his criminal offense was similar to the crime of embezzlement because both involved stealing or converting entrusted money to personal use.  CMS Br. at 10 n.2.  I find the circumstances of Petitioner Hubbard’s criminal offense are indeed similar to the crimes identified by CMS as each involves an element of fraud or deceit and the conversion of funds belonging to another person or entity for the criminal’s personal monetary gain.4   As such, Petitioners were obligated to report Petitioner Hubbard’s 2008 conviction when they sought revalidation by CMS in 2012.  Their failure to do so provided CMS a valid basis to revoke Petitioner Hubbard’s enrollment as a biller to the Medicare program.

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Petitioner Hubbard was obligated to disclose his 2008 conviction in his revalidation enrollment application.  But rather than provide a “[c]omplete, accurate, and truthful response” as required by the regulations, see 42 C.F.R. § 424.510(d)(2)(i), he chose to certify that he had never had a final adverse legal action imposed against him.  The regulation at 42 C.F.R. § 424.510(d)(3) explicitly states that “[t]he [certification statement] signature attests that the information submitted is accurate and that the provider or supplier is aware of, and abides by, all applicable statutes, regulations, and program instructions.”  The record establishes that by failing to report his conviction for a felony financial crime and then signing the certification statement on the application, Petitioner clearly certified as “true” information on his application that was misleading or false. 

Petitioners now argue that Petitioner Hubbard completed the application in good faith and did not intentionally provide false information on the applications he submitted.  Id. at 11.  Even if true, this claim has no bearing on the outcome here.  42 C.F.R. § 424.535(a)(4) does not require CMS to show evidence of intent to mislead or to misrepresent.  It only requires submission and certification of false and misleading information to justify revocation.  Sandra E. Johnson, CRNA, DAB No. 2708 at 15 (2016), citing Mark Koch, D.O., DAB No. 2610 at 4-5 (2014); Patrick Brueggeman, D.P.M., DAB No. 2725 (2016). 

Petitioners’ attempt to blame CMS’s administrative contractor for failing to provide Petitioner Hubbard with advice as a means to justify his failure to report his conviction is equally unpersuasive.  P. Br. at 6, 11.  CMS’s contractor made it clear it could not provide Petitioner Hubbard with advice.  It is difficult to believe that a highly educated licensed professional would err on the side of non-disclosure of his conviction, particularly since the cost of doing so erroneously would be significant.  In any case, if Petitioner Hubbard was genuinely confused as to his reporting obligations, he had other options.  He presumably could have sought advice from his former criminal defense attorney, or indeed, any attorney.  Petitioner Hubbard instead chose to rely on his own judgment.  He was entitled to make that choice, but he cannot evade the consequences of doing so.  

In sum, Petitioner Hubbard was obligated to report his 2008 conviction on the 2012 revalidation enrollment applications he submitted.  He did not do so.  He nevertheless certified his applications to be true, complete, and correct.  His omission of a final adverse action taken against him provided CMS a valid basis to revoke his billing privileges pursuant to 42 C.F.R. § 424.535(a)(4).

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C.  CMS properly revoked Petitioner Shorewood’s enrollment and billing privileges because Petitioner Hubbard, its sole owner, was convicted of a felony financial crime within the 10 years preceding the revalidation enrollment application and because it submitted false or misleading information on its enrollment application.

Petitioners do not dispute that Petitioner Hubbard is the sole owner of Petitioner Shorewood.  P. Ex. 3 at 1; C-17-10 Req. for Hearing at 4; CMS Ex. 3 at 27-29.  CMS therefore attributed Petitioner Hubbard’s conduct to Petitioner Shorewood, finding them equally untrustworthy to be allowed to bill the Medicare program.  CMS Ex. 4; CMS Ex. 7; CMS Ex. 12 at 4-5.  As I have already explained, Petitioner Hubbard was convicted of a financial crime within the meaning of 42 C.F.R § 424.535(a)(3) in the 10 years preceding Petitioners’ April 2012 revalidation enrollment applications.  Petitioner Hubbard was also subject to revocation because he submitted false and misleading information on both his and Shorewood’s enrollment applications.  CMS was therefore equally authorized to revoke Petitioner Shorewood’s Medicare enrollment and billing privileges pursuant to 42 C.F.R §§ 424.535(a)(3) and 424.535(a)(4).

D.  Petitioners’ equitable arguments are not bases to reverse the revocation of Petitioners’ Medicare enrollment and billing privileges.

Even if I agreed with Petitioner Hubbard that he acted in good faith, did not intend to supply false information, and that his underlying conduct had no impact on his patients, I have no authority to review CMS’s revalidation process or otherwise grant Petitioners any form of equitable relief.  See, e.g., US Ultrasound, DAB No. 2302 at 8 (2010) (“Neither the ALJ nor the Board is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”); Pepper Hill Nursing & Rehab. Ctr., LLC, DAB No. 2395 at 11 (2011) (holding that the ALJ and Board were not authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements).  CMS’s revocation of a supplier’s enrollment and billing privileges is discretionary and not subject to review based on equity or mitigating circumstances.  Letantia Bussell, M.D., DAB No. 2196 at 13 (2008).  

Rather, “the right to review of CMS’s determination by an ALJ serves to determine whether CMS had the authority to revoke [the provider’s or supplier’s] Medicare billing privileges, not to substitute the ALJ’s discretion about whether to revoke.”  Id. (underline omitted).  Once CMS establishes a legal basis on which to proceed with a revocation, its determination to revoke becomes a permissible exercise of discretion, which I am not permitted to review.  Bussell, DAB No. 2196 at 10; Ahmed, M.D., DAB No. 2261 at 19 (providing an ALJ may not substitute his or her “discretion for that of CMS in determining whether revocation is appropriate under all the circumstances” where CMS establishes the regulatory elements necessary for revocation,).

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Because I have determined CMS had a legal basis to revoke Petitioners’ Medicare enrollment and billing privileges pursuant to 42 C.F.R. §§ 424.535(a)(3) and (4), I must affirm CMS’s revocation determinations.

E.  CMS had a legal basis to add Petitioners to the preclusion list effective January 1, 2019.

The regulatory requirements for Petitioners’ inclusion on CMS’s preclusion list have been met.  42 C.F.R. § 422.2, Preclusion list.  At the time CMS made its preclusion list determinations, both Petitioners were “revoked from Medicare” under 42 C.F.R. § 424.535(a)(4) and both Petitioners were subject to a three year re-enrollment bar under 42 C.F.R. § 424.535(c).  CMS Ex. 4; CMS Ex. 5; CMS Ex. 7; CMS Ex. 8; CMS Ex. 9; CMS Ex. 11; CMS Ex. 12.  CMS then determined that the conduct underlying Petitioner Hubbard’s revocation was detrimental to the best interests of the Medicare program and therefore warranted preclusion of both Petitioners.  See CMS Ex. 11 at 3-6; CMS Ex. 12 at 3-5.

Petitioners do not dispute that their Medicare billing privileges have been revoked or that they were under a re-enrollment bar at the time of preclusion.  P. Supp. Br. at 7.  However, Petitioners argue that CMS erred in determining that their conduct was detrimental to the best interests of the Medicare program.  See id. at 7-8 (asserting Dr. Hubbard’s criminal offense involved structured deposits of his own money, so the Medicare program was not implicated or at risk).  Petitioners also argue CMS improperly relied on Petitioner Hubbard’s failure to report his conviction for its preclusion determinations because he was not obligated to report it.  Id. at 8-10.

In reviewing CMS’s decision to place a provider or supplier on the preclusion list, it is not my role to re-weigh the factors set forth in 42 C.F.R. §§ 422.2 and 423.100.  Where the regulations have granted CMS discretion to determine whether a provider or supplier’s underlying conduct is detrimental to the Medicare program, I may not substitute my own judgment as to whether CMS properly exercised that discretion.  Brian K. Ellefsen, D.O., DAB No. 2626 at 7 (2015); see also Pa. Physicians, P.C., DAB No. 2980 at 13 (2019).

Here, it is clear CMS met its regulatory obligation to consider whether the conduct underlying Petitioners’ revocation was detrimental to the best interests of the Medicare program by assessing the seriousness of that conduct and the degree to which that conduct could affect the integrity of the Medicare program.  42 C.F.R. § 422.2, Preclusion list.  In its reconsidered determinations, CMS explicitly weighed these factors, observing that: 

The federal indictment of Dr. Hubbard details the actions of Dr. Hubbard in committing this crime.  It explains that Dr.

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Hubbard “cashed out” many paychecks, with the objective to “amass a cash hoard” so that he did not have to list this cash hoard as an asset in the “financial disclosure statement” used for Dr. Hubbard’s divorce proceedings. . ..  Therefore, contrary to Dr. Hubbard’s contention, CMS finds that his felony conviction for structuring transactions to evade reporting requirements is a financial crime enumerated under 42 C.F.R. § 424.535(a)(3) and, therefore, is per se detrimental to the best interests of the Medicare program and its beneficiaries. . ..

This felony financial conviction demonstrates a lack of trustworthiness in Dr. Hubbard’s dealings with the Federal Government, as it calls into question Dr. Hubbard’s honesty and integrity and validates a propensity for deceiving the Federal Government for personal monetary gain.  CMS finds these dishonest and deceitful actions by Dr. Hubbard to be extremely serious given that payment for Medicare claims in most situations are made without pre-payment review.  Therefore, the Medicare program must rely on the trustworthiness of its providers and suppliers when paying for services/items allegedly rendered to and ordered for its beneficiaries.  Here, CMS determines that allowing an individual who was convicted of structuring financial transactions to evade federal reporting requirements, to continue to have the ability to obligate Medicare funds will place Medicare trust funds at risk, thus significantly affecting the integrity of the Medicare program. 

CMS Ex. 11 at 5; see also CMS Ex. 12 at 4-5 (making identical findings with respect to Petitioner Shorewood).  With respect to Petitioner Hubbard’s revocation for failing to report an adverse legal action against him in violation of 42 C.F.R. § 424.535(a)(4), CMS’s reconsidered determination states: 

Dr. Hubbard’s failure to disclose his felony conviction also demonstrates his propensity to be dishonest in his dealings with the Federal Government and is detrimental to the best interests of Medicare program and its beneficiaries.  Administering the benefits of Medicare program require providers and suppliers to fill out various paperwork that warrant truthful and correct information.  Allowing an individual to certify as “true” any false statements thus endangers the integrity of the Medicare Program.  Therefore, CMS finds that the underlying conduct of Dr. Hubbard’s felony conviction in addition to his providing

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false and misleading information regarding his conviction on his 2012 Medicare enrollment revalidation application, which led to the revocation of his Medicare billing privileges, is detrimental to the best interests of the Medicare program. 

CMS Ex. 11 at 6.  This discussion demonstrates CMS considered the seriousness of Petitioners’ conduct and the degree to which Petitioners’ conduct could impact the integrity of the Medicare program.  42 C.F.R. § 422.2, Preclusion list; see also 42 C.F.R. § 423.100.  CMS’s decision to preclude Petitioners is well-articulated and justified.  

There is no dispute that Petitioners were under revocation and subject to a re-enrollment bar at the time of their preclusion.  There is also sufficient evidence to conclude that CMS appropriately exercised its discretion to preclude Petitioners because of the nature of Petitioner Hubbard’s criminal conviction in 2008 and his failure to disclose it in subsequent revalidation applications he submitted on their behalf.  I therefore uphold CMS’s decision to include Petitioners on CMS’s preclusion list effective January 1, 2019.

VI.   Conclusion

For the foregoing reasons, I affirm CMS’s revocation of Petitioners’ Medicare enrollment and billing privileges pursuant to 42 C.F.R. §§ 424.535(a)(3) and 424.535(a)(4), and CMS’s placement of Petitioners on its preclusion list pursuant to 42 C.F.R. §§ 422.2 and 423.100.

1. Page 12 of the 855-I application specifically listed the following crimes as convictions CMS considered to be final adverse legal actions:  “[f]elony crimes against persons and other similar crimes for which the individual was convicted, including guilty pleas. . .financial crimes, such as extortion, embezzlement, income tax evasion, insurance fraud and other similar crimes for which the individual was convicted, including guilty pleas. . .”  CMS Ex. 3 at 25.
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2. CMS’s motion for summary judgment is denied as moot.
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3. Final adverse actions include “[a] conviction of a Federal or State felony offense. . .within the last 10 years preceding enrollment, revalidation, or re-enrollment.”  42 C.F.R. § 424.502.  They include “[f]inancial 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. § 424.525(a)(3)(ii)(B).
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4. Petitioners seem to believe it significant that the district court imposed a lighter sentence on Petitioner Hubbard because his crime did not directly victimize his patients.  P. Br. at 10, citing P. Ex. 4.  With respect to whether his crime was similar to a financial crime, the identity of the victim or victims is irrelevant.  The more salient feature is that Petitioner Hubbard’s crime involved concealing and converting money that in part belonged to another person or entity (the marital estate in his divorce proceeding and ultimately, his ex-wife).
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