Michael D. Brandner, M.D., DAB CR6058

DECISION

Petitioner, Michael D. Brandner, M.D., is an Alaska physician who participated in the Medicare program. On April 25, 2016, he was convicted of felony wire fraud and felony tax evasion. For the second time, the Centers for Medicare & Medicaid Services (CMS) has placed him on the Medicare preclusion list. CMS did so because, within the previous ten years, Petitioner was convicted of felony offenses that it determined were detrimental to the best interests of the Medicare program.

Petitioner appealed.

I affirm CMS’s determination. I find that CMS is authorized to include Petitioner Brandner on the preclusion list because, within the preceding ten years, he was convicted of felonies under federal law that CMS reasonably deems detrimental to the best interests of the Medicare program.

Background

The revocation, re-enrollment bar, and Petitioner’s first placement on the preclusion list. On April 25, 2016, Petitioner Brandner was convicted of felony wire

Page 2

fraud and felony tax evasion.  He was sentenced to 48 months in prison followed by two years of supervised release. CMS Ex. 7. Based on his conviction, the Medicare contractor, Noridian Healthcare Solutions, revoked his Medicare enrollment and billing privileges, effective April 25, 2016, followed by a three-year re-enrollment bar. CMS Ex. 8. Because his Medicare billing privileges were revoked and because he was under a re-enrollment bar, CMS added Petitioner’s name to the Medicare preclusion list, effective January 1, 2019.  CMS Ex. 8. Petitioner did not appeal either determination, which therefore became final and binding. 42 C.F.R. § 498.20(b). See Reconsidered Determination at 2 (DAB E-File Dkt. C-21-27, Doc. No. 1a). Although Petitioner now complains that he did not receive notice of these actions, I have no authority to review those prior determinations.

Petitioner’s current appeal. When Petitioner’s re-enrollment bar expired on June 1, 2019, CMS removed him from the preclusion list. This wasn’t the end of it, however. In a notice dated January 24, 2020, CMS advised Petitioner that he was being added to the CMS preclusion list. As the letter explains, CMS acted pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6), based on Petitioner’s April 25, 2016 felony convictions for wire fraud (four counts) and tax evasion (three counts). CMS Ex. 2.

Petitioner requested reconsideration. CMS Ex. 3.

In a reconsidered determination, dated May 27, 2020, a CMS hearing officer upheld the initial determination. DAB E-File Dkt. C-21-27, Doc. No. 1a. The hearing officer agreed that including Petitioner on the preclusion list was proper because, within the preceding ten years, he had been convicted of felony offenses, and his underlying conduct was detrimental to the Medicare program. Id. at 4.

Because placing someone on the preclusion list is not a criminal punishment but a civil remedial measure intended to protect the program and its beneficiaries from fraud, abuse, and other harm, CMS may impose this additional sanction. Pennsylvania Physicians, P.C., DAB No. 2980 at 7-8 (2019). Petitioner has not argued otherwise.

The date of the reconsidered determination, May 27, 2020, became the date that Petitioner was added to the preclusion list. Id.

Petitioner timely appealed.

Hearing on the written record. The parties have filed cross-motions for summary judgment. My initial order instructs them to list any proposed witnesses and to submit their written direct testimony. Acknowledgment and Prehearing Order at 3, 5 (¶¶ 4(c)(iv), 8) (October 16, 2020). The order also directs the parties to indicate which, if any, of the opposing side’s witnesses the party wishes to cross-examine and explains that

Page 3

an in-person hearing is needed only if a party wishes to cross-examine the opposing side’s witnesses. Id. at 5, 6 (¶¶ 9, 10). Neither party lists any witnesses. An in-person hearing would therefore serve no purpose, and I may decide this case based on the written record without considering whether the standards for summary judgment are met.

Exhibits. CMS submitted its brief (CMS Br.) and nine exhibits (CMS Exs. 1-9). Petitioner submitted his brief (P. Br.) and nine exhibits. Contrary to my order (which directed him to number the exhibits), he marked them Exs. A-I. Nevertheless, in the absence of any objections, I admit into evidence CMS Exs. 1-9 and P. Exs. A-I.

Discussion

CMS acted within its authority when it added Petitioner to its preclusion list because, within the preceding ten years, he was convicted of felonies that CMS reasonably determined are detrimental to the best interests of the Medicare program.1

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

Page 4

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. Act § 1861(d), (q), (r) (42 U.S.C. § 1395x(d), (q), (r)); 42 C.F.R. § 400.202.

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.2 Pursuant to 42 C.F.R. § 422.2 (Part C) and 42 C.F.R. § 423.100 (Part D), CMS’s “preclusion list” includes individuals who, within the previous ten years, have been convicted of felonies under federal or state law that CMS deems detrimental to the best interests of the Medicare program. In determining whether a felony is detrimental, CMS considers: the severity of the offense, when the offense occurred, and any other information that CMS deems relevant.

Petitioner’s felony offenses. In order to hide millions of dollars of assets from his estranged wife and the scrutiny of a divorce court, Petitioner devised a complicated scheme that included creating a sham Central American entity, over which he had complete control, and into which he deposited millions of dollars. Remarkably, he converted his funds into cashier’s checks and surreptitiously drove thousands of miles into Panama, where he personally transferred the funds. He then falsely claimed that the money would not be available for a couple of years, and, ultimately, he claimed that these “investments” were lost. CMS Ex. 5 at 2-5.

Following a jury trial, Petitioner was convicted on four felony counts of wire fraud and three felony counts of tax evasion. The guilty verdict was reached on November 4, 2015, and the federal district court entered judgment on April 25, 2016. CMS Ex. 6; CMS Ex. 7 at 1. Petitioner was sentenced to 48 months in prison, followed by two years of supervised release. CMS Ex. 7 at 2-3.

Petitioner’s placement on the preclusion list.  This case is straight-forward. Within the preceding ten years, Petitioner was convicted of several felonies that CMS has determined are detrimental to the best interests of the Medicare program and its beneficiaries. By regulation, financial crimes, such as income tax evasion, insurance, fraud, and similar crimes are per se detrimental to the program. 42 C.F.R.

Page 5

§§ 424.530(a)(3)(i)(B), 424.535(a)(3)(ii)(B). Because tax fraud and wire fraud are in fact or are similar to the types of financial crimes listed in the regulations, CMS was authorized to add Petitioner to the Medicare preclusion list. 42 C.F.R. §§ 422.2, 423.100.

Petitioner’s arguments. Petitioner attacks his conviction and the revocation. He claims that he was wrongly convicted and imprisoned based on the perjured testimony of an attorney who counseled him to set up the accounts. P. Br. at 2. Because his conviction was faulty, according to Petitioner, the revocation was faulty.

Petitioner’s appeal here is limited to whether CMS has the authority to include him on the preclusion list. 42 C.F.R. § 498.3(b)(20); 42 C.F.R. § 498.5(n). His earlier revocation is unrelated to that determination. He was not added to the preclusion list because his Medicare enrollment was revoked; he was added to the preclusion list because he was convicted of felonies detrimental to the Medicare program.3

With respect to whether he was convicted, sections 424.530(a)(3) and 424.535(a)(1) adopt the definition of “convicted” found at 42 C.F.R. § 1001.2. That section and the statute itself provide that a person is “convicted” when:  1) “a judgment of conviction has been entered” regardless of whether that judgment has been (or could be) expunged; 2) there has been a finding of guilt; 3) a plea of guilty or nolo contendere has been accepted by the court; or 4) the individual has entered into participation in a first offender, deferred adjudication, or other arrangement or program where the judgment of conviction has been withheld. Act § 1128(i); 42 C.F.R. § 1001.2(a). Here, there was a finding of guilt and entry of judgment, and that judgment is final. Petitioner may not attack it in this forum. See Saadite Green, DAB No. 2940 at 9 (2019) and cases cited therein.

Petitioner also asserts that his crimes were committed more than ten years ago. Because the criminal proceedings were protracted, his conviction came much later than it should have. The regulations are unambiguous; the date of the conviction, not the date of the crime, is the relevant onset date from which the ten-year time period is calculated. 42 C.F.R. §§ 422.2, 423.100.

Finally, Petitioner argues that he is a conscientious physician, of good character and Medicare patients will suffer if he is not allowed to participate in the program. As the Departmental Appeals Board has repeatedly confirmed, I am not authorized to overturn a

Page 6

legally valid agency action based on equitable grounds or otherwise grant equitable relief. Wendell Foo, M.D., DAB No. 2904 at 25 (2018), citing Foot Specialists of Northridge, DAB No. 2773 at 18 (2017). I may review whether the regulations authorize CMS’s actions. So long as CMS establishes a basis for placing Petitioner on the preclusion list, I must uphold its doing so. See Foo, DAB No. 2904 at 3; Wassim Younes, M.D., P.L.C., DAB No. 2861 at 8 (2018), citing Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016).

Conclusion

CMS is authorized to include Petitioner Brandner on the preclusion list because, within the preceding ten years, he was convicted of felonies under federal law that CMS reasonably deems detrimental to the best interests of the Medicare program. I therefore affirm CMS’s determination.

1. I make this one finding of fact/conclusion of law.
• back to note 1
2. Apparently, CMS considered requiring Medicare enrollment for all providers and suppliers of Medicare Advantage services and prescribers 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).
• back to note 2
3. Even where an individual is added to the preclusion list based on his Medicare enrollment having been revoked, he may not use his preclusion appeal to challenge the revocation. See 42 C.F.R. § 423.120(c)(6)(v)(A) (“A prescriber may appeal his or her inclusion on the preclusion list under this section in accordance with part 498 of this chapter.”); 83 Fed. Reg. 16643 (confirming that “the preclusion appeals process would neither include nor affect appeals of . . . enrollment revocations, for there are separate appeals processes for these actions.”).
• back to note 3