Kakra S. Gyambibi, MD, DAB CR5954 (2021)

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its Medicare administrative contractor, National Government Services (NGS), denied Kakra S. Gyambibi, MD’s (Petitioner’s) Medicare enrollment application pursuant to 42 C.F.R. § 424.530(a)(3).  NGS and CMS denied Petitioner’s enrollment application because, within the preceding 10 years, Petitioner was convicted of a felony that CMS determined was detrimental to the interests of the Medicare program and its beneficiaries.  NGS and CMS also placed Petitioner on the CMS preclusion list pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  Petitioner challenges the enrollment denial and her placement on the preclusion list.  For the reasons set forth below, I affirm that CMS had a legal basis to deny Petitioner’s Medicare enrollment application and to place Petitioner on its preclusion list.

I. Background and Procedural History

Petitioner is a physician who is licensed to practice in Connecticut.  See CMS Exhibit (Ex.) 1 at 8.  On January 18, 2019, Petitioner pleaded guilty in the United States District Court for the District of Connecticut (federal district court) to one count of conspiracy to

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commit health care fraud in violation of 18 U.S.C. § 1349.  CMS Ex. 5 at 1, 5, 8; CMS Ex. 6 at 2; P. Ex. 4 at 1.1 On or about June 12, 2019,2 the federal district court entered judgment finding Petitioner guilty and sentencing her to three months of incarceration and three years of supervised release.  CMS Ex. 5 at 6; CMS Ex. 6 at 2-3.  On February 24, 2020, the court ordered Petitioner to pay $825,166.17 in restitution.  CMS Ex. 8 at 8.  Effective May 1, 2020, the Connecticut Medical Examining Board (Medical Board) placed Petitioner’s medical license on probation for two years.  CMS Ex. 13 at 9-10.3

On or about June 30, 2020, Petitioner completed Form CMS-855I (enrollment application) requesting to be enrolled as a Medicare supplier.  CMS Ex. 1 at 36.  NGS received Petitioner’s enrollment application on July 6, 2020.  Id. at 1.  Petitioner disclosed her medical license probation on her enrollment application.  Id. at 14-24.  By letter dated October 23, 2020, NGS denied Petitioner’s enrollment application.  CMS Ex. 2 at 1.  Relying on Petitioner’s January 18, 2019 felony conviction, NGS cited 42 C.F.R. § 424.530(a)(3) as grounds for denying the application.  Id.  NGS also informed her that it would place her on the CMS preclusion list pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  Id.  Petitioner, through counsel, requested reconsideration in a letter dated December 27, 2020.  CMS Ex. 3.  By letter dated February 9, 2021, a CMS hearing officer issued a reconsidered determination upholding the denial of Petitioner’s July 6, 2020 enrollment application.  CMS Ex. 4.  The hearing officer also upheld Petitioner’s placement on the preclusion list.  Id.

Petitioner timely requested a hearing to challenge the reconsidered determination.  See Docket Entry #1 in DAB E-File.  The case was assigned to me and, on April 12, 2021, my office acknowledged Petitioner’s hearing request and provided a copy of my Standing Prehearing Order (Prehearing Order).  The Prehearing Order directed each party to file a prehearing exchange consisting of a brief and any supporting documents, including the written direct testimony of any proposed witnesses, and set forth the deadlines for those filings.  Prehearing Order ¶¶ 4-5.  In response to the Prehearing Order, CMS filed a combined brief and motion for summary judgment (CMS Br.) and 16 proposed exhibits (CMS Exs. 1‑16).

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On June 22, 2021, I issued an Order to Show Cause because Petitioner had not timely filed her prehearing exchange, proposed exhibits, or response to CMS’s motion for summary judgment in accordance with ¶ 5 of my Prehearing Order.  On that same day, counsel for Petitioner filed a motion for extension of time to file Petitioner’s prehearing exchange.  I found good cause to discharge the show cause order and granted Petitioner’s motion for an extension.  Petitioner filed a combined brief and opposition to CMS’s motion (P. Br.) and 16 proposed exhibits (P. Exs. 1-16).

Along with her brief opposing summary judgment, Petitioner filed a motion for remand (Motion for Remand) and motion for permission to add new evidence into the record (Motion to Add New Evidence).  CMS filed an opposition to Petitioner’s Motion for Remand and Motion to Add New Evidence (CMS Opposition).

Pursuant to 42 C.F.R. § 498.56(d), an administrative law judge may remand a case to CMS for consideration of a new issue.  In provider and supplier enrollment appeals, an administrative law judge must examine “any new documentary evidence submitted to the [administrative law judge] by a provider or supplier to determine whether the provider or supplier has good cause for submitting the evidence for the first time at the [administrative law judge] level.”  42 C.F.R. § 498.56(e).  If the administrative law judge does not find good cause for the failure to submit the evidence earlier, the evidence must be excluded and may not be considered in reaching a decision.  42 C.F.R. § 498.56(e)(2)(ii).

Petitioner requests remand, or in the alternative, to submit additional evidence into the record, “based upon a new issue which is verifiable by new evidence not previously available at the time of Petitioner’s enrollment application and the filing of her request for reconsideration.”  Motion for Remand at 1; Motion to Add New Evidence at 1; see also P. Br. at 1-2.  Petitioner further contends that the new issue and the related new evidence “is integral to the determinations made by CMS and relates directly to many of the evidentiary underpinnings of the decision-making as to both the denial of enrollment and placement of the Petitioner’s name on the Preclusion List.”  Motion for Remand at 1; Motion to Add New Evidence at 2.  Finally, Petitioner states that she is “prepared to demonstrate good cause as to the nature of the issue and evidence and as to why this issue and evidence were not previously presented to the CMS and placed into the underlying record.”  Id.  However, Petitioner does not further elaborate as to why good cause exists.

As CMS points out, Petitioner’s motions do not identify the new issue and evidence Petitioner wishes to introduce in this proceeding.  CMS Opposition at 3.  CMS identifies P. Exs. 7 and 15 as the new evidence because the exhibits were dated after the date of CMS’s February 9, 2021 reconsideration decision.  Id.  P. Ex. 7 is a docket sheet from the Superior Court for the State of Connecticut in the matter of State of Connecticut v. Kakra Gyambibi et al., Docket No. HHD-CV17-6075847-S, showing that the State of Connecticut withdrew its civil case against Petitioner on June 14, 2021.  P. Ex. 7 at 5, 6.

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P. Ex. 15 is a letter dated June 22, 2021 from one of Petitioner’s coworkers expressing his “support of [Petitioner] to be able to take care of Medicaid and Medicare patients.”  P. Ex. 15 at 1.

In addition to arguing that Petitioner fails to show good cause to admit P. Exs. 7 and 15, CMS argues that remand would serve no purpose, as the proffered evidence is not relevant to CMS’s determination to deny Petitioner’s Medicare enrollment application or to place her on the preclusion list.  CMS Opposition at 4.  I agree.  The State of Connecticut’s withdrawal of its civil case against Petitioner has no bearing on whether CMS had a legal basis to deny Petitioner’s Medicare enrollment and place her on the preclusion list based on her federal criminal conviction.  Similarly, general evidence as to Petitioner’s character or reputation in the community, or expressions of support from coworkers, do not prove that CMS lacked a basis for its actions.  Moreover, by opposing Petitioner’s motion to remand, CMS has signaled that remand would be futile.  See Norman Johnson, M.D., DAB CR4524 at 2 (2016).  Therefore, I deny Petitioner’s motion for remand.  In addition, absent any showing of good cause, I am required to exclude P. Exs. 7 and 15 from the record; accordingly, I deny Petitioner’s motion to add new evidence.4  42 C.F.R. § 498.56(e)(2)(ii).

CMS filed a motion for leave (CMS Reply) to respond to Petitioner’s prehearing brief and objection to CMS’s motion for summary judgment.  Petitioner did not object to CMS’s motion for leave and also filed a motion for permission to respond to CMS’s motion for leave (P. Reply).  In the absence of any objection, I grant both CMS’s and Petitioner’s motions and accept their reply briefs.

Petitioner did not object to CMS’s proposed exhibits.  There being no objection from Petitioner, I admit CMS Exs. 1-16 into the record.  Prehearing Order ¶ 7.  CMS did not object to Petitioner’s proposed exhibits; however, CMS did oppose Petitioner’s motion to introduce P. Exs. 7 and 15 into the record.  For the reasons explained above, I exclude P. Exs. 7 and 15 from the record.  I admit P. Exs. 1-6, 8-14, and 16 into the record.

The Prehearing Order advised the parties that they must submit written direct testimony for any proposed witnesses and that an in‑person hearing would be necessary only if the opposing party requested the opportunity to cross‑examine a witness.  Prehearing Order ¶¶ 8-10; CRDP §§ 16(b), 19(b); Pac. Regency Arvin, DAB No. 1823 at 7-8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross‑examine those witnesses).

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In her list of proposed exhibits, Petitioner stated that she has “elected not to submit the names and direct testimony of any proposed witnesses in this matter.”  Docket Entry #11 in DAB E-File.  Yet, Petitioner offered her own sworn affidavit as P. Ex. 14.  To the extent that Petitioner seeks to testify in this matter, CMS requested to cross-examine Petitioner.

Because I grant CMS’s motion for summary judgment, there is no need to convene a hearing to permit CMS to cross-examine Petitioner.  In its motion for summary judgment, CMS argues that there are no material facts in dispute that would require a hearing.  CMS Br. at 1.  Petitioner opposes CMS’s motion.  P. Br. at 19-20.  As explained more fully below, I find that there is no dispute as to any material fact and CMS is entitled to judgment as a matter of law.  I therefore grant CMS’s motion for summary judgment.

II. Issues

The issues in this case are:

Whether CMS is entitled to summary judgment;

Whether CMS had a legal basis to deny Petitioner’s application for Medicare enrollment and billing privileges under 42 C.F.R. § 424.530(a)(3); and

Whether CMS had a legal basis to place Petitioner on its preclusion list, as defined at 42 C.F.R. §§ 422.2 and 423.100.

III. Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(17) and (20), 498.5(l)(2) and (n)(2);5 see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

IV. Discussion

1. Statutory and Regulatory Background

Petitioner is a supplier of health care services for purposes of the Medicare program.  See Act § 1861(d) (42 U.S.C. § 1395x(d)); 42 C.F.R. §§ 400.202 (definition of supplier),

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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 42 C.F.R § 424.530.

As authorized under sections 1842(h)(8) and 1866(b)(2)(D) of the Act (42 U.S.C. §§ 1395u(h)(8) and 1395cc(b)(2)(D)), CMS may deny a supplier’s application for Medicare enrollment and billing privileges if the supplier has been convicted of a felony offense, as described 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-

(A) Felony crimes against persons, such as murder, rape, assault, and other similar crimes for which the individual was convicted, including guilty pleas and adjudicated pretrial diversions.

(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.

(C) Any felony that placed the Medicare program or its beneficiaries at immediate risk, such as a malpractice suit that results in a conviction of criminal neglect or misconduct.

(D) Any felonies that would result in mandatory exclusion under section 1128(a) of the Act.

(ii)  Denials based on felony convictions are for a period to be determined by the Secretary, but not less than 10 years from the date of conviction if the individual has been convicted on one previous occasion for one or more offenses.

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Furthermore, CMS may place on the preclusion list any “individual or entity, regardless of whether they are or were enrolled in Medicare, [that] has been convicted of a felony under Federal or State law within the previous 10 years that CMS deems detrimental to the best interests of the Medicare program.”  42 C.F.R. §§ 422.2, 423.100 (definitions of preclusion list).  Medicare Advantage organizations and Medicare Part D plan sponsors may not provide reimbursement for any items or services furnished by an individual or entity on CMS’s preclusion list, or for prescriptions the individuals write.  42 C.F.R. §§ 422.2, 422.222, 422.224, 423.100, 423.120(c)(6).  In determining whether a felony conviction is detrimental to the best interests of the Medicare program, CMS considers:

(i)        The severity of the offense;
(ii)       When the offense occurred; and
(iii)     Any other information that CMS deems relevant to its determination.

42 C.F.R. §§ 422.2; 423.100 (definitions of preclusion list at subsection (3)).

If CMS places an individual on the preclusion list based on a felony conviction, the individual will remain on the preclusion list for a 10-year period, beginning on the date of the conviction, unless CMS determines that a shorter length of time is warranted.  In making a determination as to whether a shorter term of preclusion is appropriate, CMS takes into account:

(i)        The severity of the offense;
(ii)       When the offense occurred; and
(iii)     Any other information that CMS deems relevant to its determination.

42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).

Finally, in the case of preclusion from ordering Medicare Advantage items or services, CMS has the discretion not to include a particular individual or entity on the preclusion list should CMS determine that exceptional circumstances exist regarding beneficiary access to items, services, or drugs.  In making such a determination, CMS considers:

(i)        The degree to which beneficiary access to [Medicare Advantage] items, services, or drugs would be impaired; and
(ii)       Any other evidence that CMS deems relevant to its determination.

42 C.F.R. § 422.222(a)(6).

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2. Findings of Fact, Conclusions of Law, and Analysis
   1. Summary judgment is appropriate because there is no dispute as to any material fact.6

Summary judgment is appropriate if “the record shows that there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law.”  Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (citations omitted).  The moving party must show that there are no genuine issues of material fact requiring an evidentiary hearing and that it is entitled to judgment as a matter of law.  Id.  If the moving party meets its initial burden, the non-moving party must “come forward with ‘specific facts showing that there is a genuine issue for trial . . . .’”  Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986).  “To defeat an adequately supported summary judgment motion, the non-moving party may not rely on the denials in its pleadings or briefs, but must furnish evidence of a dispute concerning a material fact – a fact that, if proven, would affect the outcome of the case under governing law.”  Senior Rehab., DAB No. 2300 at 3 (citations omitted).  To determine whether there are genuine issues of material fact for hearing, an ALJ must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party’s favor.  Id.

There is no genuine dispute as to any material fact in this case.  Petitioner acknowledges that she was convicted of the felony offense of conspiracy to commit health care fraud.  P. Br. at 2, 6, 11; P. Reply at 1.7   Petitioner also admits the conviction occurred within 10 years of NGS’s initial determination to revoke her Medicare billing privileges.  Id.  Petitioner interposes the following arguments:  1) that the offense to which Petitioner pleaded guilty, conspiracy to commit health care fraud, does not constitute health care fraud, one of the enumerated crimes under 42 C.F.R. § 424.530(a)(3)(i)(B); 2) that the felony offense to which Petitioner pleaded guilty was not detrimental to the best interests of the Medicare program and its beneficiaries; 3) that CMS’s determinations are barred by res judicata, claim and issue preclusion, double jeopardy, estoppel, and waiver; and 4) that Petitioner’s enrollment in the Medicare program would not be detrimental to the best interests of the Medicare program and its beneficiaries.  However, these arguments raise purely legal issues which are properly addressed on summary judgment.  Therefore, I conclude that there are no material facts in dispute that prevent me from ruling on CMS’s motion for summary judgment.  Because I conclude Petitioner’s arguments are without merit, I grant CMS’s motion over Petitioner’s objection.

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2. CMS had a legal basis to deny Petitioner’s Medicare enrollment pursuant to 42 C.F.R. § 424.530(a)(3) because, within the 10 years prior to her application, Petitioner was convicted of a felony offense that CMS has determined to be detrimental to the best interests of the Medicare program and its beneficiaries.
   1. Petitioner was convicted of a felony offense.

Section 424.530(a)(3) defines a conviction for which enrollment may be denied by cross‑referencing the definition at 42 C.F.R. § 1001.2.  In turn, section 1001.2 provides:

Convicted means that—

(a) A judgment of conviction has been entered against an individual or entity by a Federal, State or local court, regardless of whether:

(1) There is a post-trial motion or an appeal pending, or

(2) The judgment of conviction or other record relating to the criminal conduct has been expunged or otherwise       removed;

(b) A Federal, State or local court has made a finding of guilt against an individual or entity;

(c) A Federal, State or local court has accepted a plea of guilty or nolo contendere by an individual or entity; or

(d) An individual or entity has entered into participation in a first offender, deferred adjudication or other program or arrangement where judgment of conviction has been withheld.

The record demonstrates, and Petitioner acknowledges, that she was convicted of a felony within the previous 10 years.  P. Br. at 2, 6, 11; P. Reply at 1.  Specifically, on January 18, 2019, Petitioner pleaded guilty to one felony count of conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349.  CMS Ex. 6 at 2.  The court accepted the plea and found her guilty.  Id.  Accordingly, Petitioner was convicted of a felony offense.

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2. The regulations define the felony offense for which Petitioner was convicted as per se detrimental to Medicare and its beneficiaries.

CMS may deny a supplier’s application to enroll in the Medicare program if, within the preceding 10 years, the supplier 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).  Examples of offenses that are detrimental to the best interests of the Medicare program and for which CMS may deny enrollment, include, among others:  financial crimes such as extortion, embezzlement, income tax evasion, insurance fraud, and similar crimes; and felonies that would result in mandatory exclusion under section 1128 of the Act.  42 C.F.R. § 424.530(a)(3)(i)(B), (D).  In promulgating 42 C.F.R. § 424.530(a)(3), CMS determined that the enumerated crimes are detrimental per seto Medicare.  See Letantia Bussell, M.D., DAB No. 2196 at 9 (2008).8

CMS determined that Petitioner’s offense is akin to insurance fraud, an enumerated financial crime described in 42 C.F.R. § 424.530(a)(3)(i)(B), because Petitioner conspired to defraud two health benefit programs.  CMS Ex. 4 at 5.  CMS also determined that Petitioner’s offense is per sedetrimental to Medicare under 42 C.F.R. § 424.530(a)(3)(i)(D) because it would result in mandatory exclusion under section 1128(a)(3) of the Act.  Id.  Petitioner argues that the offense of conspiracy to commit health care fraud does not constitute insurance fraud or health care fraud because the federal district court dismissed the charges of insurance fraud and health care fraud against her.  P. Br. at 14-15.

It appears Petitioner is contending that, because she was not convicted of one of the crimes specifically mentioned in section 424.530(a)(3)(i)(B), CMS lacks a basis to deny her application to enroll in Medicare.  This is incorrect.  Section 424.530(a)(3)(i) uses the following introductory language:  “Offenses include, but are not limited in scope or severity to” before listing certain named offenses.  An appellate decision of the DAB explains that the “words ‘include’ or ‘including’ are not terms of limitation or exhaustion” and, “[w]hen followed by a list of items, those words are reasonably read as signifying that the list contains merely illustrative examples of a general proposition or category that precedes the word and is not intended to preclude unmentioned items from

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being considered supportive or part of the general proposition or category.”  Fady Fayad, M.D., DAB No. 2266, at 8 (2009), aff’d, Fayad v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011).  This interpretation gains further support from the addition of the phrase “or other similar crimes” following the listed offenses in section 424.530(a)(3)(i)(B).  Accordingly, if Petitioner’s conviction for conspiracy to commit health care fraud is similar to the enumerated financial crimes, it is per se detrimental to Medicare and provides a basis to deny Medicare enrollment.

Viewed in this light, it is apparent that Petitioner’s conviction for conspiracy to commit health care fraud is similar to insurance fraud, a financial crime enumerated at 42 C.F.R. § 424.530(a)(3)(i)(B), as CMS argues.  See CMS Br. at 18-20.  As part of her plea agreement, Petitioner signed a “Stipulation of Offense Conduct” in which she agreed that:

[She] knowingly and willfully agreed and conspired with at least one other individual to engage in a scheme and artifice to defraud health care benefit programs, including the State of Connecticut Pharmacy Benefit Plan, by submitting and causing to be submitted materially false claims for prescriptions for compound prescription drugs, when no health care provider had treated or examined the patients for whom the prescriptions were issued, no health care provider had determined that the prescription drugs were medically necessary, and the prescriptions were not made or issued in accordance with generally accepted standards of medical practice.

CMS Ex. 5 at 29; see also id. at 30 (Petitioner’s signature below a statement that “this written stipulation is part of the plea agreement.”).  Petitioner admitted that her role in the conspiracy was to sign preprinted prescription forms provided by a compounding pharmacy known as Advantage Pharmacy (Advantage).  Id. at 28.  Petitioner signed prescriptions for patients whom she had not treated, examined, or diagnosed.  Id.  Petitioner did not create or maintain any medical records for these patients.  Id.  Petitioner herself faxed some of the prescriptions to Advantage.  Id. at 29.  As charged in the indictment, Advantage filled the prescriptions and submitted claims for payment to the State of Connecticut Pharmacy Benefit Plan or Tricare.  Id. at 14; see also id. at 11 (identifying the victims of the fraud scheme).  Therefore, Petitioner’s offense is a financial crime similar to insurance fraud because, as she stipulated, she knowingly and willfully participated in a scheme to defraud two insurance programs, the State of Connecticut Pharmacy Benefit Plan and Tricare.

I also agree with CMS that Petitioner’s conviction for conspiracy to commit health care fraud would result in mandatory exclusion under section 1128(a)(3) of the Act.  See CMS

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Br. at 20-21.  Section 1128(a)(3) of the Act provides that the Secretary shall exclude an individual that has been convicted of an offense which occurred after August 21, 1996, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program, operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to health care fraud.  As the statutory language makes clear, an individual need not be convicted of health care fraud to invoke the exclusion authority – a conviction related to health care fraud is sufficient.  Petitioner’s conviction for conspiracy to commit health care fraud is, on its face, related to health care fraud.  Moreover, as described above, the acts leading to her conviction were related to the fraudulent scheme in which Advantage billed insurance plans for compound drugs that were not prescribed in accordance with generally accepted standards of medical practice.  Therefore, Petitioner’s conviction would warrant exclusion under section 1128(a)(3) of the Act.

In summary, CMS did not err in determining that Petitioner’s conviction was a financial crime similar to insurance fraud, within the meaning of 42 C.F.R. § 424.530(a)(3)(i)(B).  Similarly, CMS did not err in determining that Petitioner’s conviction was for a crime that would result in mandatory exclusion under section 1128(a) of the Act, within the meaning of 42 C.F.R. § 424.530(a)(3)(i)(D).  Accordingly, Petitioner’s conviction is per se detrimental to Medicare and its beneficiaries.

3. Even if Petitioner’s conviction is not for an offense that is per se detrimental to Medicare, CMS acted within its discretion to determine that the particular offense is detrimental to the best interests of the Medicare program and its beneficiaries.

However, even if Petitioner’s conviction was not for a crime enumerated in 42 C.F.R. § 424.530(a)(3)(i), CMS is authorized to determine, on a case-by-case basis, that a particular felony conviction is detrimental to Medicare and its beneficiaries and therefore justifies denying an enrollment application.  Saeed A. Bajwa, M.D., DAB No. 2799 at 12 (2017) (42 C.F.R. § 424.535(a)(3)(i) authorizes CMS to determine what felony convictions are a basis for revocation; CMS is not limited to the felonies enumerated as examples).9  It is apparent that CMS exercised its discretion to determine that Petitioner’s conviction for conspiracy to commit health care fraud was detrimental to Medicare and its beneficiaries.  The reconsidered determination explicitly considered and rejected Petitioner’s contention that her conviction was not detrimental to Medicare.

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In the request for reconsideration Petitioner argued, among other things, that she did not knowingly or intentionally participate in the conspiracy10 and she was not one of the primary targets of the federal investigation and the felonious conduct had nothing to do with Medicare or Medicaid.  See, e.g., CMS Ex. 3 at 2, 4-5.  CMS addressed these contentions, finding that:

[Petitioner’s] felony conviction calls into question her trustworthiness and veracity as it relates to her ability and willingness to abide by governmental rules.  Payment under the Medicare program is made for claims submitted in a manner that relies upon the trustworthiness of our Medicare partners.  Given the facts underlying [Petitioner’s] felony conviction, Trust Funds and the Medicare beneficiaries may be at risk if she enrolls in the program.  It necessarily follows that placing Trust Funds at risk is also a detriment to the beneficiaries.

CMS also finds relevant that [Petitioner] insists that her husband kept her in the dark, and that she was unaware of her participation in the criminal conspiracy.  In making this argument, [Petitioner] fails to take accountability for her actions, and attempts to shift the blame for her conduct to her husband.  Therefore, in addition to the lack of trustworthiness discussed above, CMS finds that [Petitioner’s] lack of integrity and failure to take responsibility are detrimental to the best interests of the Medicare program.  The integrity of the Medicare program is dependent upon the integrity of its partners, and [Petitioner’s] conduct could significantly affect the integrity of the Medicare program.

CMS Ex. 4 at 5.

Accordingly, the record establishes that CMS exercised its discretion under 42 C.F.R. § 424.530(a)(3) to determine that Petitioner’s conviction is detrimental to the Medicare program and its beneficiaries.  This is all that is required under the regulation to support the denial of Petitioner’s enrollment application.  Importantly, I may not set aside CMS’s decision based on my own view as to whether Petitioner’s felony conviction is detrimental to the Medicare program and its beneficiaries.  See Robert J. Tomlinson,

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M.D., DAB No. 2916 at 8 (2018), aff’d, Tomlinson v. Azar, No. 5:19-cv-05114, 2020 WL376657 (W.D. Ark. Jan. 23, 2020)(an administrative law judge is not “allowed to review CMS’s exercise of discretion to deny [a Medicare enrollment] application or to substitute [his or her] opinion as to whether [an individual] remains a threat to the Medicare program and its beneficiaries based on [a] felony conviction.”).  For all these reasons, CMS had a legal basis to deny Petitioner’s Medicare enrollment application pursuant to 42 C.F.R. § 424.530(a)(3).

3. CMS had a legal basis to add Petitioner to the preclusion list effective February 9, 2021, the date of the reconsidered determination, until January 18, 2029, 10 years from the date of Petitioner’s felony conviction.

In addition to establishing a legal basis to deny Petitioner’s application to enroll in Medicare, Petitioner’s conviction meets the regulatory requirements to include Petitioner on CMS’s preclusion list.  42 C.F.R. §§ 422.2, 423.100.  Petitioner concedes, and the record establishes, that she was convicted of a felony offense within the previous 10 years.  P. Br. at 2, 6, 11; P. Reply at 1.  Further, CMS determined Petitioner’s conviction was detrimental to the best interests of the Medicare program and, in making that determination, considered the factors outlined in  42 C.F.R. §§ 422.2 and 423.100.  In its reconsidered determination, CMS explained:

CMS considers Conspiracy to Commit Health Care Fraud to be a very severe offense.  As discussed above, prescriptions were sent to Advantage Pharmacy with [Petitioner’s] signature even though she “did not treat, examine, or even meet with the patients for whom the prescriptions were written[,]” causing health benefit programs to pay Advantage Pharmacy for the prescription drugs . . . .  This conduct is incredibly severe because it led directly to significant financial losses to various health benefit programs. This conduct could also present a risk to beneficiaries, who are prescribed unnecessary drugs.  [Petitioner] could easily replicate this conduct in the Medicare program and presents serious risks to the integrity of the Medicare program.

Regarding factor (ii), the offense in question occurred from approximately February 2014, through approximately November 2015, or for more than 18 months.  CMS finds that the severity of the offense and its duration indicate that [Petitioner’s] felony is detrimental to the best interests of the Medicare program.

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As for factor (iii) CMS finds relevant that inherent in CMS’s implementation of a denial under § 424.530(a)(3) is a determination of detriment to the best interests of the Medicare program.  Therefore, after considering the enumerated factors, CMS finds that [Petitioner’s] felony offense is detrimental to the best interests of the Medicare program.  Accordingly, CMS upholds the determination to include [Petitioner] on the CMS Preclusion List, effective the date of this decision.

CMS Ex. 4 at 6-7.

As this discussion demonstrates, CMS considered the seriousness of Petitioner’s conduct and the degree to which Petitioner’s conduct could negatively impact the integrity of the Medicare program.  42 C.F.R. § 422.2; see also 42 C.F.R. § 423.100.  In particular, CMS considered the severity of Petitioner’s felony offense, the duration of the offense, and other factors such as the significant financial losses to various health benefit programs and the risk of unnecessary drugs being prescribed to beneficiaries.  42 C.F.R. §§ 422.2, 423.100.  Moreover, although Petitioner asserts CMS’s determination to place Petitioner on the preclusion list was unreasonable and unwarranted (P. Br. at 17), she does not dispute the factors CMS outlined in its February 9, 2021 reconsidered determination.  Rather, Petitioner disagrees with how CMS evaluated those factors.

As an initial matter, it is not clear to me whether, in reviewing CMS’s decision to place a provider or supplier on the preclusion list, I am authorized to evaluate how CMS applied the factors enumerated in 42 C.F.R. §§ 422.2 and 423.100.  As I have described above, appellate decisions of the DAB have concluded that administrative law judges may not substitute their judgment for that of CMS in reviewing whether to deny a supplier’s Medicare enrollment application because the conduct underlying a conviction is detrimental to Medicare.  See Robert J. Tomlinson, M.D. DAB No. 2916 at 8; see also Brian K. Ellefsen, DO, DAB No. 2626 at 7 (2015).  Similar reasoning applies in cases involving enrollment revocations.  See, e.g., Pa. Physicians, P.C., DAB No. 2980 at 13 (2019); see also Bussell, DAB No. 2196 at 13. Thus, it is possible to read the preclusion regulations as delegating to CMS unreviewable discretion to determine if a conviction is detrimental to the best interests of the Medicare program.

I need not decide the scope of CMS’s discretion in preclusion cases to resolve this case, however.  That is because even if I were authorized to review CMS’s determination that Petitioner’s conviction is detrimental to the best interests of the Medicare program, I would not find any error by CMS.  Petitioner’s arguments to the contrary do not persuade me otherwise.

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Petitioner contends that CMS “misapprehended the facts and circumstances associated with the Petitioner’s role in the offense for which she was convicted” and “failed to consider all of the relevant and material evidence on the issue.”  P. Br. at 17 (emphasis omitted).  Petitioner asserts that “she has rehabilitated herself” and “the record unequivocally demonstrates the Petitioner is able to practice with skill and safety and in compliance with ethical standards, standards of care and the Medicare program requirements.”  Id. at 18.  Accepting Petitioner’s representations as true, they do not diminish the seriousness of Petitioner’s criminal conduct.

The underlying conduct that resulted in Petitioner’s conviction amply demonstrates that her actions were detrimental to the best interests of the Medicare program.  Petitioner wrote prescriptions for patients whom she had not treated, examined, or even met with.  CMS Ex. 5 at 28.  Advantage filled those prescriptions, sent the compound drugs directly to the patients, and then submitted claims for payment to the State of Connecticut Pharmacy Benefit Plan or Tricare.  Id. at 14.  In 2014 and 2015, Petitioner herself faxed prescriptions to Advantage, as part of the scheme.  Id. at 29.

The scheme in which Petitioner participated caused significant financial losses to the State of Connecticut Pharmacy Benefit Plan and Tricare because the health benefit programs paid for compound drugs that were not prescribed in the course of a legitimate physician-patient relationship.  The federal district court ordered Petitioner to pay $825,166.17 in restitution.  CMS Ex. 8.  Restitution has long been considered a reasonable measure of program losses.  See Jason Hollady, M.D., DAB No. 1855 (2002).  As CMS determined, if Petitioner engaged in similar conduct as a Medicare supplier, Medicare trust funds could be put at risk.  CMS Ex. 4 at 5.

More alarmingly, Petitioner signed prescriptions for compound prescription drugs for patients whom she had not treated or examined.  Advantage filled those prescriptions and sent the compound prescription drugs to the patients.  Petitioner’s actions could have placed in jeopardy the health and safety of any person who consumed the drugs, some of which may not have been medically reasonable or may even have been contraindicated.  Such a result runs counter to Petitioner’s duty as a healthcare professional.

Finally, Petitioner argues that the effective date of her placement on the preclusion list should run from the date of her felony conviction, January 18, 2019, rather than from the effective date of the reconsidered determination, February 9, 2021.  P. Br. at 18.  The regulations provide that an individual will be added to the preclusion list on the date CMS denies the individual’s reconsideration request.  42 C.F.R. §§ 422.222(a)(3)(i)(B), 423.120(c)(6)(v)(C)(1)(ii).  Thus, CMS correctly placed Petitioner on the preclusion list effective February 9, 2021.  However, the regulations also provide that an individual placed on the preclusion list because of a felony conviction will remain on the preclusion list for a 10-year period, beginning on the date of the felony conviction, unless CMS determines that a shorter length of time is warranted.  42 C.F.R. §§ 422.222(a)(5)(iii),

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423.120(c)(6)(vii)(C).  I therefore agree with Petitioner that she should be removed from the preclusion list 10 years after the date of her conviction.

Accordingly, for the reasons explained above, CMS was legally authorized to add Petitioner to the preclusion list effective February 9, 2021, the date of the reconsidered determination, until January 18, 2029, 10 years from the date of Petitioner’s felony conviction.  See 42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).

4. Petitioner’s res judicata, collateral estoppel, double jeopardy, and waiver arguments are not a basis to reverse CMS’s decision to deny Petitioner’s application to enroll in Medicare or to place her on the preclusion list.

Petitioner asserts that CMS’s determination that her conviction for conspiracy to commit health care fraud constitutes a per se felony offense under 42 C.F.R. § 424.530(a)(3)(i) “is illogical as it flies in the face of well-established notions of due process, collateral estoppel (issue preclusion), res judicata, waiver, and equitable estoppel.”  P. Br. at 12 (footnotes omitted).  Petitioner further argues:

[W]hile CMS has the discretion to exclude her as a Medicare supplier based upon her felony conviction limited to participating in a conspiracy, . . . the claim for health care fraud was . . . dismissed by the Government’s own motion, [and] the suggestion that . . . Petitioner can be held accountable by CMS for having committed the crimes of insurance fraud and/or health care fraud is not only lacking any support in the law, but it is contrary to the final judgment of dismissal entered by the federal court on such claims.

Id. at 13.  Petitioner also contends the government “waived its right to invoke its current claim that Petitioner engaged in health care fraud.”  Id.

As an initial matter, neither CMS nor the Department of Health and Human Services (HHS) was a party to the criminal case against Petitioner.  Petitioner argues that HHS is an agency of the United States government, and is therefore the same party as the Department of Justice.  P. Reply at 6-7.  However, the DAB has determined that res judicata and collateral estoppel do not apply in administrative enforcement actions, even between components of HHS, CMS, and the Inspector General.  Gregory J. Salko, M.D., DAB No. 2437 at 6-7 (2012), aff’d, Salko v. Sebelius, No. 3:12cv515, 2013 WL 618779 (M.D. Pa. Feb. 19, 2013).  Moreover, the statutes, regulations, and authority governing civil remedies, such as denial of Medicare enrollment and inclusion on the preclusion list, are completely distinct from those that governed Petitioner’s criminal case.

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Petitioner’s waiver and res judicata arguments are without merit.  The parties have not previously litigated, and the federal district court did not adjudicate, CMS’s denial of Petitioner’s Medicare enrollment application due to her conviction for a felony that CMS determined is detrimental to the Medicare program and its beneficiaries.  Indeed, if res judicata applies at all, it supports CMS’s determinations denying Petitioner Medicare enrollment and placing her on the preclusion list.11

Similarly, Petitioner’s collateral estoppel argument is without merit.  Petitioner asserts that the issues in this case are identical to an issue in her criminal case:  whether Petitioner was guilty of health care fraud.  P. Reply at 5.  Petitioner’s argument is misplaced.  I need not find that she was guilty of health care fraud to resolve the issues before me.  The issues before me are whether CMS had a legal basis to deny Petitioner’s application for Medicare enrollment and billing privileges under 42 C.F.R. § 424.530(a)(3) and whether CMS had a legal basis to place Petitioner on its preclusion list, as defined at 42 C.F.R. §§ 422.2 and 423.100.

As I have explained above, CMS had a legal basis to deny Petitioner’s Medicare enrollment pursuant to 42 C.F.R. § 424.530(a)(3) because Petitioner was convicted, within the 10 years prior to her application, of a felony offense that is per se detrimental to Medicare.  I draw this conclusion based on Petitioner’s conviction for conspiracy to commit health care fraud.  Contrary to Petitioner’s argument, I have not assumed that Petitioner was convicted of health care fraud.  Further, even if Petitioner’s offense was not one of the enumerated offenses at 42 C.F.R. § 424.530(a)(3), CMS properly exercised its discretion to determine that Petitioner’s felony conviction is detrimental to Medicare and its beneficiaries, based on the specific facts and circumstances of her case.

Finally, I do not have the authority to overturn, on constitutional grounds, an enrollment denial that was imposed in accordance with applicable enrollment regulations.  Pa. Physicians, P.C., DAB No. 2980 at 7  (citing Cornelius M. Donohue, DPM, DAB No. 2888 at 8 (2018)).  Double jeopardy does not apply in this instance, as enrollment denial and placement on the preclusion list are civil remedies to protect Medicare and its beneficiaries.  Id. at 7-8 (citing Hudson v. United States, 522 U.S. 93, 98-99 (1997) (“[t]he Clause protects only against the imposition of multiple criminal punishments for the same offense.”)).  Therefore, res judicata, collateral estoppel, double jeopardy, and waiver do not apply here.

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5. Petitioner’s equitable arguments are not a basis to reverse CMS’s decision to deny Petitioner’s application to enroll in Medicare or to place her on the preclusion list.

Petitioner argues that she has been and is committed to “providing valuable services to beneficiaries of federal and state programs.”  P. Br. at 16.  Petitioner further states that she is “sincerely remorseful and has worked very hard to demonstrate her regret to the federal and state prosecutors and judges, the medical licensing board, her probation supervisors, employers, insurers, medical colleagues and patients.”  Id.  Petitioner also asserts that because she has rehabilitated herself and is “able to practice with skill and safety and in compliance with ethical standards, standards of care and the Medicare program requirements,” CMS’s decision to place her on the preclusion list should be reversed.  Id. at 18.  Petitioner states under oath that she takes full responsibility for her actions, is working hard to rebuild her personal and professional reputation, and intends to “comply with all rules and regulations while endeavoring to protect the program beneficiaries and provide them with high quality medical care.”  P. Ex. 14 at 6 (¶¶ 17, 18).  The record indeed shows that Petitioner has completed substantial coursework in ethics, boundaries, and the standard of care for prescribing medications and has significant support from her colleagues and community.  CMS Ex. 14; see P. Ex. 14 at 5‑6 (¶ 16).

However, even accepting these contentions as true, it is well settled that an administrative law judge may not overturn CMS’s denial of Medicare enrollment based on equitable grounds.  Dr. Robert Kanowitz, DAB No. 2942 at 7 (2019).  Further, to the extent Petitioner is arguing that CMS could and should have taken Petitioner’s unique circumstances into account in deciding whether to deny her enrollment application, I am also foreclosed from overturning the enrollment denial on that ground.  City of Sugar Land, DAB No. 2719 at 8 (2016).  Moreover, I see no reason to apply a different rule when CMS has exercised its discretion to place an individual on the preclusion list.

With regard to CMS’s decision to place Petitioner on the preclusion list, Petitioner’s arguments that she provides valuable services to beneficiaries of federal and state programs and populations in need of medical care (e.g. P. Ex. 14 at 4 (¶ 9) may be intended to demonstrate “that exceptional circumstances exist regarding beneficiary access to items, services, or drugs” within the meaning of 42 C.F.R. § 422.222(a)(6).  The regulation provides that CMS has discretion not to include an individual on the preclusion list if such circumstances exist.  If Petitioner did intend to argue that CMS failed to apply 42 C.F.R. § 422.222(a)(6) in this case, I do not find the argument supports reversal of the decision to include Petitioner on the preclusion list.

First of all, CMS is likely best positioned to assess the need for specific types of medical professionals depending on geographic area and the impact of a national health emergency.  Next, I may presume that CMS conducted the required analysis and

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determined that “exceptional circumstances” did not justify excepting Petitioner from placement on the preclusion list.  See, e.g., Brian K. Ellefsen, DAB No. 2626 at 7 (2015) (citing U.S. Postal Serv. v. Gregory, 534 U.S. 1, 10 (2001) (“a presumption of regularity attaches to the actions of Government agencies”)); see also U.S. v. Chemical Found., Inc., 272 U.S. 1, 1415 (1926) (a “presumption of regularity supports the official acts of public officers,” so “in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties”).  Finally, nothing in the regulation suggests that CMS’s exercise of its discretion to waive (or not to waive) placement on the preclusion list based on beneficiary access issues is reviewable by an administrative law judge.  In another context, an appellate decision of the DAB concluded:  “Even assuming CMS had discretion to refrain from [taking an official action] in these circumstances, it chose not to do so, and we have no authority to review that choice.”  Sugar Land, DAB No. 2719 at 8.  I find the reasoning of the Sugar Land decision persuasive authority supporting a conclusion that I may not review CMS’s determination declining to apply 42 C.F.R. § 422.222(a)(6) in Petitioner’s case.

V. Conclusion

For the foregoing reasons, I find that CMS had a legal basis to deny Petitioner’s application for Medicare enrollment and billing privileges and to include Petitioner on its preclusion list, effective February 9, 2021, the date of the reconsidered determination, until January 18, 2029, 10 years from the date of Petitioner’s felony conviction.

• 1. Most of Petitioner’s exhibits (P. Exs. 1-6, 8-13, and 16) are duplicates of CMS’s exhibits. For simplicity, I will only cite to CMS’s exhibits.
• 2. It appears that Petitioner’s sentencing hearing occurred on June 12, 2019; however, the judgment was filed on June 14, 2019. CMS Ex. 5 at 6; CMS Ex. 6 at 2
• 3. On August 4, 2020, the Medical Board issued an amended decision in Petitioner’s case. CMS Ex. 13 at 13-22. The amended decision, like the original decision, placed Petitioner’s medical license on probation for two years. Id. at 19.
• 4. Even if I were to find that good cause existed to admit P. Exs. 7 and 15 because the documents were not in existence at the time Petitioner requested reconsideration, I would nevertheless exclude them as irrelevant.
• 5. Effective June 15, 2018, CMS amended 42 C.F.R. part 498 to add subsections 498.3(b)(20) and 498.5(n) (specifying that inclusion on the preclusion list is an initial determination and authorizing appeal rights for such determinations). 83 Fed. Reg. 16,440, 16,757 (Apr. 16, 2018).
• 6. My findings of fact and conclusions of law appear as numbered headings in bold italic type.
• 7. Petitioner’s reply brief is not paginated. I cite to the page numbers as they appear in the PDF document uploaded to DAB E-File.
• 8. The Bussell decision considered grounds for revoking a supplier’s Medicare enrollment found at section 424.535(a)(3) of the regulations. Subsequent decisions have noted that the language of section 424.530(a)(3) (denial) largely parallels that of section 424.535(a)(3) (revocation). See, e.g., John A. Hartman, D.O., DAB No. 2911 at 13 n.14 (2018). Therefore, consistent with the Hartman decision, I find it appropriate to look to decisions interpreting section 424.535(a)(3) for guidance in interpreting section 424.530(a)(3).
• 9. For the same reasons discussed in n.8, supra, I find the Bajwa decision persuasive authority in interpreting section 424.530(a)(3).
• 10. Petitioner continues to assert before me that she did not know at the time she wrote them that the Advantage prescriptions were part of a fraud scheme. P. Ex. 14 at 4-5 (¶ 11). This statement is contrary to her stipulation in connection with her plea agreement, quoted above. See CMS Ex. 5 at 29.
• 11. Petitioner’s guilty plea resulted in a final judgment in which the federal district court found her guilty of conspiracy to commit health care fraud. CMS Ex. 6 at 2. That judgment necessarily encompasses a finding that Petitioner “knowingly and willfully” conspired “to execute a scheme or artifice . . . to defraud any health care benefit program.” 18 U.S.C. § 1347. Further, Petitioner so stipulated in the factual basis for her guilty plea. CMS Ex. 5 at 29.