Alexander Fligelman, DMD, DAB CR6125 (2022)

DECISION

Alexander Fligelman, DMD (Dr. Fligelman or Petitioner) appeals the reconsideration determination placing him on the Centers for Medicare & Medicaid Services (CMS) preclusion list.  For the reasons explained below, I find that there was a legitimate basis for inclusion on the CMS preclusion list, based on 42 C.F.R. §§ 422.2 and 422.222. 

I.   Background and Procedural History

In an initial determination dated June 3, 2020, Dr. Fligelman was notified that he was to be placed on the CMS preclusion list because he had been convicted of a felony, under Federal or State law, within the previous 10 years that CMS deemed detrimental to the best interests of the Medicare program.  CMS Exhibit (Ex.) 3.  Petitioner filed a request for reconsideration on August 5, 2020, asserting that the April 8, 2016 conviction was expunged and he had never committed any illegal activities in his entire life.  CMS Ex. 2.  However, in a reconsideration decision dated August 31, 2020, Petitioner was notified that CMS upheld his placement on the CMS preclusion list, effective the date of that decision.  CMS Ex. 1.

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Petitioner filed a timely Request for Hearing on November 1, 2020.  The case was assigned to Judge Leslie Weyn, who issued a Standing Prehearing Order (Order) on November 3, 2020.¹  In its prehearing exchange, CMS filed its Prehearing Exchange and included a Motion for Summary Judgment (CMS Br.) and four proposed exhibits.  Petitioner filed a Motion for Extension of Time to file his exchange because of a recent malware attack on his attorney’s computer.  Judge Weyn granted the motion on January 12, 2021, finding good cause to extend the exchange deadline to January 26, 2021.  A Motion for Additional Extension of Time was filed on January 26, 2021, citing ongoing problems with computer access.  Because CMS did not oppose the motion, Judge Weyn again granted an extension until February 3, 2021.  On February 4, 2021, Petitioner filed his Prehearing Exchange, which included a brief and Cross Motion for Summary Judgment (P. Br.) and seven proposed exhibits,² as well as a Request for Leave to Supplement the Record with Additional Documents that were reportedly not currently available to him.  CMS filed an objection to the motion to hold the record open for pending documents, indicating any additional documents violated the Order and there had been no good cause presented for the submission of new evidence.  On March 25, 2021, Judge Weyn issued a Ruling Granting Petitioner’s Request for Leave to Supplement the Record with Additional Exhibits, finding good cause to allow Petitioner to supplement the record until June 22, 2021.  Although Petitioner indicated in an e-mail dated June 29, 2021 that he intended to file a motion to supplement the record, no such filing was received.  Judge Weyn issued an Order Closing Record on July 6, 2021. 

Neither party has raised objections to the proposed exhibits of the other party.  As a result, CMS Exs. 1-4 and P. Exs. F-2, F-4-F-6, and F-8-F-10³ are, therefore, admitted into the record.  

According to the Order, an in-person hearing to cross-examine witnesses will be necessary only if a party files admissible, written direct testimony, and the opposing party asks to cross examine.  Order at ¶ 6.  Neither party has offered the written direct

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testimony of any witness as part of its prehearing exchange.  As a result, an in-person hearing is not necessary and I issue this decision based on the written record.⁴ 

II.   Issue

Whether CMS had a legitimate basis for including Petitioner on the preclusion list, pursuant to the provisions of 42 C.F.R. §§ 422.2 and 422.222. 

III.   Jurisdiction

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

IV.   Discussion

 A. Statutory and Regulatory Framework

To implement certain provisions of the Comprehensive Addiction and Recovery Act (CARA), the Secretary of Health and Human Services published final rules revising the Medicare Advantage program.  83 Fed. Reg. 16,440 (Apr. 16, 2018).  Included in those revisions was the requirement that a Part D plan sponsor reject a pharmacy claim if the individual prescribing the drug was on the preclusion list.  83 Fed. Reg. 16,440, 16,441.  According to the regulatory preamble, the preclusion list would consist of individuals and entities that are currently revoked under 42 C.F.R. § 424.535 and are under an active reenrollment bar, or have engaged in behavior for which CMS could have revoked the individual or entity to the extent applicable if they had been enrolled in Medicare, and CMS determines that the underlying conduct that led, or would have led, to the revocation is detrimental to the best interests of the Medicare program.  Id.  Under these final rules, CMS is authorized to include an individual, entity, or prescriber on its preclusion list if, as relevant herein, the following requirements are met:  

(3) The individual or entity, regardless of whether they are or were enrolled in Medicare, 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.  Factors that CMS considers in making such a determination under this paragraph (3) are –

(i) The severity of the offense;

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(ii) When the offense occurred; and

(iii) Any other information that CMS deems relevant to its determination. 

42 C.F.R. § 422.2(3). 

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

1. The evidence establishes that CMS had a legitimate basis to include Petitioner on the preclusion list, pursuant to the provisions of 42 C.F.R. §§ 422.2 and 422.222. 

CMS cites as the basis for placing Petitioner on the preclusion list the fact that on April 8, 2016, he was convicted of felony Theft by Unlawful Taking or Disposition-Movable Property, in violation of 18 Pa.C.S. § 3921(a) and felony Theft By Deception-False Impression, in violation of 18 Pa.C.S. § 3922(a)(1), and the felony offenses, which occurred in the preceding 10 years, were detrimental to the best interests of the Medicare program.  CMS Ex. 1 at 4.  CMS determined that the felony convictions of theft by Dr. Fligelman were akin to the crimes enumerated at 42 C.F.R. §§ 424.535(a)(3)(ii)(B) and 424.530(a)(3)(i)(B), considered per se detrimental to the best interests of the Medicare program.  Id. at 3.  CMS also found that Dr. Fligelman was either unaware of or willfully ignorant of his obligations and prohibitions under the contract with the Philadelphia Housing Authority and this willful ignorance could be replicated in the Medicare program.  Id. at 4.  CMS concluded that as a result of Dr. Fligelman’s felony conviction, Trust Funds may be at risk if he participates in the Medicare program as a practitioner or prescriber because claims for this program are submitted in a manner that relies upon the trustworthiness and best judgment of the prescriber and a risk to the Trust Funds is detrimental to the best interests of the Medicare program.  Id.  

Petitioner disputes the conclusions of CMS.  I would initially note that it is not clear that, 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.  In other contexts, appellate decisions of the DAB have emphasized that, where the regulations grant CMS discretion to determine that a provider or supplier’s underlying conduct is detrimental to Medicare, I may not substitute my own determination for that of CMS.  See Brian K. Ellefsen, DO, DAB No. 2626 at 7 (2015); see also Pa. Physicians, P.C., DAB No. 2980 at 13 (2019).  Further, I may presume that CMS properly discharged its duty under the regulations absent “clear evidence to the contrary.”  Douglas Bradley, M.D., DAB No. 2663 at 14 (2015) (quoting United States v. Chemical Foundation, Inc., 272 U.S. 1, 14-15 (1926)).  However, even if I were authorized to review CMS’s conclusion that Petitioner’s conduct

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was detrimental to Medicare and its beneficiaries, in this case I would not find that CMS erred. 

Petitioner initially challenges the conclusion that he was convicted of a felony.  He alleges that he “was neither prosecuted nor convicted on any criminal charges under Pennsylvania law” and “the Court expunged the entire proceeding without adjudication.”  P. Br. at 2.  He essentially asserts that the Accelerated Rehabilitative Disposition Program (ARD) he was accepted into does not fall within the regulatory definition of “convicted” in 42 C.F.R. § 1001.2.⁵  P. Br. at 18.  Petitioner argues there is a distinction between a deferred prosecution program, such as the ARD program in which he was entered, which is not a conviction, and a deferred adjudication program, which he appears to concede is included under the definition of “convicted.”  Id.  He points to the 9th Circuit opinion in Travers v. Shala, 20 F.3d 993 (9th Cir. 1994) as support for this argument.  P. Br. at 20-21. 

Convicted is defined in 42 C.F.R. § 1001.2 as -

(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.

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The Travers decision cited by Petitioner explained that “[i]n a deferred prosecution, it is not simply the judgment, but the initiation of charges altogether, which is withheld.”  Travers, 20 F.3d at 997 (emphasis added).  Travers discussed the lower court's observation that “[i]n a deferred prosecution, an agreement is entered into between the prosecutor and the defendant[,]” and that the distinction between a deferred prosecution and deferred adjudication is that “[a]t the heart of deferred prosecution is an agreement by the prosecutor to delay bringing or prosecuting charges.”  Id., citing Travers v. Sullivan, 801 F. Supp. 394, 401 (E.D. Wash. 1992).  The Circuit Court determined that this distinction was a “rational distinction which is consistent with the language and purposes of the statute.”  Id.  

Travers did not hold that the existence of a deferred prosecution agreement hinges on whether a criminal defendant can withdraw his plea.  See 20 F.3d at 997.  As the Board has previously explained, a “deferred prosecution” as described in Travers requires two elements:  

(1)  the deferral of the initiation of criminal charges, and

(2)  the ability of the accused to enter or persist in a plea of not guilty and demand a trial if the agreement with the prosecutor is voided. 

Ellen L. Morand, DAB No. 2436 at 6 (2012).  

In considering the analysis described in Travers, I first consider whether the ARD program resulted in a “deferral of the initiation of criminal charges.”  A review of the relevant documents establishes that it did not.  Criminal charges, including Theft by Unlawful Taking and Theft by Deception, were filed against Petitioner in the Court of Common Pleas, County of Philadelphia, 1st Judicial District, by the Philadelphia County District Attorney.  CMS Ex. 4 at 3-4.  Docket No. CP-51-CR-0002070-2016 was assigned to the case.  Id.  The disposition of the criminal charges was described as “Held for Court” with “ARD Approved and Accepted.”  CMS Ex. 4 at 5.  In an Order dated April 8, 2016, Petitioner was accepted into the ARD program.  CMS Ex. 4 at 1.  The implementing Order clearly specifies the Charges of Theft by Unlawful Taking-Movable property and Theft by Deception-False Impression, with the Disposition of those charges by ARD-County.  Id.  This language does not support an interpretation that the prosecutor delayed bringing charges.  Rather, criminal charges were brought and disposed of in that proceeding.  In addition, Petitioner was ordered to pay fines and costs, which included payment into a Crime Victim’s Compensation Fund.  Id. at 2.  If, in fact, charges were not “brought” by the prosecutor, such payments would make no sense.  Similarly, in the form entitled ARD WAIVER OF RIGHTS signed by Petitioner on April 8, 2016, Items # 3 and # 4 clearly indicate that “the charges against me will be held open while I am in ARD” and “ARD will lead to the eventual dropping of the charges against me.”  P. Ex. F-2.  The language in that waiver indicates that the charges have already been “brought”

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and would remain open until they were eventually dropped.  There is nothing in the language of any of the above documents that would support Petitioner’s position that this was a deferred prosecution. 

To support the argument that this was a deferred prosecution, Petitioner states that following early termination of ARD, “[t]he Court then advised Dr. Fligelman that he completed ARD, which ‘was not a conviction or admission of guilt.’”  P. Br. at 24-25, citing P. Ex. F-4.  However, the statement contained in P. Ex. F-4 appears to be a letter to Petitioner from his probation officer, whose opinion on whether or not an action constitutes a conviction under federal law is not given great weight.  Moreover, even assuming that the letter was issued under the auspices of the district court, the Board has made clear that federal law, not state law, controls what constitutes a “conviction” for the purpose of Federal laws designed to protect the Medicare program and its beneficiaries.  Lorrie Laurel, PT, DAB No. 2524at 4-6 (2013). 

Petitioner made many other statements about representations made to him by the court and the district attorney that entry into the ARD program would not be considered a conviction.  P. Br. at 10-11.  While these allegations were never corroborated despite the record being held open to receive them, even accepting them as true, they are not relevant.⁶  Regardless of whether a state official believed that the placement in the ARD program was not a conviction, I must base my decision on the federal regulatory definition.  And, the facts in this case establish that, within the previous 10 years,  Petitioner was “convicted” of a felony, as that term is defined in 42 C.F.R. § 1001.2, as discussed above. 

The final inquiry is whether the felony in question was deemed by CMS to be detrimental to the best interests of the Medicare program.  In assessing whether a felony conviction is detrimental to the best interests of the Medicare program, CMS is required by 42 C.F.R. § 422.2(3) to consider (i) the severity of the offense; (ii) when the offense occurred; and (iii) any other information that CMS deems relevant to its determination. 

Petitioner argues that the charges against him were “relatively minor,” apparently to suggest that the offense was not severe.  P. Br. at 26.  However, as discussed above, he was convicted of a felony.  CMS Ex. 4 at 3.  He also appears to argue that the offense

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was not recent, asserting that the offense date was March 26, 2003.  P. Br. at 27.  However, a review of the Information Charges brought against him indicates that the stated dates of the offenses were from March 26, 2003, through and including January 7, 2016, making the offenses fairly recent.  CMS Ex. 4 at 3. 

Petitioner asserts that, even assuming his entry into ARD could theoretically be considered a conviction, CMS has not proven that the conviction was for a felony offense “detrimental to the best interest of the Medicare program or its beneficiaries.”  P. Br. 3.  He alleges that there was no legal basis for the assumption on the part of CMS that he had engaged in a “prohibited relations” under the terms of a Philadelphia Housing Authority (PHA) and or that he acted with criminal intent.⁷  P. Br. at 28.  He specifically asserted that neither his mother nor his grandmother were “covered individuals” under the PHA contract and were eligible to rent the residence from him and he was unaware of any such prohibition at the time he executed the contract.  P. Br. at 17.  Petitioner also argued that CMS failed to consider the fact that the district attorney exercised his discretion in referring him to ARD, which was designed for “relatively minor cases.”  P. Br. at 26.  The argument here seems to be that Petitioner did nothing wrong and, even if he did, it was minor so the finding of “detrimental to the best interests of the Medicare program” is unsupported. 

CMS, however, found that Dr. Fligelman’s felony conviction was per se detrimental to the best interests of the Medicare program, based on the provisions of 42 C.F.R. §§ 424.535(a)(3)(ii)(B) and 424.530(a)(3)(i)(B).  CMS Ex. 1 at 3.  Those sections of the regulations include a non-exhaustive list of the types of felony offenses that CMS considers detrimental to the best interests of the program and its beneficiaries.  As relevant herein, 42 C.F.R. § 424.535(a)(3)(ii)(B) includes

(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. 

The Board has stated that, with respect to section 424.535(a)(3)(ii)(B)’s “financial crimes,”

. . . the qualifying conviction for a financial crime need not necessarily be one of the crimes expressly identified in the

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regulation as a financial crime (extortion, embezzlement, income tax evasion, insurance fraud).  Rather, these named crimes are illustrative examples of financial crimes.  “[O]ther similar crimes” (42 C.F.R. § 424.535(a)(3)(ii)(B)) also could be qualifying crimes for revocation under section 424.535(a)(3).  The Board has also stated that, “even if [p]etitioner’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.”  Abdul Razzaque Ahmed, M.D., DAB No. 2261, at 10 (2009), aff’d, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010). 

Michael Scott Edwards, OD, and M. Scott Edwards, OD, PA, DAB No. 2975 at 10 (2019). 

In this case, CMS determined that the “felony conviction for defrauding the Philadelphia Housing Authority is akin to the crimes enumerated at §§ 424.535(a)(3)(ii)(B) and 424.503(a)(3)(i)(B), which specifically include adjudicated pretrial diversions, such as Pennsylvania’s ARD program.”  CMS Ex. 1 at 3.  Petitioner does not directly assert that he was not convicted of a financial crime.⁸  Rather, he questions the relevance of a Housing Authority violation to the Medicare program.  P. Br. at 26.  The answer, of course, is that both programs involve expending money garnered from the taxpayers to benefit the public.  Misuse of such funds for personal or familial gain does not reflect well on an individual’s capacity to submit valid claims to Medicare.  While Petitioner makes much of the “minor” nature of his offenses and seems to argue that he did nothing wrong or it was simply a lack of understanding of the rules he was never apprised of, the investigation report suggests otherwise.  There was active deception on the part of Petitioner.  The Affidavit of Probable Cause notes denial of familial relationships and use of invalid addresses until confronted with sworn forms to the contrary.  CMS Ex. 4 at 10-11.  These actions resulted in $95,113 of public money being wrongfully paid to Petitioner on his mother’s and grandmother’s behalf.  Id.  Moreover, being unaware of the rules for obtaining public funds demonstrates, at a minimum, a negligent disregard for the integrity of the Medicare program.  

CMS found that Dr. Fligelman was either unaware of or willfully ignorant of his obligations and prohibitions under the contract with the Philadelphia Housing Authority and this willful ignorance could be replicated in the Medicare program.  CMS Ex. 1 at 4.  CMS concluded that as a result of Dr. Fligelman’s felony conviction, Trust Funds may be

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at risk if he participates in the Medicare program as a practitioner or prescriber because claims for this program are submitted in a manner that relies upon the trustworthiness and best judgment of the prescriber and a risk to the Trust Funds is detrimental to the best interests of the Medicare program.  Id.  Petitioner has not submitted any evidence to support a contrary conclusion.  On the basis of the above evidence, I conclude that CMS was warranted in concluding that Petitioner’s conduct was detrimental to the best interests of the Medicare program and that CMS had a legitimate basis for placing Petitioner on the preclusion list. 

2. Petitioner’s constitutional arguments and arguments in equity are not a basis to reverse his inclusion on CMS’s preclusion list.

Petitioner raises a due process or equitable argument, asserting that he is being punished “for his arrest record only.”⁹  P. Br. at 25.  However, I have no authority to adjudicate constitutional claims.  Fady Fayed, M.D., DAB No. 2266 at 14 (2009).  Moreover, to the extent Petitioner is arguing that placing him on the preclusion list is inequitable under the circumstances, many appellate decisions of the DAB have held that administrative law judges are not authorized to overturn, on equitable grounds, an action CMS is authorized by regulation to undertake.  See, e.g., Letantia Bussell, M.D., DAB No. 2196 at 13 (2008); also Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2009), aff’d, Ahmed v. Sebelius, 710 F. Supp. 2nd 167 (D. Mass. 2010); US Ultrasound, DAB No. 2302 at 8 (2010).  I am not aware of any authorization to apply a different rule when CMS has exercised its discretion to place an individual on the preclusion list. 

V.   Conclusion

For the foregoing reasons, I affirm CMS’s placement of Petitioner on the preclusion list, pursuant to 42 C.F.R. §§ 422.2 and 422.222.

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Endnotes

¹  This case was assigned to me on June 30, 2022.

²  Petitioner submitted an Exhibit List, consisting of 10 proposed exhibits, labeled F-1 through F-10.  However, only seven proposed exhibits were submitted.  In a document entitled Alexander Fligelman’s Pre-Hearing Exchange, Petitioner requested leave to submit Exs. F-1, F-3, and F-7 when they become available.  As discussed herein, these documents were not submitted within the specified time period. 

³  Petitioner’s exhibits were not submitted in a format consist with the Order of Judge Weyn, including labeling its exhibits as “P” and including the Docket number.  Order at ¶ 5.  However, CMS has not raised any objections and there is no indication that this would result in any prejudice to CMS.  As a result, they are admitted as submitted. 

⁴  Because a hearing is not necessary, I need not decide whether summary judgment is appropriate.

⁵  Petitioner refers to 42 C.F.R. Parts 422 and 423 as “legal fiction” because they treat “non-convictions as ‘convictions’ for purposes of a person’s eligibility to participate as a provider in the federal health care programs.”  P. Br. at 2.  I note, however, that I must follow and apply validly promulgated regulations, whether or not Petitioner agrees with the definitions contained therein.

⁶  Petitioner also alleges that representations were made to him that the charges against him were “minor” and did not warrant prosecution or punishment and the district attorney determined that the elements of the criminal charges were not supported by sufficient evidence to meet the legal standard for prosecution.  P. Br. at 9.  While it appears odd and perhaps borders on prosecutorial misconduct for a prosecutor to bring felony charges against an individual for a “minor” act that did not merit prosecution, such allegations, even if accepted as true, are not relevant.  He was charged with two felonies.

⁷  While much of Petitioner’s argument on this issue appears to be directed at the validity of the underlying conviction, the validity of the underlying conviction is an issue over which I have no jurisdiction.  As the preamble to the preclusion regulation clearly stated, “Any appeal under this . . . provision will be limited strictly to the individual’s inclusion on the preclusion list.”  83 Fed. Reg. at 16,663.

⁸   It is difficult to imagine an argument that the charges of Theft by Unlawful Taking-Movable property and Theft by Deception-False Impression were not financial crimes.

⁹  CMS may have found this argument more compelling had Petitioner been arrested and then released without charges ever being filed, which was not the case here.