Edmond Petrossian and Sterling Physicians Medical Group, DAB CR6758 (2025)

DECISION

Petitioner, Edmond Petrossian (Dr. Petrossian), is a physician, licensed to practice in California, who participated in the Medicare program as a supplier of services.  Petitioner Sterling Physicians Medical Group (SPMG) is a medical practice located in California.  As of July 1, 2021, Dr. Petrossian was a 5% or greater owner of SPMG.  As of December 1, 2023, Dr. Petrossian was also the contracted managing employee and medical director of Comfort Management Hospice (Comfort).  On May 28, 2024, Comfort was notified that its Medicare enrollment was revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  In July 2024, Dr. Petrossian and SPMG were notified that their Medicare enrollments were being revoked pursuant to 42 C.F.R. § 424.535(a)(19).  Petitioners were also notified that they were being added to the Medicare preclusion list.

Petitioners now appeal.

I affirm the Centers for Medicare & Medicaid Services’ (CMS)’s determinations.  I find that CMS is authorized to revoke Petitioners’ Medicare privileges and to add their names to the Medicare preclusion list because Dr. Petrossian’s affiliation with revoked Comfort and his affiliation with SPMG posed undue risk of fraud, waste or abuse.

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I have no authority to review the length of the reenrollment bar.

Statutory and Regulatory Background.  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, outpatient rehabilitation, home health, 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 out program purposes.  Act § 1842 (42 U.S.C. § 1395u).  Contractors pay claims to “providers” (Part A) and “suppliers” (Part B).  Physicians and other practitioners who furnish healthcare services may participate in the program as “suppliers” of services; however, they must enroll in the program in order to receive Medicare payments.  Act § 1861(d), (q), (r) (42 U.S.C. § 1395x(d), (q), (r)); 42 C.F.R. §§ 400.202, 424.505.

Section 424.535(a) authorizes CMS to revoke a supplier’s Medicare enrollment and billing privileges on one or more of the grounds set forth under that subsection.  So long as CMS shows that one of the regulatory bases exists, I must uphold the revocation.  Tammy Dobbin, APN & Ebony Wellness, LLC, DAB No. 3136 at 2, 8 (2024); Wassim Younes, M.D. & 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)).

Procedural Background

Here, by letters dated July 10 and July 19, 2024, the Medicare administrative contractor, Noridian Healthcare Solutions (Noridian), advised Petitioners that their Medicare privileges were revoked, effective August 9 and August 18, 2024.  The letters explained that the

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contractor revoked Petitioners’ Medicare privileges pursuant to 42 C.F.R. § 424.535(a)(19) for an affiliation that poses undue risk.  CMS Exs. 2, 3.

The contractor imposed a 10-year reenrollment bar.  CMS Exs. 2, 3.

The letters also advised Petitioners that the contractor added them to the CMS’s preclusion list, as authorized by 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  It explained that, if Petitioners requested reconsideration, this action would become effective on the date the reconsidered determination was issued.  CMS Exs. 2, 3.

Petitioners jointly requested reconsideration.  CMS Ex. 1.  In a reconsidered determination, dated November 20, 2024, a CMS hearing officer upheld the revocations.  Specifically, she found that Dr. Petrossian’s affiliation with Comfort, a provider that was revoked for noncompliant billing, poses an undue risk of fraud, waste or abuse to the Medicare program.  CMS Ex. 11 at 7.

The hearing officer also upheld the determination to include Petitioners’ names on CMS’s preclusion list.  CMS Ex. 11 at 8.

Decision based on the written record.  CMS has moved for summary judgment.  However, the standing order1 directed the parties to list all proposed witnesses and to submit, as a proposed exhibit, the complete, written direct testimony of any proposed witness.  Standing Pre-hearing Order at 9-10 (April 8, 2022).  The order pointed out that a hearing would be necessary only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine.  Id.

CMS did not propose any witnesses.  Petitioners listed three declarations in their exhibit list but did not file a separate witness list until later.  CMS did not request to cross-examine any of those who provided declarations.  Because there are no witnesses to be cross-examined, an in-person hearing would serve no purpose, and I may decide this case based on the written record, without considering whether the standards for summary judgment have been met.2

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Exhibits.  CMS submits its brief (CMS Br.) with 13 exhibits (CMS Exs. 1-13).  Petitioners did not object to CMS’s exhibits.  In the absence of any objections, I admit into evidence CMS Exs. 1-13.

Petitioners submits their brief (P. Br.) with eight exhibits (P. Exs. 1-8).

CMS objected to Petitioners’ exhibits 1, 2, and 4 as untimely and new evidence.  The primary standard for the admission of evidence is whether it is relevant and material.  42 C.F.R. § 498.60(b).  Further, the regulations require providers and suppliers to submit all evidence with its reconsideration request.  42 C.F.R. § 405.803(e).  Providers and suppliers must show good cause to submit new evidence to an administrative law judge.  42 C.F.R. § 498.56(e).

Petitioners do not dispute that it did not offer exhibits 1, 2, and 4 at the reconsideration level.  These exhibits purport to show fake accounts that can access HospiceMD and, therefore, show that someone could have faked Dr. Petrossian’s electronic signature.  Petitioner argues that I should find good cause to admit these exhibits because he did not realize the scope of affiliation until after the reconsidered determination was received.  However, this argument is without merit.  The notice letter informed Petitioners that they were being revoked because Dr. Petrossian was listed as an individual with ownership and/or managerial control of Comfort.  Therefore, I do not find that good cause exists to admit the new evidence proposed as exhibits 1, 2, and 4 and exclude them as required by 42 C.F.R. 498.56(e)(2)(ii).

CMS also objects to Petitioners’ exhibits 3, 5, 6, and 7 as irrelevant and because Petitioners failed to file a witness list.  Petitioners submitted a witness list shortly after their filing.  Petitioners also filed an exhibit 83 on May 7, 2025 to which CMS did not object.  I will admit the remaining exhibits and any objections will go to the weight of the evidence.

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Discussion

1. Because Dr. Petrossian’s affiliation with Comfort poses an undue risk of fraud, waste and abuse, CMS properly revoked Petitioners’ Medicare enrollment under 42 C.F.R. § 424.535(a)(19).4

Revocation of enrollment.  CMS may revoke Petitioners’ Medicare enrollment and billing privileges if, within the preceding five-years prior to the revocation, each of the Petitioners had an affiliation under 42 C.F.R. § 424.519 that poses an undue risk of fraud, waste or abuse to the Medicare program.  42 C.F.R. § 424.535(a)(19).

Affiliation that poses an undue risk.  CMS determines that the provider or supplier has or has had an affiliation under section 424.519 that poses an undue risk of fraud, waste, or abuse to the Medicare program.  42 C.F.R. § 424.535(a)(19).

(f) Undue risk.  Upon receiving the information described in paragraphs (b) and (c) of this section, CMS determines whether any of the disclosed affiliations poses an undue risk of fraud, waste, or abuse by considering the following factors:

(1) The duration of the affiliation.

(2) Whether the affiliation still exists and, if not, how long ago it ended.

(3) The degree and extent of the affiliation.

(4) If applicable, the reason for the termination of the affiliation.

(5) Regarding the affiliated provider’s or supplier’s disclosable event under paragraph (b) of this section:

(i) The type of disclosable event.

(ii) When the disclosable event occurred or was imposed.

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(iii) Whether the affiliation existed when the disclosable event occurred or was imposed.

(iv) If the disclosable event is an uncollected debt:

(A) The amount of the debt.

(B) Whether the affiliated provider or supplier is repaying the debt.

(C) To whom the debt is owed.

(v) If a denial, revocation, termination, exclusion, or payment suspension is involved, the reason for the disclosable event.

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

(g) Determination of undue risk.  A determination by CMS that a particular affiliation poses an undue risk of fraud, waste, or abuse will result in, as applicable . . . the revocation of the provider's or supplier's Medicare enrollment under § 424.535(a)(19).

* * * *

(i) Undisclosed affiliations.  CMS may apply . . . § 424.535(a)(19) to situations where a disclosable affiliation (as described in § 424.519(b) and (c)) poses an undue risk of fraud, waste or abuse, but the provider or supplier has not yet reported or is not required at that time to report the affiliation to CMS.

42 C.F.R. § 424.519(f), (g), (i).

Petitioner Dr. Petrossian’s affiliations.  As of December 1, 2023, Dr. Petrossian is listed in Comfort’s filings as both a contracted managing employee and medical director.  CMS Exs. 7, 9.  In a May 28, 2024 notice letter, National Government Services, a CMS contractor, notified Comfort that its Medicare billing enrollment was being revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  CMS Ex. 6.  Comfort was also placed on the preclusion list.  Id.

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As of July 1, 2021, Dr. Petrossian was listed as a partner and director/indirect owner with a greater than 5% interest in SPMG.  CMS Ex. 5 at 6-7.  As of December 1, 2023, Dr. Petrossian was also the contracted managing employee and medical director of Comfort.  CMS Ex. 7 at 8.

On July 10, 2024, Noridian sent a notice letter to Dr. Petrossian informing him that his Medicare billing privileges were being revoked pursuant to 42 C.F.R. § 424.535(a)(19).  CMS Ex. 2.  On July 19, 2024, Noridian sent a notice letter to SPMG informing it that it was also being revoked pursuant to 42 C.F.R. § 424.535(a)(19).  CMS Ex. 3.  Both notices stated that Dr. Petrossian’s affiliation with Comfort was the basis for the revocations.  CMS Exs. 2, 3.

Legal basis for revocation.  The Departmental Appeals Board has consistently held that an administrative law judge’s review of CMS’s determination to revoke a supplier’s Medicare enrollment is limited to deciding whether CMS has established one or more of the grounds specified in section 424.535(a).  Dobbin & Ebony Wellness, DAB No. 3136 at 5; William Garner, M.D., DAB No. 3026 at 16 (2020); Norman Johnson, M.D., DAB No. 2779 at 11 (2017).  Although CMS itself has the discretion to consider “unique or mitigating circumstances in deciding whether, or how, to exercise its revocation authority,” I do not.  Johnson, DAB No. 2779 at 11 (quoting Care Pro Home Health, Inc., DAB No. 2723 at 9 n.8 (2016)).  I may not substitute my discretion for that of CMS in determining whether the revocation is appropriate.  Johnson, DAB No. 2779 at 11 (quoting Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2009), aff’d, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010)).

Here, within the last five years, Dr. Petrossian was unquestionably affiliated with both Comfort and SPMG.  It is also without question that Comfort’s Medicare billing privileges were revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii) for engaging in a pattern or practice of submitting claims that fail to meet Medicare requirements.  CMS Ex. 6 at 1.  Further, Dr. Petrossian was Comfort’s Medical Director and Contracted Managing Employee at the time Comfort’s billing privileges were revoked.  CMS Exs. 6 at 1, 9 at 4.  Dr. Petrossian was also a director with a 5% or more interest in SPMG at the time Comfort’s billing privileges were revoked.  CMS Ex. 5.

CMS has therefore established grounds for revoking Petitioners’ Medicare enrollment under section 424.535(a)(19).

Dr. Petrossian argues that the evidence shows that he is a victim of fraud and that he had no affiliation with Comfort to pose an undue risk of fraud, waste or abuse.  He argues that he had no knowledge that Comfort listed him as a managing employee or director and that he was similarly unaware of Comfort’s revocation until after he received the notice letters related to himself and SPMG.  P. Br. at 4-5; P. Ex. 3.  These arguments were raised in Petitioners’ request for reconsideration and were rejected by the hearing officer.  The hearing

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officer specifically found that there was no evidence to support Petitioners’ claims, and instead, the evidence supports the opposite – that Dr. Petrossian was a contracted managing employee and medical director which meets the definition of a managing employee.  42 C.F.R. § 424.502; CMS Ex. 11.  I agree with the hearing officer.  Petitioner has not provided sufficient evidence to support his claim he is a victim of fraud and that he had no affiliation with Comfort to pose an undue risk of fraud, waste or abuse.  Evidence submitted Petitioners is insufficient to rebut CMS’s showing.

Similarly, Dr. Petrossian argues that fake accounts could be created through a HospiceMD software, that this was demonstrated by a colleague, and that the creation of fake accounts supports his position that he was not the director or a managing employee of Comfort.  P. Br. at 5-6.  Dr. Petrossian also continues to assert that at no point did he exercise any managerial control at Comfort.  P. Br. at 4-5.  While the ability to create fake accounts through the HospiceMD software is concerning, it is not relevant to the matter at hand and does not dispute or otherwise disprove that Dr. Petrossian was the contracted managing employee and medical director on Comfort’s filings made with PECOS on December 1, 2023.  Therefore, I find that CMS acted within its authority when it determined that there was an affiliation between Petitioners and Comfort because Dr. Petrossian was listed on Comfort’s Medicare enrollment as a medical director and contracted managing employee.

2. CMS acted within its authority when it added Petitioners to the preclusion list because Petitioners are currently revoked, under a re-enrollment bar, and CMS has determined that the underlying conduct that led to the revocation was detrimental to the best interests of the Medicare program and its beneficiaries.

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.5  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 and entities that:

• are currently revoked from Medicare enrollment, are under an active reenrollment bar, and CMS determines that the underlying conduct leading to the revocation is detrimental to the best interests of the Medicare program;

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• have engaged in behavior for which CMS could have revoked the prescriber, individual, or entity had it been enrolled in the Medicare program, and CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program; or
• have been convicted of a felony within the previous ten-years that CMS deems detrimental to the best interests of the Medicare program.  In making such determination, CMS considers the severity of the offense, when the offense occurred, and any other information CMS deems relevant.

Review of Petitioners’ inclusion on the preclusion list.  My review here is limited to whether CMS had the authority to include Petitioner on the preclusion list.  42 C.F.R. § 498.3(b)(20); see 83 Fed. Reg. 16,642-16643 (Apr. 16, 2018) (explaining that appeals are limited to the individual’s inclusion on the preclusion list).

As discussed above, Petitioners are currently revoked from Medicare enrollment, are under a 10-year re-enrollment bar, and CMS determined that the underlying conduct led to an undue risk of fraud, waste or abuse which is detrimental to the best interests of the Medicare program.  CMS Ex. 11 at 7-9.  As shown by the reconsidered determination, CMS reasonably determined that Petitioners’ conduct is detrimental to the best interests of the Medicare program.  It found that Comfort, with Dr. Petrossian as its medical director, submitted claims to Medicare that were not compliant with the regulations.  CMS Ex. 11 at 8.  CMS also determined that Dr. Petrossian’s affiliation to Comfort posed a risk of fraud because “the noncompliant billing behavior exhibited by Comfort[,] where Dr. Petrossian was in a managing employee role[,] could be easily replicated by the” Petitioners.  CMS Ex. 11 at 8.  Thus, CMS established a basis for placing Petitioners on the preclusion list.

Conclusion

Dr. Petrossian was affiliated with both Comfort and SPMG when Comfort’s billing privileges were revoked for engaging in a pattern or practice of submitting claims that fail to meet Medicare requirements.  Therefore, CMS acted within their authority when it concluded that Petitioners’ affiliation posed an undue risk of fraud, waste or abuse.  CMS may therefore revoke their Medicare enrollment and billing privileges, impose a reenrollment bar, and include them on the preclusion list.

I have no authority to review the lengths of the reenrollment bar nor their time on the preclusion list.

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For these reasons, I affirm CMS’s determinations.