John Manzella, D.O., DAB CR6773 (2025)

DECISION

I affirm the determination of the Centers for Medicare & Medicaid Services (CMS) to deny enrollment for Petitioner, John Manzella, D.O., in the Medicare program and to add Petitioner’s name to the CMS Preclusion List.

I. Background and Procedural History

Petitioner is a physician.  P. Ex. 2 at 1.  On March 18, 2024, CMS received an application from Petitioner to enroll in the Medicare program as a physician/supplier.  CMS Ex. 1.  In an April 5, 2024 notice of initial determination, a CMS contractor denied Petitioner’s application for enrollment in the Medicare program because Petitioner was convicted of a felony involving the unlawful administration, dispensing, and delivery of a controlled substance under Pennsylvania law.  CMS Ex. 3 at 1.  The CMS contractor also added Petitioner’s name to the CMS Preclusion List.  CMS Ex. 3 at 1.

On June 7, 2024, Petitioner requested reconsideration of the initial determination and, on July 3, 2024, supplemented his reconsideration request with additional information and

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documents.  CMS Exs. 4, 5.  In a March 31, 2025 reconsidered determination, a CMS hearing officer upheld the initial determination.  CMS Ex. 6.

On May 28, 2025, Petitioner requested a hearing before an administrative law judge (ALJ) to dispute the reconsidered determination.  P. Ex. 1.  On May 29, 2025, the Civil Remedies Division acknowledged receipt of the hearing request, provided the parties with the dates for prehearing submissions, and issued my Standing Order.

On July 3, 2025, CMS filed a prehearing brief (CMS Br.), which included a motion for summary judgment, along with six proposed exhibits.  On August 22, 2025, Petitioner submitted a prehearing brief (P. Br.) and two proposed exhibits, one of which was written direct testimony from Petitioner (P. Ex. 2).  On September 3, 2025, CMS requested to cross-examine Petitioner.

II. Issues

1. Whether CMS had a legitimate basis to deny Petitioner’s enrollment in the Medicare program under 42 C.F.R. § 424.530(a)(3).
2. Whether CMS had a legitimate basis to include Petitioner on the CMS Preclusion List under 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).

III. Jurisdiction

I have jurisdiction to decide the issues in this case.  42 C.F.R. §§ 498.3(b)(17)(i), (20), 498.5(l)(2), (n)(2); see also 42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a), 498.1(g).

IV. Legal Framework

The Social Security Act (Act) authorizes the Secretary of Health and Human Services (Secretary) to establish regulations governing the enrollment of providers and suppliers in the Medicare program.  42 U.S.C. § 1395cc(j).  Physicians are “suppliers” for Medicare program purposes.  42 U.S.C. § 1395x(d) (defining “supplier” to include physicians and other entities that are not considered to be a “provider of services”).

To receive payment for covered Medicare items or services provided to beneficiaries under Medicare Part B, a supplier must enroll in the Medicare program.  42 U.S.C. §§ 1395n(a), 1395u(h)(1); 42 C.F.R. § 424.505.  To enroll, a supplier must complete and file an enrollment application with CMS and meet all of the requirements to be a supplier.  42 C.F.R. §§ 424.510, 424.530.  If CMS determines that an applicant does not meet the requirements for enrollment, CMS has the authority to deny enrollment.  42 C.F.R. § 424.530.

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CMS may add an individual or entity to the CMS Preclusion List for any of the reasons stated in the regulatory definition of the term “Preclusion list” applicable to Medicare Parts C and D.  42 C.F.R. §§ 422.2, 423.100.  A Medicare Advantage Organization under Medicare Part C may not make payment for a health care item, service, or drug provided by an individual or entity on the Preclusion List.  42 C.F.R. § 422.222(a)(1)(i).  Further, a Medicare Part D sponsor must deny a request for reimbursement from a Medicare beneficiary for a drug prescribed by an individual who is on the Preclusion List.  42 C.F.R. § 423.120(c)(6)(vii)(C).

V. Summary Judgment

CMS moves for summary judgment, and Petitioner opposes that motion.  I grant CMS’s motion because the undisputed material facts are sufficient to show that CMS had a legitimate basis to deny Petitioner’s enrollment and to place Petitioner’s name on the Preclusion List.

Summary judgment is appropriate if a case presents no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law.  Bartley Healthcare Nursing & Rehab., DAB No. 2539 at 3 (2013) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986)); Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009).

The moving party may show the absence of a genuine factual dispute by presenting evidence so one-sided that it must prevail as a matter of law or by showing that the non-moving party has presented no evidence “sufficient to establish the existence of an element essential to [that party’s] case, and on which [that party] will bear the burden of proof at trial.”  Livingston Care Ctr. v. U.S. Dep’t of Health & Hum. Servs.,388 F.3d 168, 173 (6th Cir. 2004) (quoting Celotex, 477 U.S. at 322).  To avoid summary judgment, the non-moving party must then act affirmatively by tendering evidence of specific facts showing that a dispute exists.  Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586 n.11 (1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing & Rehab. Ctr., DAB No. 1918 (2004).  The non-moving party may not simply rely on denials but must furnish admissible evidence of a dispute concerning a material fact.  Ill. Knights Templar, DAB No. 2274 at 4; Livingston Care Ctr., DAB No. 1871 at 5 (2003).  In doing so, the non-moving party must show more than “some metaphysical doubt as to the material facts.”  W. Tex. LTC Partners, Inc., DAB No. 2652 at 6 (2015), aff’d sub nom. W. Tex. LTC Partners, Inc. v. Dep’t of Health & Hum. Servs., 843 F.3d 1043 (5th Cir. 2016); 1866ICPayday.com, L.L.C., DAB No. 2289 at 3 (2009) (quoting Matsushita, 475 U.S. at 587).

In examining the evidence for purposes of determining whether summary judgment is appropriate, I must draw all reasonable inferences in the light most favorable to the non-moving party.  Heritage House of Marshall Health & Rehab., DAB No. 3035 at 8 (2021);

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Brightview Care Ctr., DAB No. 2132 at 2, 9 (2007); Livingston Care Ctr., 388 F.3d at 172; Guardian Health Care Ctr., DAB No. 1943 at 8 (2004); see also Brightview, DAB No. 2132 at 10 (entry of summary judgment upheld where inferences and views of non-moving party are not reasonable).  However, drawing factual inferences in the light most favorable to the non-moving party does not require that I accept the non-moving party’s legal conclusions.  W. Tex. LTC Partners, DAB No. 2652 at 6-7; cf. Guardian, DAB No. 1943 at 11 (“A dispute over the conclusion to be drawn from applying relevant legal criteria to undisputed facts does not preclude summary judgment if the record is sufficiently developed and there is only one reasonable conclusion that can be drawn from those facts.”); see Green Valley Healthcare & Rehab. Ctr., DAB No. 2947 at 8 (2019) (quoting Johnson v. Perez, 823 F.3d 701, 705 (D.C. Cir. 2016)) (noting that a genuine factual dispute does not exist “when a putatively disputed body of evidentiary material could not, even assuming a sympathetic factfinder, reasonably support a finding crucial to the nonmoving party’s legal position.”). 

Specifically, in relation to administrative proceedings involving Medicare, it is well-established that an ALJ is permitted to decide a case on summary judgment, without an evidentiary hearing.  Shah v. Azar, 920 F.3d 987, 996 (5th Cir. 2019) (citing Cedar Lake Nursing Home v. U.S. Dep’t of Health & Hum. Servs., 619 F.3d 453, 457 (5th Cir. 2010)); see Fal-Meridian, Inc. v. U.S. Dep’t of Health & Hum. Servs., 604 F.3d 445, 449 (7th Cir. 2010).  “All it means for a decision to be based on a grant of summary judgment is that there are no issues that would benefit from being resolved in an evidentiary hearing.”  Fal-Meridian, 604 F.3d at 449 (emphasis added).

Finally, deciding a case on summary judgment does not mean that it is decided without a hearing.  In reviewing administrative appeals decided on summary judgment, courts describe the case as having been decided without an “oral hearing” or without an “evidentiary hearing.”  They recognize that, by considering the evidence and applying the law, the ALJ has granted the petitioner a hearing.  See CNG Transmission Corp. v. FERC, 40 F.3d 1289, 1293 (D.C. Cir. 1994) (holding that a “paper hearing” satisfies statutory requirements for “notice and opportunity for hearing.”).

In the present case, neither party objected to any of the proposed exhibits in this case.  Therefore, for purposes of determining the relevant undisputed facts in this case, I consider all of the exhibits.

As explained below in detail, the undisputed facts in this case show that Petitioner was convicted of a felony, within the last ten years, and that the felony involved the improper prescribing of controlled substances.  CMS may deny enrollment when an individual has been convicted of a felony, within ten years, and CMS determines that the felony is detrimental to the best interests of the Medicare program and its beneficiaries.  42 C.F.R. § 424.530(a)(3); see also 42 U.S.C. § 1395u(h)(8).  Because an individual convicted of a

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felony related to the illegal prescribing of controlled substances is subject to a mandatory exclusion from federal health care programs (42 U.S.C. § 1320a-7(a)(4)), such a felony is, as a matter of law, detrimental to the best interests of the Medicare program and its beneficiaries.  42 C.F.R. § 424.530(a)(3)(i)(D).  Therefore, CMS’s denial of enrollment was appropriate based on the undisputed facts in this case.

Similarly, to add an individual to the Preclusion List, the individual must be convicted of a felony, within the last ten years, that is detrimental to the best interests of the Medicare program.  When deciding to add an individual’s name to the Preclusion List, CMS considers the severity of the criminal offense, when the offense occurred, and any other information that CMS deems relevant.  42 C.F.R. §§ 422.2 (paragraph (3) in the definition of “Preclusion list”), 423.100 (paragraph (3) in the definition of “Preclusion list”).

As stated above, the undisputed facts in this case show that Petitioner was convicted of two felonies, within the preceding ten years, that involved improper prescribing of controlled substances.  Petitioner’s primary argument against the entry of his name on the Preclusion List is that his criminal conduct occurred approximately 12 years before the initial determination was issued, his criminal case was delayed for years resulting in a conviction five years after the criminal conduct occurred, and Petitioner has rehabilitated himself during that time and regained his medical license.  Looking at the record in the light most favorable to Petitioner, CMS’s evaluation of the regulatory factors is sufficient given that the undisputed facts in this case show that, as a matter of law, Petitioner’s crime is detrimental to the best interests of the Medicare program because Petitioner was subject to a mandatory exclusion based on his conviction.  CMS considered Petitioner’s position but was free to conclude that Petitioner’s criminal offense is more important than the time that has transpired since the criminal acts occurred.

Because the undisputed facts in this case support the affirmance of CMS’s actions, I grant summary judgment in CMS’s favor.

VI. Undisputed Facts

1. Petitioner is a physician who was licensed and practiced medicine in Pennsylvania starting in the late 1990’s.  P. Ex. 2 at 1, 4; CMS Ex. 4 at 44-45.
2. In April 2013, Petitioner surrendered his medical license due to a lengthy period of alcohol and drug abuse, and entered an intensive program for drug, alcohol, and professional rehabilitation.  Petitioner “accepted full responsibility for [his] actions, including the unlawful prescribing of controlled substances.”  P. Ex. 2 at 2.

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3. In August 2013, the Pennsylvania Attorney General filed an Information in the Court of Common Pleas of Carbon County, Pennsylvania (Common Pleas Court), charging Petitioner with 98 counts of criminal conduct.  CMS Ex. 2 at 35-37; see also P. Ex. 2 at 2.
4. Counts 1 through 48 of the Information charged Petitioner with the felony offense of Unlawful Administration, Dispensing, Delivery, Gift or Prescription of a Control Substance by Practitioner in violation of 35 Pa. Stat. § 780-113(a)(14).  Specifically, these counts alleged that, on or between January 2011 and October 2012, Petitioner unlawfully administered, dispensed, delivered, gifted, or prescribed oxycodone, a Schedule II controlled substance and narcotic, and that this was not done in good faith in the course of Petitioner’s professional practice, was not within the scope of the patient relationship, and was not done in accordance with treatment principles accepted by a responsible segment of the medical profession.  CMS Ex. 2 at 35.
5. Count 97 of the Information charged Petitioner with the felony offense of Criminal Conspiracy to Unlawful Administration, Dispensing, Delivery, Gift or Prescription of a Controlled Substance by Practitioner and/or Delivery of a Controlled Substance in violation of 18 Pa. Cons. Stat. § 903.  Specifically, this count alleged that, on or between January of 2011 and October of 2012, Petitioner conspired with another individual that they, or one of them, would engage in conduct that would constitute the crime of Unlawful Administration, Dispensing, Delivery, Gift, or Prescription of a Controlled Substance by a Practitioner and/or Delivery of a Controlled Substance.  CMS Ex. 2 at 36.
6. Petitioner’s criminal case was delayed for a variety of reasons.  In May 2014, the prosecutor assigned to the case died and a new one was not assigned for approximately a year.  P. Ex. 2 at 2; see also CMS Ex. 2 at 2 (list of continuances for a pre-trial conference from October 2013 through early 2016).
7. In February and May 2016, Petitioner stipulated that he would plead guilty to some of the charges alleged in the Information.  CMS Ex. 2 at 45-47.
8. On May 3, 2016, Petitioner was scheduled to plead guilty, but the prosecutor did not appear for the hearing and the hearing needed to be rescheduled.  P. Ex. 2 at 2; see also CMS Ex. 2 at 2, 47.
9. On May 4, 2016, the Common Pleas Court set September 1, 2016, as the date for the hearing at which Petitioner would plead guilty.  The court picked a date in September “[d]ue to defense/defendant unavailability.”  CMS Ex. 2 at 47.

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10. Between September 1, 2016, and April 11, 2017, the Common Pleas Court rescheduled the plea hearing four times.  CMS Ex. 2 at 2; see also P. Ex. 2 at 2.
11. On April 11, 2017, Petitioner pleaded guilty to Counts 1 and 97 of the Information.  CMS Ex. 2 at 38; see also CMS Ex. 2 at 10, 16, 39-44; P. Ex. 2 at 2.  The Common Pleas Court scheduled a sentencing hearing.  CMS Ex. 2 at 38.
12. The crimes to which Petitioner pleaded guilty involved improperly prescribing medications to a patient with whom Petitioner had an affair and who later extorted Petitioner based on the possibility that Petitioner could lose his medical license and marriage based on that affair.  The crimes that Petitioner admitted to committing did not involve insurance fraud on the Medicare or Medicaid programs or third-party insurers.  Petitioner neither billed third-party payers related to the improper prescriptions nor received direct or indirect compensation for his illegal conduct.  P. Ex. 2 at 3.
13. On August 7, 2017, the Common Pleas Court sentenced Petitioner to not less than two years of incarceration and to not more than six years of incarceration.  CMS Ex. 2 at 10, 17, 48-51; P. Ex. 2 at 2.
14. Petitioner was imprisoned for two years, from August 2017 to August 2019.  P. Ex. 2 at 3.
15. From August 2, 2013, through June 21, 2021, the Pennsylvania Department of Human Services listed Petitioner as a precluded provider.  P. Ex. 1 at 25.
16. Petitioner agreed not to practice medicine in New Jersey for at least 20 years.  P. Ex. 2 at 3.
17. Petitioner enrolled in the Lifeguard Services Evaluation Program sponsored by the state of Pennsylvania and the Pennsylvania Medical Board to assess Petitioner’s ability to practice medicine.  Petitioner met the medical, psychological, and drug/alcohol testing requirements.  P. Ex. 2 at 4.
18. Petitioner has been enrolled in multiple monitoring programs since 2013 and Petitioner has not failed a drug test.  Petitioner is still subject to polygraph tests every six months and random drug and alcohol testing.  P. Ex. 2 at 4.
19. In 2023, Petitioner’s medical license in Pennsylvania was restored on a probationary basis.  The probationary period ends in March 2026.  P. Ex. 2 at 4.

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20. On February 19, 2025, the Drug Enforcement Administration issued a Controlled Substance Registration Certificate to Petitioner.  P. Ex. 1 at 28-29.  Petitioner is allowed to write prescriptions for all scheduled medications.  P. Ex. 2 at 4.
21. Petitioner has been approved by multiple insurers and some state sponsored Medicare/Medicaid programs such as HealthPartners.  P. Ex. 2 at 4.

VII. Conclusions of Law and Analysis

1. CMS had a legitimate basis to deny Petitioner’s enrollment as a physician/supplier in the Medicare program because Petitioner was convicted of a felony offense and that offense is per se detrimental to the best interests of the Medicare program and its beneficiaries.

The Act authorizes the Secretary to “refuse to enter into [a Medicare] agreement with a physician or supplier . . . in the event that such physician or supplier has been convicted of a felony under Federal or State law for an offense which the Secretary determines is detrimental to the best interests of the program or program beneficiaries.”  42 U.S.C. § 1395u(h)(8).  To implement this provision, the Secretary promulgated regulations providing CMS with the authority to deny or revoke the Medicare enrollment of a supplier who was convicted of a felony, in the last ten years, that is detrimental to the best interests of the Medicare program and its beneficiaries.  42 C.F.R. §§ 424.530(a)(3), 424.535(a)(3).1  The Secretary also included a non-exhaustive list of felony offense categories and examples that the Secretary determined were detrimental to the best interests of the Medicare program and its beneficiaries.  42 C.F.R. §§ 424.530(a)(3)(i), 424.535(a)(3)(ii).  Finally, the Secretary cross-referenced the definition of the term “convicted” from the regulations implementing the Secretary’s authority to exclude individuals from federal health care programs (i.e., 42 C.F.R. § 1001.2).  42 C.F.R. §§ 424.530(a)(3), 424.535(a)(3)(i); see also 42 U.S.C. § 1320a-7(i).

The undisputed facts show that Petitioner was convicted of felony offenses within the last ten years and that the felonies meet one of the listed categories of offenses that are per se detrimental to the best interests of the Medicare program and its beneficiaries.  As a result, I must uphold the denial of Petitioner’s enrollment in the Medicare program.

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a. Petitioner was convicted within the last ten years of a felony offense.

The most basic requirement to deny enrollment under 42 C.F.R. § 424.530(a)(3) is that the applicant for enrollment was convicted of a felony offense within the preceding ten years.  Relevant to this case, the word “convicted” means that a “Federal, State or local court has accepted a plea of guilty or nolo contendere by an individual or entity.”  42 C.F.R. § 1001.2; see also 42 U.S.C. § 1320a-7(i)(3).

Petitioner pleaded guilty to Counts 1 and 97 in the Information on April 11, 2017.  CMS Ex. 2 at 38; see also CMS Ex. 2 at 10, 16, 39-44.  The Information designated each of these charges as a “FELONY.”  The Common Pleas Court accepted this guilty plea as evidenced by the judge’s signature at the bottom of the Guilty Plea document to schedule the sentencing hearing.  CMS Ex. 2 at 38.  On August 7, 2017, the Common Pleas Court sentenced Petitioner to not less than two years of incarceration and to not more than six years of incarceration.  CMS Ex. 2 at 10, 17, 48-51.

Therefore, CMS denied Petitioner’s enrollment within ten years of the date that Petitioner was convicted of felony offenses because the initial determination denying enrollment is dated April 5, 2024.  CMS Ex. 3.

Petitioner asserts that his criminal case and guilty plea were delayed for years through no fault of his own.  P. Br. at 9.  However, as indicated above, Petitioner was not legally considered “convicted” under the regulations until he pleaded guilty, and the plea was accepted.

b. Petitioner’s felony convictions are per se detrimental to the best interests of the Medicare program and its beneficiaries.

The Secretary established a non-exhaustive list of the types of felony offenses that CMS will treat as per se detrimental to the best interests of the Medicare program and its beneficiaries.  42 C.F.R. § 424.530(a)(3)(i); 71 Fed. Reg. 20,754, 20,768 (Apr. 21, 2006); Letantia Bussell, M.D., DAB No. 2196 at 9 (2008).  Relevant to this case, the list includes, “[a]ny felonies that would result in mandatory exclusion under section 1128(a) of the Act.”  42 C.F.R. § 424.530(a)(3)(i)(D).

Under section 1128(a)(4) of the Act, the Secretary must exclude any individual from participation in federal health care programs who:

[H]as been convicted for an offense which occurred after August 21, 1996 [the date of the enactment of the Health Insurance Portability and Accountability Act of 1996], under Federal or State law, of a criminal offense consisting of a

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felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

42 U.S.C. § 1320a-7(a)(4).

When applying the exclusion provisions under section 1128 of the Act, the terms “related to” or “relating to” simply mean that there must be a nexus or common-sense connection.  See Quayum v. U.S. Dep’t of Health & Hum. Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998); see also Baxter v. Kennedy, 136 F.4th 70, 86 (4th Cir. 2025); Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase “relating to” in another part of section 1128 as “deliberately expansive words,” “the ordinary meaning of [which] is a broad one,” and one that is not subject to “crabbed and formalistic interpretation”) (internal quotation marks omitted).

In this case, Petitioner pleaded guilty to “[t]he administration, dispensing, delivery, gift or prescription of any controlled substance by any practitioner or professional assistant under the practitioner’s direction and supervision unless done (i) in good faith in the course of his professional practice; (ii) within the scope of the patient relationship; (iii) in accordance with treatment principles accepted by a responsible segment of the medical profession.”  35 Pa. Stat. § 780-113(a)(14).  The charge that Petitioner pleaded guilty to committing alleged that Petitioner “did unlawfully administer, dispense, deliver, gift or prescribe a controlled substance, to wit:  at least 10 grams and less than 100 grams, per count, of oxycodone, a schedule II Controlled Substance and narcotic” without one of the listed exceptions.  CMS Ex. 2 at 35.  Petitioner was also charged with, and pleaded guilty to, conspiracy with another to engage in “Unlawful Administration, Dispensing, Delivery, Gift or Prescription of a Controlled Substance by a Practitioner and/or Delivery of a Controlled Substance, and in pursuance of such conspiracy one or more overt acts were committed . . . .”  CMS Ex. 2 at 36.  Petitioner’s testimony confirmed that Petitioner improperly prescribed controlled substances to a patient with whom he had an affair.  P. Ex. 2 at 3.

Based on the charges that Petitioner pleaded guilty to committing, I conclude that Petitioner’s criminal offenses related to “the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance,” and thus subjected him to a mandatory exclusion under section 1128(a)(4) of the Act.  See Michael J. Vogini, D.O., DAB CR3118 at 4, 6-7 (2014) (upholding an exclusion under 42 U.S.C. § 1320a-7(a)(4) for, in part, a conviction under 35 Pa. Stat. § 780-113(a)(14)).

Petitioner asserts that CMS incorrectly determined that Petitioner’s felony offenses were detrimental to the best interests of the Medicare program due to the fact that the offenses were committed over ten years ago, the criminal proceedings were delayed through no fault of Petitioner, Petitioner did not misuse federal health care funds or receive any

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direct or indirect compensation for his illegal activities, Petitioner has been under continuous supervision since 2013 and has shown remarkable rehabilitation, and Petitioner is not currently a risk to the Medicare program.  P. Br. at 7-11.  However, Petitioner does not address the fact that his convictions are per se detrimental to the Medicare program because they are convictions that require a mandatory exclusion.

It is long established that “[t]he categories of offenses set forth under section 424.535(a)(3)(ii) are those that CMS has determined, by rulemaking, to be detrimental to the Medicare program and its beneficiaries as a matter of law.”  Blair Allen Nelson, M.D., DAB No. 3024 at 7 (2020).  Further, “[t]hose categories of per se detrimental offenses include, among other offenses, ‘[a]ny felonies that would result in mandatory exclusion under section 1128(a) of the Act.’”  Nelson, DAB No. 3024 at 8 (quoting 42 C.F.R. § 424.535(a)(3)(ii)(D)).  When CMS concludes that a felony conviction is per se detrimental to the Medicare program and its beneficiaries, CMS may rely on that finding to deny enrollment.

The regulation provides clear guidance for certain instances where a supplier’s application should be denied.  For example, section 424.530(a)(3) permits CMS to deny enrollment to a supplier if that supplier has been convicted of a felony that is detrimental to the Medicare program.  Under 42 C.F.R. § 424.530(a)(3)(i)(D), a felony which results in mandatory exclusion from the Medicare program under section [1]128 of the Act—such as felony health care fraud—is detrimental to the program.  CMS interpreted the regulation as written and reached a decision entirely consistent with that regulation.  Thus, it was permissible for CMS to deny Plaintiff’s enrollment application based on his health care fraud conviction based only on the language of 42 C.F.R. § 424.530(a)(3).

Tomlinson v. Azar, No. 5:19-CV-05114, 2020 WL 376657 *3 (W.D. Ark. Jan. 23, 2020) (emphasis added).  In upholding this view based on a felony conviction related to improper prescribing of controlled substances, the Departmental Appeals Board wrote:

There is no dispute Petitioner’s conviction was based on his admission that he fraudulently issued prescriptions in the names of various family members so that he could obtain and use the controlled substances himself.  Such an offense is, without question, related to the “unlawful . . . prescription . . . of a controlled substance.”  Act § 1128(a)(4).  Because Petitioner’s felony conviction would result in a mandatory

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exclusion under section 1128(a)(4), CMS determined it to be per se detrimental to the best interests of the Medicare program and its beneficiaries.  CMS, therefore, had a lawful basis to revoke Petitioner’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(3)(ii)(D) based on undisputed facts

Nelson, DAB No. 3024 at 8.

My review in this matter is limited to determining if CMS had a legal basis for denying enrollment to Petitioner.  “[T]he right to review of CMS’s determination by an ALJ serves to determine whether CMS had the authority to [deny or] revoke [the supplier’s] Medicare billing privileges, not to substitute the ALJ’s discretion about whether to [deny or] revoke.”  Bussell, DAB No. 2196 at 13 (emphasis omitted).  The CMS hearing officer acknowledged and commended Petitioner for his accomplishments; however, the CMS hearing officer also stated that CMS exercised independent judgment to determine that Petitioner’s felony conviction was per se detrimental to the best interests of the Medicare program and its beneficiaries.  CMS Ex. 6 at 5.  Once CMS identified that Petitioner’s felony convictions were per se detrimental to Medicare and its beneficiaries, CMS did not need to make a case-specific determination.  Piano, DAB No. 3096 at 13.

Petitioner argues that “there was no evidence of harm to patients or financial harm to the Medicare program” from Petitioner's crime, and that the ALJ’s contrary finding “was plain error.”  Even were we to accept for the moment the bare assertions that Petitioner is no longer “a detriment to patient care and not a financial detriment to the Medicare program” and does not pose a risk of harm to patients or the program, Petitioner could not prevail.  Petitioner’s offense was detrimental per se to Medicare, and therefore facially warranted a denial of Petitioner's enrollment application, because Petitioner (1) was convicted of a felony offense within 10 years preceding the denial of enrollment; and (2) that conviction was the basis for the I.G.’s exclusion under section 1128(a) of the Act.  Accordingly, the ALJ did not err in concluding that CMS, in its exercise of discretion, lawfully denied enrollment under section 424.530(a)(3).

Piano, DAB No. 3096 at 13-14.

Having determined that CMS had a legal basis to conclude that Petitioner’s felony offenses are detrimental to the best interests of the Medicare program and its

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beneficiaries, and that CMS exercised its discretion to deny enrollment, I have no authority to overturn CMS’s decision.  Therefore, I affirm CMS’s denial of enrollment.

2. CMS had a legitimate basis to include Petitioner on the Preclusion List.

Based on Petitioner’s felony convictions, CMS also placed Petitioner’s name on the CMS Preclusion List.  CMS Ex. 3 at 1.

CMS may add an individual to the Preclusion List when the individual has been convicted of a felony under federal or state law within the previous 10 years and CMS determines that the felony is detrimental to the best interests of the Medicare program.  To determine whether to add an individual’s name to the Preclusion List, CMS must consider the following factors:  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 (paragraph (3) of definition of “Preclusion list”), 423.100 (paragraph (3) of definition of “Preclusion list”).

In the reconsidered determination, the CMS hearing officer found that Petitioner was convicted of felonies within the preceding ten years and considered the three factors to conclude that the convictions were detrimental to the best interests of the Medicare program.  P. Ex. 6 at 5-6.  The hearing officer considered Petitioner’s crime to be severe because it involved controlled substances, acknowledged that Petitioner’s crimes began in either 2011 or 2012, and noted that Petitioner’s crime was per se detrimental to the best interests of the Medicare program under 42 C.F.R. § 424.530(a)(3).  CMS Ex. 6 at 6.

Petitioner appears to dispute both the length of the preclusion and the preclusion itself.  Petitioner asserts:  1) Petitioner’s criminal offenses occurred over 13 years ago; 2) Petitioner voluntarily surrendered his medical license; 3) the criminal investigation cleared Petitioner of committing fraud on Medicare, Medicaid, or insurance companies related to the illegal prescriptions he wrote; 4) Petitioner has undergone rehabilitation, has become clean and sober, and has atoned for his past mistakes; 5) Petitioner is subject to drug and alcohol testing; 6) Petitioner has regained his license to practice medicine in Pennsylvania on a probationary basis; 7) Petitioner has been authorized by the Drug Enforcement Administration to write prescriptions for all scheduled medications; and 8) Petitioner has been approved by multiple private insurance companies as well as state sponsored Medicare/Medicaid plans, such as Health Partners.  P. Br. at 12-14.

Based on my review of the undisputed facts in this case, I agree with the CMS hearing officer that the severity of the offenses is significant because they involved the improper prescription of controlled substances and a conspiracy to commit that offense.  Physicians have a duty to ensure that controlled substances are only prescribed to patients when

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there is an appropriate condition calling for that prescription.  Further, as admitted by Petitioner, the crime took place in the context of having an affair with a patient.

The CMS hearing officer also acknowledged the length of time that has transpired since Petitioner’s conviction.  However, the hearing officer indicated that the amount of time since the criminal conduct occurred was not sufficient to determine the question as to whether Petitioner ought to be added to the Preclusion List.  This is a reasonable conclusion.

Finally, the CMS hearing officer considered that Petitioner’s criminal offenses are per se detrimental to the Medicare program under 42 C.F.R. § 424.530(a)(3).  Although I differ from the hearing officer on the basis for the designation of Petitioner’s felony offenses to be per se detrimental, I agree that this is an important factor.

As stated above, Petitioner’s felony offenses require mandatory exclusion from federal health care programs and are, therefore, per se detrimental under 42 C.F.R. § 424.530(a)(3)(i)(D).  I consider this factor to strongly support placement of Petitioner on the Preclusion List because Congress determined that a felony offense involving the improper prescription or distribution of controlled substances to be so deleterious that it mandated a minimum five-year exclusion to be imposed on anyone convicted of such an offense.  42 U.S.C. § 1320a-7(a)(4).  For reasons that are unclear from the record in this case, it appears that Petitioner was not excluded following his conviction.

Based on the undisputed facts, Petitioner should have been subject to an exclusion.  However, also based on those facts, the exclusion should have been longer than the minimum five years.  Under the regulations implementing exclusions, there is a list of aggravating factors that may increase the length of an exclusion beyond five years.  42 C.F.R. § 1001.102(b).  The undisputed facts show that three aggravating factors are present:  Petitioner was sentenced to a term of incarceration of two to six years (CMS Ex. 2 at 48, 50); Petitioner was convicted of conspiracy that lasted more than one year in duration (CMS Ex. 2 at 36); and Petitioner was precluded from participating in the Pennsylvania Medicaid program for nearly eight years (P. Ex. 1 at 25).  42 C.F.R. § 1001.102(b)(2), (5), (9).  These factors show that Petitioner would have been subject to a lengthy exclusion.

Therefore, I uphold CMS’s determination that Petitioner’s felony offenses are detrimental to the Medicare program and, consequently, uphold the addition of Petitioner’s name to the Preclusion List.  See Omair Chaudry, M.D., DAB No. 3145 at 18 (2024) (“Moreover, having determined that Petitioner’s felony offense is detrimental to the Medicare program for purposes of revocation, we can discern no legal basis that would compel CMS to find the offense not detrimental to the Medicare program for purposes of the preclusion list.”).

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CMS placed Petitioner on the Preclusion List for ten years from the date of his conviction.  CMS Ex. 6 at 6-7.  Petitioner appears to dispute this decision.

When an individual is placed on the Preclusion List based on a felony conviction, the regulations require a ten-year period beginning with the date of the conviction.  The only exception is if CMS determines a shorter length is warranted based on the three factors that CMS considered when determining whether to add the individual’s name to the Preclusion List (i.e., severity of the offense, when the offense occurred, and other relevant information).  42 C.F.R. §§ 422.222(a)(5)(iii), 423.120(c)(6)(vii)(C).

As an initial matter, the regulation is written in a manner that indicates the ten-year length of time on the CMS Preclusion list is the default length of time, which is only shortened if CMS determines there is a reason to do so.  Given that an ALJ may not review the length of the re-enrollment bar CMS imposes after revoking the enrollment of a supplier, Vijendra Dave, M.D., DAB No. 2672 at 9 (2016), I question whether an ALJ may review CMS’s determination to impose the presumptive length of time for individuals convicted of felonies.

Even if I have such authority, I note that, consistent with my analysis above of the three factors related to adding Petitioner’s name to the preclusion list, CMS had a sufficient basis to add Petitioner’s name to the Preclusion List until ten years elapses since the date of conviction.  I am particularly persuaded that the circumstances surrounding Petitioner’s criminal convictions would have subjected him to a lengthy exclusion from participating in federal health care programs.  CMS is merely using its preclusion authority in a manner consistent with the law requiring exclusions.  Therefore, to the extent that I have the authority to review the length of time Petitioner’s name will appear on the Preclusion List, I affirm CMS’s determination.

VIII. Conclusion

I affirm CMS’s denial of Petitioner’s application to enroll in the Medicare program.  I also uphold CMS’s determination to place Petitioner’s name on the CMS Preclusion List until April 11, 2027.