Physician excluded from Medicare for tax evasion

From the CCH Medicare and Medicaid Reimbursement Newsletter:

A physician was properly excluded from enrollment as a Medicare supplier based on his felony conviction for a financial crime. On February 11, 2000, the physician was convicted and barred by CMS from enrollment in any federal health care programs for a period of ten years. The physician argued that his application should not have been denied because the Office of Inspector General (OIG) had determined not to exclude him from participation in federal programs under a different authority.

There was substantial evidence to support the finding of CMS because it has authority under 42 C.F.R. §424.530(a)(3)and Soc. Sec. Act §1842(h)(8)to revoke his enrollment as a Medicare supplier based on his felony conviction because CMS determined it was detrimental to the best interests of the program and its beneficiaries. Since there was no requirement in either §1842(h)(8) or §424.530(a)(3) that a felony conviction must be related to Medicare or health care for CMS to deny enrollment, the physician’s argument that his offenses were not health care related did not mean CMS erred when it denied his application.

Furthermore, the OIG’s determination not to exclude the physician under Soc. Sec. Act §1128(a) had no bearing on CMS’ authority to make its finding. Finally, this court does not have the authority to grant equitable relief. Review in this case was limited to whether CMS had a legal basis to deny enrollment. Accordingly, CMS' motion for summary judgment was granted. Garib v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-881, Dec. No. CR2289, December 2, 2010, ¶122,373.

Felony reporting requirement

CMS was authorized to revoke a provider’s billing privileges and enrollment due to his failure to report both his felony conviction for filing a false tax return and the related loss of his medical licenses in three states. The provider’s felony offense qualified as a “financial crime” detrimental to the best interest of the program and its beneficiaries under 42 C.F.R. §424.535(a)(3)even though the offense was not included in the enumerated list of offenses in the language of the regulation. The listed offenses are considered automatically detrimental to the program, but the language “such as”, which precedes the list, permits CMS to determine on a case-by-case basis whether a non-listed offense is similar to those listed and therefore, detrimental (see 42 C.F.R. §424.535(a)(3)(i)).

The preamble to the regulation, found at 71 FR 20768, demonstrates CMS’s intention that false statements which result in a financial benefit or loss are to be considered as a “financial crime,” thus the filing of a false tax return, which is also similar to the enumerated offense of income tax evasion, qualified as a financial crime which the provider was required to report under 42 C.F.R. §424.535(a)(9).

The provider’s contention that he was not required to report the conviction or loss of licensure (see 42 C.F.R. §424.516(d)(1)(ii)) because his failure to report was unintentional and he had not seen any Medicare patients while unlicensed was irrelevant because neither reporting regulation contains an intent requirement nor an exception for providers who stop seeing beneficiaries. Providers whose privileges are revoked are barred from reinstatement for 1 to 3 years under 42 C.F.R. §424.535(c), which did not allow the provider to appeal the duration or imposition of his re-enrollment bar. Tolliver v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-737, Dec. No. CR2281, November 23, 2010,

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