Health Law Daily Wrap Up, ADMINISTRATION OF MEDICARE/MEDICAID PROGRAMS—DAB DECISIONS: Federal tax fraud conviction ‘detrimental to Medicare,’ 10-year bar upheld, (Oct 19, 2026)

By Leah S. Poniatowski, J.D.

Nurse practitioner unsuccessfully challenged federal healthcare participation bar as not pertaining to healthcare services.

A nurse practitioner who intentionally did not report his income for two years and was convicted and jailed for felony tax evasion could not resume any employment that participated in the federal Medicare program, a Departmental Appeals Board ruled. Because his conviction and failure to report his conviction were explicitly “detrimental to the best interest of the Medicare program and its beneficiaries” per the governing regulation, the Board upheld CMS's determination and ten-year bar from participation (Acevedo, DAB No. C-26-774, Decision No. CR6979 (Sept. 10, 2026)).

Background. Under 42 C.F.R. § 424.535(a)(3)(i), CMS has the authority to revoke a healthcare service supplier’s Medicare enrollment and billing privileges if the supplier, within the previous ten years, had been convicted “felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.” The following subsection clarifies that income tax evasion is one of the many felony offenses meeting that standard. 42 C.F.R. § 424.535(a)(3)(ii)(B). Further, the failure to report a felony conviction is also a cause for privilege revocation. 42 C.F.R. § 424.535(a)(9).

The nurse practitioner was indicted in 2021 by the federal Internal Revenue Service (IRS) on two counts of willfully failing to report tens of thousands of dollars of income. Under 26 U.S.C. § 7206(1), these actions constitute a felony. A trial was held, and the nurse practitioner was found guilty on two counts of violating tax reporting laws. In 202 was sentenced to two months in prison and four months of supervised release. The nurse practitioner did not report this adverse action to a medical contractor.

CMS procedural history. In October 2024, the applicable medical contractor notified the nurse practitioner in a letter that as of July 2023, his Medicare privileges were revoked because he’d had been convicted of a felony for fraud and false statements, and for failing to report his felony conviction within 30 days to CMS. Consequently, the nurse practitioner was subject to a ten-year re-enrollment bar, and he was added to the CMS preclusion list. The nurse practitioner requested reconsideration, as provided in the letter.

In 2026, a CMS hearing officer reviewed the reconsideration request but upheld the revocation determination and the length of the re-enrollment bar on the basis of the felony conviction and failure to report the conviction. The nurse practitioner filed the present appeal before the Departmental Appeals Board DAB).

DAB ruling. The DAB panel upheld the revocation of the nurse practitioner’s federal healthcare program privileges because his felony conviction for income tax fraud was squarely within the language of the governing regulation. The reviewing panel on appeal can only consider whether CMS met its burden to show there were grounds as provided in the regulation.

The nurse practitioner’s argument that his crimes did not involve patient care or abuse of any “provision of healthcare services” and, thus, the revocation of benefits should be reversed was not persuasive because the regulation explicitly included “income tax evasion” among the types of felonies that are “detrimental to theist interests of the Medicare program and its beneficiaries.” Therefore, CMS had valid grounds to revoke the nurse practitioner’s Medicare enrollment. Further, the DAB panel had no legal authority to consider practitioners' equitable claims vis-a-vis the revocation, nor the challenge to the duration of the re-enrollment bar.

Finally, because CMS had the authority and the grounds to revoke the nurse practitioner’s participation privileges and bar re-enrollment for a specified period, under the applicable rules CMS also had the authority to include him on the preclusion list. The panel also is without authority to review CMS’ determination of length on the list. Therefore, CMS’ determinations were affirmed.

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