Professional Home Health Care, Inc., DAB CR5217 (2018)

DECISION

There is no basis for the revocation of the Medicare enrollment and billing privileges of Petitioner, Professional Home Health Care, Inc., in this case.

I. Procedural History and Jurisdiction

Petitioner is a home health agency. Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 3 at 1. On March 17, 2016, National Government Services (NGS), a Medicare administrative contractor (MAC), notified Petitioner of its initial determination to revoke Petitioner’s Medicare enrollment and billing privileges, effective November 19, 2015, and to impose a two-year re-enrollment bar. CMS Ex. 1. The MAC cited 42 C.F.R. § 424.535(a)(1) and (5)(i)1 as authority for the revocation and alleged that it was determined, based on an on-site review, that Petitioner was not operational and that Petitioner had failed to notify CMS of a change of practice location as required by 42 C.F.R. § 424.516. CMS Ex. 1 at 1. The MAC advised Petitioner that it could submit

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a corrective action plan (CAP) and request reconsideration of the revocation. CMS Ex. 1 at 1-2.

Petitioner submitted a CAP and requested reconsideration of the MAC’s initial determination to revoke in a letter dated April 13, 2016. CMS Ex. 3. On May 27, 2016, a CMS hearing officer rejected Petitioner’s CAP. CMS Ex. 4. The hearing officer incorrectly stated that Petitioner had not filed a request for a reconsidered determination. On May 27, 2016, Petitioner submitted another CAP and again requested reconsideration. CMS Ex. 5. The CMS hearing officer notified Petitioner by letter dated June 10, 2016, that CMS reopened and revised the initial reconsidered determination, and that Petitioner’s CAP was denied and revocation pursuant to 42 C.F.R. § 424.535(a)(1) and (5)(i) was upheld. CMS Ex. 6.

On July 22, 2016, Petitioner’s owner and administrator, Muhammad Chaudhry, filed a request for hearing (RFH) before an administrative law judge (ALJ). On July 29, 2016, the case was assigned to me for hearing and decision, and I issued an Acknowledgment and Prehearing Order (Prehearing Order).

On August 29, 2016, CMS filed a motion for summary judgment and prehearing brief and CMS Exs. 1 through 8. On September 21, 2016, Petitioner filed a prehearing brief and response in opposition to the CMS motion for summary judgment. On November 1, 2016, CMS waived filing a reply brief. On January 11, 2017, I denied CMS’s motion for summary judgment and ordered the parties to file a joint status report advising me of their availability for hearing.

A hearing was convened by video teleconference on June 14, 2017. A transcript (Tr.) of the proceedings was prepared. CMS offered CMS Exs. 1 through 8 and all were admitted as evidence. Tr. 21-22. CMS did not call any witnesses but rested after submission of its documents as evidence. Tr. 23. Petitioner did not file exhibits in advance of the hearing or offer any exhibits at the hearing. Petitioner presented the testimony of Ronald Lott, Waqas Rashid, Olivia Polychroni, and Muhammad Chaudhry.

On September 5, 2017, CMS filed its post-hearing brief (CMS Br.) and its Proposed Findings of Fact and Conclusions of Law. Petitioner filed its post-hearing brief on September 5, 2017 (P. Br.), with a four-page document marked “Exhibit 1.” Petitioner’s documents marked Exhibit 1 are treated as if marked Petitioner’s Exhibit (P. Ex.) 1. P. Ex. 1 purports to show payments made to Petitioner by Meridian Health Plan for services rendered by Petitioner on dates of service between October 30, 2015 and November 27, 2015.

CMS filed a post-hearing reply brief on October 3, 2017 (CMS Reply). Petitioner filed a post-hearing reply brief on October 16, 2017 (P. Reply).

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CMS objects to my consideration of P. Ex. 1. CMS argues P. Ex. 1 has not been shown to be authentic and Petitioner failed to submit P. Ex. 1 as part of its prehearing exchange. CMS argues that even if admitted, P. Ex. 1 should be entitled to no weight. CMS Reply at 2. In its post-hearing reply, Petitioner asserts that the remittance notices in P. Ex. 1 are authentic. Petitioner states that P. Ex. 1 was not offered as evidence earlier because CMS did not request such evidence. Petitioner notes that I authorized Petitioner to submit evidence of claims activity during the period of the site inspection in rebuttal to the challenge to his credibility and the weight to be accorded to testimony, issues raised by CMS at hearing. P. Reply. I advised the parties at the hearing that my duty as an ALJ under the Social Security Act (Act), the Administrative Procedure Act of 1946, and the regulations is to ensure that the record is as complete as possible. Tr. 167. To this end, I am authorized to receive any relevant and material evidence that was not offered at the hearing but submitted prior to mailing the decision. 42 C.F.R. § 498.60(b). The parties were advised at hearing that because CMS had challenged Mr. Chaudhry’s credibility, Petitioner would be permitted post-hearing to offer billing records for the relevant period as evidence that it was billing private insurance for services during the period of the site visit as he testified. Tr. 125-41; 166-68. Petitioner availed itself of this opportunity and submitted P. Ex. 1 with its post-hearing brief to rebut the CMS challenge to the credibility of Mr. Chaudhry’s assertions that Petitioner had patients and was submitting claims to insurers during the period of the site inspection. CMS argues that P. Ex. 1 cannot be authentic or reliable because it lists “February 30, 2016” as one of the processing dates. CMS Reply at 2 (referring to the “Date Processed” listed on P. Ex. 1 at 2). It is common knowledge that there is no such date as “February 30, 2016,” and this date is an obvious error in Meridian Health Plan’s remittance notice.   Given the detailed information contained in the documents in P. Ex. 1, it would take an extraordinary effort to create a false document and highly unlikely that anyone would go to such effort and then include such an obvious error as entering a date processed of “February 30, 2016.” The dates of service listed in P. Ex. 1 are the pertinent information. CMS identifies no patent anomalies in the dates of service or other evidence that the documents in P. Ex. 1 are other than what they purport to be. I do not find that the error identified by CMS overcomes Petitioner’s assertion that the documents in P. Ex. 1 are what they purport to be and are authentic. The documents in P. Ex. 1 are also relevant to rebut CMS’s challenge to the credibility of Mr. Chaudhry’s testimony that Petitioner had, at the time of the site inspection, patients for which Petitioner submitted claims to private insurers. P. Ex. 1 is offered for the limited purpose to rebut the CMS attack on Mr. Chaudhry’s testimony that Petitioner was operational. P. Ex. 1 is what it purports to be, i.e., evidence that Petitioner submitted claims to Meridian Health Plan for dates of service from October 30, 2015 through November 27, 2015. P. Ex. 1 is relevant for the limited purpose for which it is offered. P. Ex. 1 is admitted.

P. Ex. 1 is new evidence that is offered for the first time before me. Pursuant to 42 C.F.R. § 498.56(e), I am required to determine whether there is good cause for submitting new evidence for the first time at this level. P. Ex. 1 is submitted as rebuttal

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evidence on the issue of the credibility of Mr. Chaudhry. His credibility was not specifically placed in issue at the time of the reopened and revised reconsidered determination. I conclude consistent with 42 C.F.R. § 498.56(e) that there is good cause to admit P. Ex. 1. CMS opened the door to the offer of P. Ex. 1 by specifically asking at hearing whether Mr. Chaudhry could produce such documents to support his testimony. Therefore, CMS has no cause to complain that this evidence is now offered and admitted. CMS had the opportunity to review P. Ex. 1 and address the concern that it may not be authentic prior to this ruling and CMS suffered no prejudice by my receiving P. Ex. 1 post-hearing.

II. Discussion

A. Applicable Law

Section 1831 of the Act (42 U.S.C. § 1395j) establishes the supplementary medical insurance benefits program for the aged and disabled known as Medicare Part B. Administration of the Part B program is through the MACs. Act § 1842(a) (42 U.S.C. § 1395u(a)). Payment under the program for services rendered to Medicare-eligible beneficiaries may only be made to eligible providers of services and suppliers.2 Act §§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1) (42 U.S.C. § 1395u(h)(1)). Petitioner, a home health agency, is a provider.

The Act requires the Secretary of Health and Human Services (Secretary) to issue regulations that establish a process for enrolling providers and suppliers in Medicare, including the requirement to provide the right to a hearing and judicial review of certain enrollment determinations, such as revocation of enrollment and billing privileges. Act § 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to 42 C.F.R. § 424.505, providers such as Petitioner must be enrolled in the Medicare program and be issued a billing number to have billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary.

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The Secretary has delegated the authority to revoke enrollment and billing privileges to CMS. 42 C.F.R. § 424.535. CMS or its Medicare contractor may revoke an enrolled provider’s Medicare enrollment and billing privileges and provider agreement for any of the reasons listed in 42 C.F.R. § 424.535.

Pursuant to 42 C.F.R. § 424.535(a)(1), CMS may revoke a provider’s enrollment and billing privileges if the provider is determined not to be in compliance with enrollment requirements, such as the reporting requirements specified in 42 C.F.R. § 424.516. Pursuant to 42 C.F.R. § 424.535(a)(5)(i), CMS may revoke a provider’s enrollment and billing privileges if CMS determines, upon on-site review, that the provider is no longer operational to furnish Medicare-covered items or services, or has otherwise failed to satisfy any of the Medicare enrollment requirements.

Generally, when CMS revokes a provider’s Medicare billing privileges for not complying with enrollment requirements, the revocation is effective 30 days after CMS or its contractor mails notice of its determination to the provider. 42 C.F.R. §§ 424.57(e)(1), 424.535(g). However, when CMS revokes a provider’s billing privileges because the provider’s “practice location” is not operational, the revocation is effective as of the date CMS determined the provider’s practice location was no longer operational. 42 C.F.R. § 424.535(g). After a provider’s Medicare enrollment and billing privileges are revoked, the provider is barred from re-enrolling in the Medicare program for one to three years. 42 C.F.R. § 424.535(c).

A provider whose enrollment and billing privileges are revoked may request reconsideration and review as provided by 42 C.F.R. pt. 498. A provider submits a written request for reconsideration to CMS or its contractor. 42 C.F.R. § 498.22(a). CMS or its contractor must give notice of its reconsidered determination to the provider, giving the reasons for its determination and specifying the conditions or requirements the provider failed to meet, and advising the provider of its right to an ALJ hearing. 42 C.F.R. § 498.25. If the decision on reconsideration is unfavorable to the provider, the provider has the right to request a hearing by an ALJ and further review by the Departmental Appeals Board (the Board). Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5(l)(2). CMS is also granted the right to request ALJ review of a reconsidered determination with which it is dissatisfied. 42 C.F.R. § 498.5(l)(2). A hearing on the record, also known as an oral hearing, is required under the Act. Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004). The provider bears the burden to demonstrate that it meets enrollment requirements with documents and records. 42 C.F.R. § 424.545(c).

The Secretary’s regulations do not address the allocation of the burden of proof or the standard of proof. However, the Board has addressed the allocation of the burden of proof under 42 C.F.R. pt. 498 in many decisions. The standard of proof is a preponderance of the evidence. CMS has the burden of coming forward with the

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evidence and making a prima facie showing of a basis, in this case, for revocation of Petitioner’s enrollment. Petitioner bears the burden of persuasion to rebut the CMS prima facie showing by a preponderance of the evidence or to establish any affirmative defense. Batavia Nursing & Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, 129 F. App’x 181 (6th Cir. 2005); Emerald Oaks, DAB No. 1800 (2001); Cross Creek Health Care Ctr., DAB No. 1665 (1998); Hillman Rehab. Ctr., DAB No. 1611 (1997) (remand), DAB No. 1663 (1998) (aft. remand), aff’d, Hillman Rehab. Ctr. v. United States, No. 98-3789 (GEB), 1999 WL 34813783 (D.N.J. May 13, 1999).

“Prima facie” means generally that the evidence is “[s]ufficient to establish a fact or raise a presumption unless disproved or rebutted.” Black’s Law Dictionary 1228 (8th ed. 2004). Thus, CMS has the initial burden of coming forward with sufficient evidence to show that its decision to revoke Petitioner’s Medicare participation and billing privileges is legally sufficient under the Act and regulations. CMS makes a prima facie showing of a basis for revocation if the credible evidence CMS relies on is sufficient to support a decision in its favor absent an effective rebuttal by Petitioner.

B. Issue

Whether there was a basis for revocation of Petitioner’s Medicare enrollment and its billing privileges.

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

My conclusions of law are set forth in bold text followed by the pertinent findings of fact and analysis. The findings of fact are based on the exhibits admitted and testimony obtained at the hearing. I have carefully considered all the evidence and the arguments of both parties, though not all may be specifically discussed in this decision. I discuss in this decision the credible evidence given the greatest weight in my decision-making.3 I also discuss any evidence that I find is not credible or worthy of weight. The fact that evidence is not specifically discussed should not be considered sufficient to rebut the presumption that I considered all the evidence and assigned such weight or probative value to the credible evidence that I determined appropriate within my discretion as an ALJ. There is no requirement for me to discuss the weight given every piece of evidence considered in this case, nor would it be consistent with notions of judicial economy to do so. Charles H. Koch, Jr., Admin. L. and Prac. § 5:64 (3d ed. 2013).

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1. Petitioner was operational within the meaning of 42 C.F.R. § 424.502.

2. There is no basis for the revocation of Petitioner’s billing privileges and enrollment in Medicare pursuant to 42 C.F.R. § 424.535(a)(5)(i).

1. a. Facts

There is no dispute that prior to revocation of its Medicare enrollment and billing privileges, Petitioner was enrolled in Medicare as a provider of home health care services. However, CMS had directed the suspension of payment of Petitioner’s Medicare claims beginning July 8, 2015, and that suspension was to continue to about the end of December 2016. CMS suspended payment for Petitioner’s Medicare claims based on allegations of fraud by Petitioner’s prior owner Hyder Hassan. CMS Ex. 7; Tr. 141. The CMS evidence shows that Petitioner’s last claims to Medicare were for dates of service between January 5 and August 14, 2015, and the claims were paid between March 2 and October 28, 2015. CMS Ex. 2 at 2. The CMS evidence also shows that on about September 2, 2015, the United States Department of Treasury demanded that Petitioner pay a $13,347.90 debt based on a Medicare overpayment. CMS Ex. 2 at 2.

Muhammad Chaudhry purchased Petitioner from its prior owner Hyder Hassan on about April 8, 2013. CMS Ex. 2 at 14-17; CMS Ex. 5 at 6-7. On May 31, 2013, the MAC notified CMS that it processed a CMS-855A application from Petitioner that updated ownership information with the deletion of Hyder Hassan and the addition of Muhammad Chaudhry and Regina Fleming. CMS Ex. 8 at 1. The MAC approved a change of information application on December 2, 2014, that changed Petitioner’s correspondence address, practice location address, and special payments address to 25050 Outer Drive 204, Lincoln Park, MI. The MAC also approved the deletion of “Rogenia Fleming” as Petitioner’s managing employee and the addition of Mary Jean Gulmatico as the person with operational and managerial control of Petitioner. CMS Ex. 8 at 3.

The CMS evidence shows that on about October 26, 2015, a CMS representative informed the Zone Program Integrity Contractor (ZPIC) that, based on discussion with law enforcement, an on-site review could be conducted that would result in administrative action. CMS Ex. 2 at 2.

Petitioner does not dispute that on November 19, 2015, at 2:54 p.m. two inspectors, both registered nurses, attempted to conduct a site inspection of Petitioner at 25050 Outer Drive, Suite 204. The inspectors found Petitioner’s company name, “Professional HHC” on the suite door, but the door was locked, the lights were off, and, looking through the glass entry door to the office, the inspectors determined that there was no activity inside the office. The inspectors placed a telephone call to the number listed on the door but no one answered and the call went to voicemail. There is no dispute that, if the telephone

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instrument receiving the call from the inspectors could display the number from which the call originated, the receiving telephone would have listed the call as coming from a blocked number. The inspectors reported to the ZPIC that Petitioner was no longer operational to furnish or provide Medicare-covered items or services for Medicare-eligible beneficiaries. The inspectors cited as support for their conclusions that Petitioner had not filed a claim in the last 90 days, the last date of service to Medicare beneficiaries was August 14, 2015, and the last payment for a Medicare claim occurred on October 28, 2015. CMS Ex. 2 at 3. The evidence shows that the last date of service to a Medicare-eligible beneficiary was August 14, 2015. CMS Ex. 2 at 3. CMS was, more likely than not, aware of the service on August 14, 2015, based on a filed claim. The date of service of August 14, 2015, was only 97 days prior to the site inspection at Petitioner on November 19, 2015, but the date the claim was actually filed by Petitioner is not reflected by the evidence CMS presented. In the absence of evidence establishing the last date a claim was submitted by Petitioner to Medicare, I give little weight to the investigators’ conclusion that it had been more than 90 days since Petitioner filed a Medicare claim. The investigators could not accurately make that conclusion in the absence of evidence about when the last claim was actually filed, evidence that should have been readily available to the ZPIC from either the MAC or CMS. Revocation in this case is not based on failure to file a claim within 90 days anyway. CMS Ex. 6. The investigators also noted that Petitioner had not filed a change of address with the MAC. The investigators recommended revocation of Petitioner’s enrollment. CMS Ex. 2 at 2-3.

The investigators also took photographs during the site inspection. One photograph depicts a sign on which is printed “Professional HHC Monday-Friday 9:00 AM – 5:00 PM Suite 204” with telephone and facsimile numbers and an email address. CMS Ex. 2 at 22. The investigators also took photographs of the interior spaces through the door to the office. The photographs show modular cubical walls, with signs that appear to be on red-colored paper in clear document sheet protectors with the words “Employees Only;” items on a window sill; a calendar on a wall for October 2015; a carpet sweeper plugged into the wall; window shades; a two-drawer file cabinet; a fire extinguisher; a publication with an address label; files on a desk; and a machine with a green light glowing. CMS Ex. 2 at 23-25. There are no people present in any of the photographs and the lights in the office do not appear to be on.4

In its corrective action plan dated April 13, 2016, Petitioner does not deny that its office was not open and accessible at the time of the site inspection on November 19, 2015. Petitioner stated that its office continued to be located at 25050 West Outer Drive,

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Suite 204. The corrective action plan refers to an attached bill that is not in evidence before me. CMS Ex. 3. CMS denied the corrective action plan. The CMS denial notice dated May 27, 2016, indicates that a utility bill was submitted with the corrective action plan, but the hearing officer who issued the denial concluded that a utility bill does not establish the Petitioner was actually at the address on the bill. CMS Ex. 4 at 2. The reopened and revised reconsidered determination dated June 10, 2016, shows that the hearing officer considered a utility bill from “WOW! Business” dated April 5, 2016. CMS Ex. 6 at 2. A copy of that bill was not placed in evidence by CMS, but CMS asserts that it does not dispute that Petitioner had an office at the address on the bill. CMS Br. at 3 n.3. The hearing officer states that the “utility bill does not, in and of itself, establish that [Petitioner] is actually at the address listed on the bill.” CMS Ex. 6 at 3. The hearing officer is correct that a utility bill alone may not be sufficient to prove Petitioner was operational at a given location. However, the bill could be evidence that Petitioner was operational. Pursuant to the Prehearing Order, para. II.D, CMS was required to file as CMS Exhibit 1 a copy of the reconsidered decision challenged, with copies of the evidence considered by the hearing officer. CMS violated the Prehearing Order by not filing copies of the evidence considered by the hearing officer as directed. I make no judgment whether the violation of the Prehearing Order by CMS was intentional or inadvertent. However, because CMS violated the Prehearing Order and deprived me of the ability to review all the evidence considered by the hearing officer, I draw the adverse inference that the utility bill submitted by Petitioner did show that Petitioner had an active utility account at the 25050 West Outer Drive, Suite 204 address. Because the hearing officer states that the bill was dated April 5, 2016, I infer that the bill was for utility service provided prior to April 5, 2016. I cannot infer that the bill was for utility service provided during the period of the site inspection on November 19, 2015. However, the site investigators provide good evidence that at least the electricity was on in Suite 204 at the time of the site investigation based on the photograph of a machine with a light the inspectors characterized as “glowing.” CMS Ex. 2 at 25.

In its second corrective action plan and request for reconsideration, Petitioner states that Muhammad Chaudhry traveled to Indiana for a family emergency from November 18 through 20, 2015. CMS Ex. 5 at 1.

In addition to Muhammad Chaudhry – Petitioner’s owner and administrator – Petitioner called three witnesses.

Petitioner’s witness, Ronald Lott, testified that he was the maintenance man for the office building in which Petitioner was located. He testified that Petitioner was usually open 9:00 a.m. to 5:00 p.m. weekdays. Tr. 39-42. In response to my questioning, Mr. Lott testified that he was most likely on duty on November 19, 2015, the date of the site visit, given that he was usually there seven days a week. Tr. 46. Mr. Lott testified that he was familiar with Petitioner’s employees and that to his knowledge Petitioner was still leasing space in the building on November 19, 2015. According to Mr. Lott, Petitioner was open

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every day [I infer he meant every workday] during 2015. Tr. 39, 40, 45, 47. Mr. Lott’s testimony was credible and not rebutted.

Waqas Rashid was called by Petitioner and testified that he worked for Petitioner as a home health care consultant from April 2015 until the middle of January 2016. He testified that Petitioner’s Medicare payments were suspended due to a ZPIC audit and he was hired to help Petitioner find sources of revenue other than Medicare to remain financially viable. Tr. 52-55, 57-59, 68, 79-80. Prior to Petitioner’s Medicare payments being suspended as a result of the ZPIC investigation, Petitioner was delivering services to Medicare beneficiaries only. Tr. 69-70. Mr. Rashid testified that around May or June 2015, he helped Petitioner obtain contracts with three private insurance companies, two of which were CareCentrix and Meridian Healthcare Plan. Tr. 59-60, 70-73. Mr. Rashid testified that by November 2015, he believed that Petitioner had around seven or eight private insurance clients (i.e. patients), and that by February or March 2016, Petitioner had around 20 patients. Tr. 74-76. Mr. Rashid testified that several of Petitioner’s employees left Petitioner due to Petitioner’s financial difficulties. Petitioner managed to keep a clinical supervisor throughout. He testified that Petitioner had some part-time office staff in October 2015, but they may have departed by the time of the site inspection. Petitioner started to hire more staff once it had private insurance clients. Mr. Rashid testified Petitioner hired a full-time intake coordinator in November 2015. Mr. Rashid testified that contract clinicians provided care and services and they were doing so during the period when the site inspection occurred. Tr. 61, 76-78, 82-84. In response to my questioning, Mr. Rashid testified that he was “100 percent sure” that at the time of the site inspection in November 2015, Petitioner had contract health care staff providing home health care services to patients in their homes, not in Petitioner’s office. Mr. Rashid testified that he knew this as he assisted Petitioner with hiring the clinical staff through staffing agencies. Tr. 86. Mr. Rashid stated that the relationships with the private insurance companies ended in March 2016, after Petitioner’s Medicare enrollment and billing privileges were revoked. Tr. 72. Mr. Rashid’s testimony was credible and not rebutted.

Petitioner called Olivia Polychroni to testify. Ms. Polychroni testified that she was hired as Petitioner’s intake coordinator/office manager on or about November 25, 2015 and was let go after Petitioner received notice of the revocation in March 2016. Petitioner also had a part-time director of nursing when she was hired. Ms. Polychroni testified that when she started working, Petitioner had contracts with two or three insurance companies and had around seven clients. She testified that she thought Petitioner had about ten patients at the time of the revocation. According to Ms. Polychroni, Petitioner used clinical staff from five staffing agencies, and Petitioner was using the agencies while she was employed from November 2015 to March 2016 to provide home health care services. Tr. 92-104. Ms. Polychroni stated that she did not go back through Petitioner’s records to find out how many patients had been served prior to her start date in November 2015. Tr. 104. She testified that Mr. Chaudhry did the billing. Tr. 104. She testified that there

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was a period of time prior to her start date when Petitioner had no patients, but she did not know when that period was or how long it was. Tr. 108. Ms. Polychroni’s testimony was credible and not rebutted.

Petitioner’s owner and administrator, Muhammad Chaudhry, testified that Petitioner had a practice location at 25050 West Outer Drive, Suite 204, Lincoln Park, Michigan. Tr. 142-43. He testified that Petitioner had a sign showing the hours of operation as Monday through Friday, 9:00 a.m. to 5:00 p.m. He testified that the office was usually closed for lunch during which time a sign was posted indicating staff was out for lunch. Tr. 143. Mr. Chaudhry did not deny that Petitioner was closed and the door was locked at the time of the November 19, 2015 site visit. He admitted that he was not in his office on November 19, 2015, because he was out of town from November 18 to 20, 2015, when he traveled to South Bend, Indiana for a family emergency. Tr. 115-21, 143. Mr. Chaudhry stated during the hearing that he did not answer the telephone call from the site inspectors because the caller identification on his phone showed the incoming number as blocked. Tr. 35. Mr. Chaudhry testified that, while he was away from November 18 to 20, 2015, he appointed his part-time director of nursing, Jean Gulpamico, as his alternate to ensure that the day-to-day operations of the agency were covered. Mr. Chaudhry testified that he answered all telephone calls, but passed on any messages related to clinical issues to Ms. Gulpamico. Tr. 121-24; CMS Ex. 5 at 1. Mr. Chaudhry admitted that Ms. Gulpamico, who was a part-time employee, was not physically present at Petitioner’s office on the date of the site visit, November 19, 2015, as he expected her to handle clinical questions by phone. Tr. 123-24, 143.

According to Mr. Chaudhry, because his Medicare payments were suspended as a result of the ZPIC investigation, he began working with Mr. Rashid to obtain contracts with private insurance companies so that he could maintain a source of revenue. Mr. Chaudhry testified that he obtained contracts with three companies, Manage Care, CareCentrix, and Meridian. Tr. 36, 146. He stated that Petitioner last provided services to a Medicare beneficiary in August 2015, and that after August 2015, Petitioner only had non-Medicare patients. From around August 2015 to September 2015, Petitioner had no patients to whom it was providing services. Tr. 145-50. Petitioner’s first patient after that period was a non-Medicare client who received services in October 2015. Tr. 149‑50. Mr. Chaudhry testified that submitting claims to private insurance is the same as submitting claims to Medicare, but with different billing periods. Tr. 147.

Mr. Chaudhry testified that Petitioner had approximately seven active patients at the time of the November 19, 2015 site visit. Tr. 126. Mr. Chaudhry admitted that Petitioner had no patients for a period in August and September 2015. Tr. 149. Mr. Chaudhry testified that Petitioner did not see its patients in its office. Tr. 141-42. Care was delivered through contractors and they did come to the office to drop off paperwork and pick up supplies, but they usually called in advance. Tr. 144, 147-48. Mr. Chaudhry testified that Petitioner provided services to patients during November 2015, but stated that he

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would need to check his records to determine the specific dates of service. Tr. 129. When asked whether any patients were seen on November 18 and 19, 2015, Mr. Chaudhry stated he was not sure. Tr. 126-30. He explained that he had not produced any records to establish the dates of service because no one had asked him to. Tr. 128, 130. In response to my questioning, Mr. Chaudhry testified that he submitted claims to the private insurance companies for services delivered during November 2015 and would be able to produce billing records as proof. Tr. 130-31. Post-hearing Mr. Chaudhry produced billing records marked P. Ex. 1. P. Ex. 1 lists claims paid by Meridian Health Plan for four different patients, one with dates of service daily from November 18 through 27, 2015, one with dates of service ending on November 12, 2015, and then resuming from November 23 through 27, 2015, one with no dates of service after November 13, 2015, and one with no dates of service listed after November 14, 2015. P. Ex. 1. P. Ex. 1 is consistent with and supports Mr. Chaudhry’s testimony that Petitioner billed a private insurance company for care and services delivered during November 2015, including to at least one patient with dates of service from November 18 through 27, 2015.

I find Muhammad Chaudhry’s testimony credible as it is consistent with and supported by other evidence of record.

The following findings of fact, many of which are undisputed, are based upon the credible and weighty documentary and testimonial evidence discussed above:

(1) Petitioner was enrolled in Medicare as a provider of home health care services prior to the revocation of its Medicare enrollment and billing privileges.

(2) Petitioner notified CMS of a change of practice location address to 25050 Outer Drive, Suite 204, Lincoln Park, MI and that change was approved by the MAC on December 2, 2014. There is no evidence of any subsequent change of address for the practice location.

(3) Petitioner was under a suspension of payment of its Medicare claims beginning July 8, 2015, that continued through revocation of Petitioner’s enrollment and billing privileges.

(4) Petitioner’s last claims to Medicare were for dates of service between January 5 and August 14, 2015, and the claims were paid by Medicare between March 2 and October 28, 2015.

(5) Petitioner last provided services to a Medicare beneficiary in August 2015 and began providing services to a non-Medicare covered patient who was covered by private insurance in October 2015.

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(6) On November 19, 2015, the evidence shows that Petitioner had an office at 25050 Outer Drive, Suite 204; the office was identified as Petitioner’s by a sign with hours of operation and a telephone number, facsimile number, and an email address; the office contained furnishings; the electricity was on; and what appeared to be files were present in the office.

(7) Petitioner did not see patients in its office but contract caregivers did come to the office to drop off paperwork and pick up supplies. 

(8) On November 19, 2015, at about 2:54 p.m. two ZPIC inspectors attempted to conduct a site inspection of Petitioner’s office at 25050 Outer Drive, Suite 204, Lincoln Park, MI, but the office was closed and no one answered the phone when they attempted to call the number on the sign at the door.

(9) From November 18 to 20, 2015, Petitioner’s owner and administrator, Muhammad Chaudhry, was on travel to South Bend, Indiana for a family emergency.

(10) Petitioner’s owner and administrator, Muhammad Chaudhry, did not arrange to have the office opened and staffed on November 19, 2015.

(11) Petitioner’s owner and administrator did not answer the telephone call from the inspectors on November 19, 2015, because it was listed on his telephone as a blocked call. 

(12) On November 19, 2015, Petitioner had approximately seven active patients, all covered by private insurance and not Medicare.

(13) Petitioner submitted claims to at least one private insurance company for home health care and services delivered to at least one patient on November 19, 2015, and as many as four patients on various dates in November 2015.

(14) Petitioner’s owner and administrator, Muhammad Chaudhry, prepared and filed claims for Medicare prior to the suspension of Medicare payments and to private insurance thereafter. 

(15) Petitioner’s owner and administrator, Muhammad Chaudhry, prepared and submitted claims to both Medicare and private insurance on behalf of Petitioner, and the claims process was very similar but with different billing periods.

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1. b. Analysis

There is no dispute that Petitioner had only one practice location, the office at 25050 Outer Drive, Suite 204, Lincoln Park, Michigan. CMS Br. at 3; Tr. 142-43. There is no dispute in this case that Petitioner’s door was locked and its telephone was not answered on November 19, 2015, when investigators visited Petitioner’s office and attempted to call the telephone number listed on Petitioner’s sign at its door. CMS Br. at 3-4; Tr. 115-21, 143.

CMS argues that it has made a prima facie showing that Petitioner was not operational on November 19, 2015, when the site inspection occurred, because Petitioner’s office was closed. CMS argues Petitioner cannot rebut the prima facie showing because Petitioner does not dispute that its office was not open to the public or staffed when the site inspection occurred. CMS Br. at 1, 3-10; CMS Reply at 1-3. The CMS position is that this case must be resolved against Petitioner because the fact Petitioner’s office was closed and not staffed on November 19, 2015, means that Petitioner was not operational within the meaning of the regulations. However, I conclude based on the regulations, CMS policy, and prior decisions of the Board, that the determination of whether Petitioner was operational does not turn only upon whether Petitioner’s doors were open and its office staffed when the site inspection occurred.

According to the Board, my authority is limited by the reconsidered determination issued by CMS, in this case the reopened and revised reconsidered determination issued on June 10, 2016. Neb Group of Arizona LLC, DAB No. 2573 at 7 (2014) (in provider and supplier enrollment cases, the CMS determination subject to review is the reconsidered determination). The hearing officer that issued the reopened and revised reconsidered determination decided that Petitioner failed to provide “any supporting documentation to indicate that it was operational at the time of the site visit and thus, the revocation is upheld.” CMS Ex. 6 at 3. The hearing officer did not specify in the paragraph titled “decision” the specific regulatory authority for the revocation. However, earlier in her decision she stated that the initial determination to revoke was based on 42 C.F.R. § 424.535(a)(5)(i) because Petitioner was not operational and 42 C.F.R. § 424.535(a)(1) because Petitioner had failed to report a change in its practice location as required by 42 C.F.R. § 424.516(e). CMS Ex. 6 at 3. In her decision, the hearing officer does not comment about a failure to notify CMS of a change in practice location and, in fact, there is no dispute that Petitioner is not alleged to have changed its practice location. CMS Ex. 6 at 3. Accordingly, I conclude that revocation pursuant to 42 C.F.R. § 424.535(a)(1) is not properly before me as that was not a basis for revocation upheld by the hearing officer on reconsideration. I conclude that the only basis for revocation properly before me is that authorized by 42 C.F.R. § 424.535(a)(5)(i) as the hearing officer only states that revocation was upheld because Petitioner did not prove it was operational when the site visit occurred on November 19, 2015. My conclusion is consistent with and

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supported by CMS policy which requires that a MAC use 42 C.F.R. § 424.535(a)(5)(i) or (ii) for revocation in cases where the basis for revocation is that the provider or supplier is not operational. Medicare Program Integrity Manual (MPIM), ch. 15, § 15.20.1.E (rev. 765, eff. Jan. 1, 2018).5

The regulation that was the basis for revocation upheld in the revised reconsidered determination provides:

(a) Reasons for revocation. CMS may revoke a currently enrolled provider or supplier’s Medicare billing privileges and any corresponding provider agreement or supplier agreement for the following reasons:

* * * *

(5) On-site review. CMS determines, upon on-site review, that the provider or supplier is no longer operational to furnish Medicare covered items or services, or is not meeting Medicare enrollment requirements under statute or regulation to supervise treatment of, or to provide Medicare covered items or services for, Medicare patients. Upon on-site review, CMS determines that—

(i) A Medicare Part A provider is no longer operational to furnish Medicare covered items or services, or the provider fails to satisfy any of the Medicare enrollment requirements.

(ii) A Medicare Part B supplier is no longer operational to furnish Medicare covered items or services, or the supplier has failed to satisfy any or all of the Medicare enrollment requirements, or has failed to furnish Medicare covered items or services as required by the statute or regulations.

42 C.F.R. § 424.535(a)(5). Petitioner, a home health agency, is a provider and subject to 42 C.F.R. § 424.535(a)(5)(i), not subsection (5)(ii).

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The term “operational” has a specific definition under the regulations:

Operational means the provider or supplier has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.

42 C.F.R. § 424.502. The requirements or elements necessary to be operational, based on the plain language of the regulation are that:

1. The provider has a qualified physical practice location;

2. The provider’s practice location is open to the public for the purpose of providing health care related services;

3. The provider is prepared to submit valid Medicare claims; and

4. The provider is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.

CMS policy provides some clarification for how it intends the MACs to enforce the regulation. MPIM, ch. 15 § 15.20.1.A provides, regarding site verifications to determine operational status:

When conducting a site verification to determine whether a practice or administrative location is operational, the contractor shall make every effort to limit its site verification to an external review of the practice location. If the contractor cannot determine whether the practice location is operational based on an external review of the location, the contractor shall conduct an unobtrusive site verification by limiting its encounter with provider or supplier personnel or medical patients.

MPIM, ch. 15 § 15.20.1.B provides regarding the timing of site verifications:

Site verifications should be done Monday through Friday (excluding holidays) during their posted business hours. If

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there are no hours posted, the site verification should occur between 9 a.m. and 5 p.m. If, during the first attempt, there are obvious signs that facility [sic] is no longer operational no second attempt is required. If, on the first attempt the facility is closed but there are no obvious indications the facility is non-operational, a second attempt on a different day during posted hours of operation should be made.

The CMS policy clearly reflects that the fact a provider or supplier is closed and not open to the public at the time of the site investigation, does not alone support the determination that the supplier is no longer operational.6

CMS policy regarding contractor documentation of a site visit requires, in addition to a written report noting the date and time of the attempted visit, who attempted the visit, and dated and time stamped photographs, that the contractor:

Fully document all observations made at the facility (e.g., the facility was vacant and free of all furniture, a notice of eviction or similar documentation was posted at the facility, the space is now occupied by another company) . . . .

MPIM, ch. 15, § 15.20.1.C.

The Board has considered the regulations and CMS policy.

In Adora Healthcare Services, Inc., DAB No. 2714 (2016), the Board concluded CMS failed to make a prima facie showing that the home health agency was not operational based on a site inspection that could not find the agency’s office suite of record and where the inspector’s telephone call to the telephone number in CMS records was unanswered. The Board’s analysis of the record was that there was undisputed evidence Petitioner continued to be operational as it moved to a new practice location and the 90‑day period for giving CMS notice of the change of location had not elapsed. The Board commented that under 42 C.F.R. § 424.535(a)(5)(i) CMS has authority to revoke “based on finding that the provider is ‘no longer operational’ (emphasis added), language which tends to suggest a cessation of existing operations, rather than merely a move to a new location, which might cause some disruption in the existing operations during the move but typically would not end them.” Adora, DAB No. 2714 at 5.

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In I & S Healthcare Services, LLC, DAB No. 2519 (2013), the Board upheld revocation of enrollment of a home health agency where a site inspector found a sign that stated the agency voluntarily suspended normal business operations effective March 23, 2012, to October 1, 2013. The site inspection report showed the inspector found that the agency office was not open, no employees or staff were present, and there was no apparent customer activity. The agency did not deny it suspended its business operations for 18 months. Id. at 2-3. The Board noted that CMS’s basis for revocation in that case was not due to a vacation, holiday, or emergency. The Board noted further that whether temporary closure of the agency office meant the agency was not operational was not an issue in the case. Id. at 6.

In Mission Home Health, et al., DAB No. 2310 (2010), the home health agency consisted of 22 entities doing business under the name Mission Home Health. A site inspection of the office of the agency found the door locked, the space was dark, and no one answered the door. The property manager for the office space told the investigator that the agency had been locked out of the space for approximately two months due to nonpayment of rent. CMS denied the agency’s application to enroll in Medicare, that denial was upheld by the ALJ, and the Board affirmed. Significantly, the agency admitted that none of its 22 entities were operational. Id. at 4. The agency argued to the ALJ and the Board that it had been operational but had to cease operations due to the CMS delay in processing the agency’s enrollment applications. The Board noted that a showing by the agency that it was previously operational would not be a basis for reversing the denial of enrollment, and such evidence would be immaterial. However, the Board noted that the agency offered no evidence to the ALJ or the Board of its prior operational status, so arguably, that issue was not before the Board. Id. at 6-7.

In I & S and Mission, it was clear from the evidence that the home health agencies were no longer operational at the time of the site visit to determine whether they were operational. In I & S, a sign on the agency door admitted that the agency had suspended operations for 18 months. In Mission, the agency conceded that it was not operational.   In Adora, even though the agency door was locked and the lights were off at the practice location of record, the Board found that CMS failed to make a prima facie showing that the agency was not operational as there was evidence that the agency had moved and was operational at another location. Once again I note that the Board commented that under 42 C.F.R. § 424.535(a)(5)(i) CMS has authority to revoke “based on finding that the provider is ‘no longer operational’ (emphasis added), language which tends to suggest a cessation of existing operations, rather than merely a move to a new location, which might cause some disruption in the existing operations during the move but typically would not end them.” Adora, DAB No. 2714 at 5.

The case before me is more akin to Adora than I & S or Mission. CMS argues that it has made a prima facie showing that Petitioner was not operational and subject to revocation of its enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i). CMS

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Br. at 3-4. Applying the rationale of Adora to this case, it is not clear that CMS did make a prima facie showing. However, this case need not be resolved on grounds that CMS failed to make its prima facie showing, for even if one concluded CMS did make the required showing, it has been rebutted by Petitioner.

There is no question that the doors of Petitioner’s office were locked, the lights were off, and no staff or patients were present at the time of the site investigation. However, the site investigation report clearly shows that the investigators went to a physical office that had a sign with the name of Petitioner, office hours, and contact information. Photographs taken by the investigators show that the office was furnished, that electrical equipment was powered-up, and there appeared to be files and other materials present. Under CMS policy, there was at least a question based on what the investigators could observe from outside the office, as to whether Petitioner continued to be operational. Under CMS policy, which I recognize is not my prerogative to enforce against CMS, there should have been another site visit, but there was not. Rather, the MAC and CMS jumped to the conclusion that Petitioner was not operational without doing due diligence to complete the investigation as required by CMS policy, thus requiring a hearing and decision by me that effectively completed the investigation contemplated by CMS policy.

In summary, considering the elements of the term “operational” more specifically in the context of the facts, I have found in this case:

1. Petitioner had a qualified physical practice location that had been reported to CMS. The office was furnished, there appeared to be files in the office, and the electricity was on when the site inspection occurred. The building maintenance man confirmed that Petitioner rented the office space. There was a sign on the door that identified Petitioner and its hours of operation, and listed contact information.

2. Petitioner’s practice location was not open to the public for the purpose of providing health care-related services on the day of the site inspection. However, the evidence shows that the public would not normally visit the office of a home health agency such as Petitioner for health care services. The evidence shows that contract health care providers did visit the office, but with advance notice, in order to drop off paperwork and pick up supplies. According to CMS policy, site inspectors are to attempt the on-site inspection without entering the premises if possible, so the fact the inspectors were unable to enter Petitioner’s office on November 19, 2015, is not determinative of the issue of whether Petitioner was operational.

3. Petitioner was under a suspension of payment from Medicare with the last payment being made in October 2015. The evidence shows that in order to create revenue, Petitioner was actively seeking patients covered by

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private insurance rather than Medicare. For a brief period in August and September 2015, Petitioner had no patients, but at the time of the site inspection Petitioner had at least one privately insured patient to whom services were delivered. The evidence shows that there is little difference between submitting valid claims to Medicare and a private insurer; therefore, Petitioner remained prepared to submit valid Medicare claims once the suspension of payment was lifted and Petitioner had Medicare- insured patients.

4. On the day of the site inspection, no staff was present in Petitioner’s office. However, the evidence shows that Petitioner’s contract staff did deliver care and services to one patient on the date of the site inspection. The evidence also shows Petitioner had a part-time director of nursing in addition to contract health care providers, and an administrator at the time of the site inspection. Photographs taken by the site inspectors show that Petitioner’s office had furniture and other unidentified equipment. There is no evidence from which to infer that the equipment was not proper or that there was not a stock of supplies necessary to support contract health care providers and the filing of claims with Medicare or private insurers. The evidence shows Petitioner was delivering care and services, albeit to a limited number of patients.

My review in this case is de novo. Based on my review, I conclude based on the preponderance of the evidence, that Petitioner was, in fact, operational within the meaning of 42 C.F.R. §§ 424.502 and 424.535(a)(5)(i) at the time of the site inspection on November 19, 2015. Petitioner has presented credible evidence that shows that there was no cessation of Petitioner’s operations. Rather, there was only a temporary office closure from November 18 to 20, 2015, due to a family emergency.

III. Conclusion

For the foregoing reasons, I conclude that CMS has failed to establish a basis for the revocation of Petitioner’s Medicare enrollment and billing privileges.

• 1. Citations are to the 2015 revision of the Code of Federal Regulations (C.F.R.), the revision in effect at the time of both the initial and reconsidered determinations, unless otherwise stated.
• 2. A “supplier” furnishes services under Medicare and includes physicians or other practitioners and facilities that are not included within the definition of the phrase “provider of services.”  Act § 1861(d) (42 U.S.C. § 1395x(d)).  A “provider of services,” commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities, home health agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C. § 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act.  Act § 1861(u) (42 U.S.C. § 1395x(u)).  The distinction between providers and suppliers is important because they are treated differently under the Act for some purposes.
• 3. “Credible evidence” is evidence that is worthy of belief.  Black’s Law Dictionary 596 (8th ed. 2004).  The “weight of evidence” is the persuasiveness of some evidence compared to other evidence.  Id. at 1625.
• 4. CMS states in its brief that “investigators found the practice location empty.”  CMS Br. at 4.  The assertion is correct to the extent CMS intended to state no staff or patients were present, but clearly incorrect with regard to furniture and equipment based on the site inspection report photographs.  CMS Ex. 2 at 23-25.
• 5. The current CMS policy is no different from the policy originally adopted in 2010, and was the policy in effect at the time of the onsite inspection and the revised reconsidered determination.  MPIM, ch. 15, § 20.1 (rev. 354, eff. Sept. 28, 2010).
• 6. These policies are currently in effect and are consistent with the policy originally set forth in the MPIM, ch. 15, § 20.1 (rev. 354, eff. Sept. 28, 2010).