Berry Special Home Health Care, Inc., DAB CR5337 (2019)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its Medicare Administrative Contractor, Palmetto GBA (Palmetto), revoked the Medicare enrollment and billing privileges of Berry Special Home Health Care, Inc. (Petitioner) and terminated Petitioner's corresponding provider agreement. As explained more fully below, CMS properly concluded that a managing employee of Petitioner was excluded from participation in Medicare and was convicted of felony offenses detrimental to the Medicare program and its beneficiaries. I therefore affirm CMS's revocation of Petitioner's Medicare enrollment and billing privileges.

I. Background

Petitioner is a home health agency operating in Miami, Florida. See, e.g., CMS Exhibit (Ex.) 9 at 6, 11. Petitioner employed Kelvin E. Soto as Director of Nursing (DON). See id. at 22, 24. On November 6, 2012,1 the U.S. District Court for the Southern District of Florida entered judgment convicting Mr. Soto of four counts of health care fraud and one

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count of conspiracy to commit health care fraud. CMS Ex. 7 at 1. The court sentenced Mr. Soto to 72 months' incarceration and required him to pay restitution of $727,418.00. Id. at 2, 5. In an opinion issued February 3, 2014, the U.S. Court of Appeals for the Eleventh Circuit affirmed the district court's judgment of conviction and sentence. CMS Ex. 6 at 2-3. On or about May 20, 2015, the Department of Health and Human Services (HHS) Office of Inspector General (IG) excluded Mr. Soto from participating in Medicare and other federal health care programs, pursuant to section 1128(a)(1) of the Social Security Act (Act). CMS Ex. 5.

By letter dated September 7, 2016, Palmetto revoked Petitioner's Medicare billing privileges pursuant to 42 C.F.R. § 424.535(a)(2). CMS Ex. 4. Palmetto explained that the revocation was authorized because an owner, managing employee, authorized or delegated official, medical director, supervising physician, or other health care personnel of Petitioner was excluded from Medicare or another federal health care program pursuant to section 1128 of the Act. Id. at 1. Palmetto stated that Petitioner's billing privileges were revoked effective May 20, 2015. Id. I infer that Palmetto relied on Mr. Soto's exclusion as the basis for revoking Petitioner's billing privileges, because the effective date of revocation matches the effective date of Mr. Soto's exclusion. Compare CMS Ex. 4 with CMS Ex. 5.

By letter dated December 22, 2016, Palmetto reopened and revised the September 7, 2016 revocation determination. CMS Ex. 3; P. Ex. 8.2 In the revised determination Palmetto asserted the following grounds for revocation:

42 C.F.R. § 424.535(a)(2) – based on Mr. Soto's May 20, 2015 exclusion pursuant to section 1128(a)(1) of the Act;

42 C.F.R. § 424.535(a)(3) – based on Mr. Soto's conviction for felony health care fraud in the U.S. district court;

42 C.F.R. § 424.535(a)(4) – based on Petitioner's failure to disclose that Mr. Soto had been convicted of a felony offense when Petitioner completed a Medicare enrollment application (Form CMS 855) on or about December 18, 2012;

CMS Ex. 3 at 1-2. Palmetto also stated that, by failing to notify CMS of the adverse legal actions against Mr. Soto, as required by 42 C.F.R. § 424.516, Petitioner had violated 42 C.F.R. § 424.535(a)(1). Id. at 2. The revocation was made effective November 6, 2012. Id. at 1. In addition, Palmetto imposed a three-year re-enrollment bar. Id. at 3.

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By letter dated January 18, 2017, Petitioner requested reconsideration. CMS Ex. 2. CMS's Provider Enrollment and Oversight Group3 issued a reconsidered decision dated April 18, 2017, upholding the revocation based on 42 C.F.R. § 424.535(a)(1), (a)(2), (a)(3), and (a)(4). CMS Ex. 1.

Petitioner timely requested a hearing before an administrative law judge and the case was assigned to Administrative Law Judge Scott Anderson. Judge Anderson issued an Acknowledgment and Pre-Hearing Order dated June 14, 2017 (Order). The case was reassigned to me on August 25, 2017. Judge Anderson's Order directed each party to file a pre-hearing exchange consisting of a brief and any supporting documents, and also set deadlines for those filings. Order ¶ 4. CMS filed a combined pre-hearing brief and motion for summary judgment (CMS Br.) and fifteen proposed exhibits (CMS Exs. 1‑15). Petitioner filed a brief and cross-motion for summary judgment (P. Br.) and ten proposed exhibits (P. Exs. 1-10). Neither party objected to the exhibits offered by the opposing party. Therefore, in the absence of objection, I admit CMS Exs. 1-15 and P. Exs. 1-10 into the record.

Judge Anderson's Order advised the parties that they must submit written direct testimony for any proposed witness and that an in-person hearing would be necessary only if the opposing party requested the opportunity to cross-examine a witness. Order ¶¶ 8-10; Civil Remedies Division Procedures (CRDP) §§ 16(b), 19(b); Pacific Regency Arvin, DAB No. 1823 at 8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross‑examine those witnesses). Neither party offered the written direct testimony of any witness.4 Consequently, an in-person hearing is not required, and I issue this decision based on the written record, without regard to whether the standards for summary judgment are met. Order ¶¶ 8-11; CRDP § 19(d).

II. Issue

The issue in this case is whether CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges.

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III. Jurisdiction

I have jurisdiction to hear and decide this case. 42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2); see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

IV. Discussion

A. Statutory and Regulatory Background

Petitioner is a "provider" of home health services for purposes of the Medicare program. See Act § 1861(u) (42 U.S.C. § 1395x(u)); 42 C.F.R. § 400.202 (definition of provider). In order to participate in the Medicare program as a provider, an entity must meet certain criteria to enroll and receive billing privileges. 42 C.F.R. §§ 424.505, 424.510. CMS may revoke the enrollment and billing privileges of a provider for any reason stated in 42 C.F.R. § 424.535.

Pursuant to 42 C.F.R § 424.535(a)(2)(i), CMS may revoke a currently enrolled provider's Medicare billing privileges if the provider, or any owner, managing employee, authorized or delegated official, medical director, supervising physician, or other health care personnel of the provider is excluded from the Medicare, Medicaid, and any other Federal health care program. In addition, pursuant to 42 C.F.R § 424.535(a)(3), CMS may revoke a provider's Medicare enrollment and billing privileges if the provider, or any owner or managing employee of the provider was, within the preceding 10 years, convicted of a felony offense described in 42 C.F.R § 424.535(a)(3)(ii). When a provider's Medicare enrollment and billing privileges are revoked, any provider agreement in effect is terminated effective with the date of revocation. 42 C.F.R § 424.535(b). Additionally, when CMS revokes a provider's Medicare enrollment and billing privileges, CMS establishes a reenrollment bar for a period ranging from one to three years. 42 C.F.R. § 424.535(c).

Generally, a revocation becomes effective 30 days after CMS mails the initial determination revoking Medicare billing privileges, but if CMS finds a provider's owner or managing employee was convicted of a felony that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries, the revocation is effective from the date of the conviction. 42 C.F.R. § 424.535(g).

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B. Findings of Fact, Conclusions of Law and Analysis5

1. On November 6, 2012, Kelvin Soto was convicted of health care fraud and conspiracy to commit health care fraud, felony offenses described in 42 C.F.R. § 424.535(a)(3)(ii).

2. On May 20, 2015, the IG excluded Mr. Soto based on the convictions.

As described above, on November 6, 2012, Mr. Soto was convicted of four counts of health care fraud and one count of conspiracy to commit health care fraud. CMS Ex. 7. Mr. Soto was sentenced to 72 months' incarceration and to pay restitution of $727,418.00. Id. The criminal statutes Mr. Soto was convicted of violating, 18 U.S.C. §§ 1347 and 1349, are felony offenses. Id.; see also 18 U.S.C. § 3559. Based on Mr. Soto's convictions, the IG excluded him from participating in the Medicare program pursuant to section 1128(a)(1) of the Act. CMS Ex. 5. Mr. Soto's exclusion was effective May 20, 2015. Id. Petitioner has not disputed that Mr. Soto was convicted, or that the convictions – for health care fraud and conspiracy to commit health care fraud – were felony convictions as described in 42 C.F.R. § 424.535(a)(3)(ii). Similarly, Petitioner has not disputed that the IG excluded Mr. Soto as a result of the convictions. However, as discussed in the following section of this decision, Petitioner does dispute that Mr. Soto continued to serve in a management role at the time of his convictions and exclusion.

3. Petitioner failed to update its enrollment information on file with CMS; accordingly, CMS did not err in treating Mr. Soto as a managing employee at the time CMS revoked Petitioner's Medicare enrollment and billing privileges.

Records maintained by CMS support a conclusion that Mr. Soto's relationship with Petitioner continued until at least 2017. CMS offered printouts of data contained in its Provider Enrollment, Chain and Ownership System (PECOS) database. CMS Exs. 8, 12. A report dated February 8, 2017, titled "Ownership Interests and Managing Control Associations Summary" identifies Mr. Soto as a "W-2 Managing Employee" of Petitioner beginning August 18, 2009, and as an "Officer" beginning April 8, 2011. CMS Ex. 8 at 2. The report does not show an end date for Mr. Soto in either position. Id. Another PECOS report, dated June 15, 2017, titled "Enrollment Record Summary" similarly continues to list Mr. Soto as a managing employee and officer as of that date. CMS Ex.

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12 at 10, 11. At a minimum, these records raise a presumption that Mr. Soto continued to be a managing employee of Petitioner.6

Significantly, Petitioner does not contend that it updated its information on file in the PECOS database. Rather, Petitioner argues that, as a factual matter, Mr. Soto had resigned as DON effective February 24, 2012. P. Br. at 1. In support of its contention that Mr. Soto had resigned in February 2012, Petitioner points to a letter from Mr. Soto purportedly dated February 24, 2012. P. Ex. 1; see also CMS Ex. 15 (duplicate). Petitioner also offers the minutes of a meeting of its "Governing Body," dated February 5, 2012. P. Ex. 2; see also CMS Ex. 13 (duplicate). The minutes record that Mr. Soto "will continue to work with this agency but not as director of nursing." Id.

However, Petitioner admitted that, even if Mr. Soto did resign as DON in February of 2012, Petitioner did not transmit that information to CMS. In its reconsideration request, Petitioner acknowledged:

Unfortunately, [Petitioner made] an oversight in not notifying CMS on the Change of Director of Nursing. On July 18, 2012... an Administrative error occurred [in] not deleting Mr. Kelvin Soto [from] the CMS 855A, Section 6.

CMS Ex. 2 at 1. Notwithstanding this admission, Petitioner offers a different explanation in its brief and exhibits before me. However, for the reasons that follow, I do not find Petitioner's alternative explanation credible.

Petitioner offers the affidavit of its owner and president, Julia Rodriguez. P. Ex. 7. In the affidavit, Ms. Rodriguez asserts that, on or about July 24, 2012, Petitioner's staff prepared and mailed a CMS Form 855 enrollment application deleting Mr. Soto as a managing employee. Id. Petitioner also offers a document it describes as a screen-shot of the July 24, 2012 application. P. Ex. 6. However, it is impossible to decipher the meaning of the entries in this document and, in any event, there is no date entry for July 24, 2012. Id. Perhaps in an attempt to explain why there is no contemporaneous documentation of its supposed July 24, 2012 enrollment application, Petitioner's brief states that its staff did not mail the application by certified mail. P. Br. at 2. This explanation does not account for Petitioner's failure to retain a hard copy of the application, if in fact it existed. I therefore do not credit Petitioner's belated and self-interested assertion that, on or about July 24, 2012, it attempted to submit an enrollment

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application deleting Mr. Soto as a managing employee. To the contrary, I find credible the original explanation in Petitioner's reconsideration request – that Petitioner failed to update its enrollment information regarding Mr. Soto due to administrative error.

In any event, whether through administrative error or due to lost mail, CMS did not receive a request to delete Mr. Soto from Petitioner's enrollment information on or around July 24, 2012. However, CMS did receive other enrollment applications from Petitioner in 2012. Petitioner submitted (and CMS received) applications to change its enrollment information on or around July 1, 2012 and on or around December 18, 2012. See CMS Exs. 10, 11.7 Neither of these applications reported any changes to Mr. Soto's status as a managing employee of Petitioner.8 Indeed, as far as the record reveals, Petitioner did not submit an enrollment application requesting to delete Mr. Soto as a managing employee until on or about January 20, 2017. CMS Ex. 9 at 22-24, 43. Therefore, the enrollment information on file with CMS continued to list Mr. Soto as a managing employee at least through December 2016, when Palmetto issued its revised initial determination revoking Petitioner's Medicare enrollment and billing privileges. Petitioner does not dispute this in any meaningful way. See P. Br. at 2 (after receiving "the revocation letter dated December 22, 2016... [Petitioner] resubmitted a new 855A application terminating [Mr. Soto]").

As an appellate panel of the DAB has explained, CMS is entitled to rely on the information providers and suppliers submit in their enrollment applications, even if such information was submitted (or not revised) in error:

We also agree with the [administrative law judge] that even if [the supplier] mistakenly listed [an individual] as a managing employee on its September 2015 enrollment application, no provision of the statute or regulations absolves it of responsibility for [this] uncorrected error[.]

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Meadowmere Emergency Physicians, PLLC, DAB No. 2881 at 11 (2018) (internal quotation marks omitted). The panel elaborated that the enrollment regulations obligate providers and suppliers to ensure their enrollment applications are complete, accurate, and truthful and that an authorized official must sign a certification to that effect. Id. As the panel stated: "These requirements ensure... that CMS may rely on the accuracy of the information in administering the Medicare program." Id.

In sum, CMS was justified in relying on the information in the PECOS database listing Mr. Soto as a managing employee when it determined to revoke Petitioner's Medicare enrollment and billing privileges.

4. CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(2) because a managing employee of Petitioner was excluded by the IG.

For the reasons discussed in the previous section of this decision, I have concluded that Petitioner continued to list Mr. Soto as a managing employee until on or about January 20, 2017, when it submitted a Form CMS 855 requesting to delete him from this role. CMS Ex. 9 at 22-24, 43. In addition, as described above, on or about May 20, 2015, the IG excluded Mr. Soto from participating in Medicare and other federal health care programs pursuant to section 1128(a)(1) of the Act. CMS Ex. 5. Therefore, CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(2).

5. CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(3), because a managing employee of Petitioner was convicted of health care fraud, a felony which subjected him to exclusion.

As I have concluded above, Petitioner continued to list Mr. Soto as a managing employee until on or about January 20, 2017. CMS Ex. 9 at 22-24, 43. Also, as described above, Mr. Soto was convicted on four felony counts of health care fraud and one felony count of conspiracy to commit health care fraud. CMS Ex. 7 at 1. Finally, the IG excluded Mr. Soto based on his convictions in accordance with section 1128(a)(1) of the Act. CMS Ex. 5. It is therefore apparent that Mr. Soto was convicted of felony offenses "that would result in mandatory exclusion under section 1128(a)(1) of the Act" within the meaning of 42 C.F.R. § 424.535(a)(3)(ii)(D). Accordingly, CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(3).

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6. I need not decide whether CMS had a legitimate basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(1) or § 424.535(a)(4).

Having concluded that CMS had a legal basis to revoke Petitioner's enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(2) and (a)(3), I need not decide whether CMS also had a basis to revoke Petitioner's enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(1) or (a)(4). It is unnecessary for me to do so because the revocation bases under 42 C.F.R. § 424.535(a)(2) and (a)(3) are supported by the record. See, e.g., Daniel Wiltz & Family Healthcare Clinic, APMC, DAB No. 2864 at 12 (2018) (if one basis for sanction is established, CMS's action would be sustained "regardless of the existence of any additional bases for revocation"). For these reasons, I do not decide whether CMS had a legal basis to revoke Petitioner's enrollment application pursuant to 42 C.F.R. § 424.535(a)(1) or (a)(4).

V. Conclusion

For the reasons explained above, I decide that CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges and to terminate Petitioner's corresponding provider agreement effective November 6, 2012, the date of Mr. Soto's conviction.

• 1. The U.S. district judge signed the judgment on November 9, 2012, but the judgment indicates that the court imposed sentence on November 6, 2012. CMS Ex. 7 at 1.
• 2. P. Ex. 8 is a duplicate of CMS Ex. 3.
• 3. The Provider Enrollment and Oversight Group is a component of CMS itself, not an administrative contractor.
• 4. Petitioner offered the affidavit of Julia Rodriguez as P. Ex. 7. However, Petitioner did not identify Ms. Rodriguez as a witness and, in any case, CMS did not request to cross-examine her.
• 5. My findings of fact and conclusions of law appear as headings in bold italic type.
• 6. The record does not include a copy of the enrollment application on which Petitioner initially listed Mr. Soto as a managing employee. Nevertheless, Petitioner does not deny that it did employ Mr. Soto as its DON, at least until February of 2012. Nor does Petitioner deny that it transmitted that information to CMS.
• 7. I note that CMS Ex. 11 includes a copy of an envelope transmitting Petitioner's Form CMS 855, signed December 18, 2012. See CMS Ex. 11 at 8, 9. The envelope indicates that the application was sent certified mail, return receipt requested. Id. at 9. It is at least possible to infer from this document that it was Petitioner's usual practice to mail its enrollment applications via certified mail, return receipt requested.
• 8. Section 6 of the Form CMS 855 Enrollment Application is used to report Ownership Interest and/or Managing Control Information (Individuals). See CMS Ex. 9 at 22. The forms Petitioner submitted in July and December 2012 do not include section 6. CMS Exs. 10, 11. The absence of section 6 indicates that Petitioner did not request changes to the information it previously provided. In its reconsideration request, Petitioner conceded that it requested to change its address, but did not request to delete Mr. Soto as a managing employee. CMS Ex. 2 at 1.