OC Housecalls, Inc., DAB CR5504 (2020)

DECISION

Petitioner, OC Housecalls, Inc., was operational at a practice location on record with the Centers for Medicare & Medicaid Services (CMS) from its initial enrollment in Medicare in 2004 through revocation of its Medicare enrollment by the initial determination issued on November 14, 2016. Accordingly, there is no basis for the revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i).

I. Procedural History and Jurisdiction

This case is before me on remand from the Departmental Appeals Board (the Board). OC Housecalls, Inc., DAB No. 2893 (2018). A full statement of the procedural history before the remand is found in my initial decision in the case, including my evidentiary rulings. OC Housecalls, Inc., DAB CR4961 at 1-3 (2017). A brief review of the procedural history is merited in this decision. On November 14, 2016, Noridian Healthcare Solutions, a Medicare administrative contractor (MAC), notified Petitioner of its initial determination to revoke Petitioner’s Medicare enrollment and billing privileges

Page 2

effective March 22, 2016, and to impose a two-year re-enrollment bar. CMS Exhibit (Ex.) 1 at 8-9. The MAC cited 42 C.F.R. §§ 424.535(a)(5) and (a)(9)1 as authority for the revocation. CMS Ex. 1 at 8. After Petitioner requested reconsideration, the MAC, in its February 21, 2017 reconsidered determination, upheld the revocation citing 42 C.F.R. §§ 424.535(a)(5) and (a)(9) as the legal authority for revocation. CMS Ex. 1 at 1-2. Petitioner then requested a hearing, the request was timely, and I concluded that I had jurisdiction.

After the parties submitted their arguments and evidence, including the CMS motion for summary judgment, I issued my initial decision granting CMS’s motion for summary judgment. OC Housecalls, DAB CR4961. In my initial decision, I concluded, in pertinent part, that

[t]here is no genuine dispute as to any material fact in this case related to Petitioner’s notification to the MAC in March 2014 incorrectly listing a commercial mailbox as Petitioner’s practice location and the failure of Petitioner to properly notify CMS or Noridian of its correct practice location as required by 42 C.F.R. § 424.516(d)(1)(iii). Summary judgment is appropriate as to revocation pursuant to 42 C.F.R. §§ 424.535(a)(5)(ii) and (9), for failure to comply with 42 C.F.R. § 424.516(d)(1)(iii).

Id. at 6. I concluded further that “summary judgment [wa]s not appropriate for revocation pursuant to 42 C.F.R. § 424.535(a)(5)(i)” because “[t]here [we]re genuine disputes of material fact related to whether or not Petitioner was operational at another location at the time of the on-site review . . . .” Id. at 7.

In its remand decision, the Board concluded that “[r]evocation based on [42 C.F.R.]§ 424.535(a)(5)(ii) was not at issue [in this case]” and that “[r]evocation is not appropriate under 42 C.F.R. § 424.535(a)(9) because no evidence establishes that Petitioner failed to comply with the reporting requirement of 42 C.F.R. § 424.516(d)(1)(iii).” OC Housecalls, DAB No. 2893 at 11, 14 (underlining and italics omitted). I treat this determination as the law of the case, binding upon me and the Board in the event of further review. Therefore, revocation pursuant to 42 C.F.R. §§ 424.535(a)(5)(ii) or 424.535(a)(9) is no longer at issue based on the Board’s legal

Page 3

conclusions.2 The Board remanded the case for me “to decide whether a lawful basis exists under 42 C.F.R. § 424.535(a)(5)(i) to revoke Petitioner’s Medicare enrollment and billing privileges.” Id. at 17.

In my prior decision, I concluded that summary judgment was not appropriate to resolve whether there was a basis for revocation pursuant to 42 C.F.R. § 424.535(a)(5)(i), which involves mixed questions of law and fact. OC Housecalls, DAB CR4961. However, that is the sole issue on remand. It is apparent from the fact that the Board elected to remand the case rather than simply reverse, that the Board clearly did not find the facts undisputed. Therefore, I convened a hearing by video teleconference on December 20, 2018, to receive evidence necessary to resolve whether there is a basis for revocation pursuant to 42 C.F.R. § 424.535(a)(5)(i). A transcript (Tr.) of the proceedings was prepared. I previously admitted CMS Exs. 1 through 3 and Petitioner’s exhibits (P. Exs.) 1 through 13. OC Housecalls, DAB CR4961 at 2, Tr. at 8-9. CMS called as witnesses Karen Harne, the MAC employee who issued the reconsidered determination (Tr. at 20-80), and Jim Neujahr, the fraud prevention inspector who performed the site visit inspection at issue (Tr. at 83-104). Petitioner called Lynda Adrig, MD, Petitioner’s sole owner and operator (Tr. at 108-52).

Page 4

On February 15, 2019, CMS filed its post-hearing brief (CMS Br.), which contained its Proposed Findings of Fact and Conclusions of Law. Petitioner filed its post-hearing brief (P. Br.) and Proposed Findings of Fact and Conclusions of Law (P. FFCL) the same day. The parties filed their respective post-hearing reply briefs (CMS Reply and P. Reply) on March 18, 2019.

II. Discussion

A. Applicable Law

Section 1831 of the Social Security Act (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.3 Act §§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1) (42 U.S.C. § 1395u(h)(1)). Petitioner, a physician organization, is a supplier under the Act. Act § 1861(d), (q), (r) (42 U.S.C. § 1395x(d), (q), (r)); 42 C.F.R. § 424.502.

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)). The Supreme Court recently clarified that under sections 1871(a)(1)-(2) and (b) of the Act (42 U.S.C. § 1395hh(a)(1)-(2), (b)), the Secretary must use notice and comment rulemaking under the Administrative Procedure Act, 5 U.S.C. § 553, in order to impose requirements upon regulated entities that are

Page 5

intended to have the force and effect of law. Act § 1871(a)(2); Azar v. Allina Health Servs., 587 U.S. ___, 139 S.Ct. 1804 (2019).

Pursuant to 42 C.F.R. § 424.505, suppliers such as Petitioner must be enrolled in the Medicare program and be issued a National Provider Identifier (NPI), known as a billing number, to have billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary.

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

Pursuant to 42 C.F.R. § 424.535(a)(5), CMS may revoke a supplier’s enrollment and billing privileges if CMS determines, upon on-site review or other reliable evidence, that the supplier is no longer operational to furnish Medicare-covered items or services, or has otherwise failed to satisfy any of the Medicare enrollment requirements. 42 C.F.R. § 424.535(a)(5)(i)-(ii).

Generally, when CMS revokes a supplier’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 supplier. 42 C.F.R. § 424.535(g). However, when CMS revokes a supplier’s billing privileges because the supplier’s “practice location” is not operational, the revocation is effective as of the date CMS determined the supplier’s practice location was no longer operational. 42 C.F.R. § 424.535(g). After a supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred from re-enrolling in the Medicare program for one to three years. 42 C.F.R. § 424.535(c).

A supplier whose enrollment and billing privileges have been revoked may request reconsideration and review as provided by 42 C.F.R. pt. 498. A supplier 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 supplier, giving the reasons for its determination and specifying the conditions or requirements the supplier failed to meet, and advising the supplier of its right to an administrative law judge (ALJ) hearing.4 42 C.F.R. § 498.25. If the decision on reconsideration is

Page 6

unfavorable to the supplier, the supplier has the right to request a hearing by an ALJ and further review by 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 supplier bears the burden to demonstrate that it meets enrollment requirements with documents and records. 42 C.F.R. § 424.545(c). The Board has determined that the reconsidered determination is the determination subject to my review. Neb Grp. of Ariz. LLC, DAB No. 2573 at 7 (2014). The Board’s remand decision in this case shows that the language of the reconsidered determination also limits the scope of review available to providers and suppliers.

B. Issue

Whether a lawful basis exists under 42 C.F.R. § 424.535(a)(5)(i) to revoke Petitioner’s Medicare enrollment and billing privileges. OC Housecalls, DAB No. 2893 at 17.

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

My conclusions of law are set forth in bold followed by the pertinent findings of fact and analysis.

1. The only regulatory basis for revocation at issue after remand by the Board is Petitioner’s alleged violation of the requirements of 42 C.F.R. § 424.535(a)(5)(i). OC Housecalls, DAB No. 2893 at 17.

2. Petitioner must be operational to furnish Medicare-covered items or services. 42 C.F.R. § 424.535(a)(5)(i).

3. Neither CMS nor the MAC has discretion to revoke the Medicare enrollment and billing privileges of a supplier that is operational at a

Page 7

practice location on file with the MAC and CMS. 42 C.F.R. § 424.535(a)(5)(i).

4. There is no basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i) because Petitioner operated its practice at a practice location on file with the MAC and CMS from 2004, when Petitioner first enrolled in Medicare, through November 14, 2016, when the initial determination was issued by the MAC.

a. Facts

The facts in this case are straightforward and largely undisputed.

Petitioner is a solo-physician practice owned by Lynda Adrig, MD. CMS Ex. 2 at 15, 21, P. Ex. 13 at 1, Tr. at 109, 144-45. Dr. Adrig sees patients exclusively in their homes or assisted living facilities where they reside. CMS Ex. 1 at 5, CMS Ex. 2 at 18, P. Ex. 4, P. Ex. 13 at 1-2, Tr. at 28, 40, 109, 111-12. For Medicare enrollment purposes, Petitioner, as a house-calls-only practice, is required to report Dr. Adrig’s home address as its practice location. CMS Ex. 2 at 16, Tr. at 28-29.

Dr. Adrig established Petitioner in 2003. P. Ex. 13 at 1, Tr. at 110. Thereafter, she enrolled Petitioner in Medicare, effective December 1, 2004. P. Ex. 3 at 1, P. Ex. 13 at 2, Tr. at 110. Dr. Adrig testified that she reported her home address, 511 Newcastle, Irvine, California 92620 (511 Newcastle), as Petitioner’s practice location when she initially enrolled Petitioner in Medicare. Tr. at 110, CMS Ex. 1 at 5, P. Ex. 13 at 2. Dr. Adrig’s testimony on this point is unrebutted and I find that she is a credible witness.5 At no point after Petitioner’s initial enrollment did Petitioner notify CMS or the MAC to delete 511 Newcastle as Petitioner’s practice location. Tr. at 110-13, 117, P. Ex. 13 at 2-3,

Page 8

P. FFCL at 1 ¶ 6.6 Therefore, when Petitioner enrolled in Medicare, it reported 511 Newcastle as its practice location and that was Petitioner’s practice location on file with the MAC and CMS at the time of the site visit and through revocation of Petitioner’s enrollment and billing privileges.

On October 27, 2013, Dr. Adrig filed an application (a CMS-855I form) to revalidate Petitioner’s Medicare enrollment as requested by the MAC. CMS Ex. 2, P. Ex. 13 at 2, Tr. at 111. Dr. Adrig left most sections under “Section 4: Practice Location Information” of the CMS-855I blank, except she listed the following: the cities or towns where she saw patients in their homes; 3943 Irvine Blvd. #233, Irvine, California 92602 (3943 Irvine) as a special payments address; and 511 Newcastle as the medical records storage location. CMS Ex. 2 at 16-20, P. Ex. 13 at 2-3. Dr. Adrig did not complete the section to show that Petitioner changed, added, or deleted a practice location. CMS Ex. 2 at 17, P. Ex. 13 at 2-3, Tr. at 112-13, P. FFCL at 1 ¶ 6. Dr. Adrig testified that she left that portion of the application blank because she did not change, add, or delete a practice location; in her words, “nothing had changed, so I left everything blank.” Tr. at 113, P. FFCL at 1 ¶ 6. Her explanation is fully credible and consistent with the evidence of record.

On March 7, 2014, in response to correspondence from Noridian and based on a telephone conversation with a Noridian representative, Dr. Adrig provided additional information to Noridian related to Petitioner’s revalidation application. P. Ex. 13 at 3-4, Tr. at 114. Specifically, Dr. Adrig submitted pages 5, 14, 16 through 18, and 26 of a CMS-855I as requested by the MAC. On page 16 of the CMS-855I, she listed 3943 Irvine as Petitioner’s practice location. CMS Ex. 3 at 6-11. However, on page 16 of the CMS-855I, Dr. Adrig did not check the boxes next to “CHANGE,” “ADD,” or “DELETE,” in the section where she listed 3943 Irvine as Petitioner’s practice location. CMS Ex. 3 at 8, P. FFCL at 1 ¶ 7. Dr. Adrig’s testimony that she erroneously listed 3943 Irvine is unrebutted and credible. Also credible is Dr. Adrig’s testimony that she intentionally did not check any of the boxes informing the MAC that Petitioner had added or changed, or that the MAC should delete, a practice location because there was no change in Petitioner’s practice location, which remained her home at 511 Newcastle.

Page 9

Tr. at 113-15, 117, P. Ex. 13 at 4. Dr. Adrig’s testimony that she never notified CMS to delete 511 Newcastle as her practice location is also credible and unrebutted. Tr. at 118, P. FFCL at 1 ¶ 5. I infer from her testimony that Dr. Adrig never sent CMS a notice to delete 511 Newcastle, her residence, as a practice location, as nothing in the record suggests that she would have reason to communicate directly with CMS, rather than with the MAC. P. FFCL at 1 ¶ 5. Based on this testimony, I find that Dr. Adrig did not at any point, either in the 2013 revalidation application or otherwise, delete or give instructions for the CMS or the MAC to delete 511 Newcastle as Petitioner’s practice location.

Ms. Harne, the MAC employee, who I find credible, testified that suppliers can give the MAC notice of a new practice location without deleting a practice location already on file. Tr. at 44-45. She agreed with me that suppliers have “an obligation to [report] when they close a practice location” and that, “if you have a record of a practice location and the supplier doesn’t say change it, they simply give you another practice location . . . . it [is] possible that they are operational at both practice locations . . . .” Tr. at 45. I infer from her testimony that the MAC would not remove a practice location from a supplier’s enrollment file unless the supplier affirmatively instructed the MAC to do so by, for example, informing the MAC that the practice location was no longer in use. CMS has presented no documentary evidence or testimony that shows that the MAC ever removed 511 Newcastle as Petitioner’s practice location of record.7 Dr. Adrig did not instruct the MAC to remove 511 Newcastle as Petitioner’s practice location, nor is there evidence that any other person, authorized or otherwise, gave such an instruction. Ms. Harne initially suggested that, at the time she conducted the reconsideration for the MAC, 511 Newcastle was not listed as an active practice location in Petitioner’s enrollment record. Tr. at 46, 50. However, she clarified this testimony during cross-examination, agreeing that she could not “remember either way whether [she] saw on the enrollment profile 511 Newcastle, Irvine, California identified” and that she “can’t say either way” whether 511 Newcastle “could have been there and [she] didn’t see it, or it may not have been there.” Tr. 74. Ms. Harne’s testimony, taken as a whole, does not support a finding that the MAC removed 511 Newcastle as one of Petitioner’s practice locations of record or that it had any authority to do so. No other witness offered testimony on this point, and Ms. Harne’s testimony does not show it was more likely than not that the MAC ever removed 511 Newcastle as Petitioner’s practice location of record.

Accordingly, I find:

Page 10

Petitioner reported 511 Newcastle as its practice location when it first enrolled in Medicare,

No one instructed the MAC to remove 511 Newcastle as Petitioner’s practice location,

The MAC’s policy was to not remove a practice location from a supplier’s record absent an explicit instruction to do so,

No evidence shows that the MAC removed 511 Newcastle as Petitioner’s practice location, and

In light of the foregoing facts, I find Petitioner has shown by a preponderance of the evidence, i.e., it is more likely than not, that 511 Newcastle continued to be one of Petitioner’s practice locations of record from its initial enrollment date on about December 1, 2004 through November 14, 2016, when the MAC notified Petitioner of the revocation.

Much evidence establishes that Petitioner operated from Dr. Adrig’s home at 511 Newcastle at all times relevant to these proceedings. P. FFCL at 1 ¶ 8. Dr. Adrig testified that, beginning in 2003 and continuing throughout 2016, she saw patients, submitted claims for reimbursement for her services, and stored medical records at her home. P. Ex. 13 at 5-6, Tr. at 117. Petitioner’s billing records from 2016 support Dr. Adrig’s testimony; the records show she submitted more than a thousand claims to Medicare alone that year. P. Ex. 5. In addition, Petitioner submitted a series of annual business licenses issued by the City of Irvine that classify it as a “housecalls only” physician practice and list 511 Newcastle as its address continuously from June 2007 through April 2018. P. Ex. 4. CMS does not dispute that Petitioner actually operated from 511 Newcastle in 2016. CMS Br. at 2. Therefore, I find that, from its inception through at least the end of 2016, Petitioner operated from 511 Newcastle as a house-calls-only physician practice.

Mr. Neujahr, the site inspector, who I find credible, testified he received from the MAC (via an online portal) information about which locations he was to inspect. Tr. at 87-88. He explained that while it is permissible for an individual practitioner to have a residence as their practice location and the practitioner would not be presumed non-operational based on that fact, he was not given Petitioner’s 511 Newcastle address as the inspection site through the portal. Tr. at 90-91, 93, 95. He also explained that while it generally is possible for a practitioner to have more than one practice location for inspection, there usually would be a notation about that fact on the information he received from the portal, and no such notation appeared on the information he received for his site visit to 3943 Irvine (the commercial mailbox). Tr. at 95-96. When he receives only one address

Page 11

to visit for a practitioner, he does not have discretion to attempt to locate another address for that practitioner; as he testified, “the address I’m sent to is the only address that I am allowed to check.” Tr. at 102. Therefore, Mr. Neujahr never visited the 511 Newcastle address to verify whether Petitioner was operational at that location.8

b. Analysis

Based on the Board’s remand decision, which establishes the law of the case, little discretion remains for de novo review as the only possible regulatory basis for revocation under the defective reconsidered determination is 42 C.F.R. § 424.535(a)(5)(i), based on the Board’s inference that is what the hearing officer intended. OC Housecalls, DAB No. 2893 at 12-14, 17. The regulation provides:

(5) On-site review. Upon on-site review or other reliable evidence, CMS determines that the provider or supplier is . . . :

(i) No longer operational to furnish Medicare-covered items or services.

The term “operational” is defined by regulation to mean “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. This case illustrates that not all elements of the definition need be satisfied; for example, there is no dispute that a house calls practice such as Petitioner is not required to have a practice location where patients

Page 12

are seen, or where there is staff, supplies, or equipment. Although the regulation does not establish as a requirement that a supplier can be operational only at a practice location on file with CMS, the Board has interpreted the regulation as establishing such a requirement. OC Housecalls, DAB No. 2893 at 10.9 According to the Board, “a Medicare provider or supplier must be operational at its practice location of record upon onsite review, even where the supplier is mobile,” and “[i]t is no defense that a provider or supplier may be operating elsewhere other than at their qualified physical practice location at the time of onsite review . . . .” Id. Applying the Board’s logic, I find that CMS or the MAC may not revoke the Medicare enrollment and billing privileges of a supplier that is operational at a practice location on file with the MAC and CMS. 42 C.F.R. § 424.535(a)(5)(i).

Petitioner bears the burden to demonstrate that it meets enrollment requirements and to produce documents demonstrating compliance with all program participation requirements. 42 C.F.R. § 424.535(c). The Secretary has not provided in 42 C.F.R. pt. 498 for the allocation of the burden of persuasion or the quantum of evidence required to satisfy the burden. However, the Board has provided some persuasive analysis regarding the allocation of the burden of persuasion in cases subject to 42 C.F.R. pt. 498. Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004). Applying the Board’s interpretation of the regulations in Batavia to this case, I conclude that CMS has the burden of coming forward with a prima facie case of the basis for revocation; if CMS establishes a prima facie case, then Petitioner has the burden of showing by a preponderance of the evidence that CMS did not have a basis for revoking its Medicare enrollment and billing privileges.

I am constrained to apply the Board’s interpretation of 42 C.F.R. § 424.535(a)(5)(i). I conclude that CMS has not established a basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i). I have found that at the time CMS conducted a site visit on March 22, 2016, Petitioner had two practice locations on file, 3943 Irvine and 511 Newcastle. The MAC only inspected one

Page 13

of Petitioner’s on-file practice locations, 3943 Irvine, not 511 Newcastle, and made no effort to verify with Petitioner whether one or both addresses were correct. Tr. at 90-91, 93, 95-96, 102. CMS has presented neither evidence of an on-site review of 511 Newcastle nor “other reliable evidence” to establish even a prima facie case that Petitioner was not operational at that practice location of record.

To the contrary, Petitioner’s evidence shows and CMS does not dispute that Petitioner was operational at 511 Newcastle at all times relevant to this case, including throughout 2016. P. Exs. 4, 5, P. Ex. 13 at 5-6, Tr. at 117, P. FFCL at 1 ¶ 8, CMS Br. at 2. Section 4C of the CMS-855I instructs that a supplier who lacks an office and only renders services in patients’ homes, as is true for Petitioner, may report its home address as its practice location (CMS Ex. 2 at 16, CMS Reply at 2-3). Dr. Adrig’s home at 511 Newcastle was one of Petitioner’s practice locations on file with the CMS and the MAC from Petitioner’s initial enrollment through the initial determination to revoke in November 2016. Thus, 511 Newcastle was a “qualified physical practice location” for Petitioner. 42 C.F.R. § 424.502; OC Housecalls, DAB No. 2893 at 10. Petitioner delivered care and services to patients in their homes, not at a practice location. Not only was Petitioner prepared to submit valid Medicare claims, it actually submitted more than a thousand such claims in 2016. Finally, Petitioner, through Dr. Adrig, was properly staffed, equipped, and stocked to conduct the solo physician house calls that formed its sole business function. P. Ex. 5, P. Ex. 13 at 5-6, Tr. at 94, 117. Based on this evidence, I conclude that Petitioner was operational, at 511 Newcastle, a practice location on file with the MAC and CMS, from the time of Petitioner’s enrollment in Medicare in 2004 through revocation of Petitioner’s Medicare enrollment and billing privileges by the November 14, 2016 initial determination (CMS Ex. 1 at 8).

CMS argues that revocation was appropriate under 42 C.F.R. § 424.535(a)(5)(i) because Petitioner was not operational at its practice location of record at 3943 Irvine. CMS Br. at 5-6. CMS argues further that it is irrelevant whether Petitioner was operational at other locations than its practice location of record. CMS Br. at 6-7, CMS Reply at 3-4. In support of its arguments, CMS correctly observes that 3943 Irvine is a commercial mailbox—a fact Petitioner readily concedes (P. Br. at 7, P. Reply at 1)—and not a practice location open to the public or where patients could be seen. CMS Br. at 6, CMS Reply at 3-5. CMS also discusses several decisions by other ALJs and the Board in support of its argument. CMS Br. at 7, CMS Reply at 3-5. However, CMS is in error regarding the facts because CMS simply ignores the fact that Petitioner had another practice location on file with CMS at which it was operational at the time of the site inspection on March 22, 2016. Arguably, under prior Board decisions interpreting the regulations, it would likely be found inadequate if Petitioner argued that it was operational at 511 Newcastle at the time of the site inspection, if 511 Newcastle was not previously reported to CMS as Petitioner’s practice location that remained on record when the site inspection occurred. However, those are not the facts as I have found them. CMS’s argument fails because it ignores the possibility, which in fact is true here, that

Page 14

Petitioner had more than one practice location on file at the time of the site visit. CMS simply fails to grapple with the question of what legal standard should apply when a supplier, like Petitioner, has two practice locations on file and is operational at one of those locations. The cases that CMS cites in support of its position do not speak to this question and are inapposite here because, in every single one of those cases, the supplier only had a single practice location on file.10

By its terms, 42 C.F.R. § 424.535(a)(5)(i) affords a basis for revocation only when a supplier is “[n]o longer operational.” As defined, “operational” means a supplier has a qualified physical practice location, i.e. the use of the singular indicates that there must be at least one such location. 42 C.F.R. § 424.502. Read together, the clear import of these two provisions, even as narrowed by the Board in its decision, is that a supplier who is operational at one practice location on file cannot be revoked even if it is not operational at another practice location on file. Any concerns this might raise that an unscrupulous supplier might play games in reporting its practice locations are easily allayed by the fact that CMS can revoke an operational supplier for, among other things: certifying as true misleading or false information on an enrollment application (42 C.F.R. § 424.535(a)(4)); failing to satisfy any Medicare enrollment requirement, such as the requirement to submit complete, truthful, and accurate responses to all information requested in an enrollment application (42 C.F.R. §§ 424.520(d)(2)(i), 424.535(a)(5)(ii));11 or failing to report a change in practice location (42 C.F.R. §§ 424.516(d)(1)(iii), 424.535(a)(9)).

CMS may only revoke a supplier pursuant to 42 C.F.R. § 424.535(a)(5)(i) if it can make a prima facie showing that the supplier is “[n]o longer operational to furnish Medicare-

Page 15

covered items or services” and the supplier does not rebut that showing by a preponderance of the evidence. See Batavia, DAB No. 1904. As discussed, CMS did not make a prima facie showing under 42 C.F.R. § 424.535(a)(5)(i), and Petitioner has proven by preponderant evidence that it was operational within the meaning of the regulations at one of its practice locations of record at the time of the site visit. Because Petitioner was operational at 511 Newcastle from its enrollment in Medicare in 2004 to revocation in 2016, and 511 Newcastle was one of Petitioner’s practice locations on file with the MAC and CMS, I conclude that neither CMS nor the MAC had a basis to revoke Petitioner pursuant to 42 C.F.R. § 424.535(a)(5)(i).

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 2016 revision of the Code of Federal Regulations (C.F.R.) in effect at the time of the initial determination, unless otherwise stated.
• 2. However, I note contrary to the Board’s conclusion, that there is much evidence of failure to report. Petitioner is obligated to report changes under 42 C.F.R. § 424.516(d)(1)(iii). Petitioner incorrectly reported the commercial mailbox as its practice location. Petitioner is required to report correct information to the MAC and CMS. The plain language of 42 C.F.R. § 424.516(d)(1)(iii) does not make the reporting requirement contingent upon an actual physical move of a physician’s practice. Rather, the regulation is more broadly written to include any need to report a change in practice location, whether that change is due to a physical move or simply correction of incorrect information. The Board’s interpretation of the regulation would arguably rule out the need to report a change of address when, for example, a street name changes or other similar changes occur due to action of a local jurisdiction. Petitioner had an affirmative duty under the regulations to correct the erroneous address given in its revalidation application by informing CMS and the MAC of the correction. This affirmative obligation underlies the entire enrollment process, and it is unreasonable to suggest, as the Board does by its ruling, that CMS or the MACs can verify information for thousands of providers and suppliers who may report incorrect information intentionally or unintentionally. Accordingly, if the Board had not limited my discretion, I would again grant summary judgment for CMS on the undisputed facts and 42 C.F.R. §§ 424.535(a)(5)(ii) and (a)(9) for failure to correct Petitioner’s practice location address as required by 42 C.F.R. § 424.516(d)(1)(iii).
• 3. 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.
• 4. The MAC clearly violated this regulatory requirement by failing to give notice to Petitioner of the specific subsection of 42 C.F.R. § 424.535(a)(5) it applied in this case. The Board was willing to infer based on the language of the reconsidered determination that 42 C.F.R. § 424.535(a)(5)(i) was applicable but that subsection (a)(5)(ii) was not. Based on the action of the Board in this case, such lack of clarity by the MAC may require remands in future cases to ensure that the parties, the ALJ, and the Board are fully informed of the basis for the MAC’s action and the scope of review. Based on the Board’s action in this case, remand to CMS would have been pointless at this time.
• 5. The MAC for California at the time Petitioner initially enrolled was Palmetto, not Noridian. Tr. at 32. Ms. Harne agreed generally that Palmetto should have passed its enrollment records for California suppliers to Noridian when Noridian became the MAC for California. Tr. at 46. I presume that Palmetto passed Petitioner’s enrollment records to Noridian correctly and without incident. Given the extended timeline of events relevant to my decision, when I refer to “the MAC” herein, I am referring to whichever MAC was responsible at the time for maintaining Petitioner’s enrollment records.
• 6. In discussing revocation pursuant to 42 C.F.R. § 424.535(a)(9), the Board in OC Housecalls recognized that “Petitioner was entitled to defend against revocation by resenting (sic) facts, which it has, and which CMS does not dispute, that Petitioner never changed practice locations.” DAB No. 2893 at 15. The Board did not specify whether it found that the 511 Newcastle practice location was unchanged or whether it was referring to the commercial mailbox at 3943 Irvine. Accordingly, I conclude that the Board has not made a factual finding that is binding on this issue of fact.
• 7. For example, in its March 18, 2014 letter approving Petitioner’s revalidation application, Noridian gave no indication that it had removed 511 Newcastle as Petitioner’s practice location. P. Ex. 3 at 1-2.
• 8. Pursuant to CMS policy, when attempting to verify practice and administrative locations, the MAC is required to verify that the practice and administrative locations listed on the application actually exist. “If a particular location cannot first be verified, the contractor shall request clarifying information; for instance, the contractor can request the applicant furnish letterhead showing the appropriate address.” Medicare Program Integrity Manual, ch. 15 § 15.5.4A. The evidence in this case shows that the MAC made no effort to verify Petitioner’s practice location when the site inspection showed that the address on the revalidation application could not be a practice location. The evidence suggests that the MAC applied a zero-tolerance approach that is inconsistent with CMS policy requiring the MAC to verify information with the applicant. This litigation could have been avoided completely had either the MAC or CMS followed the CMS policy.
• 9. The Board’s approach to interpreting 42 C.F.R. § 424.502’s definition of “operational” and adding a requirement to the definition that the practice location be one on file with CMS without notice and comment rulemaking is questionable. CMS has shown itself capable of promulgating regulations that explicitly detail specific requirements for physical practice locations of certain types of suppliers. For example, supplier standard 7 for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) lists precise and exacting standards for physical facilities of DMEPOS suppliers. 42 C.F.R. § 424.57(c)(7).
• 10. The Board’s decision in Wendell Foo, MD, DAB No. 2904 (2018), aff’d, Foo v. Azar, No. 18-00490-JAO-WRP, 2019 WL 4600218 (D. Hi. Sept. 23, 2019), is a good example of a case where the physician did not maintain an office open to the public but saw his patients in ambulatory surgical centers. The Board found a basis existed for revocation under 42 C.F.R. § 424.535(a)(5) because the physician listed as his practice location a commercial mailbox location. The case must be distinguished from the case before me because, unlike Dr. Adrig in the case before me, Dr. Foo had no other qualifying practice location on file with CMS. Similar results were reached by the Board and ALJs in Care Pro Home Health, Inc., DAB No. 2723 at 5 (2016); Toe-Tal Family Foot Care Assoc., P.C., DAB CR5006 at 8 (2018); Robert Miles, Jr., D.P.M., DAB CR4674 at 7 (2016).
• 11. The outcome of this case might well have been different if the MAC had been more careful in articulating its bases for revoking Petitioner. Compare OC Housecalls, DAB CR4961 at 7-10, with OC Housecalls, DAB No. 2893 at 11-14.