Dr. Kenneth Crowe, DAB CR5659 (2020)

DECISION

Palmetto GBA (Palmetto), a Medicare administrative contractor for the Centers for Medicare & Medicaid Services (CMS), determined that May 2, 2018, was the effective date on which Dr. Kenneth Crowe (Petitioner) reassigned his Medicare billing privileges to Mizell Memorial Hospital (MMH).  Because Palmetto approved Petitioner's application that it received on May 2, 2018, it correctly determined Petitioner's effective date of reassignment to be May 2, 2018.  Palmetto exercised its discretion to grant Petitioner retroactive billing privileges beginning on April 2, 2018.  Therefore, I affirm the effective date determination.

I.  Background

Petitioner is a general practice physician in Alabama who was enrolled in the Medicare program as a supplier of services.  See CMS Exhibit (Ex.) 2 at 3; see also CMS Ex. 5 at 1.  On January 2, 2018, MMH acquired Petitioner's practice, and Petitioner joined

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MMH's clinic.1  Docket (Dkt.) Entry 1 in the Departmental Appeals Board (DAB) Electronic Filing System (E-File) (Request for Hearing (RFH)).  On January 5, 2018, MMH filed an enrollment application via CMS's Provider Enrollment, Chain, and Ownership System (PECOS), notifying CMS of the changes to its practice location and management related to the MMH clinic.2  CMS Ex. 3.  In a letter dated May 3, 2018, Palmetto notified MMH that the January 5, 2018 change of information application was approved.  CMS Ex. 4.

Petitioner applied to enroll in Medicare and reassign his right to Medicare reimbursement to MMH by submitting Forms CMS-855I and CMS-855R to Palmetto via PECOS.  CMS Ex. 2.  Palmetto received the applications on May 2, 2018.  Id.; see also P. Ex. 8.

By letter dated June 29, 2018, Palmetto approved Petitioner's Medicare enrollment and reassignment applications, effective May 2, 2018.3  CMS Ex. 5.  Petitioner timely requested reconsideration to challenge Palmetto's effective date determination.  CMS Ex. 6.  In the reconsideration request, Petitioner requested an effective date of January 2, 2018.  Id. at 2.

By letter dated October 23, 2018, Palmetto issued an unfavorable reconsidered determination affirming May 2, 2018, as the effective date of Petitioner's Medicare enrollment and reassignment to MMH, with retrospective billing privileges effective April 2, 2018.  CMS Ex. 1 at 1-2.  Petitioner timely requested a hearing before an administrative law judge to challenge Palmetto's unfavorable reconsidered determination, and the case was assigned to me.

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On December 6, 2018, I issued an Acknowledgment and Pre-Hearing Order (Pre-Hearing Order).  Dkt. Entry 2 in DAB E-File.  CMS filed a Motion for Summary Judgment and Pre-Hearing Brief (CMS Br.) and six proposed exhibits (CMS Exs. 1‑6).  Petitioner filed a brief (P. Br.) in which he responded to CMS's motion for summary judgment and cross‑moved for summary judgment.  With his brief, Petitioner submitted thirteen proposed exhibits (P. Exs. 1‑13).

Neither party objected to the exhibits proposed by the opposing party.  Therefore, in the absence of objection, I admit CMS Exs. 1-6 and P. Exs. 1-13.  Neither CMS nor Petitioner offered the written direct testimony of any witness as part of its pre-hearing exchange.  As I informed the parties in my Pre-Hearing Order, "[a]n in-person hearing to cross-examine witnesses will be necessary only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine."  Pre‑Hearing Order ¶¶ 8-11; CRDP § 19(d).  Therefore, an in-person hearing is not necessary, and I decide this case based on the parties' written submissions, without regard to whether the standards for summary judgment are satisfied.

II.  Issue

Whether Palmetto, acting on behalf of CMS, properly established that Petitioner's effective date of Medicare enrollment and reassignment of billing privileges as May 2, 2018.

III.  Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(15), 498.5(l)(2); see also Social Security Act § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

IV.  Discussion

A.  Applicable Legal Authority

The Social Security Act (Act) authorizes the Secretary of Health and Human Services to promulgate regulations governing the enrollment process for providers and suppliers.  Act §§ 1102, 1866(j) (42 U.S.C. §§ 1302, 1395cc(j)).  A "supplier" is "a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services" under the Medicare provisions of the Act.  Act § 1861(d) (42 U.S.C. § 1395x(d)); see also Act § 1861(u) (42 U.S.C. § 1395x(u)).

A supplier must enroll in the Medicare program to receive payment for covered Medicare items or services.  42 C.F.R. § 424.505.  The regulations define "Enroll/Enrollment" as, "the process that Medicare uses to establish eligibility to submit claims for Medicare covered items and services."  42 C.F.R. § 424.502.  A provider or supplier seeking billing

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privileges under the Medicare program must "submit enrollment information on the applicable enrollment application.  Once the provider or supplier successfully completes the enrollment process . . . CMS enrolls the provider or supplier into the Medicare program."  42 C.F.R. § 424.510(a).  CMS then establishes an effective date for billing privileges consistent with 42 C.F.R. § 424.520 and may permit retrospective billing as provided in 42 C.F.R. § 424.521.

The Act and regulations limit who may receive Medicare payments due to a supplier of services and also provide for reassignment of the right to receive those payments.  Act §§ 1815(c), 1842(b)(6) (42 U.S.C. §§ 1395g(c), 1395u(b)(6)); 42 C.F.R. § 424.70(a).  For Medicare Part B claims, a beneficiary may assign his or her benefits to an enrolled physician or non‑physician supplier providing services to that beneficiary.  Act § 1842(b)(3)(B)(ii) (42 U.S.C. § 1395u(b)(3)(B)(ii)).  In certain circumstances, a supplier who has received an assignment of benefits may reassign those benefits to an employer, or to an individual or entity with which the supplier has a contractual arrangement.  Act § 1842(b)(3) (42 U.S.C. § 1395u(b)(3)); 42 C.F.R. § 424.80(b)(1)-(2).

For a supplier, such as a physician, to reassign benefits to an eligible entity, a supplier must complete and submit an application using Form CMS‑855R.  Medicare Program Integrity Manual (MPIM), CMS Pub. 100‑08, Ch. 15, § 15.5.20.A.  The MPIM provides that reassignment of benefits may only occur between enrolled suppliers.  Id.  Further, the MPIM instructs contractors that when a Form CMS‑855R is submitted as a "stand alone" form (i.e. where an enrolled physician joins a new group practice), "the effective date of the enrollment and the reassignment shall be consistent with the 30‑day rule."  MPIM § 15.5.20.E.3.4  Under the "30‑day rule," CMS contractors calculate the effective date based on "the later of the date of filing or the date the reassignor first began furnishing services at the new location."  Id. ; see also 42 C.F.R. § 424.520(d).  Suppliers have the right to appeal an initial determination regarding the effective date.  42 C.F.R. § 498.5(l)(1); see also 42 C.F.R. § 498.22(a).

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B.  Findings of Fact and Conclusions of Law5

1. On May 2, 2018, Palmetto received Petitioner's application to enroll in Medicare and reassign billing privileges, and subsequently approved that application.

2. The effective date for Petitioner's Medicare billing privileges and reassignment is May 2, 2018, with retrospective billing privileges effective April 2, 2018.

The effective date for Medicare billing privileges and reassignment of those privileges for physicians, non-physician practitioners, and physician or non-physician practitioner organizations is the later of the "date of filing" or the date the supplier first began furnishing services at a new practice location.  42 C.F.R. § 424.520(d).  The "date of filing" is the date that the Medicare contractor "receives" a signed enrollment application that the Medicare contractor is able to process to approval.  73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); Donald Dolce, M.D., DAB No. 2685 at 8 (2016).

Palmetto received an enrollment application from Petitioner on May 2, 2018.  CMS Ex. 2 at 1.  This was the only reassignment application Palmetto received from Petitioner.  Palmetto processed the application to completion.  Palmetto approved the application with an effective date of May 2, 2018, and granted Petitioner 30 days of retrospective billing.  CMS Ex. 5 at 1.  Accordingly, as required by regulation, the effective date of Petitioner's Medicare enrollment and reassignment is May 2, 2018, with retrospective billing privileges effective April 2, 2018.

Petitioner does not contend that he filed an application earlier than May 2, 2018.  Rather he argues, in effect, that actions of the contractors – either Cahaba or Palmetto – prevented him from filing an earlier application.  In the following section of this decision, I explain why Petitioner's contentions are not a basis to change the effective date of Petitioner's enrollment and reassignment of benefits.

3. Petitioner's arguments in equity are not a basis to change the effective date of his Medicare enrollment and billing privileges.

Petitioner's hearing request represents that Petitioner delayed filing his application to enroll and reassign his Medicare reimbursements to MMH based on instructions from Cahaba:

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According to Cahaba Provider Enrollment, the appropriate enrollment process to facilitate the relocation of [MMH's] existing group and the addition of [Petitioner] as a provider to [that] group, was to submit the group relocation as a first step.  After the group's relocation approval, the next step would be to add [Petitioner] to the group.

RFH at 1.  Based on that understanding, Petitioner argues, he did not submit his enrollment/reassignment application until after MMH's change of information application had been approved.  Id. at 2.  Petitioner's argument that he delayed filing his application based on instructions from the contractor suggests that he may be arguing he is entitled to an earlier effective date based on the doctrine of equitable estoppel ‒ i.e., he relied to his detriment on false or misleading information provided by CMS or its contractor.

However, Petitioner has produced no evidence from which I can conclude that the contractor provided false or misleading information on which Petitioner relied.  While it is apparent that Petitioner in fact did not submit his enrollment/reassignment application until after Palmetto processed MMH's change of information application, there is no evidence proving why he did so.6  For example, he has produced no emails from the contractor stating that Petitioner should delay filing his reassignment application.  Similarly, he has produced no notes of telephone conversations between his representatives and contractor personnel.  Nor has he pointed to instructions on the contractor's website on which he claims to have relied.

Yet, even if Petitioner had produced such evidence, I would not conclude that any such communications support a claim for equitable estoppel.  Appellate panels of the DAB have recognized that equitable estoppel will not lie against a government entity absent some type of affirmative misconduct.  See, e.g., Richard Weinberger, M.D. & Barbara Vizy, M.D., DAB No. 2823 at 19 (2017) (citing Office of Personnel Management v. Richmond, 496 U.S. 414, 419-21 (1990)).  As the appellate panel in Weinberger & Vizy emphasized, "affirmative misconduct appears to require something more than failing to provide accurate information or negligently giving wrong advice."  DAB No. 2823 at 19(internal quotation marks and citations omitted).  Thus, if one of the Medicare contractor's staff advised Petitioner's representatives to proceed as they did, such instructions might support an inference that the contractor's employees negligently gave wrong advice, but not that they committed affirmative misconduct.

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Petitioner additionally argues that contractor personnel committed affirmative misconduct based on what Petitioner views as the unreasonable delay in approving MMH's change of information application.  Petitioner states:  "[i]t is completely unconscionable and inequitable that Petitioner is being penalized (1) for being honest in the application process; and (2) for being the victim of constructive fraud on the part of Cahaba and Palmetto; (3) due to a bureaucratic blunder resulting from the changing of Medicare contractors."  P. Br. at 8.

One may infer that processing delays could have resulted from negligent handling of pending applications during the transition from Cahaba to Palmetto.  However, as I have explained above, proof of affirmative misconduct requires more than mere negligence.  As such, the delays of which Petitioner complains do not rise to the level of fraud, nor affirmative misconduct.  Therefore, I find no basis to overturn Palmetto's effective date determination based on equitable estoppel.

Finally, to the extent Petitioner's argument is that I should grant him an earlier effective date based on principles of fairness, such general appeals to equity are not a basis to overturn Palmetto's determination in this case.  I may not set aside the lawful exercise of discretion by CMS or its contractor based on principles of equity.  See US Ultrasound, DAB No. 2302 at 8 (2010); Cent. Kan. Cancer Inst., DAB No. 2749 at 10 (2016).

V.  Conclusion

I affirm Palmetto's determination that the effective date of Petitioner's Medicare billing privileges and reassignment is May 2, 2018, with retrospective billing privileges beginning April 2, 2018.  I deny the parties' cross-motions for summary judgment as moot.

• 1. Petitioner states that he joined MMH's clinic after MMH acquired his practice.  The record does not reveal whether the clinic has a corporate identity separate from MMH.  This point is not crucial to my decision.  In any event, Petitioner reassigned his Medicare reimbursements to MMH.  See CMS Ex. 2 at 3.
• 2. In January 2018, the Medicare administrative contractor for Alabama was Cahaba GBA (Cahaba).  See RFH at 1; see also CMS Br. at 6.  At some time between January and May 2018, Palmetto succeeded Cahaba as the administrative contractor for Alabama.  CMS Br. at 6.
• 3. Both the initial and the reconsidered determinations incorrectly identify April 2, 2018, as the effective date of enrollment/reassignment.  CMS Ex. 5; CMS Ex. 13.  April 2, 2018, is the effective date of retroactive billing privileges as allowed under 42 C.F.R. § 424.521(a).  Pursuant to the regulations, the effective date of enrollment is the date the contractor receives an application that is subsequently processed to approval, which in this case is May 2, 2018.  42 C.F.R. § 424.520(d).
• 4. CMS added section 15.5.20.E.3 to the MPIM by transmittal R676PI, which was effective December 19, 2016.  See https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2016-Transmittals-Items/R676PI.html (last visited July 12, 2020).  Thus, per CMS policy, the "30-day rule" was applicable in 2018, when Petitioner submitted his applications.  In light of the Supreme Court's decision in Azar v. Allina Health Services, 139 S. Ct. 1804 (2019), it is unclear what effect, if any, I should give to guidance promulgated via the MPIM.  Nevertheless, in my view, the effective date regulation (42 C.F.R. § 424.520(d)) is clear and the MPIM guidance is consistent with the regulation.
• 5. My findings of fact and conclusions of law appear as numbered headings in bold italic type.
• 6. The statements of Petitioner's representative in Petitioner's hearing request and brief are not evidence.  Petitioner did not submit the written direct testimony of any witness as he was permitted to do.  See Pre-Hearing Order ¶ 8.