DRS Health Group LLC d/b/a A Wiser Mind, DAB CR5444 (2019)

DECISION

The Centers for Medicare & Medicaid Services (CMS) revoked the Medicare enrollment and billing privileges of DRS Health Group LLC d/b/a A Wiser Mind (DRS or Petitioner) because DRS filed 12 Medicare claims seeking reimbursement for services provided from October 3, 2018 through October 9, 2018, by a licensed clinical social worker whose state license had been summarily suspended on October 2, 2018. Specifically, CMS determined that DRS's conduct showed that it engaged in a pattern or practice of filing claims that did not meet Medicare requirements. 42 C.F.R. § 424.535(a)(8)(ii).

DRS requested a hearing to dispute CMS's revocation, asserting that DRS was unaware of the social worker's suspended license until CMS informed DRS of the suspension months later. Upon notice, DRS promptly refunded the Medicare payments it received for the 12 claims.

Based on the evidentiary record and on the factors in 42 C.F.R. § 424.535(a)(8)(ii)(A)-(F), I conclude that, while DRS filed 12 claims that failed to meet Medicare requirements, DRS did not engage in a pattern or practice of filing claims that failed to meet such requirements. Therefore, I reverse CMS's revocation of DRS's Medicare enrollment and billing privileges.

Page 2

I. Background

DRS is a practice that provides cognitive therapy and rehabilitation for individuals with depression, anxiety, Alzheimer's disease, and mild-brain injuries. CMS Exhibit (Ex.) 6 ¶  3. DRS had been enrolled in the Medicare program as a supplier since 2009. Petitioner (P.) Ex. 10 at 2.

In a December 31, 2018 initial determination, a CMS contractor revoked DRS's Medicare enrollment and billing privileges, effective January 30, 2019, for the following reason:

42 CFR § 424.535(a)(8)(ii) – Abuse of Billing Privileges

As a basic Medicare enrollment requirement, a provider or supplier must maintain appropriate state licensure based on the type of services the provider or supplier type will furnish and bill Medicare. See 42 C.F.R. § 424.516(a)(2). Angela Raval's license to practice as a Clinical Social Worker was suspended by the Colorado State Board of Social Work Examiners effective October 2, 2018.

Data analysis was conducted on claims submitted by DRS Health Group LLC which listed Angela Raval as the rendering provider during a period in which Raval's license was suspended. This data revealed twelve (12) claims were submitted for seven (7) unique beneficiaries for dates of service between October 3, 2018 and October 9, 2018. See Enclosure A.

Accordingly, DRS Health Group LLC billed for services purportedly rendered by a provider whose license was suspended. The billing for claims of services rendered by an unlicensed provider was abusive and improper.

CMS Ex. 8 at 1. CMS also barred Petitioner from re-enrollment in the Medicare program for three years. CMS Ex. 8 at 2.

DRS requested reconsideration of the revocation and presented evidence and argument as to why the CMS contractor should not have revoked its enrollment and billing privileges. P. Ex. 10. DRS argued that the factors in 42 C.F.R. § 424.535(a)(8)(ii)(A)-(F) did not support a finding that it engaged in a pattern of abusive billing practices:

In the letter dated December 31, 2018 ("the December 31st letter"), Novitas does not reference any facts that would

Page 3

support a revocation for "Abuse of Billing Practice". It has not denied claims that The Group has submitted, at least not in any way that would amount to a statistically meaningful percentage. Novitas has not given any reason for any claim denials. The Group does not have a history of final adverse actions. Novitas has not identified a pattern of claim denials. Furthermore, The Group has been enrolled in Medicare since December 7, 2009 and in 2018, it submitted approximately 16,000 claims to Novitas. It provided approximately 306 therapy sessions to Colorado beneficiaries every week. The December 31, 2018 letter complains about 12 of those sessions. The 12 sessions of therapy make up less than .08% of the claims The Group submitted to Novitas in 2018. In short, there is no basis to revoke The Group's privileges for any alleged abuse of billing practice.

P. Ex. 10 at 2.

In the reconsidered determination, a CMS hearing officer upheld the revocation. CMS Ex. 17. The hearing officer stated the following in the portion of the reconsidered determination entitled "Decision":

Angela Raval's clinical social worker license was suspended on October 2, 2018 and is currently in suspended status. D[RS] billed for social work services for a period of seven days after the suspension of Ms. Raval's clinical social worker license. The submission of 12 claims by DRS Health Group LLC during a period of time in which Ms. Raval's clinical social worker license was suspended, amounts to abuse of billing. Therefore, CMS upholds the revocation of DRS Health Group LLC's Medicare billing privileges under 42 C.F.R. § 424.535(a)(8).

CMS Ex. 17 at 5.

Petitioner timely requested administrative law judge (ALJ) review. I was assigned to this case and, on June 27, 2019, the Civil Remedies Division issued my Standing Prehearing Order (Order), which established a submission schedule for the parties. In compliance with the Order, CMS filed a prehearing brief and motion for summary judgment (CMS Br.), along with 17 exhibits (CMS Exs. 1-17). Petitioner filed a prehearing brief and cross-motion for summary judgment (P. Br.), along with 11 exhibits, although Petitioner's exhibit list showed 14 proposed exhibits. Petitioner later filed an amended exhibit list along with 13 proposed exhibits (P. Exs. 1-13). Two of the exhibits, P. Exs. 3

Page 4

and 6, were affidavits for two witnesses. CMS did not file a reply brief, a response to Petitioner's cross motion for summary judgment, an objection to any of Petitioner's proposed exhibits, or a request to cross-examine Petitioner's witnesses.

II. Decision on the Record

Petitioner did not object to any of CMS's proposed exhibits; therefore, I admit CMS Exs. 1-3 and 5-17. See Order ¶ 10; Civil Remedies Division Procedures (CRDP) § 14(e). However, I exclude CMS Ex. 4, an affidavit from one of Petitioner's witnesses, because it is missing a page. I admit P. Ex. 3 in its place as a complete version of the affidavit. Further, I admit P. Ex. 10 because it represents the complete submission of Petitioner's request for reconsideration. Finally, I exclude P. Exs. 1-2, 4-9, and 11-13 as duplicative. Order ¶ 7; CRDP § 14(a); see also 5 U.S.C. § 556(d).

The Order advised the parties that an in-person hearing would only be necessary if a party submitted the written direct testimony of a proposed witness and the opposing party requested an opportunity to cross-examine a witness. Order ¶¶ 11-13; CRDP §§ 16(b), 19(b); see Vandalia Park, DAB No. 1940 (2004); Pac. 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). Although Petitioner submitted written direct testimony for two witnesses, CMS did not request to cross-examine them. Therefore, I do not need to hold a hearing in this case and I decide this case based on the written record. Order ¶ 14; CRDP § 19(d). Consequently, I deny the parties' motions for summary judgment.

III. Issue

Whether CMS had a legitimate basis for revoking Petitioner's Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).

IV. Jurisdiction

I have jurisdiction to decide this case. 42 C.F.R. §§ 498.1(g), 498.3(b)(17), 498.5(l)(2); see also 42 U.S.C. § 1395cc(j)(8).

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

My findings of fact and conclusions of law appear in bold and italics.

The Social Security Act (Act) authorizes the Secretary of Health and Human Services to establish regulations for enrolling providers and suppliers in the Medicare program. 42 U.S.C. § 1395cc(j)(1)(A). Suppliers encompass physicians, other practitioners, and entities, such as a group practice of practitioners. 42 U.S.C. § 1395x(d); 42 C.F.R.

Page 5

§§ 424.202, 424.520(d). Suppliers must enroll in the Medicare program to receive a billing number in order to obtain payment for services rendered to Medicare beneficiaries. 42 C.F.R. § 424.505. Once enrolled, suppliers may, under certain circumstances, reassign the Medicare payments they would receive to an entity that is also enrolled as a provider or supplier in the Medicare program. One such circumstance is when the supplier has a contractual relationship in which the entity bills Medicare instead of the supplier. 42 C.F.R. § 424.80(b)(2). If there is a reassignment, then the supplier and the entity are jointly and severally responsible for overpayments made to the entity. 42 C.F.R. § 424.80(d)(1).

The regulations delegate to CMS the authority to revoke the Medicare enrollment and billing privileges of suppliers. 42 C.F.R. § 424.535. CMS or a CMS contractor may revoke a supplier's Medicare enrollment and billing privileges for any of the reasons listed in 42 C.F.R. § 424.535(a). 42 C.F.R. §§ 405.800(b)(1), 424.535(a). If CMS revokes a supplier's Medicare enrollment and billing privileges, the revocation becomes effective 30 days after CMS or one of its contractors mails the revocation notice to the supplier, subject to some exceptions not applicable in this case. 42 C.F.R. §§ 405.800(b)(2), 424.535(g). After CMS revokes a supplier's enrollment and billing privileges, CMS bars the supplier from reenrolling in the Medicare program for a minimum of one year, but no more than three years. 42 C.F.R. § 424.535(c).

A supplier may request a hearing before an ALJ to challenge a revocation. 42 C.F.R. §§ 424.545(a), 498.3(b)(17), 498.5(l)(2), 498.40(a). An ALJ conducts a de novo proceeding and issues a decision that affirms, reverses, or modifies the reconsidered determination. 42 U.S.C. §§ 405(b), 1395cc(j)(8); 42 C.F.R. §§ 498.25(b)(2), 498.74; Fady Fayad, M.D., DAB No. 2266 at 11 (2009) aff'd 803 F. Supp. 2d 699 (E.D. Mich. 2011).

1. Petitioner filed 12 Medicare claims between October 12, 2018 and November 2, 2018, seeking reimbursement for services provided to seven beneficiaries from October 3, 2018 through October 9, 2018, by a social worker whose state license had been summarily suspended on October 2, 2018.

DRS is a practice that provides emotional care and cognitive therapy and rehabilitation for individuals living with depression, anxiety, Alzheimer's disease, and mild-brain injuries. CMS Ex. 6 ¶ 3. In May 2018, DRS offered Angela Raval a position as a therapist. CMS Ex. 6 ¶ 4. Ms. Raval accepted the offer and provided DRS with a document showing that Ms. Raval had a Colorado license to practice as a licensed clinical social worker. CMS Ex. 3; CMS Ex. 6 ¶ 5. That document also showed that Ms. Raval received her license on October 25, 2001, that Ms. Raval did not have a history of discipline, and that Ms. Raval's license did not expire until August 31, 2019. CMS Ex. 3. Also in May 2018, Ms. Raval acknowledged that she received, read, and understood DRS's employee handbook, which required that employees alert DRS

Page 6

management of all government inquiries, investigations and notices. CMS Ex. 6 ¶ 6; CMS Ex. 5 at 3-4. Finally, Ms. Raval reassigned to DRS her right to file claims for Medicare benefits related to the patients she treated. CMS Ex. 15 at 3. Ms. Raval treated patients at DRS from June 18, 2018 through October 9, 2018. P. Ex. 3 ¶ 4; CMS Ex. 6 ¶ 8.

At the end of May 2018, the Colorado State Board of Social Work Examiners (State Board) received a complaint concerning Ms. Raval. In July 2018, the State Board determined there was reasonable cause to believe that Ms. Raval was unable to practice as a social worker and ordered Ms. Raval to submit to a mental status examination. Ms. Raval appeared for an examination in August 2018, but after the results of that examination indicated that another examination was necessary, Ms. Raval did not schedule the additional examination. As a result, the State Board summarily suspended Ms. Raval's clinical social worker's license on October 2, 2018. CMS Ex. 12.

Ms. Raval saw patients immediately following the suspension, but then notified DRS on October 10, 2018, that she needed to take time off from work right away. By October 16, 2018, Ms. Raval informed DRS that she had an emergency that she was hoping she could resolve within the next week or two. On October 30, 2018, DRS received its last communication from Ms. Raval indicating that her patients should be reassigned to other therapists. Ms. Raval did not inform DRS of the summary suspension. See CMS Ex. 6 ¶¶ 9-16; CMS Ex. 7; CMS Ex. 11.

Although Ms. Raval saw patients through October 9, 2018, she did not complete her last progress notes for those patients until October 26, 2018. In October and early November 2018, DRS submitted claims to Medicare for the patients Ms. Raval treated in early October 2018. P. Ex. 3 ¶ 5; CMS Ex. 8 at 3. DRS billed Medicare for a total of 12 claims for treatment provided to seven beneficiaries from October 3, 2018 through October 9, 2018. CMS Ex. 8 at 3; see also P. Ex. 3 ¶ 7.

In January 2019, DRS received the initial determination revoking DRS's Medicare enrollment and billing privileges, which indicated that Ms. Raval's license had been suspended effective October 2, 2018. This was the first notice that DRS had concerning Ms. Raval's license suspension. P. Ex. 3 ¶ 6; CMS Ex. 6 ¶ 17; CMS Ex. 11. DRS took action to return the money it received from Medicare for the 12 claims that had been filed based on the services Ms. Raval provided after October 2, 2018. P. Ex. 3 ¶¶ 8-10.

2. CMS did not have a legitimate basis to revoke Petitioner's Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).

CMS revoked Petitioner's Medicare enrollment and billing privileges based on 42 C.F.R. § 424.535(a)(8)(ii), which authorizes revocation when the supplier: 1) has filed claims that do not meet Medicare requirements, and 2) engaged in a "pattern or practice" of

Page 7

filing such claims. As explained below, although I conclude that Petitioner filed 12 claims that did not meet Medicare requirements, I also conclude that the record does not support that Petitioner engaged in a pattern or practice of filing such claims.

a. Petitioner filed 12 claims for services that did not meet Medicare requirements.

Under the Act, a "social worker" is, in pertinent part, an individual who is licensed or certified as a clinical social worker by the state in which the services are performed. 42 U.S.C. § 1395x(hh)(1)(C)(i). Medicare Part B covers "clinical social worker services," which is defined as services that the clinical social worker is legally authorized to perform under the state law of the state in which the services are performed. 42 C.F.R. § 410.73(b)(1); see also 42 U.S.C. § 1395x(hh)(2). There is no doubt, and Petitioner does not dispute, that the 12 claims Petitioner filed for the services Ms. Raval provided after her license was suspended cannot be reimbursed by Medicare.

b. Petitioner did not engage in a pattern or practice of submitting claims that were not in compliance with Medicare requirements under 42 C.F.R. § 424.535(a)(8)(ii).

In determining whether a provider has engaged in a pattern or practice of submitting claims that are not in compliance with Medicare requirements, CMS will consider the following factors "as appropriate or applicable":

1. The percentage of submitted claims that were denied.
2. The reason(s) for the claim denials.
3. Whether the provider or supplier has any history of final adverse actions (as that term is defined under § 424.502) and the nature of any such actions.
4. The length of time over which the pattern has continued.
5. How long the provider or supplier has been enrolled in Medicare.
6. Any other information regarding the provider or supplier's specific circumstances that CMS deems relevant to its determination as to whether the provider or supplier has or has not engaged in the pattern or practice described in this paragraph.

Page 8

42 C.F.R. § 424.535(a)(8)(ii).

In its reconsidered determination, CMS's hearing officer indicated that she relied on two of these factors to conclude that there was a pattern or practice.

The factors that are appropriate and applicable here include Ms. Raval's history of final adverse actions, and the specific circumstances that CMS deems relevant to its determination. 42 C.F.R. § 424.502 defines a final adverse action as a suspension or revocation of a license to provide health care by any State licensing authority. In this case, Ms. Raval's CSW license was suspended on October 2, 2018 and remains in suspended status. Additionally, on October 19, 2018, a formal complaint was filed with the Board against Ms. Raval after the suspension of her CSW license. Most significantly, by its own admission, D[RS] admits that it billed Medicare 12 claims for healthcare services that were provided by Ms. Raval while her license was suspended. The submission of claims for services rendered by an unlicensed supplier is abusive and improper.

CMS Ex. 17 at 4 (citation omitted).

Ms. Raval's immediate suspension should not have been considered as a factor showing that DRS engaged in a pattern or practice in this matter. The factor is "[w]hether the provider or supplier has any history of final adverse actions" and not whether an employee or former employee had such a history. 42 C.F.R. § 424.535(a)(8)(ii)(C). There is no evidence in the record showing that DRS has any final adverse actions. Further, in this proceeding, CMS does not present an argument as to how Ms. Raval's suspension can be imputed to Petitioner for purposes of 42 C.F.R. § 424.535(a)(8)(ii)(C).

The CMS hearing officer also considered that DRS admitted that it filed 12 Medicare claims that were provided while Ms. Raval's license was suspended. The hearing officer considered this fact under the factor that allows consideration of the specific circumstances in a given matter. 42 C.F.R. § 424.535(a)(8)(ii)(F). However, a more fulsome consideration of the circumstances in this case, including Petitioner's unrebutted evidence, shows that Petitioner filed claims for services that occurred within seven days of Ms. Raval's summary suspension and that Ms. Raval did not inform DRS of the summary suspension. Considering that the State Board's inquiry leading to the summary suspension was based on concerns regarding Ms. Raval's questionable mental status and Ms. Raval's apparent refusal to have a more extensive mental examination (CMS Exs. 12, 13), the situation lends credence to Petitioner's witnesses who testified that DRS did not know of Ms. Raval's suspension until DRS received the initial determination.

Page 9

The hearing officer did not expressly consider the factors involving "[t]he percentage of submitted claims that were denied"; "[t]he reason(s) for the claim denials"; "[t]he length of time over which the pattern has continued"; and "[h]ow long the provider or supplier has been enrolled in Medicare." 42 C.F.R. § 424.535(a)(8)(ii). While CMS need not consider all of the factors, these factors are extremely important to determining whether a pattern and practice existed. The preamble to the final rule explained that "[t]he term 'abusive,' as used in the context of § 424.535(a)(8)(ii), is meant to capture a variety of situations in which a provider or supplier regularly and repeatedly submits non-compliant claims over a period of time." 79 Fed. Reg. 72,500, 72,515 (Dec. 5, 2014) (emphasis added). The expectation stated in the preamble is that "a repeated pattern of submitting non-compliant claims indicates that the associated claims denials are not altering the provider's behavior.... this final rule is focused on providers who cannot or will not come into compliance with our payment requirements after repeated claims denials." Id.

In the present case, none of the 12 claims identified in the initial determination were denied before CMS issued its initial determination to revoke. CMS Ex. 9. Further, by the time of the initial determination, Petitioner had already promptly filed all of the claims related to the services that Ms. Raval provided during the seven days following her immediate suspension. Thus, the record shows only a brief period of time in which Petitioner filed improper claims, which ended when Ms. Raval complied with the summary suspension order and stopped practicing as a social worker. Reviewing the factors in the regulations in conjunction with the record, there is neither legal nor evidentiary support to conclude that Petitioner engaged in a pattern or practice of filing claims that do not meet Medicare requirements. The CMS contractor and the CMS hearing officer simply failed to apply the regulations as clearly articulated in the preamble to the final rule.

It is appears that the CMS hearing officer's primary reason for concluding that there was a pattern or practice is the following:

For purposes of assessing an abuse of billing, CMS finds a pattern of abuse of billing where three or more claims were submitted to Medicare. 73 Fed. Reg. 36455 (June 27, 2008). Here, the 12 claims submitted for seven Medicare beneficiaries exceeds this threshold and therefore, establishes a pattern or practice of abuse of billing.

CMS Ex. 17 at 4-5. Petitioner argues that applying this standard was incorrect. P. Br. at 11.

I agree with Petitioner that three instances of improperly billed claims do not automatically show a pattern or practice of abusive billing practices under

Page 10

§ 424.535(a)(8)(ii). It is true that when the original language for § 424.535(a)(8) was promulgated, the preamble to the final rule indicated that CMS would not revoke a supplier based on accidental or isolated billing mistakes, but that evidence of three or more instances of improper billing would not be considered accidental when determining if abusive billing occurred. See 73 Fed. Reg. 36,448, 36,455 (June 27, 2008). However, when § 424.535(a)(8)(ii) was added, the original text of § 424.535(a)(8) became § 424.535(a)(8)(i). 79 Fed. Reg. at 72,513, 72,520. Therefore, the fact that Petitioner filed more than three claims that failed to meet Medicare requirements is not a legal basis for concluding that Petitioner engaged in a pattern or practice of filing such claims under § 424.535(a)(8)(ii).

VI. Conclusion

For the foregoing reasons, I reverse CMS's revocation of Petitioner's Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).