Linda A. Herman, CRNA, ALJ Ruling 2020-17 (HHS CRD Sept. 25, 2020)

REMAND

Petitioner, Linda A. Herman, CRNA, is a nurse anesthetist, licensed to practice in Oregon, who participates in the Medicare program as a supplier of services.  Based on a telephone conversation, the Medicare contractor, Noridian Healthcare Solutions, retroactively “terminated” her Medicare participation at one of her practice locations.  See CMS Ex. 2.  CMS characterizes the contractor’s action as a “deactivation,” which is not reviewable in this forum.  In significant respects, however, it deviates from what we’ve come to recognize as a deactivation followed by re-enrollment and, at a minimum, could be viewed as a de facto revocation of enrollment. 

In any event, assuming that this case is a deactivation, followed by re-enrollment, I cannot determine the proper effective date of re-enrollment because the record does not include the relevant enrollment application(s). 

For the reasons discussed below, I remand this case to CMS to consider the appropriateness of retroactively terminating Petitioner’s reimbursement.  If necessary, on appeal, CMS should be prepared to present evidence as to the appropriate effective date for Petitioner’s re-enrollment.  

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Discussion

In a letter, dated November 7, 2017, the Medicare contractor, Noridian Healthcare Solutions, directed Petitioner to revalidate her Medicare enrollment by updating or confirming the information in her record.  The letter listed three businesses to which she had reassigned her benefits and indicated that she should revalidate her records pertaining to them:  Oregon Anesthesiology Group PC; Anesthesia Associates Northwest, LLC; and Metropolitan Anesthesia LLC.  The letter directed Petitioner to submit, no later than January 31, 2018, an updated paper CMS-855 Medicare enrollment application or to update or confirm all the information in her record through the PECOS system.  CMS Ex. 1.

On November 10, 2017, Petitioner filed an 855I application, revalidating her Medicare enrollment, and listing Oregon Anesthesiology as a practice to which she reassigned payment.1   CMS Ex. 12 at 12.  CMS did not submit a copy of the application Petitioner filed regarding Metropolitan Anesthesia, even though this case revolves around Petitioner’s relationship with that practice.  In fact, the marginally relevant document pertaining to Oregon Anesthesiology is the only enrollment application CMS submits. 

I should nevertheless be able to infer that Petitioner filed a similar application for Metropolitan Anesthesia, because, in notices dated December 15, 2017, the contractor advised Petitioner that at least two of her revalidated Medicare enrollment applications were approved:  one for Oregon Anesthesiology (CMS Ex. 3); and one for Metropolitan Anesthesia (CMS Ex. 4).  Presumably, she’d have had to submit an actual application in order to make any changes in enrollment, and that document would be critically important for determining the nature of the contractor’s action.  42 C.F.R. § 424.515.

The December 15 “approval” letter, relating to Metropolitan Anesthesia, approves nothing.  Instead, it lists an “effective date” of January 15, 2016, but then says:  “We have updated our files to reflect . . . [w]e have deactivated the enrollment referenced above for the above for dates of service beginning April 2, 2016.”  CMS Ex. 4 at 1-2.  In terms of Petitioner’s rights to challenge the determination, the notice letter advises

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Petitioner of her right to request reconsideration “if you disagree with the effective date determination in this letter.”  CMS Ex. 4 at 2-3. 

CMS’s justification for the contractor’s action is troubling.  CMS asserts that Petitioner called the contractor on December 5, 2017, to say that she no longer worked at Metropolitan Anesthesia.  CMS Br. at 3.  CMS cites no evidence of this call, although a January 19, 2018 email alludes to it as the reason for such a late effective date.2   CMS Ex. 7.  Petitioner admits that she called the contractor in December 2017, and spoke to a customer service representative.  In responding to the representative’s questions, she did not recognize the name Metropolitan Anesthesia, apparently because Metropolitan’s marketing firm (Innovative Anesthesia) handled hiring and personnel matters.  Petitioner was not aware that Metropolitan Anesthesia was the name of the entity enrolled in Medicare (and for whom she worked), and she admits that she incorrectly told the representative that she stopped working there in April 2016.  P. Br. at 1; P. Ex. 2 at 2.

Based on her confused, and ultimately inaccurate, remarks, the contractor determined that Petitioner had, more than a year earlier, ended her association with Metropolitan Anesthesia, but that Metropolitan had continued to bill for her services.  On December 12, 2017, the contractor “terminated” the billing with an “effective date” of 04/01/2016.  CMS Ex. 2. 

I see no evidence that either Petitioner or Metropolitan ever reported any change in her employment relationship, as required by 42 C.F.R. § 424.516(d) (undoubtedly because it never occurred).  Such a failure to report and Metropolitan’s purportedly fraudulent billing practices are not the kinds of activities for which deactivation is generally considered the appropriate response.  See 42 C.F.R. § 424.540(a).  Those activities are more likely to result in a revocation of billing privileges.  See 42 C.F.R. § 424.535(a)(8) and (9).  It seems incongruous for CMS to require suppliers to report such critical information via an enrollment application, and yet accept, in this instance, a verbal report without an accompanying writing.  See 42 C.F.R. § 424.510(a)(1) (“Providers and suppliers must submit enrollment information on the applicable enrollment application.”).  

According to CMS, even if the deactivation were a mistake, Petitioner has no recourse.  The contractor “deactivated” her billing privileges; it did not revoke them, and a deactivation is not reviewable.  I have two problems with CMS’s position.  First, although labeled a deactivation, this has the practical consequences of a revocation (without the appeal rights).  For suppliers, two factors distinguish a deactivation from a revocation of enrollment:  1) following a revocation, CMS imposes a re-enrollment bar of at least one year; and 2) a supplier whose enrollment is revoked has appeal rights.  Arkansas Health Group, DAB No. 2929 at 2-3 (2019); 42 C.F.R. §§ 424.535(a), (b), (c); 424.540(c).  This retroactive action effectively ended the supplier’s Medicare

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participation, and it kept the supplier out of the program for over nineteen months.  That sounds a lot like a revocation followed by an enrollment bar. 

Second, even a deactivation affords the supplier some protections, which the contractor did not provide here.  At a minimum, the contractor should have given Petitioner (and Metropolitan) prior notice of the action and should have afforded them the opportunity to file a rebuttal.  42 C.F.R. §§ 405.374; 424.545(b).  The contractor did neither.  It simply presented the retroactive deactivation as a fait accompli.  Its failure to afford these protections is particularly concerning in light of the accompanying overpayment it appears to have imposed on Metropolitan as a result.  P. Ex. 1.

Ultimately, there seems no doubt that the contractor based its action on misinformation (which could have been clarified, had the contractor permitted Petitioner to file a rebuttal pursuant to section 424.545(b)).  We can be reasonably sure that the telephone report that Petitioner stopped working at Metropolitan was wrong because the contractor subsequently approved her re-enrollment application.  In a letter dated January 23, 2018, it advised Metropolitan that it approved Petitioner’s “initial Medicare enrollment application,” assigning her billing privileges.  CMS Ex. 6.  Obviously, the contractor would not have done so had Petitioner not been associated with Metropolitan.

Assuming CMS can get past these significant issues, a second problem prevents me from deciding this matter.  According to the January 23, 2018 notice letter, the effective date of Petitioner’s enrollment is January 17, 2018.  CMS Ex. 6 at 1.  For a non-physician practitioner, the effective date for billing privileges “is the later of the date of filing” a subsequently-approved enrollment application or “[t]he date that the supplier first began furnishing services at a new practice location.”  42 C.F.R. § 424.520(d) (emphasis added).  Here CMS has proffered no evidence as to the date Petitioner filed her subsequently-approved enrollment application.  Without such evidence, I cannot determine the effective date. 

I note, finally, that CMS is correct:  my review authority is limited – although perhaps not as limited as CMS maintains.  However, I am not necessarily the final decision-maker here, and a federal court might look askance at the contractor’s retroactively ending a supplier’s billing privileges, without notice or an opportunity for rebuttal or review.  It might also frown on characterizing as a deactivation, and therefore not reviewable, an action that has the practical effect of a revocation.  Even more important, Congress has afforded CMS broad discretion to administer the Medicare program, expecting the agency to do so fairly.  Without regard to any outside review, CMS should not abuse that discretion. 

Conclusion

I remand this case to CMS to consider the propriety of retroactively ending a supplier’s billing privileges, and effectively locking it out of the program for nineteen months,

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without notice or an opportunity for rebuttal.  If necessary, it should review the enrollment evidence for any new application and be prepared to produce evidence of the appropriate effective date if the matter is again appealed. 

1. CMS indicates that the date on this application is illegible, except for the year.  CMS Br. at 4.  I find this puzzling, inasmuch as the contractor date-stamped each page of the application, using a Julian (or Gregorian) calendar date stamp, which counts the days of the years consecutively.  CMS Ex. 12; see, e.g., Ramarao Kaza, M.D., Ramarao Kaza, M.D., P.C., DAB No. 2924 at 3 n.2 (2019).  The first two digits stamped on CMS Ex. 12 indicate that the year filed was 2017.  The next three digits indicate the date, the 314th day of 2017, or November 10, 2017.  This is consistent with other indicia of the date filed:  the application’s signature is dated October 31, 2017, and the cover letter is dated November 8, 2017.  CMS Ex. 12 at 20, 22.
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2. CMS cites to the reconsidered determination as evidence of the call.  A reconsidered determination is not evidence.  Presumably, the contractor would have maintained a record of such a significant call, but CMS has not produced it.
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