411 Urgent Care Center, LLC, DAB CR5999 (2021)

DECISION

I uphold the Centers for Medicare & Medicaid Services (CMS) revocation of the Medicare enrollment and billing privileges of 441 Urgent Care Center, LLC (441 Urgent Care or Petitioner) based on 42 C.F.R. § 424.535(a)(8)(ii) (abuse of billing privileges by engaging in a pattern or practice of filing claims that do not meet Medicare requirements).  I grant CMS's Motion for Summary Judgment because the undisputed facts show that Petitioner filed numerous noncompliant Medicare claims for reimbursement without sufficient documentation to support the medical necessity of the services.

I.  Background and Procedural History

Petitioner was enrolled in the Medicare program as a clinic/group practice.  CMS Exhibit (Ex.) 1 at 1.  A Clinic/Group Practice is considered a "supplier of services" or a "supplier" in the Medicare program.  42 U.S.C. § 1395x(d); 42 C.F.R. § 400.202.  In an initial determination dated November 22, 2019, CMS revoked Petitioner's Medicare billing privileges effective December 22, 2019 based on violations of 42 C.F.R. § 424.535(a)(8)(ii), established a 10-year reenrollment bar, and added it to the CMS

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preclusion list, effective May 1, 2020.  CMS Ex. 14.  Petitioner requested reconsideration of this determination on January 22, 2020.  However, in a reconsidered determination dated March 24, 2020, the CMS Hearing Officer upheld the revocation, the 10-year reenrollment bar, and placement on the preclusion list.  CMS Ex. 15.

Petitioner filed a timely Request for Hearing on May 22, 2020.  The case was assigned to Judge Leslie Weyn, who issued an Acknowledgement and Prehearing Order (Order) on May 26, 2020.1   In its prehearing exchange, CMS filed its Centers for Medicare & Medicaid Services' Brief in Support of its Motion for Summary Judgment (CMS Br.) and 17 proposed exhibits.  Following an Order to Show Cause, Petitioner filed an Amended Combined Motion and Memorandum of Law in Opposition to CMS's Motion for Summary Judgment (P. Motion) and eight proposed exhibits, including the declarations of three witnesses.  There were no objections to either party's proposed exhibits.  Order ¶ 7.  As a result, I admit CMS Exs. 1-17 and P. Exs. 1-8 into the record.

II.  Issues

1. Whether summary judgment is appropriate;
2. Whether CMS had a legitimate basis for revoking Petitioner's enrollment and billing privileges pursuant to the provisions of 42 C.F.R. § 424.535(a)(8)(ii); and
3. Whether CMS had a legitimate basis for including Petitioner on the preclusion list pursuant to the provisions of 42 C.F.R. §§ 422.2 and 422.222.

III.  Jurisdiction

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

IV.  Findings of Fact, Conclusion of Law, and Analysis

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 must enroll in the Medicare program and receive a billing number in order to obtain payment for services rendered to Medicare beneficiaries.  42 C.F.R. § 424.505.

The regulations delegate to CMS the authority to revoke the enrollment and billing privileges of suppliers.  42 C.F.R. § 424.535.  CMS or a Medicare contractor may revoke a supplier's Medicare enrollment and billing privileges for a number of specified reasons,

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including, as relevant here, abuse of billing privileges.  42 C.F.R. § 424.535(a)(8).  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 not greater than 10 years.  42 C.F.R. § 424.535(c)(1)(i).

1. CMS is entitled to summary judgment.  The undisputed evidence establishes that there is a legitimate basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).

Summary judgment is appropriate if "the record shows that there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law."  Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (citations omitted).  The moving party must show that there are no genuine issues of material fact requiring an evidentiary hearing and that it is entitled to judgment as a matter of law.  Id.  If the moving party meets its initial burden, "the non-moving party must ‘come forward with specific facts showing that there is a genuine issue for trial.'"  Id. (citing Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)).  "To defeat an adequately supported summary judgment motion, the non-moving party may not rely on the denials in its pleadings or briefs, but must furnish evidence of a dispute concerning a material fact—a fact that, if proven, would affect the outcome of the case under governing law."  Senior Rehab., DAB No. 2300 at 3 (citations omitted).  To determine whether there are genuine issues of material fact for hearing, an ALJ "must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party's favor."  Id.

As detailed below, there is no genuine dispute as to any material fact in this case. Petitioner does not present a genuine dispute to the material facts necessary to uphold the basis for revocation.  Specifically, Petitioner neither expressly asserts nor comes forward with evidence that the prepayment reviews relied on by CMS as a basis for revocation did not establish a pattern or practice of submitting claims that failed to meet Medicare requirements.  These are the sole material facts on which this revocation action depends.

Petitioner had been enrolled in the Medicare program as a clinic/group practice supplier of services since 2009.  CMS Ex. 1 at 1.  William Goellner, M.D., a physician with Petitioner, was identified in a review not relevant to this adjudication as the top emergency medicine physician in claims billed to Medicare.  Petitioner was paid $2,847,610 for visits billed in conjunction with use of modifier code 25 and billing evaluation and management codes 99213, 99214, and 99204 with every Ceftriaxone (Rocephin) injection.  CMS Ex. 13 at 3.  There was a resulting overpayment, which is not at issue in this decision.  CMS Ex. 15 at 2.  However, following this overpayment, a code specific prepayment review of Petitioner's billing of visit codes 99213, 99214, and 99204 when billed with Ceftriaxone injection code J0696 was initiated by SafeGuard Services, LLC (SGS or SafeGuard), the Medicare Southeastern Unified Program Integrity

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Contractor (SE UPIC), on May 24, 2018.  CMS Ex. 13 at 4.

On August 24, 2018, Petitioner was notified by SafeGuard that a prepayment medical review was completed on August 14, 2018.  This review evaluated 642 claims involving 2,132 services and resulted in a denial of 641 claims and 1,876 services, for a 99.84% denial rate.  Petitioner was informed that the majority of the services were denied because the injections were not allowed and the documentation did not support the services billed.  The notice informed Petitioner that, due to the high percentage of claims denied, the prepayment review would remain in effect until documentation showed a significant decrease in the denial percentage.  In addition, Petitioner was reminded that 42 C.F.R. § 424.535 authorizes CMS to revoke Medicare billing privileges under certain conditions, including when the supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  CMS Ex. 2 at 4-5.  An educational spreadsheet with Denial Code Descriptions for each claim reviewed was also provided to Petitioner.  CMS Ex. 3.  The spreadsheet indicated that 65.34% of the claims were denied because the injection was not allowed and 20.59% of the claims were denied because the documentation did not support the service.  As relevant here, Rocephin injections were specifically denied as not being administered within the FDA approved guidelines, diagnostic monitoring standards were not maintained to provide accurate treatment, and the injection administrations were denied as not meeting medical necessity guidelines.  CMS Ex. 3 at 1-2.

Petitioner was notified by SafeGuard on November 29, 2018 that after completing a second prepayment review on November 14, 2018, 1,403 claims involving 4,601 services were evaluated, resulting in the denial of 1,402 claims and 4,164 services, with a resulting denial rate of 99.93%.  Petitioner was again reminded that Medicare billing privileges can be revoked if a supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  CMS Ex. 5 at 4-6.  An educational spreadsheet with Denial Code Descriptions for each claim reviewed and a narrative explanation for the denial of coverage was again provided.  CMS Ex. 6.

In a letter dated June 6, 2019, SafeGuard notified Petitioner that a review through April 12, 2019 resulted in the denial of 1,585 claims and 4,523 services, with a 100% denial rate of claims.  CMS Ex. 9 at 3.  An educational spreadsheet with Denial Code Descriptions for each claim reviewed with a narrative explanation for the denial of coverage was again provided.  CMS Ex. 10.

The CMS Center for Program Integrity submitted an Administrative Action Request for Revocation on July 3, 2019.  In this request, CMS cited as the basis for revocation a 99.9% denial rate of the 13,599 claims evaluated in prepayment review by SGS, despite three educational status letters being sent.  CMS Ex. 13 at 4.

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On November 22, 2019, First Coast Service Options, Inc., a CMS-Contracted Medicare Administrative Contractor (First Coast), notified Petitioner that its Medicare privileges were being revoked effective December 22, 2019 because, despite repeated instances of specific and targeted education, Petitioner had engaged in a pattern or practice of submitting claims that failed to meet Medicare requirements, in violation of 42 C.F.R. § 424.535(a)(8)(ii).  First Coast noted that at the time of the second review, 55 of the claims submitted were for dates of service 30 days after receipt of a prior education letter.  It noted that at the time of third review, 155 of the claims submitted were for dates of service 30 days after receipt of a prior education letter.  In the same notice, Petitioner was informed that in light of the revocation, a reenrollment bar for 10 years was established, effective December 22, 2019, and Petitioner was being added to the CMS preclusion list, effective May 1, 2020, pursuant to the provisions of 42 C.F.R. §§ 424.535(c), 422.2, 422.222, 423.100, and 423.120(c)(6).  CMS Ex. 14 at 1-3.

Petitioner filed a timely request for reconsideration.  However, in a reconsidered determination dated March 24, 2020, the CMS Hearing Officer determined that Petitioner routinely and systematically engaged in a practice or pattern of abusive billing as it submitted claims for payment that failed to meet Medicare requirements, despite receiving at least three educational letters, demonstrating a continued systemic pattern of non-compliant behavior.  As a result, the revocation of Petitioner's Medicare enrollment was upheld.  CMS declined to lower the reenrollment bar from the 10 years imposed.  Finally, CMS upheld Petitioner's placement on the CMS preclusion list, effective May 1, 2020.  CMS Ex. 15 at 9, 11.

42 C.F.R. § 424.535(a)(8)(ii) provides that CMS may revoke a currently enrolled supplier's Medicare enrollment and any corresponding supplier agreement if, among other reasons, CMS determines that the supplier has a "pattern or practice of submitting claims that fail to meet Medicare requirements."  In making this determination, CMS considers, as appropriate or applicable, the following factors:

(A) The percentage of submitted claims that were denied.

(B) The reason(s) for the claim denials.

(C) 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.

(D) The length of time over which the pattern has continued.

(E) How long the provider or supplier has been enrolled in Medicare.

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(F) 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.

42 C.F.R. § 424.535(a)(8)(ii).

The preamble to the December 2014 final rule notes that in the analysis of these factors, none are more important than another and all factors need not be considered.  "We have decided not to give certain factors greater weight in our § 424.535(a)(8)(ii) determinations and other[s], for the importance of each factor may vary based on the particular situation."  79 Fed. Reg. 72, 500, 72,517 (2014).  Further, CMS repeatedly refers in the preamble to "a careful and thorough consideration of the factors" outlined in the new regulation to determine whether a pattern or practice is present.  Id. at 72,519. CMS states that "abusive" billing "is meant to capture a variety of situations in which a [supplier] regularly and repeatedly submits non-compliant claims over a period of time."  Id. at 72,515.

Petitioner initially asserts that "the medication and the services provided in these claims were appropriate and medically necessary due to the condition of the patients who presented for treatment at 441 Urgent Care with an upper respiratory tract infection diagnosed as acute bronchitis and/or acute sinusitis requiring immediate care."  It cites as support for the medical necessity of these medical services the Declarations of William Goellner, M.D., Norman Samuels, M.D., and Adamastor Santos, P.A., and attached articles.  P. Motion at 5.

In considering this first argument, it is necessary to identify the issues that are before me for adjudication.  Pursuant to the provisions of 42 C.F.R. § 498.48(c), the issues for adjudication are those set forth in the notice of determination and any new issue to which a party has given timely notice.  In this case, the issues addressed in the reconsidered determination were set forth above:  (1) whether CMS had a legitimate basis for revoking Petitioner's enrollment billing privileges, pursuant to the provisions of 42 C.F.R. § 424.535(a)(8)(ii); and (2) whether CMS had a legitimate basis to include Petitioner on the preclusion list, pursuant to the provisions of 42 C.F.R. §§ 422.2 and 422.222.  Petitioner, in its arguments, appears to be raising a new issue, that of the medical necessity of the denied claims.  Petitioner asserts that it "disputes this denial reason and has separately appealed the relevant decision."  P. Motion at 5.  However, the issue of the medical necessity of the denied claims is not before me.  I have no authority to review adverse payment determinations.  This proceeding is governed by the regulations in 42 C.F.R. part 498, which permit a Medicare supplier to appeal only certain types of CMS "initial determinations," as specified in 42 C.F.R. § 498.3(b).  Those appealable determinations do not include an adverse Medicare coverage or payment determination.

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As a result, the issue of the medical necessity of the denied prepayment review claims will not be addressed in this decision.2

It is also necessary to define the scope of my review.  In reviewing the revocation of a supplier's Medicare billing privileges, the ALJ decides only whether CMS has established a lawful basis for the revocation.  Jason R. Bailey, M.D., P.A., DAB No. 2855 at 18 (2018).  In this case, CMS, upon reconsideration, upheld the revocation on the basis that Petitioner "routinely and systematically engaged in a practice or pattern of abusive billing" by submitting "claims for payment to Medicare, that failed to meet Medicare requirements."  CMS Ex. 15 at 9.  The ALJ is then limited to deciding whether that stated basis for revocation is factually substantiated and legally sufficient.  Keller Orthotics, Inc., DAB No. 2588 at 7 (2014).

In determining whether CMS has established that the supplier has a "pattern or practice of submitting claims that fail to meet Medicare requirements," I have considered  Petitioner's arguments on the factors to be considered in that analysis.  Petitioner asserts that CMS misapplied the factors set forth in 42 C.F.R. § 424.535(a)(8)(ii)(A)-(F).  It alleges that the "practice in question was 441 Urgent Care's first offense, that it was limited in duration, and that it occurred after nearly a decade of diligent compliance with Medicare requirements."  It then addresses each regulatory factor individually.  P. Motion at 4, 6.

Petitioner asserts that the factor of percentage of submitted claims that were denied should have minimal weight in the analysis because it has limited utility in a case, such as this, involving a single issue of medical necessity.  Petitioner argues that where the vast majority of claims are denied for the same reason, the denial percentage will either be close to 0% or 100%.  P. Motion at 4.  This argument would perhaps be more compelling in a situation where the supplier was unaware that similar claims would be denied.  That is not the situation here, however.  Petitioner was given notice on August 24, 2018 that a prepayment review resulted in denials of 641 out of 642 claims submitted, with a detailed explanation for the basis of the denials.  CMS Ex. 2, CMS Ex. 3.  Despite this notice, when a second prepayment review was completed on November 14, 2018, there were 55 denied claims for the same services for which coverage had been denied earlier that had been submitted 30 days after the initial notice and educational letter.  CMS Ex. 14 at 1, CMS Ex. 5 at 4-6, CMS Ex. 6.  Even after the second notice of the noncoverage of this type of claim was provided on November 29, 2018, when a third prepayment review was completed on April 12, 2019, there were 155 denied claims involving services identical to those for which coverage had been denied previously that were submitted 30 days after

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receipt of the prior notice and educational letter.  CMS Ex. 14 at 2, CMS Ex. 9 at 3, CMS Ex. 10.  Given the coverage information provided to Petitioner in the previously referenced notices and educational letters, an ongoing denial rate of nearly 100% was not a foregone conclusion.  The denial rate certainly could have been much lower had Petitioner heeded the coverage information provided to it.  In the reconsidered determination, the CMS Hearing Officer stated that the "claims denied formed a rate of 100%, which undeniably is extremely high."  These undisputed facts were the basis for CMS's conclusion that the denial rate of the claims, for which 411 Urgent Care had received education, was "significant."  CMS Ex. 15 at 8.

Petitioner then argues that the second regulatory factor, the reason for the denials, weighs in favor of 441 Urgent Care.  It asserts that "the medication and the services provided in these claims were appropriate and medically necessary due to the conditions of the patients."  P. Motion at 5.  However, as discussed above, the medical necessity of the services in question is no longer in dispute.  There were no appeals filed when the initial denials of coverage were made.  CMS Ex. 12, CMS Ex. 13 at 4.  Moreover, the reason for the denials remained the same throughout the prepayment reviews, despite ongoing notice of noncoverage of the services in question.  As CMS found in the reconsidered determination, the review findings established that "411 [sic] Urgent Care has a habit of submitting the same types of claims that continue to be denied due to its failure to comply with Medicare requirements, demonstrating its refusal to implement the necessary changes as indicated in the education provided."  CMS Ex. 15 at 8.

This conclusion is supported by the fact that Petitioner was constructively aware since August 24, 2018 that coverage for Rocephin injections would be denied absent evidence of an initial trial of first line oral antibiotics or documentation that the beneficiary's symptoms were either of such high acuity and severity that the beneficiary required injection or compliance was uncertain.  CMS Ex. 2 at 5, CMS Ex. 3 at 2.  Yet, Petitioner continued to bill for that service without the specified information necessary to establish medical necessity, despite multiple notices of noncoverage.  At the time of the third review, which was completed on April 14, 2019, the educational spreadsheet continued to show denied claims for this service.  CMS Ex. 10 at 1757.  CMS noted in the reconsidered determination that at the time of the April 12, 2019 review, there was an increase of 100 claims for which 441 Urgent Care received education, and the claims still failed to meet Medicare standards.  CMS Ex. 15 at 7.  The fact that Petitioner made no apparent changes in its billing practices, after receiving notices of noncoverage of the claims in question and educational spreadsheets months earlier, resulted in the claims continuing to be denied for the same reason.  These undisputed facts support CMS's conclusion that the denial rate reflected Petitioner's failure to implement changes in its billing procedures, even after notice and education.

With respect to the factor of history of adverse final actions (P. Motion at 6), I concur with Petitioner that there is no record of any such actions.

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In considering the length of time over which the pattern or practice continued (P. Motion at 6), I initially note that there is a difference of opinion over the calculation of the relevant time period.  CMS asserts that Petitioner engaged in a pattern or practice of submitting noncompliant claims for at least 11 months.  CMS Br. at 9.  Petitioner argues that the length of time should be calculated from the first letter of education regarding the billing procedure through the final date of service for the last round of reviews, resulting in a period of "5 months."  P. Motion at 7.  Considering this evidence in the light most favorable to Petitioner, I will accept its method of calculation and conclude that the length of time over which the billing pattern continued was five months.  Still, this does not cut in Petitioner's favor.  The relevant point is that Petitioner continued to bill for services it knew or should have known were not covered for five additional months.  As a result, this is not a factor favoring Petitioner.  Utilizing Petitioner's calculation of the time period does not change the conclusion that Petitioner was a supplier that "regularly and repeatedly submits non-compliant claims over a period of time."  79 Fed. Reg. at 72,515.

How long a provider has been enrolled in Medicare (P. Motion at 6) is another regulatory factor to be considered in determining whether there has been a pattern or practice of submitting claims that fail to meet Medicare requirements.  The undisputed evidence establishes that Petitioner has been enrolled in the Medicare program since June 30, 2009.  CMS Ex. 1 at 1.  CMS concluded that, because of this, Petitioner had ample time to become familiar with Medicare billing policies.  CMS Br. at 9, CMS Ex. 15 at 9.  Petitioner asserts that in nearly 11 years of enrollment, there have been no prior adverse actions, showing a "track record of compliance."  P. Motion at 6.  In considering these opposing views of this factor, I find CMS's interpretation of the significance of the June 30, 2009 enrollment date to be more persuasive.  Petitioner has asserted that "[a]fter much research and observation of patient outcomes, 441 Urgent Care developed a proactive protocol to treat its elderly patients with intramuscular ceftriaxone (Rocephin) injections and daily vital sign observation."  P. Motion at 5; P. Ex. 3 at 7-8, 16, 25.  Petitioner makes no argument, however, that it made any attempt to determine whether this new "protocol" would meet Medicare guidelines for coverage.  Having been enrolled for more than 11 years, Petitioner had sufficient time to become familiar with procedures for determining whether its new "protocol" met the Medicare standards for coverage.

The final regulatory factor for consideration is any other information regarding the provider's specific circumstances.  Petitioner argues that it "did not intend to abuse their billing privileges or defraud the Medicare program" and had only "altruistic intent."  P. Motion at 6-7.  However, even accepting this proposition as true for the purposes of summary judgment would not change the outcome of this case.  42 C.F.R. § 424.525(a)(8)(ii) does not require fraudulent intent or culpability.  Further, there is no requirement of actual or constructive knowledge to find a pattern or practice of abusive billing.  79 Fed. Reg. at 72,516, 72,520.  As the preamble to the final rule stated:

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Proposed new paragraph (a)(8)(ii) would permit revocation if we determine that the provider or supplier has a pattern or practice of billing for services that do not meet Medicare requirements such as, but not limited to, the requirement that the service be reasonable and necessary.  We explained that a provider or supplier should be responsible for submitting valid claims at all times and that the provider or supplier's repeated failure to do so poses a risk to the Medicare Trust Funds.  We note that the responsibility for submitting valid claims exists irrespective of whether the provider or supplier itself submits the claims or hires a billing agency to perform this function; in either case, the claims are submitted on behalf of the provider or supplier.

Id. at 72,513.

Petitioner was responsible under the regulations for ensuring that it submitted claims that fully complied with Medicare regulations.  In an approximately five-month span of time, it submitted 13,599 claims, 13,580 of which were denied, resulting in a denial rate of 99.9%.  CMS Ex. 13 at 4.  On the basis of this billing history, I find that CMS was warranted in concluding that a pattern or practice of abusive billing was present and, as a result, CMS had a legitimate basis to revoke Petitioner's enrollment and billing privileges under the provisions of 42 C.F.R. § 424.535(a)(8)(ii).

2. I have no jurisdiction to adjudicate the 10-year reenrollment bar.

Petitioner has argued that the 10-year reenrollment bar is not only a due process violation, but "is clearly excessive based on the circumstances detailed above."  P. Motion at 24.  While the constitutional arguments are addressed below, I am unable to consider its request to reduce the length of the reenrollment bar.  The only CMS actions subject to appeal under part 498 are the types of initial determinations specified in section 498.3(b).  The Departmental Appeals Board (DAB) held in Vijendra Dave, M.D., DAB No. 2672 at 10-11 (2016) that CMS's determination of the length of the reenrollment bar under section 498.535(c) is not subject to review.  The DAB explained:

Although the [reenrollment] bar is a direct and legally mandated consequence of an appealable revocation determination, nothing in Part 498 authorizes the Board to review the length of the bar despite that relationship between a revocation and a reenrollment bar.  Given section 498.3(b)'s precise and exclusive enumeration of appealable determinations, we cannot find a CMS action to be appealable under Part 498 unless section 498.3(b) describes the subject

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matter of that action.  See North Ridge Care Ctr., DAB No. 1857, at 8 (2002) (stating that "[b]y its very terms, Part 498 provides appeal rights only for these listed actions" (italics added)).  On its face, section 498.3(b) does not describe any matter related to a post-revocation [reenrollment] bar.

Id. at 10.

Petitioner cites no contrary authority.  Given this holding by the DAB, I have no regulatory authority to review the length of the reenrollment bar.

3. The undisputed evidence establishes that CMS had a legitimate basis to include Petitioner on the preclusion list, pursuant to the provisions of 42 C.F.R. §§ 422.2 and 422.222.

As noted above, CMS made a determination to include Petitioner on the CMS preclusion list, effective May 1, 2020.  Preclusion list is defined in 42 C.F.R. § 422.2 as follows:

[A] CMS compiled list of individuals and entities that –

(1) Meet all of the following requirements:

(i) The individual or entity is currently revoked from Medicare for a reason other than that stated in § 424.535(a)(3) of this chapter.

(ii) The individual or entity is currently under a reenrollment bar under § 424.535(c).

(iii) CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination under this paragraph (1)(iii), CMS considers the following factors:

(A) The seriousness of the conduct underlying the individual's or entity's revocation.

(B) The degree to which the individual's or entity's conduct could affect the integrity of the Medicare program.

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(C) Any other evidence that CMS deems relevant to its determination.

CMS cites as a basis for placing Petitioner on the preclusion list Petitioner's collective behavior, which was a threat to the integrity of and a detriment to the Medicare program.  CMS based this conclusion on Petitioner's submission of claims for services that were not medically necessary and its failure to make attempts to rectify its pattern of abusive billing, despite the three education letters provided to it.  CMS Ex. 15 at 10-11.  Petitioner argues that revocation and preclusion are unnecessary because it has changed its approach to the treatment of upper respiratory infections, is currently operating pursuant to a corrective action plan, is adhering to evidence based guidelines for treatment of upper respiratory infections, is currently being monitored for compliance, has increased physician oversight and monitoring of mid-level providers, and has significantly reduced the billing of the codes at issue.  Petitioner also asserts that Medicare beneficiaries will be denied access to their preferred providers and it will be forced out of business if its Medicare billing privileges are lost.  P. Motion at 7-14.

In considering the regulatory criteria for placement on the preclusion list, I find that Petitioner has met the first two factors for its inclusion on the list:  Petitioner's enrollment is revoked, under the provisions of 42 C.F.R. § 424.535(a)(8)(ii) for abuse of billing privileges, and Petitioner is subject to a 10-year reenrollment bar.  In considering the remaining criteria, CMS found that during the three prepayment reviews, 99 to 100% of the audited claims were denied due to the absence of medical necessity and failure to provide documentation needed to adjudicate the claims.  The CMS Hearing Officer stated that SGS provided education to Petitioner regarding the noncompliant claims and informed Petitioner of the potential consequences of continued improper billing.  Because Petitioner did not alter its behavior and continued to submit claims that failed to meet Medicare standards, CMS concluded that this conduct was "very serious and detrimental to the best interests of the Medicare program."  CMS Ex. 15 at 10.

Based on the factors above, Petitioner's ongoing billing practices in the face of three prepayment reviews with a nearly 100% denial of coverage rate and three educational letters demonstrates a wanton disregard for the integrity of the Medicare program.  Therefore, I conclude that CMS was warranted in concluding that Petitioner's conduct was very serious and detrimental to the best interests of the Medicare Program and that CMS had a legitimate basis for placing Petitioner on the preclusion list.

4. Petitioner is not entitled to equitable relief.

Petitioner argues that revocation, reenrollment bar, and addition to the preclusion list violated due process by depriving it of protected property and liberty interests without notice and opportunity to respond, as well as unlawful retroactive application of the 10‑year reenrollment bar.  P. Motion at 14.  Petitioner also asserts that this was a "first-

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time offense which occurred after a decade of compliance and which was not accompanied by any malintent."  P. Motion at 7.  Finally, Petitioner alleges that CMS's action will deny Medicare beneficiaries access to their preferred providers and will likely force it out of business.  P. Motion at 11-14.

Considering first Petitioner's constitutional arguments, I note the following:

The Board has repeatedly held that ALJs and the Board are bound by the Medicare enrollment regulations and "lack the authority to overturn, on constitutional grounds, a revocation that was imposed in accordance with the applicable law and regulations."  Cornelius M. Donohue, DPM, DAB No. 2888, at 8-9 (2018).  Where "the regulatory prerequisites for revocation (both procedural and substantive) are satisfied, as they were here, we must apply the regulations and sustain the revocation."  Id. (citing Zahid Imran, M.D., DAB No. 2680, at 9 (2016) (stating that the Board may not "[f]ind invalid or refuse to follow Federal statutes and regulations on constitutional grounds" (internal quotation marks omitted)); see also Horace Bledsoe, M.D., & Bledsoe Family Med., DAB No. 2753, at 10-11 (2016), appeal dismissed, Bledsoe v. Price, No. 3:17-cv-00442 (D.S.C. May 4, 2017) (declining to rule on equitable estoppel claim, as well as abuse‑of‑discretion and constitutional claims, in upholding revocation under section 424.535(a)(3)).

Lilia Gorovits, M.D., P.C., DAB No. 2985 at 19 (2020), aff'd sub nom. Gorovits v. Becerra, Civ. Action No. 20-1850, slip op. (E.D. Pa. May 17, 2021).

Accordingly, I have no authority to disregard validly promulgated regulations on constitutional grounds in this matter.

Similarly, to the extent that Petitioner's request for relief is based on principles of equity, I cannot grant such relief.  US Ultrasound, DAB No. 2302 at 8 (2010) ("Neither the ALJ nor the [DAB] is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.").  The DAB has consistently held that neither the ALJ nor the Board has authority to reverse an authorized revocation for reasons of equity.  See, e.g., Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016) (the ALJ and the Board may not "restore a supplier's billing privileges on equitable grounds"); Bledsoe, DAB No. 2753 at 11 (declining to rule on petitioners' estoppel claim and stating that the Board may not overturn CMS's lawful revocation of petitioners' billing privileges on equitable grounds).  As such, I cannot grant Petitioner's request for relief on the basis of equity.

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V.  Conclusion

For the foregoing reasons, I grant CMS's Motion for Summary Judgment, affirm CMS's revocation of Petitioner's enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii), and affirm CMS's placement of Petitioner on the preclusion list pursuant to 42 C.F.R. §§ 422.2 and 422.222.

1. This case was assigned to me on October 29, 2021.
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2. Because neither the previously referenced overpayment nor the underlying basis of the overpayment are issues before me, the declarations of Petitioner's witnesses in P. Ex. 3 are not relevant, since they all relate to the claims comprising the overpayment.  P. Ex. 3 at 1-9 (Santos Decl.), 10-18 (Goellner Decl.), 19-27 (Samuels Decl.).
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