Harmony Home Health Care, LLC, DAB CR5218 (2018)

DECISION

Petitioner, Harmony Home Health Care, LLC, is a home health agency (HHA) located in Boston, Massachusetts that participated in the Medicare program.  Surveyors from the Massachusetts Department of Public Health (herein “state agency” or “DPH”) attempted to conduct a survey on June 14, 2017, and Petitioner refused to allow the surveyors the access necessary to conduct the survey.  As a result, the Centers for Medicare & Medicaid Services (CMS) terminated Petitioner’s Medicare provider agreement.  For the reasons discussed below, I affirm the termination of Petitioner’s Medicare provider agreement.

I. Background

The Social Security Act (Act) sets forth requirements for HHA participation in the Medicare program.  The Act authorizes the Secretary of the United States Department of Health and Human Services (Secretary) to promulgate regulations implementing those statutory provisions.  42 U.S.C. §§ 1395x(m), (o), 1395bbb.  The Secretary’s regulations are found at 42 C.F.R. pt. 484.

In order to participate in the Medicare program, an HHA must meet all conditions of participation specified in 42 U.S.C. § 1395bbb(a) and 42 C.F.R. §§ 484.10 through

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484.115.  42 U.S.C. § 1395x(o)(6).  CMS enters into agreements with state survey agencies, and these local survey agencies determine compliance with Medicare requirements.  42 C.F.R. §§ 488.10, 488.11, 488.26.  As relevant here, CMS may terminate an HHA’s provider agreement if it no longer meets the requirements of the Act, the conditions of participation, or other regulations.  42 U.S.C. §§ 1395cc(b)(2), 1395bbb(e); 42 C.F.R. § 489.53(a).  An HHA may dispute its termination by requesting a hearing before an administrative law judge (ALJ).  42 C.F.R. §§ 498.3(b)(8) and 498.5(b).

On appeal to an ALJ, CMS must make a prima facie case that the HHA failed to comply substantially with federal participation requirements and, if shown, the “burden [is] on [an HHA] to demonstrate compliance with the identified conditions by the preponderance of the evidence in the record.”  Nightingale Home Healthcare, Inc., DAB No. 2784 at 11 (2017).  An ALJ hearing is a de novo proceeding.  See, e.g., Jewish Home of E. Pa.,DAB No. 2380 at 7-8 (2011).

The state agency attempted to conduct a survey on June 14, 2017.  As discussed in detail below, Petitioner did not allow the state agency to conduct the survey.  See CMS Exhibit (Ex.) 1 at 1.  On August 16, 2017, CMS sent Petitioner a letter informing it that its Medicare provider agreement would be terminated, effective August 31, 2017, because it “failed to cooperate with [the] surveyors and effectively obstruct[ed]” the surveyors from conducting the survey.  CMS Ex. 1 at 1.

Petitioner filed a request for hearing on October 17, 2017.  In accordance with my Acknowledgment and Pre-Hearing Order (Pre-Hearing Order), CMS filed a pre-hearing brief (CMS Br.) and four exhibits (CMS Exs. 1-4), and Petitioner filed a pre-hearing brief (P. Br.) and five exhibits (P. Exs. 1-5), along with a motion for summary disposition.  Thereafter, CMS filed a motion for decision on the written record, to which Petitioner filed a reply and supporting documents, to include a 287-page document filed on June 25, 2017, that it identified as a complaint against the Massachusetts Attorney General’s Office.1  In the absence of any objections, I admit CMS Exs. 1-4 and P. Exs. 1-6 into the evidentiary record.

Petitioner argues that summary disposition is warranted, and CMS argues that a decision based on the written record is warranted.  Neither party has requested an opportunity to cross-examine any witnesses.  Therefore, a hearing for the purpose of cross-examination is unnecessary.  Pre-Hearing Order, §§ 8-10.  This matter is ready for a decision on the merits.

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II. Issue

Whether CMS had a legitimate basis to terminate Petitioner’s Medicare provider agreement.

III. Jurisdiction

I have jurisdiction in this matter pursuant to Act § 1866(h)(1) and 42 C.F.R. §§ 489.53(e), 498.3(b)(8), 498.5(b).

IV. Findings of Fact and Conclusions of Law, and Analysis2

CMS, acting on behalf of the Secretary, may terminate a provider agreement based on the provider’s failure to comply with provisions of section 1861 of the Act or its failure to comply with all requirements in the implementing regulations.  Act § 1866(b)(2); 42 C.F.R. § 489.53(a); Cmty. Home Health, DAB No. 2134 at 13 (2007).  To monitor compliance, CMS contracts with state agencies that conduct periodic surveys.  Act § 1864(a); 42 C.F.R. § 488.20.  The state agency’s certifications represent recommendations to CMS.  42 C.F.R. § 488.12.  CMS uses these recommendations to determine whether a provider or supplier is eligible to participate in the Medicare program.  42 C.F.R. § 488.12(a)(1).

HHAs may choose to participate in a CMS-approved accreditation program of a private accrediting organization.  If an HHA passes a CMS-approved accreditation survey, CMS may deem the HHA to meet the HHA conditions of participation, thus granting the HHA deemed status.  42 C.F.R. § 488.4(a).  When an HHA’s accreditation is terminated by its accrediting organization, the state survey agency will conduct a full review.  42 C.F.R. § 488.13.  CMS may terminate a provider agreement for failure to comply with any requirements in 42 C.F.R. § 489.53(a).

1. Community Health Accreditation Partner (CHAP), an accrediting agency, terminated Petitioner’s accreditation on May 15, 2017.

2. Following the termination of its accreditation by CHAP, Petitioner no longer had deemed status as an accredited Medicare provider.

3. Because Petitioner was no longer a deemed status provider, the state agency was required to conduct a reaccreditation survey.

4. On June 14, 2017, Petitioner refused to allow stage agency surveyors to conduct a reaccreditation survey.

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Petitioner participated in the Medicare program via deemed status through CHAP, which is an accrediting program for HHAs.  See 42 C.F.R. § 488.4(a) (a provider that complies with all accreditation program requirements may be granted deemed status as a Medicare provider); 83 Fed. Reg. 12,769 (Mar. 23, 2018) (approving CHAP for “continued recognition as a national accrediting organization for home health agencies . . . that wish to participate in the Medicare or Medicaid programs.”).

On May 15, 2017, CHAP notified Petitioner that “CHAP accreditation with deemed Medicare provider status . . . has been withdrawn,” effective May 6, 2017.  CMS Ex. 3 at 3 (emphasis in original).  CHAP provided a courtesy copy of its notice to both CMS and the state agency.  CMS Ex. 3 at 3.

After Petitioner lost its CHAP accreditation on May 15, 2017, the state agency was required to conduct a certification survey.  42 C.F.R. § 488.13 (“If an accrediting organization notifies CMS that it is terminating a provider or supplier due to non‑compliance with its CMS-approved accreditation requirements, the [survey agency] will conduct a full review in a timely manner.”).  On June 4, 2017, two surveyors employed by the state agency visited Petitioner’s office and attempted to conduct a recertification survey.  CMS Ex. 3 at 2 (statement of deficiencies); CMS Ex. 4 at 2 (written testimony of Stephen A. Rothwell).

Mr. Rothwell, a registered nurse and the survey team coordinator, explained that although he and another surveyor, Cynthia Ferrick, were present at Petitioner’s office from 9:00 am through 4:00 pm on June 14, 2017, they were unable to complete a survey.  CMS Ex. 4.  Mr. Rothwell testified that “we presented identification and information about the survey,” to include “DPH photo-identification, Ms. Ferrick’s business card, which bears her DPH email address, and a copy of a letter from the Community Health Accreditation Partner (CHAP), dated May 15, 2017, reporting an effective date withdrawal of May 6, 2017.”  CMS Ex. 4 at 3.  Mr. Rothwell explained that Petitioner’s administrative assistant,3 who was the only employee on site, would not allow the surveyors access to Petitioner’s records.  CMS Ex. 4 at 1-2.  Mr. Rothwell explained that he “observed [the administrative assistant] texting and heard him in telephone communication with a party I believe to have been Elena Kurbatzky.”4   CMS Ex. 4 at 2.  Petitioner’s administrative assistant informed Mr. Rothwell that “Ms. Kurba[t]zky had instructed him to telephone the police if Ms. Ferrick or I touched any records.”  CMS Ex. 4 at 3.  Mr. Rothwell further explained that he and Ms. Ferrick “emailed and left voice messages for

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Ms. Kurbatzky, seeking her cooperation by coming in to the office to grant us access for the purpose of conducting the survey.”  CMS Ex. 4 at 3.  Mr. Rothwell discussed that although the administrative assistant provided a patient list, he would not provide a list of employees.  CMS Ex. 4 at 3.  The surveyors were unable to interview clinical staff or patients, and were unable to review any clinical or other HHA records.  CMS Ex. 4 at 3.

Both parties submitted a copy of an email exchange between Ms. Ferrick and Ms. Kurbatzky.  CMS Ex. 4 at 11; P. Ex. 1.  Ms. Ferrick sent the following message, via her state agency email account, to Ms. Kurbatzky at 9:59 am on the day of the attempted survey:

Hi Elena, I am here at your agency to conduct your Medicare recertification survey. Since you no longer have deemed status from CHAP, the state agency will now conduct your survey. I understand you are on vacation, but the survey must proceed. If whoever is in charge while you are away can come to the office it would be greatly appreciated. It should be someone who knows the clinical information. Please let me know as soon as possible who that would be. Regards, Cynthia Ferrick

CMS Ex. 4 at 11; P. Ex. 1.  Ms. Kurbatzky sent the following message in reply at 2:00 pm that day:

Dear Cynthia, Please provide right paper work for the survey/audit. Please put attention that I copy Mr. Tom Price, The Secretary of Health and Human Services to this email as well as file complaint to Charlie Baker, The Governor of Massachusetts.

CMS Ex. 4 at 11; P. Ex. 1. In response, Ms. Ferrick stated the following at 2:26 pm:5

The previous paperwork dated 5/15/2017 that [the administrative assistant] sent you is our authorization to conduct your Medicare survey.  If you would kindly call me at [phone number redacted], I would like to talk to you about this.  We have announced the survey per the State Operations Manu[a]l for Home Health Agencies protocols.  I am not clear what the confusion is, but you have failed to return any of our calls and I have been here since 9:30 A.M.  I am going to call our man[a]ger for further guidance at this point.

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Just to clarify why we are here is due to the agency not having the recertification survey which is due by C[HAP].  When you come out of deemed status, the state agency comes to do your recertification survey.  Hence, your recertification has begun today.  Again, I urge you to call me, Thank you.

CMS Ex. 4 at 11.

In her written testimony, Ms. Kurbatzky explained that she was in contact with the administrative assistant throughout the day and “instructed” him to “not allow” the surveyors “any access to any documentation.”  P. Ex. 3 at 4.  Although Ms. Kurbatzky acknowledged that the two surveyors presented “DPH identification Cards,” she refused to grant the surveyors access because they did not present a letter on DPH letterhead indicating that a survey would be conducted that day, the names of the surveyors, and a “detailed description of what survey the two Officials are intending to perform and the list of required records (patients, employees, financial, etc[.]) that we have to present.”  P. Ex. 3 at 3-4.

5. CMS had a legitimate basis to terminate Petitioner’s provider agreement based on 42 C.F.R. § 489.53(a).

In its August 15, 2017 letter, CMS explained that Petitioner had been certified based on a CHAP accreditation survey that was effective for a three-year period that ended April 3, 2017, and that it was no longer accredited by CHAP effective May 15, 2017.  CMS Ex. 1 at 1.  CMS further explained that Petitioner failed to cooperate with the surveyors who attempted to conduct a survey on June 14, 2017, and “effectively obstructed them” from performing the survey to determine whether Petitioner met the conditions of participation for home health services.  CMS Ex. 1 at 2.  CMS informed Petitioner that its provider agreement “will be terminated effective August 31, 2017” based on [s]ections 1861(b)(2) and 1891(e) of the Act and Federal regulations at 42 C.F.R. § 489.53(a).”  CMS Ex. 1 at 3.  CMS presently argues that termination was mandated pursuant to various subsections of 42 C.F.R. § 489.53(a), to include subsections 489.53(a)(4), (a)(5), (a)(13), and (a)(18).  CMS Br. at 8-11.

CMS is authorized to terminate a provider agreement when a provider “fails to furnish information that CMS finds necessary for a determination as to whether payments are or were due under Medicare and the amounts due.”  42 C.F.R. § 489.53(a)(4).  CMS may also terminate a provider agreement when a provider “refuses to permit examination of its fiscal or other records by, or on behalf of CMS, as necessary for verification of information furnished as a basis for payment under Medicare.”  42 C.F.R. § 489.53(a)(5).  Termination of a provider agreement is also warranted when a provider “refuses to permit copying of any records by, or on behalf of, CMS, as necessary to determine or verify compliance with participation requirements.”  42 C.F.R. § 489.53(a)(13).  And finally,

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CMS may terminate a provider agreement when a provider “fails to grant immediate access upon a reasonable request to a state survey agency or other authorized entity for the purpose of determining, in accordance with § 488.3, whether the provider or supplier meets the applicable requirements, conditions of participation, conditions for coverage, or conditions for certification.”  42 C.F.R. § 489.53(a)(18).

State agency surveyors were onsite at Petitioner’s office for a full day on June 14, 2017, and Petitioner refused to cooperate with the surveyors’ requests.  Petitioner refused to grant the surveyors access to its records, and it even threatened to call the police if the surveyors touched any files.  CMS Ex. 4 at 3.  Because Petitioner did not allow the survey to be performed, the state agency could not determine whether Petitioner was in compliance with Medicare requirements.

Petitioner’s failure to allow a survey amounted to noncompliance with various provisions of 42 C.F.R. § 489.53(a).  Because Petitioner would not allow the surveyors to review any records, it failed to furnish information necessary to determine whether payments are or were due under Medicare and the amounts due.  42 C.F.R. § 489.53(a)(4).  And Petitioner’s failure to allow examination of records to verify information furnished as a basis for payment under Medicare was not only in contravention of 42 C.F.R. § 489.53(a)(5), but also was in contravention of 42 C.F.R. § 489.53(a)(13) because the state agency was likewise unable to copy records to determine or verify compliance with participation requirements.  And finally, Petitioner’s failure to grant the surveyors access to its office and records prevented the state agency from determining whether it met applicable requirements and conditions of participation, and therefore, it did not comply with 42 C.F.R. § 489.53(a)(18).  Petitioner’s failure to allow the survey prevented the state agency from having an opportunity to review its records and complete an accreditation survey; termination of its provider agreement is the appropriate remedy.  42 C.F.R. § 489.53(a).

Petitioner concedes that the surveyors presented “DPH Identification Cards” when they appeared at its office on June 14, 2017.  P. Ex. 3 at 3.  Petitioner also concedes that the surveyors presented a copy of CHAP’s letter informing Petitioner that its accreditation had been terminated, which was the basis for the state agency’s need to conduct a reaccreditation survey pursuant to 42 C.F.R. § 488.13.  Petitioner nonetheless argues, without any support, that the surveyors “did not have proper documentation.”  P. Br. at 5.  Petitioner argues that it “is required to make sure that surveyors present written request[s] for any survey which will include the date of the survey, the name/purpose of the survey and detail[ed] description of requested documentation which [Petitioner] needs to present as well as names of the surveyors.”  P. Br. at 6.  Petitioner has not cited any legal or other authority requiring that surveyors, who had already presented their DPH identification cards, provide such documentation; in fact, there is no such requirement.

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Petitioner, citing 45 C.F.R. § 164.502, argues that the Health Insurance Portability and Accountability Act (HIPAA) precluded it from disclosing protected health information to the surveyors “unless [a] written request is presented . . . . ”  P. Br. at 2.  Petitioner is mistaken.  An entity that participates in a government regulatory program is authorized to disclose protected health information to a health oversight agency in order for the health oversight agency to determine compliance with program standards.  45 C.F.R. § 164.512(d).  The surveyors were acting on behalf of the state agency (a health oversight agency), and Petitioner, a participant in Medicare (a government regulatory program), was not precluded from disclosing protected health information for the purpose of demonstrating its compliance with Medicare program standards.

Petitioner also argues that the Privacy Act of 1974 precluded it from allowing the surveyors to access its records.  P. Br. at 2-4.  However, the Privacy Act is applicable only to certain records collected, maintained, used, and disseminated by federal agencies.  5 U.S.C. § 552a(e).  Petitioner is not a federal agency, and the Privacy Act is not a legal basis for Petitioner to refuse to comply with a survey to assess its compliance with Medicare requirements.

Even though Petitioner’s CHAP accreditation had been terminated and it no longer had deemed provider status, it prevented the state agency from conducting a reaccreditation survey.  Termination of its provider agreement is appropriate pursuant to 42 C.F.R. § 489.53(a).6

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V. Conclusion

For the reasons set forth above, CMS properly terminated Petitioner’s Medicare provider agreement.

1. Because I refer to the June 25, 2017 evidentiary submission, I will admit this document as P. Ex. 6. My references to page numbers in that document refer to the page numbers that appear on the .pdf version of the document.
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2. My findings of fact and conclusions of law are set forth in italics and bold font.
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3. Although Mr. Rothwell identifies this individual as a receptionist, Petitioner’s administrator testified that this individual is an administrative assistant. P. Ex. 3 at 3.
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4. Ms. Kurbatzky testified that she is the founder, administrator, and clinical director of Petitioner. P. Ex. 3 at 1-2.
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5. Ms. Ferrick’s reply is not included in the version submitted by Petitioner as P. Ex. 1.
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6. For reasons I do not fully understand, Petitioner submitted evidence relating to pending criminal charges against Petitioner, Ms. Kurbatzky, and one of its employees. P. Ex. 6. This voluminous submission includes a multi-count grand jury indictment, returned in July 2017, charging three counts that Petitioner submitted false Medicaid claims and three counts that it committed larceny of more than $250. P. Ex. 6 at 145-51. The submission also evidences a seven-count indictment against Ms. Kurbatzky, charging three counts of the submission of false Medicaid claims, three counts of larceny over $250, and one count of Medicaid eligibility fraud. P. Ex. 6 at 152-56, 167. The Commonwealth of Massachusetts asserted, on-the-record during Ms. Kurbatzky’s arraignment, that between February 2015 and October 2016, Petitioner “billed MassHealth for home health services allegedly provided to 38 patients and which no services were actually provided to those patients or that the defendants billed for more services that were - - than were actually provided.” P. Ex. 6 at 168. The Commonwealth further alleged that “[a]t the time many of these services were allegedly provided the defendants were traveling out of the county or out of the state and could not have provided any services . . . .” P. Ex. 6 at 169. The Commonwealth charged that Ms. Kurbatzky “was herself a recipient of home health services from her own company and MassHealth paid for those services,” even though she was “the owner of a multimillion dollar home health agency.” P. Ex. 6 at 170. Although alleged criminal conduct is not a recognized basis to refuse to comply with a Medicare survey, it is logical that Petitioner and Ms. Kurbatzky, if they in fact had committed the Medicaid-related crimes charged in the indictment, would be reluctant to allow state agency employees to assess their compliance with Medicare program requirements through the inspection of Petitioner’s records.
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