Kevin McCarthy, DC, DAB CR5439 (2019)

DECISION

The Medicare enrollment and billing privileges of Petitioner are revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii),1  effective January 19, 2018. There is a basis for listing Petitioner on the Centers for Medicare & Medicaid Services (CMS) preclusion list for the duration of his three-year reenrollment bar.

I. Background

CMS notified Petitioner by letter dated December 20, 2017, that his Medicare enrollment and billing privileges were revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii) effective January 19, 2018, based on Petitioner’s noncompliance with 42 C.F.R. § 424.516(a)(2). CMS advised Petitioner that he was subject to a three-year reenrollment bar pursuant to 42 C.F.R. § 424.535(c) to begin 30 days after the date of CMS’s letter. CMS Exhibit (Ex.) 1 at 9-10.

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Petitioner requested reconsideration by letter dated January 8, 2018. CMS Ex. 1 at 7. On April 12, 2018, a CMS hearing officer issued a reconsidered determination upholding the revocation effective January 19, 2018. CMS Ex. 1 at 1-6.

Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated May 31, 2018 (RFH). On June 21, 2018, the case was assigned to me for hearing and decision and an Acknowledgment and Prehearing Order (Prehearing Order) was issued.

On July 23, 2018, CMS filed a motion for summary judgment and brief in support of its motion and CMS Ex. 1. Petitioner filed his exchange, including a response in opposition to the CMS motion for summary judgment, on September 6, 2018, with Petitioner’s Exhibits (P. Exs.) 1 and 2. CMS filed a reply brief on September 25, 2018.

On August 1, 2018, CMS notified Petitioner that he was being placed on the CMS preclusion list as defined by 42 C.F.R. §§ 422.2, and 423.100. Petitioner requested reconsideration and, on November 27, 2018, a CMS hearing officer upheld the initial determination to place Petitioner on the CMS preclusion list for the duration of his reenrollment bar. CMS Ex. 2. On December 13, 2018, Petitioner requested a hearing before an ALJ on the reconsidered determination upholding his placement on the CMS preclusion list. On December 17, 2018, I issued an “Order Amending Schedule to Permit Parties to Address Preclusion List Issues.” I also authorized the parties to amend their previously filed exchanges. On January 16, 2019, CMS filed an amended motion for summary judgment and supporting brief addressing both revocation and the preclusion list issues (CMS Br.). CMS filed CMS Ex. 1 a second time with two new exhibits – CMS Exs. 2 and 3. On February 10, 2019, Petitioner filed his amended response (P. Br.) to CMS’s motion and P. Exs. 1 through 4. The parties have not objected to my consideration of the exhibits offered with the amended exchanges, and CMS Exs. 1 through 3 and P. Exs. 1 through 4 are admitted and considered as evidence.

II. Discussion

A. Applicable Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the supplementary medical insurance benefits program for the aged and disabled known as Medicare Part B. Payment under the program for services rendered to Medicare-eligible beneficiaries may only be made to eligible providers of services and suppliers.2  Act

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§§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1) (42 U.S.C. § 1395u(h)(1)). Petitioner is a chiropractor and, therefore, a supplier.

The Act requires that the Secretary of Health and Human Services (Secretary) issue regulations that establish a process for the enrollment in Medicare of providers and suppliers, including the right to a hearing and judicial review of certain enrollment determinations, such as revocation of enrollment and billing privileges. Act § 1866(j) (42 U.S.C. § 1395cc(j)). Pursuant to 42 C.F.R. § 424.505, a supplier must be enrolled in the Medicare program and be issued a billing number to have billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary.

The Secretary has delegated the authority to revoke enrollment and billing privileges to CMS. 42 C.F.R. § 424.535. CMS or its Medicare contractor may revoke an enrolled supplier’s Medicare enrollment and billing privileges and supplier agreement for any of the reasons listed in 42 C.F.R. § 424.535. If CMS revokes a supplier’s Medicare 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. After a supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred 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).

Effective June 15, 2018, CMS was required to establish a preclusion list as defined by 42 C.F.R. §§ 422.2 and 423.100 (2018). There is only one preclusion list. 83 Fed. Reg. 16,440, 16,641-67 (Apr. 16, 2018). CMS adds to the preclusion list suppliers whose Medicare enrollment and billing privileges are revoked pursuant to 42 C.F.R. § 424.535; who are currently subject to a reenrollment bar under 42 C.F.R. § 424.535(c); and whose conduct that is the basis for revocation CMS determines is detrimental to the best interests of the Medicare program. In deciding whether conduct is detrimental to Medicare, CMS considers the seriousness of the conduct; the degree to which the conduct could affect the integrity of the Medicare program; and other evidence CMS considers

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relevant. Suppliers not enrolled in Medicare may be added to the preclusion list if CMS determines that their conduct would have provided a basis for revocation of Medicare enrollment and after consideration of the other factors listed above. 42 C.F.R. §§ 422.2, 423.100 (2018). No payment under Medicare Parts C and D may be made to anyone on the preclusion list. 42 C.F.R. §§ 422.222-.224; 422.504(i)(2)(v); 423.120(c)(6) (2018). CMS must notify a supplier in writing that the supplier is being added to the preclusion list, the basis for the action, and inform the supplier of the right to ALJ review and appeal pursuant to 42 C.F.R. pt. 498. 42 C.F.R. §§ 422.222(a)(2); 423.120(c)(6)(v) (2018).

A supplier whose enrollment and billing privileges have been revoked or who has been placed on the preclusion list may request reconsideration and review as provided by 42 C.F.R. pt. 498. 42 C.F.R. §§ 424.545(a); 422.222(a)(2); 423.120(c)(6)(v) (2018). A supplier submits a written request for reconsideration to CMS or its contractor. 42 C.F.R. § 498.22(a). CMS or its contractor must give notice of its reconsidered determination to the supplier, giving the reasons for its determination and specifying the conditions or requirements the supplier failed to meet, and the right to an ALJ hearing. 42 C.F.R. § 498.25. If the decision on reconsideration is unfavorable to the supplier, the supplier has the right to request a hearing by an ALJ and further review by the Departmental Appeals Board (the Board). Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), (20) (2018), 498.5. A hearing on the record, also known as an oral hearing, is required under the Act, unless waived. Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004). CMS is also granted the right to request ALJ review of a reconsidered determination with which it is dissatisfied. 42 C.F.R. § 498.5(l)(2). The supplier bears the burden to demonstrate that it meets enrollment requirements with documents and records. 42 C.F.R. § 424.545(c). Preclusion list review is strictly limited to whether there is a basis for adding the supplier to the preclusion list. 83 Fed. Reg. at 16,642.

B. Issues

Whether summary judgment is appropriate;

Whether there was a basis for the revocation of Petitioner’s billing privileges and enrollment in Medicare; and

Whether there is a basis to list Petitioner on the CMS preclusion list.

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

My conclusions of law are set forth in bold followed by the undisputed facts and analysis.

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1. Summary judgment is appropriate.

CMS filed a motion for summary judgment, and Petitioner opposes the motion. A supplier whose enrollment has been revoked and/or who has been placed on the preclusion list has a right to a hearing and judicial review, and a hearing on the record is required under the Act. Act §§ 205(b), 1866(h)(1), (j); 42 C.F.R. §§ 498.3(b)(5), (6), (8), (15), (17), (20);3  498.5; Crestview, 373 F.3d at 748-51. A party may waive appearance at an oral hearing but must do so affirmatively in writing. 42 C.F.R. § 498.66. In this case, Petitioner has not waived the right to oral hearing or otherwise consented to a decision based only upon the documentary evidence or pleadings. Accordingly, disposition on the written record alone is not permissible, unless summary judgment is appropriate as I conclude it is in this case.

Summary judgment is not automatic upon request but is limited to certain specific conditions. The Secretary’s regulations at 42 C.F.R. pt. 498 that establish the procedures to be followed in adjudicating Petitioner’s case do not establish a summary judgment procedure or recognize such a procedure. However, the Board has long accepted that summary judgment is an acceptable procedural device in cases adjudicated pursuant to 42 C.F.R. pt. 498. See, e.g., Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997). The Board also has recognized that the Federal Rules of Civil Procedure do not apply in administrative adjudications such as this, but the Board has accepted that Fed. R. Civ. Pro. 56 and related cases provide useful guidance for determining whether summary judgment is appropriate. A summary judgment procedure is described and made available in the adjudication of this case by the Prehearing Order, para. II.D, G.

Summary judgment is appropriate when there is no genuine dispute as to any issue of material fact for adjudication and/or the moving party is entitled to judgment as a matter of law. In determining whether there are genuine issues of material fact for trial, the ALJ must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party’s favor. The party requesting summary judgment bears the burden of showing that there are no genuine issues of material fact for trial and/or that it is entitled to judgment as a matter of law. Generally, the non-movant may not defeat an adequately supported summary judgment motion by relying upon the denials in its pleadings or briefs but must furnish evidence of a dispute concerning a material fact, i.e., a fact that would affect the outcome of the case if proven. Mission Hosp. Reg’l Med. Ctr., DAB No. 2459 at 4 (2012) (and cases cited therein); Experts Are

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Us, Inc., DAB No. 2452 at 4 (2012) (and cases cited therein); Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The standard for deciding a case on summary judgment and an ALJ’s decision-making in deciding a summary judgment motion differ from that used in resolving a case after a hearing. On summary judgment, the ALJ does not make credibility determinations, weigh the evidence, or decide which inferences to draw from the evidence, as would be done when finding facts after a hearing on the record. Rather, on summary judgment, the ALJ construes the evidence in a light most favorable to the non-movant and avoids deciding which version of the facts is more likely true. Holy Cross Vill. at Notre Dame, Inc., DAB No. 2291 at 5 (2009). The Board also has recognized that on summary judgment it is appropriate for the ALJ to consider whether a rational trier of fact could find that the party’s evidence would be sufficient to meet that party’s evidentiary burden. Dumas Nursing & Rehab., L.P., DAB No. 2347 at 5 (2010). The Secretary has not provided in 42 C.F.R. pt. 498 for the allocation of the burden of persuasion or the quantum of evidence required to satisfy the burden of persuasion. However, the Board has provided some persuasive analysis regarding the allocation of the burden of persuasion in cases subject to 42 C.F.R. pt. 498. Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 Fed. App’x 181 (6th Cir. 2005).

There is no dispute that Petitioner submitted 17 claims to Medicare for payment related to 8 Medicare-eligible beneficiaries for chiropractic services. The 17 claims were for services Petitioner claimed to have delivered during a period when his state chiropractor license had expired. Whether or not the undisputed conduct is a basis for revocation of Medicare enrollment and billing privileges is resolved against Petitioner as a matter of law, as are Petitioner’s asserted defenses. Having determined that there is a basis for revocation, whether or not there is a basis for adding Petitioner to the CMS preclusion list must also be resolved against him as a matter of law.

Viewing the evidence before me in a light most favorable to Petitioner and drawing all inferences in Petitioner’s favor, I conclude that there are no genuine disputes as to any material facts pertinent to revocation under 42 C.F.R. § 424.535(a)(8)(ii) or the addition of Petitioner to the preclusion list that require a hearing in this case. CMS is entitled to judgment as a matter of law. Accordingly, summary judgment is appropriate.

2. Billing privileges are abused, within the meaning of 42 C.F.R. § 424.535(a)(8)(ii), when CMS determines that a provider or supplier has a pattern or practice of submitting claims that do not meet Medicare requirements.

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3. Petitioner submitted 17 claims for chiropractic services he claimed to have delivered to 8 Medicare-eligible beneficiaries during the period August 1 through October 18, 2017 -- a period during which he did not have an active chiropractic license and did not meet the enrollment requirement of 42 C.F.R. § 424.516(a)(2) related to state licensure.

4. There is a basis for revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).

5. The effective date of revocation in this case was January 19, 2018, 30 days after the date of the notice of initial determination to revoke. 42 C.F.R. § 424.535(g).

6. There is a basis for adding Petitioner to the CMS preclusion list for the duration of his bar to reenrollment.

a. Undisputed Facts

The facts are undisputed or, for purposes of summary judgment, Petitioner’s averred facts are accepted as true and all favorable inferences are drawn in favor of Petitioner.

Petitioner’s license to practice as a chiropractor issued by the State of Illinois expired July 31, 2017. P. Br. at 2; P. Ex. 3.

Petitioner admitted in a letter dated January 8, 2018, that he did not know until notified by CMS by letter dated December 20, 2017, that his Illinois chiropractor license had expired. CMS Ex. 1 at 7. As of May 31, 2018, Petitioner’s chiropractic license had not been restored to active status by the State of Illinois. P. Ex. 4 at 1. It is not disputed that Petitioner’s chiropractor license was not reinstated until June 2018. Letter dated June 25, 2018, from Petitioner to CMS Hearing Officer (Departmental Appeals Board Electronic Filing System (DAB E-File) # 6); CMS Ex. 3.

Petitioner does not and cannot aver that he renewed his Illinois license within 90 days of July 31, 2017, his state license expiration date.

Petitioner does not dispute the allegation of CMS that Petitioner submitted 17 claims related to 8 Medicare-eligible beneficiaries for chiropractic services Petitioner claims to have delivered between August 1, 2017 and October 18, 2017. P. Br. at 2; CMS Ex. 1 at 11-12.

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b. Analysis

The regulation provides:

(8) Abuse of billing privileges. Abuse of billing privileges includes either of the following:

* * * *

(ii) CMS determines that the provider or 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:

(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.

(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) (italics in original).

I conclude that the undisputed facts establish a prima facie case of abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(ii). Under the regulation, an abuse occurs when CMS determines, after consideration of whichever of the specified factors CMS deems appropriate, that Petitioner has a pattern or practice of submitting claims that fail to meet Medicare requirements. The undisputed evidence shows that Petitioner submitted 17 claims related to 8 Medicare-eligible beneficiaries for chiropractic services he claimed to have delivered during a period when his state license as a chiropractor was

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expired. The claims did not meet Medicare requirements because Petitioner did not meet the state licensure requirement of 42 C.F.R. § 424.516(a)(2) when the services were provided. Accordingly, CMS had a basis to revoke Petitioner’s Medicare enrollment and billing privileges and the discretion to do so after consideration of the factors established by 42 C.F.R. § 424.535(a)(8)(ii) that CMS deemed applicable and appropriate.

The only determination of CMS or the Medicare Administrative Contractor that is subject to my review in a provider and supplier enrollment case is the reconsidered determination. 42 C.F.R. § 498.5(l)(1)-(2); Neb Grp. of Ariz., DAB No. 2573 at 7 (2014). Based on my review of the CMS Hearing Officer’s decision, it is clear that she considered some of the six factors specified by 42 C.F.R. § 424.535(a)(8)(ii), and the factors considered are consistent with and supported by the undisputed facts. CMS Ex. 1 at 4-5. The undisputed evidence shows that there is a basis for revocation pursuant to 42 C.F.R. § 424.535(a)(8)(ii). Petitioner argues, “CMS should have exercised meaningful discretion” in deciding whether or not to revoke. P. Br. at 5. I infer that Petitioner intends to advocate that CMS should have exercised its discretion and not revoked Petitioner’s Medicare enrollment and billing privileges. However, I have no authority to review the exercise of discretion by CMS or its contractor to revoke enrollment where there is a basis for such action. Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2009), aff’d, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010).

Petitioner also argues that, although his Illinois chiropractor license expired on July 31, 2017, he was still within the 90-day grace period to renew his license under the Illinois statute when he submitted the claims at issue. Petitioner reasons that because he was in the grace period his license was not actually expired. P. Br. at 3. The Illinois licensing statute does not support Petitioner’s theory. Pursuant to 225 Ill. Comp. Stat. 60/21 (2019), the holder of a license may renew the license within 90 days after expiration by complying with renewal requirements and paying required fees. The statute further provides that if a license is properly renewed within 90 days, the license renewal is retroactive to the expiration date of the license. Petitioner can find no relief in this statute however, because it is clear that his license did expire on July 31, 2017, and he failed to renew his license within 90 days so that, when he did renew, the renewal was not retroactive to July 31, 2017. Therefore, Petitioner’s license was truly expired during the time he claims to have provided chiropractic services for Medicare-eligible beneficiaries -- a time when he was not licensed by the state and did not meet Medicare enrollment requirements.

Petitioner is ultimately responsible as a matter of law for ensuring that his claims for Medicare reimbursement are accurate and for any errors in those claims. Louis J. Gaefke, D.P.M., DAB No. 2554 at 5-6 (2013) (citing 73 Fed. Reg. 36,448, 36,455 (June 27, 2008)). Petitioner, as the enrolled supplier, is responsible to ensure compliance with

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Medicare requirements. 42 C.F.R. §§ 424.510(d)(3); 424.516. As the drafters of 42 C.F.R. § 424.535(a)(8) stated:

In conclusion, we believe that providers and suppliers are responsible for the claims they submit or the claims submitted on their behalf. We believe it is essential that providers and suppliers take the necessary steps to ensure they are billing appropriately for services furnished to Medicare beneficiaries.

73 Fed. Reg. at 36,455. Petitioner’s assertion that he did not realize that his license expired is, therefore, no defense to revocation.

CMS imposed a reenrollment bar of three years in this case. Under the regulations, the reenrollment bar after a revocation is a minimum of one year and a maximum of three years. 42 C.F.R. § 424.535(c). There is no statutory or regulatory language establishing a right to review of the duration of the reenrollment bar CMS imposes. Act § 1866(j)(8); 42 C.F.R. §§ 424.535(c); 424.545; 498.3(b); and 498.5. The Board has held that the duration of a revoked supplier’s reenrollment bar is not an appealable initial determination listed in 42 C.F.R. § 498.3(b) and, thus, is not subject to ALJ review. Vijendra Dave, M.D., DAB No. 2672 at 11 (2016).

To the extent Petitioner’s arguments may be construed as a request that I grant equitable relief, I have no authority to do so. US Ultrasound, DAB No. 2302 at 8 (2010). Furthermore, I am required to follow the Act and regulations and have no authority to declare statutes or regulations invalid. 1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009).

Because I have found that there is a basis for revocation, CMS has a basis for adding Petitioner to the CMS preclusion list for the duration of his reenrollment bar. I find no authority to conduct review of the CMS exercise of discretion in determining that Petitioner’s underlying conduct was detrimental to Medicare and in adding Petitioner to the preclusion list where, as here, I determine that there is a basis for such action. 42 C.F.R. §§ 422.2, 423.100 (2018); 83 Fed. Reg. 16,440, 16,641-67.

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III. Conclusion

For the foregoing reasons, the Medicare enrollment and billing privileges of Petitioner are revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii), effective January 19, 2018. There is a basis for listing Petitioner on the CMS preclusion list for the duration of his three-year bar to reenrollment.

1. Citations are to the 2017 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated.
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2. A “supplier” furnishes services under Medicare and includes physicians or other practitioners and facilities that are not included within the definition of the phrase “provider of services.”  Act § 1861(d) (42 U.S.C. § 1395x(d)).  A “provider of services,” commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities, home health agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C. § 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act.  Act § 1861(u) (42 U.S.C. § 1395x(u)).  The distinction between providers and suppliers is important because they are treated differently under the Act for some purposes.
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3. 42 C.F.R. § 498.3(b)(20) (2018).
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