West Coast Mobile Eye Care, Inc., DAB CR5568 (2020)

DECISION

The Centers for Medicare & Medicaid Services (CMS) revoked the Medicare enrollment and billing privileges of West Coast Mobile Eye Care, Inc. (Petitioner) for billing services “that could not have been furnished” to certain Medicare beneficiaries because they were deceased on the dates of service claimed.  As explained below, I affirm CMS’s revocation. 

I. Background

Petitioner’s optometrists and technicians travel to provide “sight saving eye care” to facility-bound patients who reside in nursing homes, assisted living facilities, and skilled nursing facilities.  CMS Exhibit (Ex.) 2 at 1.  Many of Petitioner’s patients are Medicare beneficiaries and Petitioner was enrolled in the Medicare program as a “supplier” of physician services.  CMS Ex. 2 at 1, 5; 42 U.S.C. § 1395x(d).

On May 25, 2017, pursuant to 42 C.F.R. § 424.535(a)(8)(i), CMS revoked Petitioner’s Medicare enrollment and billing privileges effective June 24, 2017.  CMS Ex. 3 at 1.

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CMS determined that Petitioner submitted ten claims for three different deceased beneficiaries with dates of service between June 12, 2014, and November 30, 2016.  Id.  CMS also barred Petitioner from re-enrolling in the Medicare program for three years.  Id. at 2.

Petitioner requested reconsideration, and CMS upheld its revocation determination.  CMS Ex. 1 at 5.  Petitioner timely sought review by an administrative law judge and I was designated to hear and decide this case.  On December 22, 2017, I issued an Acknowledgment and Pre‑hearing Order (Pre‑hearing Order) setting forth a schedule for the parties to submit arguments and evidence.  CMS moved for summary judgment (CMS Br.) and submitted four proposed exhibits (CMS Exs. 1-4).  Petitioner filed a response to CMS’s motion for summary judgment (P. Br.) along with three proposed exhibits (P. Exs. 1-3).

II. Admission of Exhibits and Decision on the Record

In the absence of any objection, I admit CMS Exs. 1-4 and P. Exs. 1-3 into evidence.

Neither party offered the written direct testimony of a witness as part of its pre-hearing exchange, meaning an in-person hearing is not necessary in this matter.  Pre-hearing Order at 5-6.  Therefore, I will decide this case on the record, meaning the parties’ written submissions and arguments.  Civ. Remedies. Div. P. § 19(d).  CMS’s motion for summary judgment is denied as moot. 

III. Issue

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

IV. Jurisdiction

I have jurisdiction to decide the issue in this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2); see also Social Security Act § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

V. Applicable Law

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.

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CMS’s regulations give it the authority to revoke the enrollment and billing privileges of suppliers under certain circumstances, including where a supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of service, such as “[w]here the beneficiary is deceased.”  42 C.F.R. § 424.535(a), (a)(8)(i)(A).

The preamble to the final rule provides the following guidance regarding the intended uses of this particular basis for revocation:

This revocation authority is not intended to be used for isolated occurrences or accidental billing errors.  Rather, this basis for revocation is directed at providers and suppliers who are engaging in a pattern of improper billing. . . . We believe that it is both appropriate and necessary that we have the ability to revoke billing privileges when services could not have been furnished by a provider or supplier.  We recognize the impact that this revocation has, and a revocation will not be issued unless sufficient evidence demonstrates abusive billing patterns.  Accordingly, we will not revoke billing privileges under § 424.535(a)(8) unless there are multiple instances, at least three, where abusive billing practices have taken place. . . .  In conclusion, we believe that providers and suppliers are responsible for the claims they submit or the claims submitted on their behalf.  We believe that 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. 36,448, 36,455 (June 27, 2008).1

After revoking a supplier’s enrollment and billing privileges, CMS will bar that supplier from re-enrolling in the Medicare program for a period of one to three years.  42 C.F.R. § 424.535(c).

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VI. Findings of Fact, Conclusions of Law and Analysis

1. CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(i) because Petitioner filed ten claims for deceased beneficiaries.

CMS revoked Petitioner’s enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(i) based on its determination that Petitioner submitted claims for services furnished to deceased beneficiaries.  In an attachment to its initial determination, CMS identified the following claims that Petitioner had billed for three deceased beneficiaries:

Beneficiary Initials, (Medicare Health Insurance Claim Number) & Date of Death2	Dates of Service
F.W. (xxx-xx-5930A) 12/23/2005	12/24/2014
	05/03/2015
	03/13/2015
K.S. (xxx-xx-3620A) 02/13/2010	06/12/2014
	12/13/2014
	12/14/2014
W.S. (xxx-xx-5605A) 12/30/2009	05/22/2015
	05/30/2015
	05/13/2016
	05/21/2016

CMS Ex. 3 at 3. 

CMS also submitted screenshots from Medicare’s Health Insurance Master Record (HIMR) verifying the death dates of these beneficiaries as well as the claim information that Petitioner submitted related to those beneficiaries.  CMS Ex. 4 at 1-3 (Beneficiary K.S.); CMS Ex. 4 at 4-8 (Beneficiary F.W.); CMS Ex. 4 at 9-13 (Beneficiary W.S.).

I find these HIMR screenshots confirm Petitioner’s submission of ten claims for deceased beneficiaries.  Petitioner disputes two of the claims as listed:  the “05/03/2015” service date for Beneficiary F.W. and the “06/12/2014” service date for Beneficiary K.S.  CMS Ex. 2 at 2; RFH at 2.  But as Petitioner concedes, CMS simply misidentified the actual services dates by reversing the month and day for those two claims.  Request for Hearing (RFH) at 2 n.1 (“This is an example of a clerical error by CMS in their initial

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determination.”).  The HIMR screenshots show that Petitioner submitted claims for a “03/05/2015” service date for Beneficiary F.W. and a “12/06/2014” service date for Beneficiary K.S.  CMS Ex. 4 at 4-5 (Beneficiary F.W.); CMS Ex. 4 at 1-2 (Beneficiary K.S.); CMS Ex. 2 at 52.

This evidence establishes Petitioner submitted ten claims for services to three deceased beneficiaries, meaning Petitioner could not have possibly provided the services for which it claimed reimbursement.  I therefore find CMS had a basis to revoke Petitioner’s billing privileges under 42 C.F.R. § 424.535(a)(8)(i). 

2. Petitioner’s arguments regarding the “disparate treatment” of suppliers under subsections 42 C.F.R. § 424.535(a)(8)(i) and (ii) are irrelevant to my review.

Throughout its appeals, Petitioner has acknowledged that it submitted noncompliant claims.  P. Br. at 3, ¶ 8; CMS Ex. 2 at 2-4.  Petitioner explains that it provided care to living beneficiaries and inadvertently billed for “incorrect” beneficiaries who were deceased but happened to have the same name and resided in the same nursing home as each living beneficiary.  CMS Ex. 2 at 2-3.  For example, Petitioner provided services to Beneficiary F.W., who was born in 1924, but submitted a claim for another beneficiary by the same name who was born a different date and was deceased on the service date.  CMS Ex. 2 at 2, 71, 89-90.  These “clerical errors,” according to Petitioner, were the result of many factors, including its mobile medical record systems, stringent HIPAA and state privacy laws, and the patients themselves, some of whom had trouble confirming their own identity.  CMS Ex. 2 at 2.

Petitioner’s explanation that the noncompliant claims were the result of “clerical errors” does not change the result here, since the regulation does not require CMS to demonstrate that Petitioner intended to defraud Medicare in order to revoke Petitioner’s billing privileges.  Instead, the regulation authorizes CMS to revoke the billing privileges of a supplier when, as here, that supplier submits “a claim or claims for services that could not have been furnished to a specific individual on the date of service.”  Patrick Brueggeman, D.P.M., DAB No. 2725 at 8-9 (2016); Louis J. Gaefke, D.P.M., DAB No. 2554 at 6-10 (2013); Howard B. Reife, D.P.M., DAB No. 2527 at 5-7 (2013). 

In any event, it is clear Petitioner’s failings amount to more than mere “clerical errors.”  Each pair of living and deceased beneficiaries had different dates of birth and health insurance claim numbers, but as it concedes, Petitioner did not always confirm each beneficiary’s date of birth.  RFH at 2.  And the record shows this was not an isolated error.  Petitioner submitted noncompliant claims on five separate occasions for three different beneficiaries over period of at least one year.  CMS Ex. 3 at 3.

And on at least two occasions, Petitioner knew its claims were denied because it had identified a deceased beneficiary to whom it purportedly provided service, but

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subsequently made the same billing mistake for the same two individuals.  Petitioner billed CMS for services intended for Beneficiary F.W. (identifying a deceased individual with the same name but different birth date) in December 2014.  Id.  CMS’s contractor denied payment for that service on January 9, 2015.  CMS Ex. 2 at 25.  The contractor cited error code “CO-13,” which meant it denied the payment because “[t]he date of death precede[d] the date of service.”  Id. at 25, 63.  Despite receiving this notice of denial for identifying a deceased beneficiary as the recipient of services, Petitioner made the same mistake regarding Beneficiary F.W. for service dates in March 2015.  Id. at 25, 43. 

Similarly, Petitioner billed CMS for two dates of service intended for Beneficiary W.S. (and again identifying a deceased individual with the same name but different date of birth) in May 2015.  Id. at 25.  CMS’s contractor denied those claims on August 31, 2015, again identifying the “CO-13” code.  Id. at 15-16, 25.  Yet despite this explicit warning that it had attempted to bill Medicare for services to a deceased individual, Petitioner submitted claims for services rendered to Beneficiary W.S. in May 2016, again identifying the wrong (and deceased) individual.  Id. at 13, 25.

Based on the earlier denials, Petitioner should have known that it needed to change its procedures to better ensure it was billing for the correct beneficiary.  As the Departmental Appeals Board has observed, “[s]urely, repeatedly mistaking the identity of the individual being treated and failing to confirm identifiers (such as full name, Medicare number or date of birth) does raise questions of lack of attention and a pattern of unreliable or abusive billing.”  John M. Shimko, D.P.M, DAB No. 2689 at 7 (2016).

Petitioner also complains of a “disparity” between subsections 424.535(a)(8)(i) and (ii), claiming CMS permits suppliers to repay internally discovered overpayments and avoid liability under the latter provision, but not under the former.  P. Br. at 1-2, ¶¶ 2-4.  In other words, Petitioner believes suppliers can self-correct claims to avoid violating subsection 424.535(a)(8)(ii), but not subsection 424.535(a)(8)(i).3   Id.

CMS did not reply to contest or confirm this notion.  But I note the overpayment refund form Petitioner cites for this proposition does not mention either regulatory provision.  It simply permits a supplier or provider to return an overpayment to First Coast for a number of specified reasons, including “Billed in error” and “Services not rendered.”

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P. Br. at 2 (citing First Coast’s Medicare Pt. B non-MSP overpayment refund form, available at https://medicare.fcso.com/Forms/138379.pdf (last rev. Dec. 1, 2017)). 

This suggests Petitioner could have used this form to self-report and perhaps avoid revocation.  But Petitioner never attempted to correct these errors before they were discovered by CMS, rendering any supposed distinction moot.  Ultimately, Petitioner’s argument misses the point because it ignores Petitioner’s responsibility to ensure that claims are compliant when they are submitted.  As noted, the preamble to the regulation provides that “providers and suppliers are responsible for the claims they submit or the claims submitted on their behalf” and that “it is essential that providers and suppliers take the necessary steps to ensure they are billing appropriately for services furnished to Medicare beneficiaries.”4   73 Fed. Reg. at 36,455.

Petitioner’s attempt to raise a constitutional claim based on its claim that CMS exercised its discretion arbitrarily and capriciously has no remedy before me, as I have no authority to review constitutional claims, or provide relief not expressly permitted under the regulations.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (“An ALJ is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground, even a constitutional one.”).  And while I may agree that it is somewhat harsh to impose the maximum three-year re-enrollment bar for what are clearly a limited number of clerical errors, I have no authority to shorten the revocation period selected by CMS.

I further find irrelevant Petitioner’s complaint that CMS has similarly mistaken living beneficiaries for deceased ones in some of its erroneous payment denials.  The Act and implementing regulations authorize CMS to revoke Medicare billing privileges in a number of circumstances described at § 424.535(a).  The narrow issue in this case is simply whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(i).  As noted, there is sufficient evidence to support CMS’s revocation, based on Petitioner’s multiple claims for deceased beneficiaries, “claims that could not have been furnished to a specific individual on the date of service.”

3. I have no authority to review the length of the re-enrollment bar imposed.

Finally, Petitioner’s objection to CMS’s selection of a three-year re-enrollment bar is unavailing.  While Petitioner reasonably questions the imposition of the maximum

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possible barring period for what are obviously a handful of clerical errors, I do not have authority to review CMS’s selection of the length of time it will bar a supplier from re-enrollment after revocation.  RFH at 6-7 (citing Arriva Medical, LLC, DAB CR4834 (2017)); Vijendra Dave, M.D., DAB No. 2672 at 8-12 (2016). 

VII. Conclusion

I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(i), effective June 24, 2017.

1. Section 424.535(a)(8)(i) was originally promulgated as the sole provision in § 424.535(a)(8).  73 Fed. Reg. 36,448, 36,461 (June 27, 2008).  However, when § 424.535(a)(8)(ii) was added, the original text of § 424.535(a)(8) was moved to § 424.535(a)(8)(i).  79 Fed. Reg. 72,500, 72,520 (Dec. 5, 2014).  Therefore, all references to § 424.535(a)(8) in the 2008 preamble to the final rule relate to the text that is now located at § 424.535(a)(8)(i).
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2. The beneficiaries’ full names and Medicare Health Insurance Claim Numbers are redacted for confidentiality purposes.
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3. It is possible Petitioner means to claim that CMS would permit it to file a Corrective Action Plan (CAP) under subsection 424.535(a)(8)(ii), but not under subsection 424.535(a)(8)(i), since it appears to have argued for the opportunity to submit a CAP in its request for reconsideration.  CMS Ex. 1 at 4.  However, as the Hearing Officer correctly explained in her reconsidered determination, 42 C.F.R. § 405.809(a)(1) only permits a supplier to submit a CAP to avoid revocation for noncompliance under 42 C.F.R. § 424.535(a)(1).  Id.  CMS’s regulations do not afford the opportunity for a supplier to submit a CAP to avoid revocation under either subsection of 42 C.F.R. § 424.535(a)(8).
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4. In its hearing request, Petitioner asserts that, “before CMS decided to revoke,” Petitioner had tried to report some of its mistakes to the Medicare administrative contractor, First Coast Service Options, Inc. (First Coast).  RFH at 2.  Petitioner’s own exhibits contradict this account.  In multiple letters, First Coast acknowledged receiving Petitioner’s requests on June 23, 2017, which was well after CMS’s initial determination to revoke, dated May 25, 2017, and only a day before the revocation became effective.  P. Ex. 1 at 5-6, 13, 18, 22, 32; CMS Ex. 3 at 1.
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