Windows for Hope, Inc., DAB CR5888 (2021)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its Medicare administrative contractor, Noridian Healthcare Solutions (Noridian), revoked the Medicare enrollment and billing privileges of Windows for Hope, Inc. (Petitioner), pursuant to 42 C.F.R. § 424.535(a)(8)(i).  Noridian concluded that Petitioner had abused its billing privileges because it submitted claims to Medicare for reimbursement of services that could not have been rendered to specific individuals on the dates of service because those individuals were deceased.  As explained more fully below, I conclude that CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges.

I.  Background

Petitioner is a clinical psychology group practice in the state of California.  CMS Exhibit (Ex.) 1.  Shirin Nooravi, Psy.D. (Dr. Nooravi) is Petitioner's sole owner.  CMS Ex. 2 at 3.  Dr. Nooravi reassigned her Medicare billing privileges to Petitioner on March 11, 2008.  CMS Ex. 1 at 13.

Data analysis conducted on claims billed by Petitioner between January 19, 2017, and June 11, 2018, identified eleven claims for services provided to three beneficiaries who were deceased on the purported dates of service.  CMS Exs. 2-6; CMS Ex. 7 at 3.  In a

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letter dated February 6, 2019, Noridian revoked Petitioner's billing privileges under 42 C.F.R. § 424.535(a)(8)(i), and imposed a re-enrollment bar for a period of three years.  CMS Ex. 7.  Petitioner requested reconsideration.  CMS Ex. 9.  In the reconsideration request, Petitioner admitted that its third-party biller had billed Medicare for services that were purportedly rendered after the patients' dates of death.  Id. at 2.  Petitioner argued that the bills were "mistakes" for which its third-party biller was responsible.  Id.  Petitioner also asserted that it had retained the services of a new billing company.  Id. at 3.  In a reconsidered determination dated May 8, 2019, CMS, through its Provider Enrollment & Oversight Group, upheld the revocation.  CMS Ex. 10.

Petitioner requested a hearing and the case was assigned to me.  At my direction, my office acknowledged Petitioner's hearing request and provided a copy of my Standing Prehearing Order (Prehearing Order).  The Prehearing Order directed each party to file a prehearing exchange consisting of a brief and any supporting documents, including the written direct testimony of any proposed witnesses, and set forth the deadlines for those filings.  Prehearing Order ¶¶ 4-5.  In response to the Prehearing Order, CMS filed a motion for summary judgment and brief (CMS Br.) and ten proposed exhibits (CMS Exs. 1-10).  CMS did not list any proposed witnesses.

Petitioner, through counsel, filed a brief opposing summary judgment (P. Br.).  With its brief, Petitioner filed a declaration signed by Dr. Nooravi.  Petitioner did not mark the declaration as an exhibit, nor did Petitioner list Dr. Nooravi as a witness, as required by my Prehearing Order.  However, as CMS did not object to Dr. Nooravi's declaration, I admit it as Petitioner's Exhibit (P. Ex.) 1.  Similarly, Petitioner did not object to CMS's proposed exhibits.  Therefore, in the absence of objection, I admit CMS Exs. 1-10.

My Prehearing Order advised the parties that an in-person hearing would only be necessary if a party offered the written direct testimony of a witness and the opposing party requested cross-examination.  Prehearing Order ¶¶ 8-10; Civil Remedies Division Procedures (CRDP) §§ 16(b), 19(b); see Pac. Regency Arvin, DAB No. 1823 at 8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross‑examine those witnesses).  I construe P. Ex. 1 as the written direct testimony of Dr. Nooravi.  However, CMS did not request to cross-examine her.  Consequently, an in‑person hearing is not required, and I issue this decision based on the written record, without regard to whether the standards for summary judgment are met.  Prehearing Order ¶¶ 8-10, 12; CRDP § 19(d).  I deny CMS's motion for summary judgment as moot.

II.  Issue

The issue in this case is whether CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(i) because

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Petitioner submitted claims to Medicare for services rendered to beneficiaries who were deceased on the purported dates of service.

III.  Jurisdiction

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

IV.  Discussion

A. Statutory and Regulatory Framework

Petitioner is a "supplier" for purposes of the Medicare program.  See Act § 1861(d) (42 U.S.C. § 1395x(d)); 42 C.F.R. §§ 400.202 (definition of supplier).  To participate in the Medicare program as a supplier, an individual or entity must meet certain criteria to enroll and receive billing privileges.  42 C.F.R. §§ 424.505, 424.510.  CMS may revoke the enrollment and billing privileges of a supplier for any reason stated in 42 C.F.R. § 424.535.  When CMS revokes a supplier's Medicare billing privileges, CMS establishes a re-enrollment bar for a period ranging from one to three years.1   42 C.F.R. § 424.535(c).  Generally, a revocation becomes effective 30 days after CMS mails the initial determination revoking Medicare billing privileges, but if the revocation is based on a felony conviction, the revocation is effective with the date of the conviction.  42 C.F.R. § 424.535(g).

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

1.  CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(i)(A) because Petitioner submitted claims for services rendered to beneficiaries who were deceased on the purported dates of service.2

Pursuant to 42 C.F.R. § 424.535(a)(8), CMS may revoke a supplier's enrollment in the Medicare program if a supplier abuses its billing privileges.  Abuse of billing privileges includes any of the following:

(i) The provider or supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of

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service.  These instances include but are not limited to the following situations:

(A) Where the beneficiary is deceased.

(B) The directing physician or beneficiary is not in the state or country when services were furnished.

(C) When the equipment necessary for testing is not present where the testing is said to have occurred.

42 C.F.R. § 424.535(a)(8)(i).

On its face, section 424.535(a)(8)(i) authorizes CMS to revoke enrollment and billing privileges when a provider or supplier submits even a single claim for services that could not have been furnished to a specific individual on the date of service.3  However, in the preamble to the regulation, the drafters explained that CMS will exercise its discretion to revoke only in instances where a provider or supplier has submitted at least three such claims.  73 Fed. Reg. 36,448, 36,455 (June 27, 2008).4

Petitioner does not dispute that it submitted eleven claims for three beneficiaries who were deceased on the purported dates of service.  See, e.g., P. Br. at 5.5   Thus, the number of "impossible" claims submitted is well in excess of the three-claim threshold.  In addition, Dr. Nooravi admitted in Petitioner's reconsideration request that it is her "responsibility to have oversight over billing practice[s], including . . . third-party contractors."  CMS Ex. 9 at 3.  Petitioner nevertheless argues that it did not engage in abusive billing because "the bills at issue were submitted without Petitioner's permission, instruction or knowledge."  P. Br. at 6.  Petitioner seeks to place the entire responsibility for the improper claims on its third-party biller, asserting, in essence, that Petitioner could not have foreseen or prevented the erroneous billing.  Id.  Finally, Petitioner points out that it has retained a new billing agent.  Id. at 2.

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Petitioner's arguments do not demonstrate that CMS lacked a basis to revoke Petitioner's billing privileges.  Appellate decisions of the DAB make clear that suppliers cannot avoid revocation by claiming that a third-party biller is responsible for the erroneous claims.  For example, in Louis J. Gaefke, D.P.M., DAB No. 2554 at 6 (2013), the DAB rejected the supplier's contention that he was not at fault because the claims at issue were submitted by a third-party biller.  The decision explains that Medicare suppliers are responsible for the accuracy of their claims and that "efforts to assign blame for the improper billing to [a] billing agent or [an] assistant do not relieve [a supplier] of . . . responsibility for the improper claims or bar CMS from revoking [the supplier's] billing privileges."  Id.; see also 73 Fed. Reg. at 36,455 (explaining that "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." (emphasis added)).

Moreover, to the extent Petitioner's argument is that its third-party biller did not submit the improper claims "on its behalf" because Petitioner did not instruct the biller to submit the specific claims that led CMS to revoke its billing privileges, I reject that argument, as well.  Petitioner admits that it delegated general authority to the billing company to submit Medicare claims on its behalf.  See, e.g., P. Ex. 1 at ¶ 5.  Thus, Petitioner designated the billing company its agent for submitting Medicare claims.  Therefore, regardless of whether Petitioner instructed its billing agent to submit the exact claims at issue, the billing agent was acting within the scope of its delegated authority when it submitted the claims.  As the administrative law judge observed in the Gaefke decision below, a supplier's "failure to properly supervise the billing for services is not a defense because otherwise CMS would have no means to stop improper billing.  In fact, suppliers would be protected when acting through an agent."  DAB CR2785 at 7 (2013) (cited with approval in DAB No. 2554 at 5).  Further, it was at all times within Petitioner's control whether to delegate responsibility for its billing to an agent, or to perform those duties itself.  Having chosen to employ a third party as its billing agent, Petitioner cannot, after the fact, disavow its agent's actions.  Cf. Jackson Manor Health Care, DAB CR545 at 7 (1998) (corporation may not avoid the consequences of the avoidable failure of one of its employees to discharge a duty).

Finally, the fact that Petitioner subsequently terminated its contract with its third-party biller does not negate CMS's authority to revoke Petitioner's Medicare enrollment.  Petitioner's decision to terminate its contract with the third-party biller represents a corrective action taken to ameliorate past errors and ensure that Petitioner would not again bill for services purportedly rendered to deceased beneficiaries.  As stated in another appellate decision of the DAB, "[a] plan to reduce improper billing in the future does not preclude CMS from taking action about improper claims already submitted."  John P. McDonough, III, Ph.D., et al., DAB No. 2728 at 8 (2016).

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In summary, the third-party biller that Petitioner authorized to submit claims on its behalf submitted more than three claims to Medicare for reimbursement of services purportedly rendered after the beneficiaries' dates of death.  I therefore conclude that CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(i)(A).  In the following sections of this decision, I explain why Petitioner's remaining arguments are not a basis to reverse the revocation or to shorten the duration of the re-enrollment bar.

2.  Petitioner's arguments in equity are not a basis to reverse the revocation of Petitioner's Medicare enrollment and billing privileges.

In its reconsideration request, Petitioner argued that CMS should not revoke its Medicare enrollment based on "unique mitigating circumstances" because, according to Petitioner, it was without fault for submitting the claims at issue.  CMS Ex. 9 at 1, 2.  As I have explained in the previous section of this decision, I do not accept Petitioner's contention that its billing company was solely to blame for submitting the "impossible" claims.  However, if Petitioner intended to argue that, notwithstanding its responsibility for the claims, CMS should not have revoked its Medicare enrollment and billing privileges because to do so is inequitable under the circumstances presented, I may not reverse a revocation on such grounds.

CMS's discretionary act to revoke a provider or supplier is not subject to review based on equity or mitigating circumstances.  Letantia Bussell, M.D., DAB No. 2196, at 13 (2008).  Rather, "the right to review of CMS's determination by an [administrative law judge] serves to determine whether CMS had the authority to revoke [the supplier's] Medicare billing privileges, not to substitute the [administrative law judge's] discretion about whether to revoke."  Id. (emphasis in original).  Once CMS establishes a legal basis on which to proceed with a revocation, then the CMS determination to revoke becomes a permissible exercise of discretion, which I am not permitted to review.  See id. at 10; see also Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2009), aff'd, Ahmed v. Sebelius, 710 F. Supp. 2nd 167 (D. Mass. 2010) (if CMS establishes the regulatory elements necessary for revocation, an administrative law judge may not substitute his or her "discretion for that of CMS in determining whether revocation is appropriate under all the circumstances").  Accordingly, because I have determined that CMS had a legal basis to revoke Petitioner's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(i)(A), the regulations do not authorize me to second-guess CMS's decision to revoke.

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3.  I am not authorized to review or alter the length of the re-enrollment bar imposed by CMS.

Moreover, as is true of CMS's exercise of discretion in deciding whether or not to revoke a supplier's Medicare enrollment based on a ground specified in 42 C.F.R. § 424.535, I do not have authority to alter CMS's determination setting the length of a re-enrollment bar.  The decision in Vijendra Dave, M.D. held that "CMS's determination regarding the duration of the re-enrollment bar is not reviewable [by an administrative law judge]."  DAB No. 2672 at 11 (2016).  The decision explains:

[T]he only CMS actions subject to appeal under Part 498 are the types of initial determinations specified in section 498.3(b).  The determinations specified in section 498.3(b) do not, under any reasonable interpretation of the regulation's text, include CMS decisions regarding the severity of the basis for revocation or the duration of a revoked supplier's re-enrollment bar.

Id.  Thus, although Petitioner asserts that the three-year re-enrollment bar is "very harsh considering [it is Dr. Nooravi's] first mistake" (Hearing Request, Docket Entry #1 in DAB E-File), I have no authority to review this issue.  Accordingly, I do not disturb the three-year re-enrollment bar imposed by CMS.

V.  Conclusion

For the reasons stated, I affirm CMS's determination to revoke Petitioner's Medicare enrollment and billing privileges.

1. Effective November 4, 2019 (i.e. after the revocation at issue in the present case), CMS increased the maximum re-enrollment bar from three to ten years, and up to twenty years for a second revocation.  84 Fed. Reg. 47,794, 47,826, 47,855 (Sept. 10, 2019).
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2. My numbered findings of fact/conclusions of law appear in bold italic type.
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3. Appellate decisions of the Departmental Appeals Board (DAB) have referred to claims that are improper in the manner described in section 424.535(a)(8)(i) by way of shorthand as "impossible" claims.  See, e.g., Rural Metro Corp. of Fla., Inc., DAB No. 2977 at 7 (2019).
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4. In light of the Supreme Court's decision in Azar v. Allina Health Services, 139 S. Ct. 1804 (2019), it is unclear what weight, if any, I should give to the preamble language.
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5. Petitioner did not paginate its brief.  I cite to the PDF page numbers as the document is displayed in DAB E-File.
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