James G. Hendricks, M.D., DAB CR5580 (2020)

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, Noridian Healthcare Solutions (Noridian), revoked the Medicare enrollment and billing privileges of James G. Hendricks, M.D. (Petitioner), pursuant to 42 C.F.R. § 424.535(a)(1) because the Medical Board of California (Medical Board) issued an order dated December 20, 2017, directing Petitioner to cease practicing medicine.  While the Medical Board’s order was in effect, Petitioner was not authorized to practice medicine in the State of California.  I therefore affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

I. Background and Procedural History

Petitioner is a physician licensed to practice medicine in California.  CMS Exhibit (Ex.) 10 at 5, 14.  On November 5, 2013, the Medical Board adopted a Stipulated Settlement and Disciplinary Order (Settlement Order) that revoked Petitioner’s medical license, but stayed the revocation and placed Petitioner on probation for four years.  Id. at 1, 4.  During the probationary period, Petitioner was required to abstain from using alcohol and to submit to biological fluid testing “upon request of the [Medical] Board or

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its designee,” among other conditions.  Id. at 5-8.  The Settlement Order provided that, if Petitioner “has a confirmed positive biological fluid test for alcohol” he would receive notification from the Medical Board to cease practice.  Id. at 4.  On January 4, 2017, the Medical Board entered into another Stipulated Settlement and Disciplinary Order (Second Settlement Order) with Petitioner.  CMS Ex. 11.  The Second Settlement Order resolved a pending action to revoke Petitioner’s probation.  Id. at 2.  The Medical Board proposed to revoke Petitioner’s probation because it alleged Petitioner had failed to abstain from using alcohol.  Id.  The Second Settlement Order extended the term of Petitioner’s probation by two years.  Id. at 5.  The Second Settlement Order continued to require that Petitioner abstain from using alcohol and that he submit to biological fluid testing.  Id. at 5-6.

By order issued December 20, 2017, the Medical Board directed Petitioner to cease practice (Cease Practice Order), effective immediately, based on the Medical Board’s conclusion that Petitioner tested positive for “71ng/mL of alcohol.”  CMS Ex. 2 at 2.  The Cease Practice Order provided that Petitioner was “prohibited from engaging in the practice of medicine.”  Id. 

By letter dated January 5, 2018, Noridian notified Petitioner that his Medicare billing privileges were revoked, effective December 20, 2017.  CMS Ex. 1 at 1.  In the revocation notice, Noridian explained that Petitioner’s Medicare enrollment and billing privileges were revoked pursuant to 42 C.F.R. § 424.535(a)(1) because Petitioner was not in compliance with Medicare requirements due to the Cease Practice Order.  Id.  The revocation notice further notified Petitioner that he was barred from re-enrolling in the Medicare program for one year, effective “30 days after the postmark date of [the] letter.”  Id. at 2.

On January 12, 2018, the Medical Board issued a Corrected Cease Practice Order.  CMS Ex. 2 at 3.  The Corrected Cease Practice Order specified that Petitioner tested positive for 71ng/mL of Phosphatidyl Ethanol, changed from the prior statement that Petitioner tested positive for 71ng/mL of alcohol.  Id.  The Corrected Cease Practice Order continued to prohibit Petitioner “from engaging in the practice of medicine” as of the original Cease Practice Order’s effective date.  Id. 

In an action dated February 1, 2018, the Medical Board terminated the Corrected Cease Practice Order.  CMS Ex. 3.  In a letter dated February 2, 2018, Petitioner requested that Noridian reconsider the determination to revoke his Medicare billing privileges in light of the termination of the Corrected Cease Practice Order.1   CMS Ex. 5 at 1.  Petitioner

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additionally submitted a Corrective Action Plan (CAP) via a letter dated February 2, 2018.  CMS Ex. 4.

In a letter dated March 19, 2018, Noridian informed Petitioner that it was rejecting his CAP.  CMS Ex. 6 at 1.  Noridian explained that Petitioner was out of compliance with Medicare requirements, within the meaning of 42 C.F.R. § 424.535(a)(1), because the Medical Board’s Cease Practice Order forbade him to practice medicine from December 20, 2017, until the order was rescinded on February 1, 2018.  Id.  By letter dated March 27, 2018, Noridian issued a reconsidered determination upholding the revocation of Petitioner’s Medicare billing privileges due to Petitioner’s failure to provide “evidence to show full compliance with the standards for which [he was] revoked.”  CMS Ex. 7 at 1.

In a letter dated March 27, 2018, Petitioner asked Noridian to review the March 19, 2018 rejection of his CAP.  CMS Ex. 8.  Noridian denied Petitioner’s request by letter dated April 25, 2018, explaining the denial of a CAP is not appealable.  CMS Ex. 9.

Petitioner timely requested a hearing before an administrative law judge to challenge CMS’s reconsidered determination, and the request was assigned to me for a hearing and decision.  I issued an Acknowledgement and Pre‑Hearing Order (Pre‑Hearing Order) establishing deadlines for the submission of pre‑hearing exchanges.  Pursuant to the Pre‑Hearing Order, CMS submitted a Pre-hearing Brief and Motion for Summary Judgment (CMS Br.) and 11 proposed exhibits (CMS Exs. 1-11).  Petitioner filed a brief in response (P. Br.), along with three proposed exhibits (P. Exs. 1-3).

Petitioner did not object to CMS’s proposed exhibits.  Therefore, in the absence of objection, I admit CMS Exs. 1‑11 into the record.  CMS objected to all of Petitioner’s proposed exhibits, arguing they are not relevant to any issue I have authority to hear and decide.  I overrule CMS’s objections.  P. Ex. 1 is an excerpt from CMS’s Medicare Program Integrity Manual.  P. Ex. 2 is a copy of a scholarly article.  These items are not evidence, but authorities to which Petitioner refers in his brief.  I could take administrative notice of these items even if I did not admit them.  For the sake of convenience, I admit them.  P. Ex. 3 is Petitioner’s declaration.  As I explain in more detail below, most of the testimony Petitioner offers does not concern matters that are material to my decision.  Nevertheless, I admit P. Ex. 3 in the interest of making a complete record.  See 42 C.F.R. § 498.60(b)(1).

CMS did not propose to call any witnesses.  Petitioner himself proposed to testify and offered his declaration as P. Ex. 3, as I have noted.  CMS requested to cross-examine Petitioner, if I should deny CMS’s motion for summary judgment.  Because I grant CMS’s motion for summary judgment, there is no need to convene a hearing to permit CMS to cross-examine Petitioner.

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II. Issue

The issues in this case are:

1. Whether summary judgment is appropriate; and

2. Whether CMS had a basis to revoke Petitioner’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(1).

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 Background

The Act authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations governing the enrollment process for providers and suppliers.  Act §§ 1102, 1866(j) (42 U.S.C. §§ 1302, 1395cc(j)).  A “supplier” is “a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services” under the Medicare provisions of the Act.  Act § 1861(d) (42 U.S.C. § 1395x(d)); see also Act § 1861(u) (42 U.S.C. § 1395x(u)).

The Secretary has delegated authority to revoke enrollment and billing privileges to CMS.  42 C.F.R. § 424.535.  CMS or its administrative contractor may revoke an enrolled supplier’s Medicare enrollment and billing privileges for any of the reasons listed in 42 C.F.R § 424.535.  Pursuant to 42 C.F.R. § 424.535(a)(1), CMS may revoke a supplier’s enrollment and billing privileges if the supplier is determined not to be in compliance with enrollment requirements found at 42 C.F.R. § 424, subpart P.  Relevant here, suppliers have an obligation to maintain “[c]ompliance with Federal and State licensure, certification, and regulatory requirements, as required, based on the type of services or supplies the provider or supplier type will furnish and bill Medicare.”  42 C.F.R. § 424.516(a)(2).

If CMS revokes a supplier’s billing privileges, the revocation generally becomes effective 30 days after CMS or one of its contractors mails the revocation notice to the supplier.  42 C.F.R. § 424.535(g).  However, where a revocation is based on a license suspension or revocation, the revocation is effective as of the date of the license suspension or revocation.  Id.  After a supplier’s Medicare enrollment and billing privileges are

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revoked, the supplier is barred from reenrolling in the Medicare program for one to three years.2   42 C.F.R. § 424.535(c).

B. Findings of Fact, Conclusions of Law, and Analysis.3

1. Summary judgment is appropriate.

Summary judgment is appropriate if there is “no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law.”  Mission Hosp. Reg’l Med. Ctr., DAB No. 2459 at 5 (2012) (citations omitted).  In order to prevail on a motion for summary judgment, the moving party must show that there is no genuine dispute 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 this initial burden, the non-moving party must “come forward with ‘specific facts showing that there is a genuine issue for trial . . . .’”  Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis in original).  “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. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (quoting Matsushita).

In evaluating a motion for summary judgment, an administrative law judge does not address credibility or evaluate the weight of conflicting evidence.  Holy Cross Village at Notre Dame, Inc.,DAB No. 2291 at 5 (2009).  Rather, in examining the evidence to determine the appropriateness of summary judgment, an administrative law judge must draw all reasonable inferences in favor of the non-moving party.  See Brightview Care Ctr., DAB No. 2132 at 10 (2007) (upholding summary judgment where inferences and views of non-moving party are not reasonable).  “[A]t the summary judgment stage the judge’s function is not . . . to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.”  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).  However, drawing factual inferences in the light most favorable to the non-moving party does not require that I accept the non-moving party’s legal conclusions.  Cedar Lake Nursing Home, DAB No. 2344 at 7 (2010).

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Petitioner opposes CMS’s motion for summary judgment.  P. Br. at 10.  However, Petitioner does not dispute that the Medical Board issued orders directing him to cease practicing medicine.  See, e.g., P. Ex. 3, ¶ 6.  Nor does Petitioner dispute that the Medical Board’s orders “precluded him from exercising his right to practice medicine.”  P. Br. at 4-5.  These are the only facts material to my decision.  As I explain below, Petitioner’s assertion that he did not violate the conditions of his probation is not material to my decision.  See P. Ex. 3, ¶¶ 2, 3.  Petitioner’s other arguments ‒ for example, that Noridian applied the regulations and CMS policies incorrectly (P. Br. at 5-10) ‒ raise only disputes as to the law.  I address Petitioner’s arguments in my analysis below.  Because there are no material facts in dispute, I conclude that summary judgment is appropriate in this case.

2. CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(1) because Petitioner was prohibited from practicing medicine from December 20, 2017 through January 31, 2018.

Pursuant to 42 C.F.R. § 424.535(a)(1), CMS or its contractor may revoke a Medicare supplier’s enrollment and billing privileges if the supplier no longer meets the enrollment requirements for a supplier of its type and the supplier has not submitted a CAP that has been accepted by CMS.  See Akram A. Ismail, M.D., DAB No. 2429 at 5-6 (2011).  To comply with applicable enrollment requirements within the meaning of 42 C.F.R. § 424.535(a)(1), suppliers must also comply with the additional requirements specified in 42 C.F.R. § 424.516.  Id.  In relevant part, section 424.516(a)(2) requires that a supplier comply with “Federal and State licensure, certification, and regulatory requirements . . . .”  A physician who is not “legally authorized to practice medicine” does not meet the regulatory requirements in section 424.516(a)(2).  Id. at 6 (cross-referencing the provisions of 42 C.F.R. § 410.20(b)).

Petitioner argues that the Cease Practice Order and Corrected Cease Practice Order (collectively “Cease Practice Orders”), cannot be a basis to revoke his Medicare enrollment and billing privileges because “as a matter of law” the orders were “merely an interim, temporary action that did not equate to discipline, suspension or revocation.”  P. Br. at 5.  Significantly, Petitioner does not cite any legal authority for this conclusion.4   See id. at 5, 11.  But, even if under California law, the Cease Practice Orders are not deemed equivalent to a license suspension, this would not lead to a different result.  The

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question of whether CMS had a basis to revoke Petitioner’s Medicare enrollment is a matter of federal ‒ not state ‒ law.  I find that, as a result of the Cease Practice Orders, Petitioner was not legally authorized to practice medicine in California from December 20, 2017 through January 31, 2018.  Thus, CMS had a basis to revoke Petitioner’s Medicare billing privileges pursuant to 42 C.F.R. § 424.535(a)(1).  See Ismail, DAB No. 2429 at 6.

Petitioner argues additionally that Noridian revoked his Medicare billing privileges prematurely and unnecessarily.  P. Br. at 9.  Petitioner contends that, under 42 C.F.R. § 424.516(d)(1)(ii) (reporting of an adverse legal action), CMS and its contractors must afford Petitioner 30 days after receipt of a Cease Practice Order to self-report the “adverse legal action.”  Id.  Thus, Petitioner argues that Noridian’s revocation determination was premature and a violation of due process.  While I agree with Petitioner that 42 C.F.R. § 424.516(d)(1)(ii) allows a supplier up to 30 days to report an adverse legal action, that provision does not aid Petitioner here.

In the present case, neither CMS nor its contractor Noridian relied on 42 C.F.R. § 424.535(a)(9) as a basis for revoking Petitioner’s Medicare enrollment.  Subsection (a)(9) authorizes revocation if a “supplier did not comply with the reporting requirements specified in § 424.516(d)(1)(ii).”  Because section 424.516(d)(1)(ii) provides a 30-day window for reporting, CMS or a contractor may not revoke a supplier’s enrollment pursuant to 42 C.F.R. § 424.535(a)(9) until after the 30-day reporting period has expired.  Here, Noridian revoked Petitioner’s Medicare billing privileges pursuant to 42 C.F.R. § 424.535(a)(1).  Failing to report is not a condition for revocation under subsection (a)(1); therefore, the time for reporting adverse legal actions is irrelevant.  Further, the fact that the Medical Board ultimately restored Petitioner’s right to practice medicine does not lead to a different result.

3. The reinstatement of Petitioner’s medical license does not remove the basis for revocation.

Petitioner points out that his license was reinstated on February 1, 2018, shortly after the Medical Board issued its Cease Practice Orders.  P. Br. at 9.  CMS does not dispute this.  CMS Br. at 2, 3.  While it is true that the Medical Board terminated the Corrected Cease Practice Order and reinstated Petitioner’s right to practice medicine, this does not remove the basis for revocation.  As the appellate panel stated in Ismail:

CMS may determine a supplier is out of compliance with the Medicare enrollment requirements at any time.  See 71 Fed. Reg. at 20,761(“[A] provider or supplier's enrollment and billing privileges may be revoked if at any time, it is determined to be out of compliance with the Medicare enrollment requirements outlined in subpart P . . . .” (emphasis added)).  Thus, the [appropriate inquiry was] the immediate effect of [the supplier’s]

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suspension rather than the possibility that the suspension may be lifted at some point.

Ismail, DAB No. 2429at 8; see also Angela R. Styles, M.D., DAB No. 2882 at 6 (2018) (explaining that the Ismail decision “concluded that the revocation was lawful because the suspension left [the supplier] without legal authority to practice medicine, regardless of whether the suspension was temporary or permanent.”).  For the reasons explained in the previous section of this decision, I have concluded that Petitioner was not legally authorized to practice medicine from December 20, 2017 through January 31, 2018.  The fact that the period during which he was forbidden to practice was brief does not alter the outcome.  Nor do Petitioner’s remaining arguments provide a basis to overturn CMS’s revocation determination.

4. I have no authority to review Noridian’s rejection of Petitioner’s CAP.

Petitioner devotes much of his brief to arguing that Noridian misinterpreted the regulations and CMS policies when reviewing Petitioner’s CAP.  P. Br. at 3-4, 5-9.  Even if Petitioner were correct in this assertion, however, I could not set aside the revocation of his billing privileges based on an alleged misapplication of regulations and policies governing CAPs.  As Petitioner concedes (P. Br. at 3 n.4), the regulations do not authorize administrative law judge review of CMS’s acceptance or rejection of a CAP.  See 42 C.F.R. § 405.809(b)(2) (“The refusal of CMS or its contractor to reinstate a provider or supplier’s billing privileges based on a corrective action plan is not an initial determination under part 498 of this chapter.”).  The decision to accept or reject a CAP is entirely within CMS’s discretion, and I may not consider whether CMS, through Noridian, acted appropriately in its handling of Petitioner’s CAP.  See, e.g., Conchita Jackson, M.D., DAB No. 2495 at 6 (2013) (“[T]he refusal by CMS or one of its contractors to reinstate a supplier after a correction attempt is not . . . an action that constitutes an initial determination subject to administrative appeal under section 498.3(b)”).

5. Petitioner may not collaterally attack the actions of the Medical Board in this forum.

Petitioner argues that the Medical Board abused its discretion by issuing the Cease Practice Orders in the absence of “scientifically-acceptable proof” that Petitioner had failed to comply with the terms of his probation (by consuming alcohol).  P. Br. at 5.  See also id. at 11-12.  In making this argument, Petitioner invites me to opine on whether, in my judgment, the Medical Board acted properly.  But, even if I agreed with Petitioner that the Cease Practice Orders were based on insufficient evidence (a finding I do not make), I would not overturn the revocation of his Medicare billing privileges.  That is because the regulations under which I review revocation actions do not authorize me to entertain collateral attacks on legal actions by state administrative bodies.  Douglas

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Bradley, M.D., DAB No. 2663 at 16 (2015); cf. Ravindra Patel,M.D.,DAB CR2171 at 6 (2010) (no collateral attack of conviction); Gary J. Ordog, M.D., DAB CR4806 at 7 (2017) (same).  As such, Petitioner’s factual assertions that he did not violate the terms of his probation by consuming alcohol are not material to my decision.  See P. Ex. 3.  My inquiry is limited to whether Petitioner was at all times legally authorized to practice medicine in California.  As I have explained above, there is no dispute that, for a time, Petitioner was not authorized to practice.  Accordingly, there is no basis to reverse the revocation of Petitioner’s Medicare enrollment and billing privileges.

6. I do not have authority to grant equitable relief.

Finally, to the extent Petitioner argues that revocation of his Medicare enrollment is unfair or too harsh, such general appeals to equity are not a basis to set aside the revocation.  I may not set aside the lawful exercise of discretion by CMS or its contractor based on principles of equity.  See US Ultrasound, DAB No. 2302 at 8 (2010); Cent. Kan. Cancer Inst., DAB No. 2749 at 10 (2016). 

V. Conclusion

For the foregoing reasons, I grant CMS’s motion for summary judgment.  I affirm the determination to revoke Petitioner’s Medicare enrollment and billing privileges, effective December 20, 2017, pursuant to 42 C.F.R. § 424.535(a)(1).

• 1. Petitioner himself did not submit the reconsideration request.  Rather, it was submitted by the Medical Director of Hemet Valley Urology Medical Center, Inc., Petitioner’s employer.  CMS Ex. 5 at 1.  See also Petitioner’s Brief at 2-3.
• 2. Effective November 4, 2019, the regulations governing revocations were revised.  84 Fed. Reg. 47,794 (Sept. 10, 2019).  The revisions authorize CMS to establish a reenrollment bar for a period ranging from one to ten years for a first-time revocation, and up to twenty years for a second revocation.  Id. at 47,794, 47,855 (amending 42 C.F.R. § 424.535(c)).  These revisions took effect well after the initial determination to revoke issued in this case.  I apply the regulations in effect at the time of the initial determination.  Linda Silva, P.A., DAB No. 2966 at 1 n.1 (2019).
• 3. My findings of fact and conclusions of law are set forth in italics and bold font.
• 4. The argument that the Cease Practice Orders do not represent discipline against Petitioner’s license strikes me as strained at best.  The Cease Practice Orders arose out of Petitioner’s second settlement agreement with the Medical Board, in which Petitioner stipulated that his medical license was subject to discipline.  CMS Ex. 11 at 4 ¶ 10.  Moreover, elsewhere in his brief, Petitioner describes the Cease Practice Orders as equivalent to a “temporary license suspension.”  P Br. at 9 (underscore omitted).