Christopher Galuardi, M.D., ALJ Ruling 2020-15 (HHS CRD Aug. 4, 2020)

REMAND

Petitioner, Christopher Galuardi, M.D., is a physician anesthesiologist, practicing in Maryland.  Without his knowledge or consent, the Medicare contractor terminated the existing assignment of his billing privileges and reassigned them to another medical practice.  The contractor did not send Petitioner notice of the change and, when he brought the problem to the contractor's attention, the contractor refused to correct.  Instead, it directed Petitioner to submit a new application, which he did.  The contractor approved the application, but Petitioner suffered a gap in reimbursement.

Here, Petitioner challenges the erroneous reassignment and resulting gap in reimbursement.  CMS does not seriously dispute that the contractor improperly terminated the existing assignment and improperly reassigned Petitioner's billing privileges, but it argues that those transactions are not reviewable.  In CMS's view, the only issue before me is the effective date of the second reassignment.

The parties have filed cross-motions for summary judgment.

For the reasons set forth below, I deny both motions and remand this case to CMS.  I find, at a minimum, that Petitioner may challenge the effective date of the erroneous

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reassignment.  Moreover, it might behoove CMS to consider carefully whether it should sanction an obviously improper – if not fraudulent – act, which contravened the Medicare statute and regulations.

Discussion

The facts of this case are not in dispute.  Petitioner participates in the Medicare program as a supplier of services.  He is employed by KNJ Properties, and, prior to July 2017, his Medicare billing privileges were assigned to that practice.  CMS Ex. 1 at 2; see CMS Br. at 2; P. Br. at 1.  Another medical practice, Advanced Spine and Pain, PLLC, offered to purchase KNJ.  Negotiations ensued, and, in anticipation of the sale, Petitioner provided Advanced Spine with his Medicare enrollment information.

The negotiations reached an impasse, and the sale did not occur.  P. Br. at 1.  Nevertheless, without Petitioner's approval, authorization, or signature, on July 6, 2017, a representative from Advanced Spine affixed Petitioner's signature to electronic applications (Forms CMS-855R), asking to terminate the assignment of his billing privileges to KNJ and to reassign those privileges to Advanced Spine.  CMS Exs. 1, 8; P. Br. at 2.1

By letters dated August 1, 2017, the Medicare contractor, Novitas Solutions, indicated that it had granted the applications, effective July 1, 2017.  CMS Exs. 2, 3.  It terminated the assignment of Petitioner's benefits to KNJ Properties and approved a reassignment of benefits to Advanced Spine.  CMS Exs. 2, 3.  Although Petitioner's name is on the notice letters, they were not sent to him; they were sent to Advanced Spine.  CMS Ex. 2 at 1; CMS Ex. 3 at 1; P. Br. at 3; compare CMS Ex. 3 at 1 with CMS Ex. 7 at 1.

When Petitioner learned what had happened (after his payment requests were denied), he contacted the contractor and was advised to submit another application for reassignment of benefits.  CMS Ex. 8.  On August 16, 2017, he submitted his own application (Form CMS-855R), asking to reassign his Medicare billing privileges to his employer, KNJ Properties.  CMS Ex. 4.  In a letter dated September 20, 2017, the contractor advised Petitioner that it approved the reassignment with an effective date of August 9, 2017, resulting in a six-week coverage gap (July 1-August 9).  CMS Ex. 7.

Petitioner sought reconsideration.  CMS Ex. 8.  In a reconsidered determination, dated December 21, 2017, the contractor denied Petitioner an earlier effective date and, in fact, imposed a later date – August 16 – the date Petitioner filed his application to reactivate the reassignment (resulting in a lapse of almost nine weeks).  CMS Ex. 9.  Without any explanation or justification, the contractor also mentioned that the July 1 termination of

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Petitioner's assignment "was processed correctly," although the determination includes no indication that the contractor seriously reviewed the July 6 transactions.  CMS Ex. 9 at 3.

In fact, even assuming that the application forms submitted by Advanced Spine on July 6 were legitimate (and the undisputed evidence shows that they were not), the July 1 effective dates were incorrect.  As the contractor recognized when it changed the August effective date, the effective date can be no earlier than the date of filing a subsequently-approved enrollment application.  42 C.F.R. § 424.520(d).  The enrollment applications were filed on July 6, so the earliest effective dates would have been that date, not July 1.

But this error is minor compared to the more serious problems with the contractor's handling of the July applications.  CMS has not come forward with any evidence suggesting that Advanced Spine was authorized to submit the July applications nor that they were signed by the physician or an authorized or delegated official, as required by CMS rules.  Medicare Program Integrity Manual (MPIM) CMS Pub. 100-08, Ch. 15 § 15.5.14.2.  For this reason, CMS's reliance on the Departmental Appeals Board's decision in Sandra E. Johnson, CRNA, DAB No. 2708 (2016) is misplaced.  There, although the physician blamed her employer's "billing person" for errors in her Medicare application, she conceded that she had, in fact, signed the application, albeit without reviewing its contents.  The Board held that the physician was responsible for reviewing the content of her applications before she attested to their accuracy and that, by her signature, she affirmed that she had done so.  Johnson, DAB No. 2708 at 14.  In contrast here, Petitioner could hardly have reviewed the applications or affirmed their accuracy since he was not even aware of them.

Equally important, the Medicare statute and regulations generally preclude a supplier from reassigning his Medicare claims.  Social Security Act § 1842(b)(6); 42 C.F.R. § 424.80(a).  There are exceptions, but none of them apply here:  1) Petitioner is not employed by Advanced Spine; 2) he has no contractual arrangement with Advanced Spine; 3) Advanced Spine is not a government agency; 4) reassignment was not established by court order; and 5) Advanced Spine was not acting as Petitioner's agent.  See 42 C.F.R. § 424.80(b).  By reassigning the benefits to an entity that was unrelated to Petitioner, the contractor violated the statute and regulation.

CMS does not seriously argue that the contractor appropriately approved the July applications.  Instead, it focuses almost exclusively on Petitioner's August application, arguing that the August 16 effective date is correct.  With respect to the July 1 termination of assignment and reassignment, CMS refers to the decision of an administrative law judge and argues that termination of an assignment of benefits is not reviewable.  Pueblo Family Physicians, DAB CR4661 (2016).  Putting aside the fact that another ALJ's decision does not bind me (Donald W. Hayes, D.P.M., DAB No. 2862 at 6 n.8 (2018)), Pueblo Family was a narrowly-decided case that does not stand for the proposition that changes in reassignment (CMS-855R applications) are not reviewable.

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There, CMS revoked a physician organization's Medicare enrollment pursuant to 42 C.F.R. § 424.535(a)(4), because the practice purportedly made false or misleading statements on its CMS-855R enrollment applications.  The ALJ quoted the exact language of section 424.535(a)(4), which requires "misleading or false information on the enrollment application to be enrolled or maintain enrollment in the Medicare program."  Pueblo Family, DAB CR4661 at 8.  Although considered and labeled an enrollment application (see CMS Ex. 10 at 1), the ALJ determined that the 855R was an enrollment application to reassign Medicare benefits, not to enroll or maintain enrollment.  Id. at 9.  He therefore concluded that the practice's Medicare enrollment could not be revoked based on section 424.535(a)(4).  Id. at 7-10.  Pueblo Family was thus limited to revocation actions brought under section 424.535(a)(4).

Moreover, while I agree that not every administrative action is subject to appeal, Petitioner was unquestionably entitled to notice of the July 1 reassignment and the opportunity to appeal the effective date of that reassignment.  42 C.F.R. § 498.3(b)(15); Gaurav Lakhanpal, MD, DAB No. 2951 at 2 (2019).2   Because he was denied that opportunity, I remand this matter to CMS to consider the validity of the July 2017 enrollment applications, and, if necessary, to provide Petitioner an opportunity for the review to which he is entitled.

Finally, CMS is correct that my review authority is limited – although perhaps not as limited as CMS maintains.  However, I am not necessarily the final decision-maker here, and a federal court might expect that CMS would adhere to the statute and regulations and would not sanction an unauthorized effort to transfer Medicare billing privileges to an entity that was not entitled to accept it.  If a federal court were to review the contractor's actions here, CMS might not be happy with the result.  Even more important, Congress has afforded CMS broad discretion to administer the Medicare program, expecting the agency to do so fairly.  Without regard to any outside review, CMS should not abuse that discretion.

Conclusion

Petitioner was not given proper notice of the July 1 termination of the assignment of his Medicare benefits to KNJ and the reassignment of those benefits to Advanced Spine; nor was he afforded his appeal rights.  The reassignment to an entity unrelated to Petitioner contravened the statute and regulations.  I remand this matter to CMS to correct its errors.  42 C.F.R. § 498.56(d).

• 1. Form CMS-855R reassigns the practitioner's billing privileges to a Medicare-eligible entity, which may submit claims and receive payment for Medicare services provided by the practitioner.
• 2. Arguably, he could show that the effective dates were wrong because the applications were invalid and the contractor was not authorized to approve them.