Tosan Fregene, M.D. and Oncology Clinics, Inc., DAB No. 3018 (2020)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Petitioners Tosan Fregene, M.D. and Oncology Clinics, Inc. appeal the January 9, 2020 decision of an Administrative Law Judge, Tosan Fregene, M.D. & Oncology Clinics, Inc., DAB CR5509 (2020) (ALJ Decision).  The ALJ affirmed the revised reconsidered determination by the Centers for Medicare & Medicaid Services (CMS), through a Medicare contractor, setting July 19, 2018 as the effective date for reactivation of Petitioners' Medicare billing privileges.

For the reasons discussed below, we conclude that the ALJ Decision is supported by substantial evidence and free from legal error.  Petitioners assert that the ALJ did not address their claims about the rejection of the first Medicare revalidation enrollment application they submitted, their efforts to contact CMS, or their lack of notice that additional information was needed to complete the application.  The rejection of their first revalidation enrollment application caused deactivation of their Medicare billing privileges, which resulted in a gap in Medicare reimbursement for services furnished between the deactivation and reactivation.  The ALJ correctly concluded he was not authorized to review the rejection of Petitioners' first revalidation enrollment application or deactivation of Petitioners' billing privileges.  Petitioners also asked the ALJ to order Medicare reimbursement for services provided while their billing privileges were inactive based on fairness principles.  The ALJ correctly concluded that he lacked authority to order such payments based on claims of equity.  Accordingly, we affirm the ALJ Decision.

Legal Background

A physician, physician practice, or other "supplier" must enroll (and maintain enrollment) in Medicare to receive payment for Medicare-covered items and services furnished to Medicare beneficiaries.  42 C.F.R. §§ 400.202, 424.500, 424.502, 424.505,

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424.510, 424.516.1   The Medicare enrollment process includes:  (1) identifying a supplier; (2) validating the supplier's eligibility to provide items or services to Medicare beneficiaries; (3) identifying and confirming the supplier's practice locations and owners; and (4) granting the supplier Medicare billing privileges.  Id. § 424.502.

CMS delegates certain Medicare administrative functions to private contractors that act on behalf of CMS.  See Social Security Act §§ 1816, 1842, 1874, 1874A; 42 C.F.R. Part 421.

To maintain Medicare billing privileges, an enrolled supplier must "revalidate" its enrollment every five years by resubmitting and recertifying its Medicare enrollment information.  42 C.F.R. § 424.515.  "CMS contacts [the] supplier directly when it is time to revalidate their enrollment information," and the "supplier must submit to CMS the applicable enrollment application with complete and accurate information and applicable supporting documentation within 60 calendar days."  Id. § 424.515(a).

CMS may "deactivate" the Medicare billing privileges of a supplier that "does not furnish complete and accurate information and all supporting documentation within 90 calendar days of receipt of notification from CMS to submit an enrollment application and supporting documentation, or resubmit and certify to the accuracy of its enrollment information."  42 C.F.R. § 424.540(a)(3).  "Deactivate" means that the "supplier's billing privileges were stopped, but can be restored upon the submission of updated information."  Id. § 424.502.  A supplier whose billing privileges are deactivated (for reasons other than that it has not submitted any Medicare claims for one year) "must complete and submit a new enrollment application to reactivate its Medicare billing privileges" unless CMS permits the supplier to "recertify that the enrollment information currently on file with Medicare is correct."  Id. § 424.540(b)(1).

CMS may reject a supplier's enrollment application if the "supplier fails to furnish complete information on the . . . enrollment application within 30 calendar days from the date of the contractor request for the missing information."  42 C.F.R. § 424.525(a)(1).  After CMS rejects an enrollment application, the "supplier must complete and submit a new enrollment application and submit all supporting documentation for CMS review and approval."  Id. § 424.525(c).  If CMS approves an enrollment application, the effective date for billing privileges for a physician or physician organization is the later of:  "(1) The date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor; or (2) The date that the supplier first began furnishing services at a new practice location."  Id. § 424.520(d).

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The determination of the effective date of a supplier's billing privileges is an "initial determination" that the supplier may appeal under 42 C.F.R. Part 498.  42 C.F.R. § 498.3(a)(1), (b)(15); Victor Alvarez, M.D., DAB No. 2325, at 3 (2010).  A supplier may ask CMS to reconsider the effective date, and may thereafter request a hearing before an ALJ on the reconsidered determination, and may request review of the ALJ decision by the Departmental Appeals Board (Board).  42 C.F.R. §§ 498.5(l), 498.5(f); see Alvarez at 3 (approval of enrollment with a specific effective date is, in essence, a denial of enrollment with an earlier effective date, and the supplier has a right to reconsideration review of the effective date of enrollment under section 498.5(l)).

A CMS rejection of a supplier's enrollment application and deactivation of a supplier's billing privileges are not "initial determinations" subject to review by an ALJ or the Board under 42 C.F.R. § 498.3(b).  A supplier whose enrollment application is rejected and whose billing privileges are deactivated may instead file a rebuttal in accordance with 42 C.F.R. § 405.374, by filing a written statement with the contractor, "but has no right to appeal the contractor's determination on deactivation to an ALJ or the Board."  Chaplin Liu, M.D., DAB No. 2976, at 3 (2019) (citing 42 C.F.R. §§ 424.525(d), 424.545(b)).

Background

This background information is taken from the ALJ Decision and the parties' briefs.  We make no new findings of fact.

By letters dated March 8, 2018, a CMS Medicare contractor notified Petitioners that they were required to revalidate their Medicare enrollment through the Provider, Enrollment, Chain and Ownership System, or by submitting the appropriate form CMS-855 enrollment application by May 31, 2018.  CMS Exs. 1-4.  The contractor cautioned Petitioners that if it did not receive an enrollment application by May 31, 2018, it might stop Petitioners' Medicare billing privileges, which would "cause a gap in [their] reimbursement."  Id.

Petitioners timely submitted two revalidation enrollment forms, a CMS-855B application and a CMS-855I application, to the contractor to revalidate their Medicare enrollment.  CMS Exs. 5, 6.

On June 4, 2018, the CMS contractor e-mailed a notice to Petitioners stating that it had received the form CMS-855I application, but that some of the information provided was illegible and the application was incomplete.  CMS Ex. 7; CMS Ex. 24, at 1.  The notice warned Petitioners that if they did not submit the revisions and additional information identified in the letter within 30 days, the contractor would deactivate their Medicare billing privileges.  Id.  On the same date, the contractor also notified Petitioners that the form CMS-855B was not needed because the CMS-855I revalidation application would

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be used for both Petitioners.  CMS Ex. 8.  (Also on June 4, 2018, a contractor employee called Petitioners' office at 8:34 a.m.; however, Petitioners' authorized contact person was not available, and no message was left.  CMS Ex. 23.)

By letters dated July 6, 2018, the contractor notified Petitioners that it had rejected their revalidation enrollment application and stopped their Medicare billing privileges on July 5, 2018, because Petitioners had not responded to the contractor's development request.  CMS Exs. 9, 10.  The contractor stated that, if Petitioners wanted to enroll in Medicare, they would need to submit a new enrollment application with all required documentation and addressing the issues identified in the contractor's June 4, 2018 notice.  CMS Ex. 10.

On July 18, 2018, Petitioners sent a new CMS-855I enrollment application to the contractor by overnight delivery, and the contractor received it on July 19, 2018.  CMS Ex. 11, at 29, 32 (date stamped with Julian calendar date 2018200).  The contractor later requested additional information from Petitioners to complete the application, and Petitioners provided the information within the time set.  CMS Exs. 12-18.

By letter dated September 7, 2018, the contractor notified Petitioners that it had approved their enrollment application.  CMS Ex. 19.  The notice stated Petitioners would "have a gap in billing privileges from July 05, 2018 through July 24, 2018," and "will not be reimbursed for services provided to Medicare beneficiaries during this time period."  Id.  at 1.

By letter dated September 10, 2018, Petitioners asked the contractor to reconsider its September 7, 2018 initial determination.  CMS Ex. 20.  On October 10, 2018, the contractor affirmed its initial determination on reconsideration.  CMS Ex. 22.

Petitioners timely requested an ALJ hearing, seeking Medicare "reimbursement for the July 5, 2018 to July 24, 2018 pay period."  Request for ALJ Hearing at 1, Dkt. No. C-19-277.

On February 4, 2019, after the ALJ issued an Acknowledgment and Prehearing Order setting a schedule for the parties' prehearing exchanges, the contractor reopened and revised its October 10, 2018 reconsidered determination.  CMS Ex. 25.  The contractor determined that July 19, 2018, not July 24, 2018, was the date the contractor received the revalidation application that it subsequently approved.  Id. at 3.  Therefore, the contractor reduced the gap in Petitioners' Medicare reimbursement to the period July 5, 2018 through July 18, 2018.  Id. at 2.

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ALJ Decision

The ALJ issued a decision based on the written record after admitting all of the proposed exhibits into the record without objection and determining that an in-person hearing was unnecessary.  ALJ Decision at 3.

The ALJ made two findings of fact and conclusions of law.  First, the ALJ found that, after the contractor rejected Petitioners' first CMS-855I enrollment revalidation application, Petitioners sent a second CMS-855I revalidation application to the contractor on July 18, 2018, via overnight delivery, which the contractor received on July 19, 2018.  ALJ Decision at 4-5 (citing CMS Ex. 11, at 32; CMS Ex. 20, at 8).  The contractor ultimately approved that application, the ALJ found, and reactivated Petitioners' billing privileges effective July 19, 2018.  Id. (citing P. Ex. 2, at 3; CMS Ex. 19, at 1; CMS Ex. 25, at 3).

Second, the ALJ concluded that the "effective date for Petitioners' Medicare billing privileges is July 19, 2018."  ALJ Decision at 5.  In reaching this conclusion, the ALJ stated that the effective date for billing privileges for physicians and physician organizations "is the later of the 'date of filing' or the date the supplier first began furnishing services at a new practice location."  Id. (citing 42 C.F.R. § 424.520(d)).  "The 'date of filing' is the date that the Medicare contractor 'receives' a signed enrollment application that [it] is able to process to approval," the ALJ stated.  Id. (citing 73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); Donald Dolce, M.D., DAB No. 2685, at 8 (2016)).  Applying the regulations to the facts, the ALJ concluded, the CMS contractor correctly determined on reopening and revision that Petitioners' effective date for reactivation of Medicare billing privileges is July 19, 2018.  Id. at 5 (citing P. Ex. 2, at 3; CMS Ex. 25, at 3).

The ALJ further discussed Petitioners' arguments seeking "to remove the gap" in their Medicare billing privileges.  ALJ Decision at 5.  The ALJ stated that Petitioners' arguments related to CMS's decisions to reject Petitioners' initial revalidation enrollment application and to deactivate their billing privileges, which he did "not have the authority to review."  Id. at 5-6 (citing 42 C.F.R. §§ 424.525(d), 424.545(b), 498.3(b); Willie Goffney, Jr., M.D., DAB No. 2763, at 4-5 (2017), aff'd, Goffney v. Azar, No. 2:17-CV-8032 MRW (C.D. Cal. Sept. 25, 2019)).  Further, the ALJ concluded, he did "not have authority to provide equitable relief" to Petitioners "based on principles of fairness."  ALJ Decision at 6.

This appeal ensued.

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Standard of Review & Review Process

The Board's standard of review on a disputed factual issue is whether the ALJ decision is supported by substantial evidence in the record as a whole.  The standard of review on a disputed issue of law is whether the ALJ decision is erroneous.  Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider's or Supplier's Enrollment in the Medicare Program (Guidelines), available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html.2

A request for review of an ALJ decision must specify each finding of fact and conclusion of law with which the party disagrees and the basis for contending that each such finding or conclusion is unsupported or incorrect.  Guidelines – Starting the Review Process, (d) Contents of Request for Review.  The Board will not consider issues not raised in the request for review or which could have been presented to the ALJ but were not.  Guidelines – Completion of the Review Process, (a).

Analysis

1.  The ALJ correctly determined the July 19, 2018 effective date for reactivation of Petitioners' Medicare billing privileges.

Petitioners do not dispute the ALJ's determination that 42 C.F.R. § 424.520(d) sets the effective date for a physician or physician organization's Medicare billing privileges as "the later of the 'date of filing' or the date the supplier first began furnishing services at a new practice location."  ALJ Decision at 5.  Nor do Petitioners dispute that the "date of filing" is the date the contractor "receives" a signed enrollment application from the supplier that it is able to process to approval.  Id. (citing 73 Fed. Reg. at 69,769; Dolce at 8).  As the ALJ noted, the Board has repeatedly applied these provisions to cases involving the effective date for reactivation of a supplier's Medicare billing privileges.  Id. (citing Howard M. Sokoloff, DPM, MS, Inc., DAB No. 2972, at 6-7 (2019)).

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Furthermore, Petitioners identify no error in the ALJ's finding that the Medicare revalidation enrollment application that the Medicare contractor was able to and did process to approval was the CMS-855I revalidation application received by the Medicare contractor on July 19, 2018.  ALJ Decision at 4-5 (citing CMS. Ex. 11, at 32; CMS Ex. 20, at 8).  Accordingly, under the governing legal authority, the undisputed facts support the ALJ's affirmation of July 19, 2018 as the effective date of Petitioners' reactivated Medicare billing privileges (ALJ Decision at 5).

2.  The ALJ correctly concluded he did not have authority to review CMS's decision to reject Petitioners' first revalidation enrollment application and deactivate Petitioners' Medicare billing privileges.

On appeal to the Board, Petitioners assert that the ALJ Decision "omitted the fact that the application was sent in a timely manner, the consistent calls made without follow-up from CMS, the lack of messages left by CMS, and the email was not received on July 5, 2018."  RR. Petitioners' assertions refer to the submission of their first enrollment revalidation application, their efforts to contact CMS about their revalidation application, and their alleged lack of notice that the submission was incomplete.  See P. Br. at 1-3.  Given the circumstances they assert led to the deactivation of their Medicare billing privileges, Petitioners argued before the ALJ, CMS wrongly deactivated their billing privileges, and, consequently, "CMS should reimburse" Petitioners "for all services rendered" during the gap between the deactivation and reactivation of their billing privileges.  Id.

As summarized above, the regulations governing these proceedings list the types of "initial determinations by CMS" that a Medicare supplier may appeal to an ALJ (including certain contractor or CMS reconsidered determinations).  42 C.F.R. § 498.3(b).  The list does not include either the rejection of a supplier's enrollment application or the deactivation of a supplier's billing privileges.  Id.  Further, the enrollment regulations explicitly state that "[e]nrollment applications that are rejected are not afforded appeal rights."  Id. § 424.525(d).  Moreover, the ALJ correctly explained, "deactivation decisions have a separate review process involving the submission of a rebuttal to CMS."  ALJ Decision at 5-6 (citing 42 C.F.R. §§ 424.545(b), 498.3(b); Goffney, DAB No. 2763, at 4-5); see also Urology Group of NJ, LLC, DAB No. 2860, at 6 (2018).  The ALJ thus did not err in concluding he lacked authority to review CMS's decision to reject Petitioner's first enrollment revalidation application or its decision to deactivate Petitioners' Medicare billing privileges.

In sum, the ALJ correctly stated, the only CMS determination in this matter that the ALJ had authority to decide is the effective date of reactivation of Petitioners' billing privileges.  ALJ Decision at 1; see also Goffney, DAB No. 2763, at 3-5 (citing cases).

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3.  The ALJ correctly concluded that he did not have authority to provide equitable relief to Petitioners based on principles of fairness.

Petitioners further argue on appeal that they were "penalized unfairly" because the deactivation of their Medicare billing privileges resulted in a gap in their Medicare reimbursement for services from July 5, 2018 through July 18, 2018.  RR.

As the ALJ correctly concluded, insofar as Petitioners are requesting an earlier effective date to eliminate the gap in their Medicare billing privileges and thereby obtain reimbursement for services furnished during the gap, ALJs "do not have authority to provide equitable relief based on principles of fairness or equitable estoppel and thus cannot change Petitioners' effective date for that reason."  ALJ Decision at 6 (citing US Ultrasound, DAB No. 2302, at 8 (2010) ("[n]either an ALJ nor the Board is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements")).  Furthermore, the Board has repeatedly held that it, and ALJs, are bound by the applicable regulations and cannot alter an effective date based on principles of equity.  See, e.g., Liu at 10 (and cases cited therein).  For that reason, "however sympathetic a picture" Petitioners' concerns evoke, they "are not legal grounds for the Board or an ALJ to set an earlier effective date" for Petitioners' "Medicare billing privileges, where CMS's determination of that date is . . . consistent with the governing regulation."  Id.

The same principle applies here and precludes changing the authorized effective date to provide the Medicare reimbursement that Petitioners seek.

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Conclusion

For the reasons discussed above, we affirm the ALJ Decision upholding CMS's determination that the effective date for reactivation of Petitioner's Medicare billing privileges is July 19, 2018.

• 1. Some of the regulations governing Medicare enrollment and billing privileges were revised effective November 4, 2019.  84 Fed. Reg. 47,794, 47,852 (Sept. 10, 2019).  We apply the regulations in effect during all times relevant to this appeal.
• 2. The Civil Remedies Division provided a copy of the Guidelines to Petitioners with the transmittal of the ALJ Decision in Docket No. C-19-277.  On appeal to the Board, Petitioners submitted a single-page letter with the file name, "Appeal Letter to Department of Health and Human Services," which we refer to as Petitioners' Request for Review (RR).  Petitioners also resubmitted the brief and exhibits that they filed in the ALJ proceedings.
  
  We reject Petitioner Exhibit 1 because it includes patient personally identifiable information.  As stated in the Appellate Division Practice Manual, with limited exception, documents submitted as part of an appeal before the Board are public records, and parties must redact information from their submissions which might violate federal, state or other confidentiality or privacy requirements.  In any case, the contents of Petitioner Exhibit 1 are not relevant to any issue properly before the Board.