Farzana Naqvi, M.D. and Syed Naqvi, M.D., DAB No. 3016 (2020)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

The Centers for Medicare & Medicaid Services (CMS) appeals the decision of an administrative law judge (ALJ) concluding Farzana Naqvi, M.D. and Syed Naqvi, M.D. (Petitioners) are entitled to a period of retrospective billing beginning 30 days before reactivation of their Medicare billing privileges.  Farzana Naqvi, M.D. and Syed Naqvi, M.D., DAB CR5360 (2019) (ALJ Decision).  The ALJ upheld on summary judgment a CMS contractor’s reconsidered determinations regarding the effective dates of Petitioners’ reactivation of billing privileges.  The ALJ further concluded, sua sponte, that Petitioners were entitled to a period of retrospective billing beginning 30 days before reactivation of their billing privileges. 

For the reasons explained below, we vacate that part of the ALJ Decision granting Petitioners a 30-day retrospective billing period because that issue was not properly before the ALJ.  The ALJ’s conclusion regarding the effective dates of Petitioners’ reactivation of Medicare billing privileges was not appealed and remains unchanged. 

Legal Background

In order to receive payment by Medicare for services furnished to Medicare beneficiaries, “suppliers,” such as physicians, must be approved by CMS for “enrollment” in the program.  See 42 C.F.R. §§ 424.500, 424.505, 424.510.  “Enrollment” is the process that CMS and its contractors use to identify the supplier, validate the supplier’s eligibility to provide items or services to Medicare beneficiaries, identify and confirm a supplier’s practice location and owners, and grant the supplier Medicare billing privileges.  Id. § 424.502 (defining “Enroll/Enrollment”).

Once enrolled, suppliers are required to resubmit and recertify the accuracy of their enrollment information at specified intervals as determined by CMS.  See 42 C.F.R. §§ 424.515 (describing 5-year revalidation schedule and off-cycle revalidations); 424.516 (describing supplier requirements for maintaining active enrollment).  CMS may deactivate the Medicare billing privileges of a supplier if the supplier does not furnish

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complete and accurate information and all supporting documentation within 90 calendar days of receipt of notification from CMS to resubmit and certify the accuracy of enrollment information.  Id. § 424.540(a)(3). 

“Deactivate” means the “supplier’s billing privileges were stopped, but can be restored upon the submission of updated information.”  42 C.F.R. § 424.502.  When a supplier’s billing privileges have been deactivated, “[n]o payment may be made for otherwise Medicare covered items or services furnished to a Medicare beneficiary.”  Id. § 424.555(b).  If any supplier “furnishes an otherwise Medicare covered item or service for which payment may not be made” due to deactivation, any expense incurred for such item or service shall be the responsibility of the supplier.  Id. § 424.555(c).1

In order to reactivate billing privileges, the supplier must recertify that the enrollment information currently on file with Medicare is correct and furnish any missing information as appropriate.  42 C.F.R. § 424.540(b)(1).  In addition, CMS may, for any reason, require a deactivated supplier to submit a new enrollment application as a prerequisite for reactivating billing privileges.  Id. § 424.540(b)(2).

When a Medicare enrollment application is approved, CMS (or its contractor) sets the “effective date for billing privileges” in accordance with 42 C.F.R. § 424.520.  Section 424.520(d) provides that the effective date of Medicare billing privileges for a physician 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).  In the preamble to the rulemaking that adopted section 424.520, CMS explained that “date of filing” means “the date that the Medicare contractor receives a

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signed . . . enrollment application that the Medicare contractor is able to process to approval.”  73 Fed. Reg. 69,726, 69,766-70 (Nov. 19, 2008); accord Alexander C. Gatzimos, MD, JD, LLC, DAB No. 2730, at 15-17 (2016). 

For purposes of section 424.520(d), CMS and its contractors treat an application to revalidate billing privileges as an initial enrollment application, which means that a reactivated supplier will have a new effective date that is the later of (i) the date of filing of the application processed to completion, or (ii) the date on which the supplier first began providing services at a new practice location (if there were a change).  See Arkansas Health Group, DAB No. 2929, at 9 n.5 (2019) (citing Arkady B. Stern, M.D., DAB No. 2329, at 4 n.5 (2010)). 

Although suppliers may not appeal CMS’s (or its contractor’s) deactivation decision, the determination of a supplier’s effective date of reactivation is an “initial determination” subject to administrative review.  See 42 C.F.R. § 498.3(a)(1), (b)(15); Arkansas Health at 9; Urology Group of N.J., DAB No. 2860, at 6 (2018).  Any party dissatisfied with a hearing decision issued by an ALJ may request review of the ALJ decision by the Departmental Appeals Board.  See 42 C.F.R. § 498.80.

A physician whose enrollment application has been approved may retrospectively bill Medicare in accordance with 42 C.F.R. § 424.521.  Under section 424.521(a)(1), a physician “may retrospectively bill for services” that were provided up to 30 days (and, in certain disaster situations, up to 90 days) prior to the physician’s “effective date” if the following circumstances are met:  (1) the physician has met all program requirements (including state licensure requirements); (2) the services were furnished at the physician’s enrolled practice location; and (3) “circumstances precluded enrollment in advance of providing services to Medicare beneficiaries[.]”  See 42 C.F.R. § 424.521(a)(1); see also Richard Weinberger, M.D., and Barbara Vizy, M.D., DAB No. 2823, at 22 (2017) (discussing regulatory criteria for retrospective billing).

Case Background

Syed Naqvi, M.D. (Dr. Syed) and Farzana Naqvi, M.D. (Dr. Farzana) are physicians enrolled in the Medicare program.  On October 14, 2016, Noridian Healthcare Solutions, LLC (Noridian), a Medicare administrative contractor for CMS, sent letters to Dr. Syed (at both of his addresses on file) requesting that he revalidate his Medicare enrollment information by December 31, 2016.  PHX Ex. 1, at 27-30.2   The letters warned that the failure to respond may result in deactivation and a gap in reimbursement.  Id. at 27, 29. Noridian received no response.  On January 26, 2017, Noridian sent letters to Dr. Syed

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noting that he did not revalidate his Medicare enrollment record by December 31, 2016, and warning that his failure to revalidate may result in deactivation and a gap in reimbursement.  Id. at 23-26.  Noridian again received no response. 

On March 17, 2017, Noridian notified Dr. Syed that his Medicare billing privileges were deactivated as of March 3, 2017, because he failed to revalidate his enrollment record.  Id. at 21-22.  No evidence was presented of any rebuttal by Dr. Syed to this deactivation decision in accordance with 42 C.F.R. § 424.545(b).  Noridian, however, received an enrollment application from Dr. Syed on April 3, 2017, with corrections made on April 25, 2017.  Id. at 16-20.  On May 5, 2017, Noridian advised Dr. Syed that his revalidated Medicare enrollment application was approved, with a lapse in coverage from March 3, 2017 through April 3, 2017.  Id. at 9-10.

Dr. Syed requested reconsideration of Noridian’s decision regarding his lapse in coverage.  Id. at 6-8.  In the reconsideration request, Dr. Syed indicated that he “would like to request retro activation to cover the lapsed period.”  Id. at 7.  He explained that he did not receive the revalidation requests from Noridian because he had moved practice locations and some mail was not forwarded to him.  Id.  He further explained that due to staff changes “much of the mail was misplaced (perhaps intentionally).”  Id. 

On August 24, 2017, Noridian issued an unfavorable reconsidered determination, but concluded Dr. Syed’s lapse in coverage should have ended on April 2, 2017, instead of April 3, 2017.  Id. at 1-2.  Noridian stated that the “gap in billing cannot be removed due to the enrollment not being reactivated by the due date . . . .”  Id. at 2.  The reconsidered determination quoted 42 C.F.R. § 424.521 regarding retrospective billing, but did not analyze the criteria under section 424.521(a)(1), or determine whether Dr. Syed was entitled to a period of retrospective billing.  Id.  Noridian subsequently issued a letter to Dr. Syed noting the lapse in coverage from March 3, 2017 through April 2, 2017.  PHX Ex. 4. 

On November 11, 2016, Noridian sent letters to Dr. Farzana (at both of her addresses on file) requesting that she revalidate her Medicare enrollment information by January 31, 2017.  PHX Ex. 2, at 37-42.  The letters warned that the failure to respond may result in deactivation and a gap in reimbursement.  Id. at 37, 39.  Noridian received no response.  In February 2017, Noridian sent letters to Dr. Farzana noting that she did not revalidate her Medicare enrollment record by January 31, 2017, and warning that her failure to revalidate may result in deactivation and a gap in reimbursement.  Id. at 33-36.  Noridian again received no response. 

On April 21, 2017, Noridian notified Dr. Farzana that her Medicare billing privileges were deactivated as of April 3, 2017, because she failed to revalidate her enrollment record.  Id. at 31-32.  No evidence was presented of any rebuttal by Dr. Farzana to this deactivation decision in accordance with 42 C.F.R. § 424.545(b).  Noridian, however,

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received an enrollment application from Dr. Farzana on May 1, 2017.  Id. at 27-30.  On May 24, 2017, Noridian advised Dr. Farzana that her revalidated Medicare enrollment application was approved effective May 1, 2017, with a lapse in coverage from April 3, 2017 through April 30, 2017.  Id. at 24-25.

Dr. Farzana requested reconsideration of Noridian’s decision regarding her lapse in coverage.  Id. at 21-23.  In her reconsideration request, which echoed Dr. Syed’s request, Dr. Farzana indicated that she “would like to request retro activation to cover the lapsed period.”  Id. at 21.  She explained that she did not receive the revalidation requests from Noridian because she had moved practice locations and some mail was not forwarded.  Id.  She further explained that due to staff changes “much of the mail was misplaced (perhaps intentionally).”  Id. 

On August 24, 2017, Noridian issued an unfavorable reconsidered determination, concluding that Dr. Farzana’s enrollment was subject to a lapse in coverage beginning on April 3, 2017, and ending on April 30, 2017.  Id. at 1-2.  Noridian stated that the “gap in billing cannot be removed due to the enrollment not being revalidated by the due date . . . .”  Id. at 2.  The reconsidered determination quoted 42 C.F.R. § 424.521 regarding retrospective billing, but did not analyze the criteria under section 424.521(a)(1), or determine whether Dr. Farzana was entitled to a period of retrospective billing.  Id.  

ALJ Proceedings and Decision

Petitioners appealed the August 24, 2017, reconsidered determinations, requesting a hearing before an ALJ.  Petitioners stated that they did not timely respond to the revalidation requests because their third-party billing company failed to inform them of the revalidation notices.  Request for Hearing at 1-2.  Petitioners argued that their Medicare billing privileges should be reinstated from April 2, 2017 through April 30, 2017, because they provided services to Medicare beneficiaries in good faith and were only deactivated due to the “negligence” of their billing company.  Id. at 2.  Petitioners’ request for hearing did not raise any issue regarding retrospective billing or their compliance with the requirements of 42 C.F.R. § 424.521(a)(1).  Instead, Petitioners focused their appeal on challenging the deactivation of their billing privileges. 

On October 26, 2017, CMS filed a pre-hearing brief and motion for summary judgment, arguing that it correctly determined when Petitioners’ billing privileges were reactivated based on receipt of Petitioners’ enrollment applications.  Petitioners did not file a pre-hearing brief or any response to CMS’s motion for summary judgment.  On December 4, 2017, the ALJ issued an Order to Show Cause why the case should not be dismissed for abandonment.  On December 7, 2017, in response to the show cause order, Petitioners filed a one-page document stating that they cannot afford legal representation and do not understand all of the documents, but “simply want the revocation of our provider number

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for the thirty days of March overturned because we run a small business and the thirty days hurts us very hard economically.”  Billing Dept. Letter from C.L., dated 12/05/2017. On July 1, 2019, the ALJ issued a decision on summary judgment upholding the effective dates of Petitioners’ reactivation of billing privileges as determined by CMS.  ALJ Decision at 1, 7-8 (affirming reactivation of Dr. Syed on April 3, 2017, and Dr. Farzana on May 1, 2017).  The ALJ further held that Petitioners did not have the right to appeal their deactivation, and he did not have authority to consider Petitioners’ arguments that were based on equity principles.  Id. at 4-5, 8‑9.  

The ALJ further concluded, sua sponte, that Petitioners were entitled to a period of retrospective billing beginning 30 days before their effective dates of reactivation based on a “new” CMS policy adopted in March 2019.  Id. at 7-8 (discussing the Medicare Program Integrity Manual (MPIM), CMS Pub. 100-08, ch. 15 (rev. 865, eff. Mar. 12, 2019)).3   According to the ALJ, CMS contractors are now required to grant retrospective billing privileges in accordance with MPIM section 15.17(B) when reactivating providers or suppliers.  ALJ Decision at 7-8.

Board Proceedings

CMS timely filed a request for review of the ALJ Decision on the issue of retrospective billing.  CMS Request for Review of ALJ Decision (RR).  CMS argued, among other things, that the issue of retrospective billing was not properly before the ALJ because the CMS contractor’s initial and reconsidered determinations made no determination about whether Petitioners were entitled to a period of retrospective billing.  Id. at 6-7.  CMS’s filing included a certificate of service stating that Petitioners were served with a copy of the request for review by first class mail, postage prepaid, at their address of record.  Id. at 10.  Petitioners did not request review of the ALJ Decision.

On September 4, 2019, the Board acknowledged receipt of CMS’s request for review and issued a letter specifying next steps and applicable filing deadlines.  Appellate Division Acknowledgment, A-19-125.  The Board issued its acknowledgment letter by DAB E-File and mailed a copy to Petitioners by certified mail–return receipt requested.  Id.  The acknowledgement letter required the parties to use DAB E-File to file and receive documents in this appeal, unless they are granted a waiver.  Id.  The acknowledgement letter further specified that within 30 days after receipt of CMS’s request for review, Petitioners may submit a response.  Id.  The certified mail receipt shows the

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acknowledgment letter was delivered to Petitioners on September 10, 2019.  Certified Mail Receipt, A-19-125.  

Petitioners did not submit a response to CMS’s request for review.  The time for Petitioners to file a response expired on or about October 4, 2019.  On October 18, 2019, the Board issued a “Notice of Record Closing” advising the parties that it was closing the record and would proceed to decision-making.  Notice of Record Closing, A-19-125.  Petitioners did not respond to the Notice of Record Closing and never requested access to DAB E-File or a waiver.

Standard of Review

Whether summary judgment is appropriate is a legal issue that we address de novo.  1866ICPayday.com, DAB No. 2289, at 2 (2009) (citing Lebanon Nursing & Rehab. Ctr., DAB No. 1918 (2004)).  Summary judgment is appropriate when the record shows that there is no genuine dispute of fact material to the result.  Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986)). 
The Board’s standard of review on a disputed issue of law is whether the ALJ’s 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), accessible at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html.  The Board may modify, reverse, or remand an ALJ decision if a legal conclusion necessary to the outcome of the decision is erroneous, the decision is contrary to law or applicable regulations, or a prejudicial error of procedure was committed.  Id.

Analysis

1.    The ALJ erred by granting Petitioners a 30-day period of retrospective billing because that issue was not before the ALJ.

The governing regulations do not grant suppliers the right to appeal a deactivation decision; but, suppliers may appeal their effective date of reactivation in connection with the approval of a revalidation application.  See Arkansas Health at 9; Urology Group at 6.  In this case, the ALJ upheld the effective dates of reactivation as determined by CMS based on the dates CMS received Petitioners’ respective revalidation applications that were subsequently approved.  ALJ Decision at 5, 7.  Neither Petitioners nor CMS appealed the ALJ’s conclusion upholding the effective dates of reactivation, and that part of the ALJ Decision is consistent with 42 C.F.R. § 424.420(d)(1) and Board precedent.  See Arkansas Health at 10-11; Urology Group at 7.  We find no error in the ALJ’s determination of the effective dates of reactivation.

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The ALJ further concluded, however, that Petitioners were entitled to a period of retrospective billing beginning 30 days before the effective dates of Petitioners’ reactivation of billing privileges.  ALJ Decision at 7-8.  CMS contends the issue of retrospective billing was not properly before the ALJ because its contractor made no determination about whether Petitioners were entitled to a period of retrospective billing in its initial or reconsidered determinations.  CMS Request for Review at 6-7.  CMS also argues that the decision whether to grant retrospective billing is not an appealable determination.  Id.at 7-9.

The initial determinations by Noridian approving Petitioners’ respective revalidation applications did not address whether Petitioners were entitled to a period of retrospective billing under 42 C.F.R. § 424.521.  PHX Ex. 1 at 9; PHX Ex. 2 at 24.  Similarly, the reconsidered determinations by Noridian did not determine the issue of retrospective billing.  PHX Ex. 1 at 1-2; PHX Ex. 2 at 1-2.  Although the reconsidered determinations quoted the language from 42 C.F.R. § 424.521, no determination was made to grant or deny retrospective billing in the reconsidered determinations.  See id.; see also CMS Request for Review at 3, 4.  Petitioners have not participated in this appeal at the Board level and, therefore, did not challenge CMS’s contention that the reconsidered determinations did not decide the issue of retrospective billing.  Further, Petitioners did not raise the issue of retrospective billing in their appeal before the ALJ. 

Nothing in the record shows CMS or its contractor denied retrospective billing in the initial or reconsidered determinations and, therefore, the issue of retrospective billing was not before the ALJ for decision.  See Weinberger, DAB No. 2823, at 22 (declining to review issue of retrospective billing because, inter alia, retrospective billing was not denied in the initial or reconsidered determinations); Shalbhadra Bafna, M.D., DAB No. 2449, at 5 (2012) (same).  

Because the ALJ erred in addressing an issue that was not properly before him, we need not reach the question of whether a denial of retrospective billing is appealable under 42 C.F.R. Part 498.

2.     The MPIM does not “require” a period of retrospective billing when a supplier’s billing privileges are reactivated.

For the reasons discussed above, we decline to review whether Petitioners may be entitled to a period of retrospective billing; however, we write separately to address the ALJ’s assertion that the latest version of the MPIM “requires that contractors grant retrospective billing privileges in accordance with MPIM section 15.17(B) when reactivating” a provider or supplier’s billing privileges.  ALJ Decision at 7-8 (citing MPIM section 15.27.1.2).  As an initial matter, we note that CMS’s contractor could not have applied a March 2019 “change” to the MPIM when it issued its reconsidered determinations in August 2017.  Moreover, MPIM section 15.27.1.2 does not mandate

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that contractors grant retrospective billing privileges whenever a supplier’s billing privileges are reactivated.  Section 15.27.1.2 provides that “[c]ontractors shall grant retrospective billing privileges in accordance with Section 15.17(B) for reactivating providers and suppliers . . . .”  MPIM § 15.27.1.2 (emphasis added).  MPIM section 15.17(B) restates the requirements of 42 C.F.R. § 424.521(a), which provides that a supplier “may retrospectively bill for services” that were provided up to 30 days before the physician’s “effective date” if:  (1) the supplier has met all program requirements (including state licensure requirements); (2) the services were furnished at the supplier’s enrolled practice location; and (3) “circumstances precluded enrollment in advance of providing services to Medicare beneficiaries[.]”  See MPIM § 15.17(B). 

The MPIM sub-regulatory guidance is consistent with the regulations and does not purport to alter the requirements of 42 C.F.R. § 424.521(a)(1), which are binding on ALJs and the Board.  See Judith E. Wessely, CNS, DAB No. 2909, at 9 (2018) (reiterating that CMS manuals constitute sub-regulatory guidance and, unlike statutes and regulations, do not have the force and effect of law and are not binding on ALJs or the Board).  As explained in the MPIM, the effective date of a supplier’s billing privileges is determined by section 424.520(d).  See MPIM § 15.17(C).  CMS may grant a supplier a period of retrospective billing, but only if “the requirements of 42 C.F.R. § 424.521(a) are met.”  Id.   

Still further, MPIM section 15.29.4.3 addresses the situation when, as here, a revalidation application is submitted after a deactivation.  After deactivation, CMS contractors will require that the supplier submit a new application to reactivate their enrollment record, the contractor shall process the application as a reactivation, and the contractor “shall reflect a gap in coverage (between the deactivation and reactivation of billing privileges) . . . based on the receipt date of the application along with applying the retrospective billing date if appropriate.”  See MPIM § 15.29.4.3 (emphasis added).  Again, retrospective billing is not automatically granted—a supplier would need to satisfy the requirements of section 424.521(a) for retrospective billing to be “appropriate.”

Here, Petitioners never asserted that they satisfied the requirements of section 424.521(a).  See Bafna at 5 (declining to address retrospective billing because petitioner never alleged that he met all of the conditions for retrospective billing).  And, the ALJ did not determine whether Petitioners satisfied the requirements of section 424.521(a).  No findings were made that in the 30-day period before reactivation (1) Petitioners had met all program requirements; (2) all services were furnished at Petitioners’ enrolled practice location; and (3) “circumstances precluded enrollment in advance of providing services to Medicare beneficiaries[.]”  See 42 C.F.R. § 424.521(a)(1); see also Weinberger at 22 (explaining the regulatory criteria for retrospective billing).  This further demonstrates the error in reaching an issue that was not addressed by the parties, not developed on the record, and not properly before the ALJ.

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Conclusion

For all of the foregoing reasons, we vacate that part of the ALJ Decision concluding that Petitioners, Farzana Naqvi, M.D. and Syed Naqvi, M.D., are entitled to a period of retrospective billing beginning 30 days before the reactivation of their Medicare billing privileges.  The ALJ’s conclusion upholding the effective dates of Petitioners’ reactivation of Medicare billing privileges (April 3, 2017 for Dr. Syed and May 1, 2017 for Dr. Farzana) remains unchanged.

• 1. The deactivation of billing privileges is distinguishable from the denial of enrollment or revocation of billing privileges in important ways.  See Arkansas Health Group, DAB No. 2929, at 2-3 (2019) (explaining differences between deactivation and denial of enrollment or revocation).  “Denial of enrollment and revocation of billing privileges may be appealed under Part 498, whereas deactivation may not be appealed.”  Id. at 2; see also 42 C.F.R. § 424.545(a), (b).  Rather, a deactivated supplier may “file a rebuttal,” usually within 15 days, explaining why the deactivation “should not be put into effect on the date specified in the notice.”  See 42 C.F.R. §§ 424.545(b), 405.374(a).  Additionally, revocation terminates a provider agreement and requires the imposition of a re-enrollment bar of at least one year, neither of which occurs with deactivation.  Compare 42 C.F.R. § 424.535(a), (b), (c) with § 424.540(c); see also Arkansas Health at 3.
• 2. “PHX Ex. _” refers to the exhibits filed by CMS with its Pre-Hearing Brief and Motion for Summary Judgment.
• 3. Provisions of Chapter 15 of the MPIM, CMS Publication 100-08, are primarily intended as guidance or instructions for CMS fee-for-service contractors.  Viora Home Health, Inc., DAB No. 2690, at 8 (2016) (quoting introduction to MPIM Ch. 15).  CMS internet-only manuals, including the MPIM, are available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs.html.