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                              Thomas Falls, M.D., DAB CR5562 (2020)
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Thomas Falls, M.D., DAB CR5562 (2020)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





Thomas Falls, M.D.
	(NPI: 1013216217),
	Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-20-116Decision No. CR5562March 23, 2020

        
              
    

      DECISION
I affirm the Centers for Medicare & Medicaid Services’ (CMS) determination to revoke the Medicare enrollment and billing privileges of Thomas Falls, M.D. (Dr. Falls or Petitioner).
I. Background and Procedural History
Petitioner was enrolled in the Medicare program as a physician. CMS Ex. 10.
On September 25, 2019, a CMS hearing officer issued an unfavorable reconsidered determination upholding an initial determination by a CMS contractor to revoke Petitioner’s Medicare enrollment and billing privileges. CMS Ex. 6. The hearing officer concluded:
On May 9, 2018, Dr. Falls’ medical license in the state of Kentucky was suspended from May 8, 2018 to October 18 2019. Dr. Falls failed to timely report the suspension of his Kentucky license to CMS within 30 days of its occurrence.
Page 2
Therefore, the revocation in regard to Dr. Falls[’] failure to report his Kentucky license suspension pursuant to 42 C.F.R. § 424.535(a)(9) is appropriate and upheld. Additionally, Dr. Falls’ Kentucky M[edicaid] program participation was terminated, effective May 11, 2018. Dr. Falls exhausted all applicable appeal rights related to this termination. Therefore, CMS upholds the revocation of Dr. Falls[’] Medicare billing privileges under 42 C.F.R. § 424.535(a)(9) and (12) for these reasons.
CMS Ex. 6 at 6.
Petitioner timely requested a hearing to dispute the revocation. On November 26, 2019, the Civil Remedies Division (CRD) issued an acknowledgement of receipt of the hearing request and issued my Standing Prehearing Order (Order) establishing deadlines for the submission of prehearing exchanges. In accordance with the Order, CMS filed its prehearing exchange, which included a motion for summary judgment and brief (CMS Br.) and 11 exhibits (CMS Exs. 1-11). Petitioner also filed a prehearing exchange, which included a cross-motion for summary judgment and a brief (P. Br.) and 33 exhibits (P. Exs. 1-33). CMS filed a reply brief.
II. Evidentiary Rulings and Decision on the Record****
Petitioner moved for the admission of P. Exs. 31 and 32 because those documents did not exist during the pendency of his reconsideration request. Those exhibits purport to show that Petitioner has tried to ascertain the status of his attempt to appeal the termination of his Medicaid provider agreement. CMS objected to those exhibits because Petitioner failed to show good cause for their submission at this level of appeal. Further, CMS objected to the reliability of these documents.
I overrule CMS’s objection. I conclude that Petitioner has good cause, as asserted by Petitioner, and the documents provide relevant information concerning his effort to appeal the termination, which is a central issue in this case.*See*42 C.F.R. § 498.56(e).
Because neither party has objected to any of the other proposed exhibits, I admit all of them into the record.
I ordered the parties to submit written direct testimony for all of their proposed witnesses and that I would only hold a hearing if a party requested to cross-examine a witness from whom written direct testimony was submitted. Order ¶¶ 11-12; CRD Procedures §§ 16(b), 19(b). Petitioner submitted his own written direct testimony and I have admitted that testimony into the record.  P. Ex. 33. However, CMS does not wish to cross-examine Petitioner.
Page 3
Further, Petitioner requested to cross-examine Susan Schwenk, from the CMS contractor’s Provider Enrollment Department, to testify about the basis for determining and imposing the revocation of Petitioner’s Medicare billing privileges. CMS objected to this request because Ms. Schwenk is neither a CMS witness (i.e., CMS did not submit her written direct testimony) nor one for Petitioner. Further, Petitioner did not attempt to subpoena Ms. Schwenk to testify.
I sustain CMS’s objection. Ms. Schwenk is not a witness and Petitioner did not request a subpoena. *See* 42 C.F.R. § 498.58; CRD Procedures § 17(b)). Even if Petitioner had made such a request, I would deny it because I may only issue a subpoena if it is reasonably necessary for the full presentation of the case. Ms. Schwenk’s testimony is unnecessary and inappropriate.
Ms. Schwenk signed the initial determination revoking Petitioner’s Medicare enrollment and billing privileges. CMS Ex. 5 at 2. In issuing this determination, she was acting in an adjudicatory capacity or, at the very least, in the capacity of a charging official. She is not a fact witness. Further, Petitioner’s appeal is from the reconsidered determination and not the initial determination, making Ms. Schwenk’s relevance even more attenuated. Finally, I decide the issues of revocation in this case *de novo*. Ms. Schwenk’s views as to why she thought revocation was legitimate are simply irrelevant to me. In rendering this decision, I have independently weighed the evidence of record and applied the law.
Because there are no witnesses who need to be cross-examined, I issue this decision based on the written record. Order ¶¶ 13-14; CRD Procedures § 19(d).
III. Issue
Whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges based on 42 C.F.R. §§ 424.535(a)(9) and (a)(12).
IV. Jurisdiction****
I have jurisdiction to hear and decide this case. 42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2);*see also* 42 U.S.C. § 1395cc(j)(8); 42 C.F.R. § 498.1(g).
V. Findings of Fact
Petitioner received his Doctor of Medicine degree in 2011 and was subsequently licensed to practice medicine in the states of Kentucky and New York. P. Ex. 33 ¶¶ 1, 2.
	Petitioner also became a provider in the Kentucky Medicaid program and was enrolled as a supplier in the Medicare program. CMS Exs. 4, 10.Page 4
From 2017 to 2018, Petitioner was employed at an orthopedic practice in Louisville, Kentucky. P. Ex. 1 at 1.
	On May 5, 2018, Petitioner was arrested by the Louisville Metro Police and charged with unlawfully using electronic means to procure sex with a minor, promoting human trafficking, and soliciting of a prostitute. CMS Ex. 1 at 1; CMS Ex. 3 at 1-2; P. Ex. 6 at 1-2; P. Ex. 33 ¶ 3.
	On May 8, 2018, Petitioner’s employment was terminated. CMS Ex. 3 at 2.
	On May 9, 2018, the Kentucky Board of Medical Licensure (Kentucky Board) issued an Emergency Order of Suspension in which it concluded that there was probable cause that Petitioner’s practice “constitutes a danger to the health, welfare and safety of his patients or the general public.” CMS Ex. 3 at 2.
	The Emergency Order of Suspension stated Petitioner’s medical license in Kentucky was suspended and that Petitioner “is prohibited from performing any act which constitutes the ‘practice of medicine,’ as that term is defined by [Kentucky law] – the diagnosis, treatment, or correction of any and all human conditions, ailments, diseases, injuries, or infirmities by any and all means, methods, devices, or instrumentalities – until the resolution of the Complaint setting forth the allegations discussed in this pleading or until such further Order of the Board.” CMS Ex. 3 at 4; *see also* P. Ex. 33 ¶ 4.
	On May 14, 2018, the Kentucky Department for Medicaid Services (Kentucky Medicaid Department) issued a letter to Petitioner in which it stated that it had terminated his provider agreement due to the suspension of his Kentucky medical license. CMS Ex. 4 at 1. The letter stated that Petitioner had 30 days from receipt of the letter to request a Dispute Resolution Meeting. The letter indicated that following a written determination after the meeting, Petitioner would be provided information on how to request an administrative hearing. CMS Ex. 4 at 2.
	On May 17, 2018, a Complaint was filed with the Kentucky Board seeking unspecified discipline against Petitioner based on the criminal charges pending against him. The Complaint stated that the Kentucky Board would hold a hearing on the allegations in the Complaint in August 2018. P. Ex. 4.
	On September 13, 2018, Petitioner pleaded guilty to a misdemeanor charge of soliciting a prostitute and was sentenced to a 90-day suspended sentence, a two-year conditional discharge, and a $100 fine. CMS Ex. 2; P. Ex. 6 at 2-3; P. Ex. 8 at 1; P. Ex. 33 ¶ 6.Page 5
On October 18, 2018, the Kentucky Board issued an Agreed Order in which it reinstated Petitioner’s medical license but placed Petitioner on probation for five years. P. Ex. 6 at 3; P. Ex. 33 ¶ 7.
	As part of the Agreed Order, Petitioner’s fitness was evaluated by the Acumen Institute, which concluded that “within a reasonable degree of psychological certainty . . .  Dr. Falls is psychologically fit to practice medicine with safety and good clinical judgment.” P. Ex. 6 at 4; P. Ex. 7 at 27; P. Ex. 33 ¶ 7.
	On March 18, 2019, the New York Bureau for Professional Medical Conduct issued charges against Petitioner based on his criminal conviction and the discipline imposed in the Agreed Order. P. Ex. 9 at 10-12; P. Ex. 33 ¶ 8.
	On May 28, 2019, a CMS contractor issued an initial determination revoking Petitioner’s Medicare enrollment and billing privileges because he failed to report the Kentucky Board’s Emergency Suspension Order and the Kentucky Medicaid Department terminated Petitioner’s provider agreement. The CMS contractor also barred Petitioner from re-enrolling for two years. CMS Ex. 5.
	In June 2019, Petitioner entered into a Consent Agreement with the New York Bureau of Professional Medical Conduct in which he agreed, in part, that he “shall be precluded from practicing medicine in New York State,” and the New York Board of Professional Medical Conduct adopted that agreement in a June 18, 2019 Consent Order. P. Ex. 9 at 2, 4; P. Ex. 33 ¶ 9.
	On June 27, 2019, Petitioner wrote to the Kentucky Medicaid Department to contest the termination of his provider agreement.  Petitioner asserted that he did not receive the May 14, 2018 letter terminating his provider agreement. P. Ex. 12; P. Ex. 33 ¶ 11.
	On July 24, 2019, Petitioner requested that CMS reconsider the revocation of his Medicare enrollment and billing privileges. CMS Ex. 7.
	On September 25, 2019, CMS upheld the revocation of Petitioner’s Medicare enrollment and billing privileges. CMS Ex. 6.
	In a January 9, 2020 letter, Petitioner sought a response to his June 27, 2019 letter seeking a Dispute Resolution Meeting with the Kentucky Medicaid Department. P. Exs. 31, 32; P. Ex. 33 ¶ 12. As of February 24, 2020, the Kentucky Medicaid Department had not yet acted on Petitioner’s request. P. Ex. 33 ¶ 13.Page 6
VI. Conclusions of Law and Analysis
Petitioner is a physician and, therefore, a supplier for purposes of the Medicare program. *See* 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of *Supplier*), 410.20(b)(1). CMS may revoke a supplier’s Medicare billing privileges for any of the reasons stated in 42 C.F.R. § 424.535. When CMS revokes a supplier’s Medicare billing privileges, CMS establishes a re-enrollment bar that lasts from one to three years. 42 C.F.R. § 424.535(c). Generally, a revocation becomes effective 30 days after CMS mails the initial determination revoking Medicare billing privileges. 42 C.F.R. § 424.535(g).
***1. CMS had a legitimate basis under 42 C.F.R. § 424.535(a)(9) to revoke Petitioner’s Medicare enrollment and billing privileges because the Kentucky Board took an adverse legal action against Petitioner when it issued an Emergency Order of Suspension prohibiting Petitioner from the practice of medicine and Petitioner did not report that adverse legal action to CMS within 30 days.***
The regulations require that physicians report, within 30 days, “[a]ny adverse legal action” to their Medicare contractor. 42 C.F.R. § 424.516(d)(1)(ii). Failure to timely report is a basis to revoke a physician’s Medicare enrollment and billing privileges. 42 C.F.R. § 424.535(a)(9).
In the present case, there is no dispute that the Kentucky Board suspended Petitioner’s medical license on an emergency basis before a hearing could be held.  Further, it is not disputed that the Emergency Order of Suspension resulted in the prohibition of Petitioner from the practice of medicine from May 9, 2018 to October 18, 2018. Finally, Petitioner does not assert that he reported this suspension to CMS within 30 days of it taking affect.
Rather, Petitioner argues that the phrase “[a]ny adverse legal action” in 42 C.F.R. § 424.516(d)(1)(ii) really means “final adverse action,” as that term is defined in 42 C.F.R. § 424.502. Because the Emergency Order of Suspension was only a temporary suspension pending the outcome of disciplinary charges, Petitioner reasons that it was not a final adverse action and, therefore, not reportable under 42 C.F.R. § 424.516(d)(1)(ii). In support of this assertion, Petitioner points out that the CMS-855I enrollment application indicates that all applicable final adverse legal actions must be reported (P. Ex. 25 at 12) and the preamble to the final rule promulgating § 424.516 discusses the requirement to report final adverse actions (73 Fed. Reg. 69,725, 69,777 (Nov. 19, 2008). P. Br. at 13-16.
CMS argues that Petitioner was required to report the Emergency Order of Suspension because the primary issue “is whether there is in fact a suspension, not whether the suspension is temporary pending some ultimate decision or outcome that may or may not warrant some action other than continuation of the suspension.” CMS Br. at 6. CMS
Page 7
cited *Akram A. Ismail, M.D*., DAB No. 2429 (2011) as a primary case supporting CMS’s position and indicated that its holding directly applied to an emergency suspension order similar to the one in this case. CMS Br. at 4 n.1.
CMS is correct that, while *Ismail* was mostly concerned with a suspension in New Jersey that was being appealed, the Department Appeals Board (DAB) noted that an emergency suspension from Florida also triggered the reporting requirement in § 424.516. DAB No. 2429 at 4 n.4. In *Ismail*, the DAB explicitly rejected Petitioner’s argument that the term “any adverse legal action” from § 424.516(d)(1)(ii) is equivalent to the term “final adverse action” defined in § 424.502. As stated in the decision:
We agree with the ALJ that the phrase “[a]ny adverse legal action” in section 424.516(d)(1)(ii) should be read according to its plain language to require the reporting of a license suspension even if an appeal of the suspension is pending. The Secretary added the reporting requirement in that section as an “incentive for [individual practitioners] to report a change that may adversely affect their ability to continue to receive Medicare payments.” 73 Fed. Reg. at 69,777. The definition of “final adverse action” contained in section 424.502 was promulgated in the same rulemaking that established the reporting requirement. *See id.* at 69,778, 69,939. If the Secretary had intended the definition in section 424.502 to limit the scope of section 424.516(d)(l)(ii), she would not have used different language. The phrase “[a]ny adverse legal action,” as it is used in the provider/supplier enrollment regulations, is on its face broader than “final adverse action,” and includes, but is not limited to, a final adverse action.  In this case, we agree with the ALJ that the suspensions of Dr. Ismail's medical licenses constituted “legal actions" that were adverse to his interests.
Our interpretation is consistent with the plain reading of the phrase “[a]ny adverse legal action” and is also appropriate in view of the goal of the section, which, as the Board stated in *Gulf South Medical & Surgical Institute*, DAB No. 2400, at 8 (2011), is “to provide CMS with information about adverse legal actions that CMS had determined are relevant to evaluating whether a supplier should continue to participate in Medicare.” Allowing a doctor of medicine with a suspended medical license to participate in Medicare pending an appeal of the suspension without having to notify a CMS
Page 8
contractor of the suspension would prevent CMS from effectively evaluating whether the supplier should continue to participate in Medicare, and would undercut the regulatory goal of reducing improper payments to unqualified practitioners. *See* 71 Fed. Reg. at 20,754.
*Ismail*, DAB No. 2429 at 10-11.
This interpretation is consistent with the statutory requirements to be enrolled in the Medicare program as a physician. Relevant to this case, a “physician” for Medicare program purposes is “a doctor of medicine . . . legally authorized to practice medicine and surgery by the State in which he performs such function or action . . . .” 42 U.S.C. § 1395x(r)(1); 42 C.F.R.§ 410.20(b). Therefore, a physician’s enrollment is revocable whenever he or she is out of compliance with any enrollment requirement and it is proper to look at the immediate effect of a suspension rather than at the possibility that the suspension will be lifted in the future. *Ismail*, DAB No. 2429 at 8. If a physician is no longer licensed to practice medicine in the state where he or she practices, then that physician cannot provide services to Medicare beneficiaries. However, permitting such a physician to remain enrolled puts the Medicare program at risk for false claims. Therefore, the purpose of § 424.516(d) could not be achieved if “[a]ny adverse legal action” did not in fact include all license suspensions.
Even if Petitioner’s argument is correct and only “final adverse actions” are reportable, *Ismail* states that all suspensions are encompassed by the definition of that term.
Even if the definition in section 424.502 limited the phrase “[a]ny adverse legal action” in section 424.516(d)(l)(ii) as Dr. Ismail suggests, [the New Jersey State Board of Medical Examiners’] suspension of Dr. Ismail’s license would nevertheless have to be reported. Section 424.502 specifically provides that “[s]uspension or revocation of a license to provide health care by any state license authority" is a “final adverse action.” Moreover, the Secretary has expressly stated that license suspensions are “final” for the purposes of the Medicare enrollment regulations irrespective of any ongoing appeal rights. *See* 73 Fed. Reg. at 69, 777 (“[W]e believe that a final adverse action has occurred when the sanction is imposed and not when a supplier has exhausted all of the appeal rights associated with the action itself.”). Therefore, notwithstanding any pending appeal, the suspension of Dr. Ismail’s license would already be considered “final” for the purposes of the reporting requirements.
Page 9
*Ismail*, DAB No. 2429 at 11. This interpretation is consistent with the information provided on the CMS-855I regarding the need to report final adverse actions. It states, in pertinent part, that a final adverse action includes: “**Any** current or past . . . suspension or voluntary surrender of a medical license in lieu of further disciplinary action.” P. Ex 25 at 12 (emphasis added).
Therefore, I reject Petitioner’s argument and conclude that the Emergency Order of Suspension that prohibited him from the practice of medicine in Kentucky for more than five months constituted a reportable adverse action under § 424.516(d). I conclude CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under § 424.535(a)(9).
***2. CMS had a legitimate basis under 42 C.F.R. § 424.535(a)(12) for revoking Petitioner’s Medicare enrollment and billing privileges because a state Medicaid agency terminated Petitioner’s participation in Medicaid and Petitioner has no appeal of the termination pending.***
CMS may revoke a supplier’s Medicare billing privileges if:
(i) Medicaid billing privileges are terminated or revoked by a State Medicaid Agency.
(ii) Medicare may not terminate unless and until a provider or supplier has exhausted all applicable appeal rights.
42 C.F.R. § 424.535(a)(12) (2019). CMS revoked Petitioner’s Medicare enrollment and billing privileges based on the Kentucky Medicaid Department’s May 14, 2018 letter terminating Petitioner’s provider agreement. CMS Ex. 4.
Petitioner argues that CMS improperly revoked his Medicare enrollment and billing privileges based on the termination of his provider agreement with the Kentucky Medicaid program. Petitioner neither disputes that the Kentucky Medicaid Department is a state Medicaid agency nor that he was terminated from the Kentucky Medicaid program. Petitioner does dispute that he has exhausted all applicable appeal rights to the termination. Specifically, Petitioner asserts that he did not receive the May 14 termination letter and only learned of the termination about a year later when the CMS contractor referenced the termination in its initial determination to revoke. Petitioner argues that because he filed an appeal shortly after learning of the termination and the Kentucky Medicaid Department has not completed that appeal, CMS cannot revoke him based on the termination. P. Br. at 7-9.
Page 10
CMS argues that it strains credulity that Petitioner could have gone a year without knowing that his Medicaid agreement had been terminated. Further, CMS points out that the Medicaid termination letter was sent to the same address as the CMS contractor’s initial determination to revoke. CMS Br. at 7-8.
Petitioner has not shown that he has an appeal pending with the Kentucky Medicaid Department. Petitioner has sent letters seeking to file a late appeal; however, the Kentucky Medicaid Department has not sent Petitioner a letter or other written confirmation that the Kentucky Medicaid Department is entertaining Petitioner’s appeal. If the Kentucky Medicaid Department had accepted Petitioner’s late appeal, it would have taken immediate action to conduct the dispute resolution meeting. The applicable state regulation, 907 KAR 1:671 § 8(7), states:
The department shall, within ten (10) calendar days of receipt of the request for a dispute resolution meeting, send a written response to the provider identifying the time and place in which the meeting shall be held within thirty (30) days of receipt of the request and identifying the department’s representative who is expected to attend the meeting. The meeting shall be held within forty (40) calendar days of receipt of the request, unless a postponement is requested. The dispute resolution meeting may be postponed for a maximum additional period of sixty (60) calendar days, at the request of any party.
P. Ex. 15 at 12. However, Petitioner admits that his two letters have not resulted in a dispute resolution meeting. P. Ex. 33 ¶ 13. Therefore, there is insufficient evidence to conclude that Petitioner’s termination is presently under appeal. If it had been, Petitioner would have completed the dispute resolution meeting level of appeal by now.
Based on the evidence of record, CMS had a legitimate basis to revoke Petitioner’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(12).
VII. Conclusion
I affirm CMS’s determination to revoke Petitioner’s Medicare enrollment and billing privileges.
  
          /s/
        Scott Anderson

                      Administrative Law Judge Back to top
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