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                              James M. Hawk, DAB CR5864 (2021)
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James M. Hawk, DAB CR5864 (2021)








  
  
    

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





James M. Hawk,
(NPI: 1326028440 / PTAN: 5L141G647),
Petitioner,

v.

Centers for Medicare & Medicaid Services,
Respondent.
Docket No. C-18-1219Decision No. CR5864May 11, 2021

        
              
    

      DECISION

Respondent, the Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, Novitas Solutions, Inc. (Novitas), revoked the Medicare enrollment and billing privileges of Petitioner, James M. Hawk, pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  Petitioner challenges the revocation.  For the reasons discussed below, I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

I.  Background

Petitioner is a physician who at times relevant here was licensed to practice in Arkansas.  On April 19, 2017, Petitioner entered into a Consent Order with the Arkansas State Medical Board in which he agreed he would not practice medicine in the State of Arkansas “until he return[ed] to the Board, having undergone an evaluation at a facility approved by the Arkansas Medical Foundation (Foundation) and he regain[ed] the advocacy of the Foundation.”  CMS Ex. 4 at 1-2.  From April 17 to April 19, 2017, Petitioner underwent the required evaluation at an approved facility and obtained the required advocacy of the Foundation.  CMS Ex. 5.  Though he had not yet returned to the Medical Board to seek reinstatement of his medical license, Petitioner reopened his

**Page 2**

practice on April 24, 2017 and provided services to 19 Medicare beneficiaries.  CMS Ex. 2 at 3.

Between April 25, 2017 and June 29, 2017, Petitioner submitted 20 claims to Medicare for services rendered to 19 Medicare beneficiaries on April 24, 2017.  CMS Ex. 2 at 3.  On April 28, 2017, Petitioner sought reinstatement by the Medical Board, which denied his request.  CMS Ex. 3 at 6.  On June 16, 2017, Petitioner entered into another Consent Order with the Medical Board in which he agreed to submit to a five-year contract for monitoring and rehabilitation, comply with the recommendations of the Sante Center for Healing, and reimburse the Board for the costs of the investigation and hearing.  CMS Ex. 10 at 1-2.  The Medical Board agreed to allow Petitioner to resume practicing medicine upon his successful compliance with these terms.  *Id.*at 2.

On April 18, 2018, Novitas notified Petitioner it revoked his Medicare enrollment and billing privileges for abuse of billing privileges effective May 18, 2018.  CMS Ex. 2.  Novitas explained that pursuant to 42 C.F.R. § 424.535(a)(8)(ii), Petitioner engaged in abusive and improper billing practices because he submitted claims for medical services provided during a period of time he was not permitted to practice medicine.  CMS Ex. 2 at 1.  CMS barred Petitioner from re-enrolling in the Medicare program for three years pursuant to 42 C.F.R. § 424.535(c).  CMS Ex. 2 at 2.

Petitioner timely requested reconsideration.  CMS Ex. 8.  On July 26, 2018, CMS issued a reconsidered determination upholding its contractor’s revocation action.  CMS Ex. 1.  Petitioner timely sought review by an administrative law judge and I was designated to hear and decide this case.  On August 16, 2018, I issued an Acknowledgment and Pre‐hearing Order (Pre‐hearing Order) setting forth a schedule for the submission of arguments and evidence by the parties.  CMS moved for summary judgment (CMS Br.) and submitted 10 proposed exhibits (CMS Exs. 1-10), including the written direct testimony of one witness (CMS Ex. 9).  Petitioner filed a response to CMS’s motion for summary judgment (P. Br.).1
  He also submitted six documents comprising three proposed exhibits (P. Exs. 1-3).2

II.  Admission of Exhibits and Decision on the Record

Neither party has objected to exhibits proposed by the opposing party.  I therefore admit CMS Exs. 1-10 and P. Exs. 1-3 into the record.  CMS identified one witness and offered her written direct testimony.  Petitioner did not request to cross-examine CMS’s witness.  Consequently, I will not hold an in-person hearing in this matter and issue this decision

**Page 3**

based on the written record.  Civ. Remedies Div. P. § 19(d).  CMS’s motion for summary judgment is denied as moot.

III.  Issue

Whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).

IV.  Jurisdiction

I have jurisdiction to decide the issue in this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(*l*)(2); *see also*Soc. Sec. Act § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

V.  Applicable Law

The Social Security Act (Act) authorizes the Secretary of Health and Human Services to establish regulations for enrolling providers and suppliers in the Medicare program.  42 U.S.C. § 1395cc(j)(1)(A).  Suppliers must enroll in the Medicare program and receive a billing number in order to obtain payment for services rendered to Medicare beneficiaries.  42 C.F.R. § 424.505.

CMS may revoke a supplier’s Medicare enrollment and billing privileges for any reason stated in 42 C.F.R § 424.535(a), including when CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  42 C.F.R. § 424.535(a)(8)(ii).  In making this determination, CMS considers the following:

(A) The percentage of submitted claims that were denied.

(B) The reason(s) for the claim denials.

(C) Whether the provider or supplier has any history of final adverse actions (as that term is defined under § 424.502) and the nature of any such actions.

(D) The length of time over which the pattern has continued.

(E) How long the provider or supplier has been enrolled in Medicare.

(F) Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination as to whether the provider or supplier has or

**Page 4**

has not engaged in the pattern or practice described in this paragraph.

*Id*.

After revoking a supplier’s enrollment and billing privileges, CMS will bar that supplier from re-enrolling in the Medicare program for a period of one to three years.  42 C.F.R. § 424.535(c).3

VI.      Findings of Fact, Conclusions of Law and Analysis

***1. CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) because Petitioner submitted 20 claims for services he provided on a date he was not authorized to practice medicine in Arkansas.***

Acting through an administrative contractor, CMS revoked Petitioner’s enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii) based on its determination that Petitioner submitted claims for services provided on April 24, 2017, at which time he did not have an active medical license as required by 42 C.F.R. § 424.516(a)(2).  Petitioner is required to maintain an active medical license to render and bill for services in the Medicare program.  42 C.F.R. § 424.516(a)(2).  In an attachment to its initial determination, Novitas identified the claims that Petitioner had billed for services provided on April 24, 2017.  CMS Ex. 2 at 3.

This documentation confirms Petitioner submitted 20 claims to Medicare for services provided on April 24, 2017.  Petitioner does not dispute that he submitted these claims on that date.  Nor does he dispute the fact he was not authorized to practice medicine on April 24, 2017.  *See*P. Req. for Hearing; P. Br.  Petitioner instead asserts he mistakenly believed he could resume the practice of medicine on April 24, 2017.  *See id.*  He explains that once his attorney apprised him of his misunderstanding, he closed his office and sent any remaining patients home.  P. Br.  I do not find Petitioner’s assertion incredible, but the fact remains that Petitioner submitted 20 claims for services provided on April 24, 2017, while he was not actually authorized to practice medicine.4

The claims for services provided on April 24, 2017 did not meet Medicare requirements because Petitioner did not meet the state licensure requirement under 42 C.F.R.

**Page 5**

§ 424.516(a)(2) on the date he provided the services.  Petitioner committed an abuse of billing because he rendered and billed for services in the Medicare program when his medical license was suspended.  I therefore find CMS had a valid basis to revoke Petitioner’s billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).

***2. Petitioner engaged in a pattern or practice of submitting claims that were not in compliance with Medicare requirements under******42 C.F.R. § 424.535(a)(8)(ii).***

In determining whether a supplier has engaged in a pattern or practice of submitting claims that are not in compliance with Medicare requirements, CMS will consider certain enumerated factors “as appropriate or applicable.”  42 C.F.R. § 424.535(a)(8)(ii)(A)-(F).  No factor is considered more important than another and all factors need not be considered.

We have decided not to give certain factors greater weight in our § 424.535(a)(8)(ii) determinations than other[s], for the importance of each factor may vary based on the particular situation. We have also decided not to establish a minimum percentage threshold for claim denials; as stated earlier, we need flexibility to address a variety of scenarios.

79 Fed. Reg. 72,500, 72,517 (Dec. 5, 2014).

CMS explained it would undertake “a careful and thorough consideration of the factors” outlined in the new regulation to determine whether a pattern or practice of submitting non-compliant claims was present.  *Id.* at 72,519.  CMS further indicated it would consider the “specific facts” present in each case.  *Id*.  CMS observed that “[t]he term ‘abusive,’ as used in the context of 42 C.F.R. § 424.535(a)(8)(ii), is meant to capture a variety of situations in which a provider or supplier regularly and repeatedly submits non-compliant claims over a period of time.” *Id.*at 72,515.

In her reconsidered determination, CMS Hearing Officer Minisha Hicks noted that she found three of the six factors set forth at 42 C.F.R. § 424.535(a)(8)(ii)(A)-(F) relevant in determining whether Petitioner engaged in a pattern or practice of improper Medicare billing.  CMS Ex. 1 at 5.  Hearing Officer Hicks first considered Petitioner’s history of final adverse actions, as defined under 42 C.F.R. § 424.502, and the nature of those actions.  42 C.F.R. § 424.535(a)(8)(ii)(C); CMS Ex. 1 at 5.  She observed that suspension or revocation of a supplier’s medical license by a state licensing authority met the definition of an adverse action under 42 C.F.R. § 424.502, and noted Arkansas’ Medical Board had twice suspended Petitioner’s medical license for endangering the health, safety, and welfare of its citizens, first on an emergency basis in 2014 for excess prescription of controlled substances, and again in 2016 for demonstrating acute signs of mental illness.  CMS Ex. 1 at 5.

**Page 6**

Petitioner does not dispute the fact his medical license was in fact suspended in 2014 and 2016, as the hearing officer related.  Therefore, CMS properly considered Petitioner’s prior medical license suspensions under 42 C.F.R. § 424.535(a)(8)(ii)(C) as one factor in determining he engaged in a pattern or practice of abusive billing.

Hearing Officer Hicks next considered whether the number of claims submitted by Petitioner suggested a pattern or practice of submitting improper claims.  Though the hearing officer does not explicitly cite the regulation, her analysis properly included the number of improper claims submitted.  42 C.F.R. § 424.535(a)(8)(ii)(F) permits CMS to consider any other specific circumstances it deems relevant to its revocation determination.  Here, CMS announced the number of improper claims to be a specific circumstance relevant to a revocation action when it first promulgated the applicable regulation.  The preamble to the first published final rule establishing CMS’s revocation authority stated “We will not revoke billing privileges under § 424.535(a)(8) unless there are multiple instances, *at least three*, where abusive billing practices have taken place. . . . ”  73 Fed. Reg. 36,448, 36,455 (Jun. 27, 2008) (emphasis added).  Hearing Officer Hicks relied on this prefatory language, observing “CMS also considers three instances of improperly billing Medicare as a pattern or practice of abuse of billing.”  CMS Ex. 1 at 5.

In support of Hearing Officer Hicks’ consideration of these regulatory factors, CMS submitted before me a declaration from Lailaa Woods-Green, an employee of the administrative contractor that investigated Petitioner’s billing issues.  CMS Ex. 9.  Ms. Woods-Green confirmed three periods of time during which Petitioner’s medical license was suspended, alluded to more generally by Hearing Officer Hicks.  *Id.* at 1-3.  Ms. Woods-Green also claimed Petitioner submitted a total of 70 improper Medicare claims during the three periods his license to practice medicine was suspended.  *Id.* at 2-3.

Petitioner objects to Ms. Woods-Green’s identification of allegedly improper claim submissions that CMS did not rely on in either its initial or reconsidered determination.  P. Br., citing CMS Ex. 2.  He otherwise disputes that he submitted claims while his medical license was suspended in 2014 or 2016.  P. Br.  CMS filed no reply to address Petitioner’s objection, and its sparse and largely boilerplate summary judgment motion fails to explain why it submitted Ms. Woods-Green’s declaration.  In any case, I agree with Petitioner that it would be improper to consider any evidence supporting revocation other than that which CMS or its contractor actually considered.  *Neb Grp. of Ariz.*, DAB No. 2573 at 7 (2014).  CMS may not now attempt to buttress its decision to revoke Petitioner’s enrollment with evidence it did not consider when it took that action.  I therefore decline to consider any allegedly improper claims made by Petitioner and identified by Ms. Woods-Green, except the 20 claims cited in CMS’s initial and reconsidered determinations.
Considering only the 20 claims cited by Hearing Officer Hicks, I find sufficient evidence to affirm her conclusion that Petitioner engaged in a pattern or practice of abusive billing.

**Page 7**

While prefatory language in a regulation does not bear the same force and effect as the regulation itself, it does provide insight into the intent of the drafters.  In the prefatory language applicable here, CMS indicated it found the number of total improperly submitted claims to be relevant to determining whether to revoke the billing privileges of a provider or supplier for abusive billing practices.  73 Fed. Reg. at 36,455.  I cannot say this is an unreasonable view.  Reasonable minds may differ as to whether three instances of any event can be considered a pattern, or whether an individual claim can properly be considered an ‘instance,’ but in this case, I find CMS properly considered the submission of 20 improper claims by Petitioner in determining he engaged in a pattern or practice of billing abuse.  CMS Ex. 1 at 5-6; CMS Ex. 2 at 3.
Hearing Officer Hicks finally considered the length of time over which Petitioner’s improper billing occurred, a relevant factor under 42 C.F.R. § 424.535(a)(8)(ii)(D).  CMS Ex. 5 at 1.  She acknowledged that all 20 claims derived from medical services provided by Petitioner on one day, but noted Petitioner actually submitted those 20 claims over a two-month period.  CMS Ex. 1 at 6.  Petitioner does not dispute the dates or numbers of his claims, all of which occurred after he was apprised by counsel that he could not resume the practice of medicine without approval from the Medical Board.  He instead argues that “all issues stem from a single day,” P. Br, which I take to mean he did not believe his submission of improper claims amounted to a pattern or practice of doing so.

It is true that most of the claims were submitted from April 25, 2017 to April 26, 2017, the two days following the day Petitioner provided services to 19 Medicare beneficiaries and generated 20 claims.  CMS Ex. 2 at 3.  But of the 20 improper claims, two were submitted on June 20, 2017 and June 29, 2017.  *Id.*  Thus, it is technically true Petitioner submitted 20 improper claims over a period of two months.  The length of time involved in this conduct is sufficient to establish that Petitioner submitted improper claims for payment from the Medicare Trust over a meaningful period of time, as opposed to “sporadic instances [where] providers or suppliers may submit claims in error.”  79 Fed. Reg. at 72,520.

Based on the factors above, I affirm CMS’s determination that Petitioner improperly submitted 20 claims for payment from the Medicare Trust for services he was not qualified to provide owing to the suspension of his medical license, and that the submission of these 20 improper claims over a two-month period represented more than an isolated instance of noncompliance with Medicare billing requirements.  CMS had a valid basis to revoke Petitioner’s enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).

**Page 8**

***3. It is no defense to a revocation action for abuse of billing privileges under 42 C.F.R. §*** ***424.535(a)(8)(ii) that the improper claims were due to unintentional errors.***

Petitioner contends that a third party submitted claims for the services he provided on April 24, 2017.  P. Br.; P. Ex. 3 at 2.  Petitioner explains he forgot to instruct the third-party biller to not bill for services rendered on April 24, 2017, and that he fully reimbursed the amounts he was paid for the 20 claims back to Medicare.  P. Br.; P. Ex. 3. at 2; *see*P. Ex. 1.  I am sympathetic to Petitioner’s explanation that his submission of noncompliant claims was “an honest mistake,” but that does not change the outcome here.  The applicable regulation does not require CMS to demonstrate Petitioner intended to defraud Medicare in order to revoke Petitioner’s billing privileges.  *Louis J. Gaefke, D.P.M.*, DAB No. 2554 at 7-8 (2013) (affirming revocation under 42 C.F.R. § 424.535(a) even if the improper claims were attributed to actions of a billing agent or reckless indifference by the provider); *see also* 79 Fed. Reg. at 72,516, 72,520 (declining to incorporate an intent or knowledge standard into 42 C.F.R. § 424.535(a)(8)(ii)).

Petitioner was instead obligated under the regulations to ensure he submitted claims that fully complied with Medicare requirements, whether directly or through a third-party biller.  79 Fed. Reg. at 72,513 (“We explained that a provider or supplier should be responsible for submitting valid claims at all times and that the provider or supplier’s repeated failure to do so poses a risk to the Medicare Trust Funds.  We note that the responsibility for submitting valid claims exists irrespective of whether the provider or supplier itself submits the claims or hires a billing agency to perform this function; in either case, the claims are submitted on behalf of the provider or supplier.”).

VII.  Conclusion

For the foregoing reasons, I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).


          /s/
        Bill Thomas

                      Administrative Law Judge
      1. Petitioner labeled his response as Petitioner’s Exhibit 4.  For simplicity’s sake I refer to it as P. Br. back to note 1
                      2. Document Nos. 4-6 in the electronic docket for this case are duplicates of Documents Nos. 7-9 but are not labeled as exhibits.  Document Nos. 7-9 are properly exhibited versions of the same documents. back to note 2
                      3. This regulation now permits CMS to bar a supplier from re-enrollment for up to 10 years.  84 Fed. Reg. at 47,855. back to note 3
                      4. Even allowing Petitioner only examined patients that day because he misunderstood the status of his medical license, by his own admission he submitted 20 claims for payment by the Medicare program over a period of two months after he discovered his mistake.  P. Br. back to note 4 Back to top
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