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                              Diagnostic Imaging Network Medical Group, Inc., DAB No. 3100 (2023)
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Diagnostic Imaging Network Medical Group, Inc., DAB No. 3100 (2023)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Appellate Division





Diagnostic Imaging Network Medical Group, Inc.
Docket No. A-20-41Decision No. 3100June 12, 2023

        
              
    

      FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Diagnostic Imaging Network Medical Group, Inc. (Petitioner), an independent diagnostic testing facility, appeals the December 3, 2019 Administrative Law Judge decision, *Diagnostic Imaging Network Medical Group, Inc.*, DAB CR5481 (2019) (ALJ Decision).  The ALJ upheld a reconsidered determination by the Centers for Medicare & Medicaid Services (CMS) to revoke Petitioner’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(2) because one of Petitioner’s health care technicians was excluded from participating in federal health care programs in accordance with section 1128 of the Social Security Act (Act).  For the reasons discussed below, we affirm the ALJ decision.

Legal Background

CMS regulates the Medicare program, including the enrollment of health care suppliers, and delegates certain program functions to private contractors that act as CMS’s agents in administering the Medicare program.  *See*Act §§ 1816, 1842, 1866(j)(1)(A), 1874A; 42 C.F.R. § 421.5(b).1

The requirements for establishing and maintaining Medicare billing privileges are found in 42 C.F.R. Part 424, subpart P (§§ 424.500-424.570).2  In order to receive payment for services furnished to Medicare beneficiaries, a “supplier” must be enrolled in Medicare and maintain active enrollment status.  42 C.F.R. §§ 424.500, 424.505, 424.510, 424.515, 424.516; *see id*. § 424.502 (defining “*Enrollment*”).  The term “supplier” includes an

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independent diagnostic testing facility, such as Petitioner, that furnishes health care services under Medicare.  *See*42 C.F.R. §§ 400.202, 498.2 (defining “*Supplier*”); *accord* Act § 1861(d).

CMS may revoke a provider’s or supplier’s billing privileges for any of the reasons set forth in 42 C.F.R. § 424.535(a), including when:

(2) *Provider or supplier conduct*.The provider or supplier, or any owner, managing employee, authorized or delegated official, medical director, supervising physician, or other health care personnel[3] of the provider or supplier is—

(i) Excluded from the Medicare, Medicaid, and any other Federal health care program . . . in accordance with section 1128 [and other sections] of the Act.

42 C.F.R. § 424.535(a)(2)(i).

“Revoke/Revocation means that the . . . supplier’s billing privileges are terminated.”  *Id*. § 424.502.  After CMS revokes a supplier’s billing privileges, the supplier is barred from participating in the Medicare program from the effective date of the revocation until the end of the re-enrollment bar.  *Id.* § 424.535(b), (c)(1).  On the date CMS revoked Petitioner’s billing privileges, the regulations established a re-enrollment bar of a minimum of one year but not greater than three years.  *Id.* § 424.535(c)(1).  CMS also has discretion to reverse a revocation determination that is based on certain “adverse activity,” including an exclusion, against a supplier’s owner, managing employee, medical director, supervising physician, authorized or delegated official, “or other personnel,” “if the . . . supplier terminates and submits proof that it has terminated its business relationship with that individual within 30 days of the revocation notification.”  *Id*. § 424.535(e); *accord Main Street Pharmacy, LLC*, DAB No. 2349, at 8 (2010) (explaining that CMS’s authority to reverse a revocation is purely discretionary and “permissive in nature”).

A supplier whose Medicare billing privileges have been revoked may request a reconsidered determination by CMS or its contractor.  42 C.F.R. §§ 498.3(b)(17), 424.545(a), 498.22(a).  A reconsidered determination “affirm[s] or modif[ies] the initial determination and the findings on which it was based.”  *Id.* § 498.24(c).  A party “dissatisfied with a reconsidered determination . . . is entitled to a hearing before an ALJ,” and a party dissatisfied with an ALJ’s decision may then seek Departmental Appeals Board (Board) review.  *Id.*§§ 498.5(*l*)(2), 498.80.

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Case Background4

In a letter dated October 17, 2016, Noridian Healthcare Solutions (Noridian), a CMS contractor, notified Petitioner that it was revoking its Medicare billing privileges and imposing a three-year re-enrollment bar under 42 C.F.R. § 424.535(a)(2) and 424.535(c).  CMS Ex. 1, at 1-2.  The October 17, 2016 revocation letter states in relevant part:

Your Medicare privileges are being revoked effective June 26, 2008 for the following reasons:

**42 CFR § 424.535(a)(2) – Excluded/Debarred from Federal Program**
One of your technicians, [E.S.], was sanctioned by the Office of Inspector General (OIG) on February 20, 2008.

*    *    *

Pursuant to 42 CFR § 424.535(c), Noridian is establishing a re-enrollment bar for a period of three year(s) that shall begin 30 days after the postmark date of this letter.  This enrollment bar only applies to your participation in the Medicare program.  In order to re-enroll, you must meet all requirements for your provider or supplier type.

*Id*.

The letter advised that Petitioner could appeal the revocation determination by “request[ing] a reconsidered determination before a contract hearing officer,” and that such a request “must state the issues or findings of fact with which you disagree and the reasons for disagreement.”  *Id*. at 1.  The letter also warned Petitioner that the reconsideration request was Petitioner’s “only opportunity to submit information during the administrative appeals process” unless an ALJ specifically allowed new evidence pursuant to 42 C.F.R. § 498.56(e) (providing that ALJ may admit new documentary evidence in supplier enrollment appeals only upon a determination that “good cause” exists for submitting the evidence for the first time at the ALJ level).  *Id*.

Petitioner timely requested reconsideration.  CMS Ex. 5.  On March 7, 2017, CMS issued its reconsidered determination sustaining the revocation of Petitioner’s billing privileges.  CMS Ex. 4, at 3.  The reconsidered determination stated that “[t]he revocation of [Petitioner] under 42 C.F.R. § 424.535(a)(2) was proper due to [E.S.]’s OIG exclusion

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from all Federal health care programs,” and stated that E.S. “is currently excluded by the OIG, effective February 20, 2008 pursuant to the [Act] § 1128(a)(1) for a program related conviction.”  *Id*.  The reconsidered determination also stated that “[E.S.] is currently employed as a technician, which is a health care personnel position, by [Petitioner] even though he has been excluded by the OIG.”  *Id*.  Accordingly, CMS concluded that Noridian did not err in revoking Petitioner’s billing privileges.  *Id*.  However, “because the exclusion occurred prior to [E.S.]’s employment with [Petitioner],” CMS changed the effective date of Petitioner’s revocation from February 20, 2008, the date that E.S. was excluded, to January 11, 2012, the date that CMS concluded was E.S.’s start of employment for Petitioner.  *Id*.

Petitioner timely sought ALJ review.  Request for Hearing.  Each party submitted a pre-hearing brief and exhibits.  *See*CMS Pre-Hearing Br., CMS Exs. 1-8; P. Pre-Hearing Br., P. Exs. 1-7.  On December 3, 2019, the ALJ issued a decision on the written record.5  ALJ Decision at 2.

The ALJ Decision

The ALJ first resolved a pending evidentiary dispute, excluding from the record a purported excerpt of Petitioner’s employment log (submitted as P. Ex. 6, P. Ex. 7, at 3, and CMS Ex. 8).6  ALJ Decision at 2-3.  The ALJ admitted into evidence all other exhibits.  *Id*. at 3.

The ALJ found that “the IG excluded [E.S.] from participating in all federal health care programs because he had been convicted of a program-related offense.”  ALJ Decision at 3 (citing CMS Ex. 2 (I.G. Exclusion Search Result for E.S.)).  The ALJ further found that “Petitioner . . . concede[d] that Technician [E.S.] was, in fact, excluded and that it hired an excluded individual for a health care position.”  *Id*. at 4.

Page 5

The ALJ then rejected Petitioner’s argument that its billing privileges should not be revoked because, Petitioner claimed, its employment relationship with E.S. had ended by the time of revocation.  ALJ Decision at 4-5.  Petitioner submitted a declaration from its Human Resources Administrator alleging that E.S.’s employment had ended on July 31, 2015, before CMS issued the October 17, 2016 revocation letter.  P. Ex. 7, at 1-2; *see*ALJ Decision at 4.  The ALJ concluded that the declaration was not “persuasive,” and questioned the “timing of this disclosure” because prior to requesting a hearing before the ALJ, Petitioner never suggested that E.S.’s employment with Petitioner had already ended.  ALJ Decision at 4-5.  The ALJ also stated that Petitioner offered no evidence that it had asked a CMS contractor to remove E.S. from Petitioner’s list of approved supplier technicians, an act that the ALJ said would have supported a finding that Petitioner no longer employed E.S. by the date of the revocation letter.  *Id*. at 5.

Regardless, the ALJ ultimately concluded:  “In any event, I am not persuaded that the language of [section 424.535(a)(2)] excuses a supplier from employing an excluded individual so long as the excluded individual leaves his job before the [revocation] notice letter is released.”  ALJ Decision at 5.  Specifically, the ALJ found that the regulation’s use of the present tense in the phrase “‘other health care personnel of the . . . supplier *is*—excluded’ . . . means that the employment and the exclusion must coincide,” not that CMS’s action and the employment of the excluded individual must coincide.  *Id*.

The ALJ noted that the Board had previously “considered the significance of the present tense in a similar phrase; section 424.535(a)(1),” which authorizes CMS to revoke a supplier’s billing privileges if the supplier “*is* determined to not be in compliance with . . . enrollment requirements. . . .”  ALJ Decision at 5 (citing *Miendert Niemeyer, M.D.*, DAB No. 2865 (2018)).  In *Niemeyer*, the Board concluded that section 424.535(a)(1) authorizes CMS to revoke billing privileges for noncompliance “regardless of whether the noncompliance continues to exist” by the date of revocation, given the absence of explicit limiting language in the regulation and because such an interpretation was reasonable and consistent with CMS’s policy goals.  DAB No. 2865, at 9.  The Board also held that requiring a supplier’s noncompliance to persist until the date of the revocation would place an “undue burden” on the CMS contractor and render that regulation “unworkable in instances of short-term periods of noncompliance.”  *Id*.

The ALJ ultimately concluded that “CMS may revoke Petitioner’s Medicare enrollment because the supplier hired and employed a health care technician who was excluded from program participation.”  ALJ Decision at 6.  Therefore, the ALJ upheld the revocation, with an effective date of January 11, 2012.  *Id*.

Standard of Review

The Board’s standard of review on a disputed issue of fact is whether the ALJ decision is supported by substantial evidence in the record as a whole.  The standard of review on a

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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*, accessible at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html.

Analysis

Before the Board, Petitioner does not challenge the ALJ’s finding that it hired E.S. as a health care technician, and thus that E.S. was among Petitioner’s “health care personnel” for purposes of section 424.535(a)(2).  *See*ALJ Decision at 3-4.  Furthermore, Petitioner already had conceded that “[E.S.] was excluded from the Medicare program as of February 20, 2008,” and Petitioner “agree[d] that [E.S.] was excluded from the Medicare program at the time of his employment.”  P. Pre-Hearing Br. at 4.  Petitioner also does not challenge the ALJ’s observation that prior to hiring E.S., Petitioner “could easily have verified whether [E.S.] had been excluded” from Medicare by reviewing the I.G.’s online database of excluded individuals.  ALJ Decision at 4; *see also*CMS Ex. 2.

Petitioner argues primarily that the ALJ erred in affirming CMS’s revocation determination because, Petitioner contends, section 424.535(a)(2) permits revocation only if the excluded individual at issue is “currently employed” by the supplier or provider on the date of the revocation notice.  Request for Review (RR) at 4-5.  Petitioner maintains that the ALJ erred in finding that Petitioner previously conceded that it still employed E.S. at the time it received the revocation letter, and asserts that the reconsidered determination “was the first time Petitioner was made aware that the presumed fact of [E.S.’s] current employment by [Petitioner] was an issue in the case.”  *Id*. at 2-4 (citing P. Ex. 5, at 3).  Petitioner also contends that the ALJ ignored a prior ALJ decision, *Santa Rosa Orthopaedic Medical Group Inc.*, DAB CR4722 (2016), which, Petitioner says, supports its interpretation of the relevant regulatory language.  *Id*. at 4.  Finally, Petitioner asserts – for the first time on appeal – that the ALJ failed to address what Petitioner sees as a conflict between section 424.535(a)(2) and section 424.535(e), which the *Santa Rosa*ALJ “explicitly found . . . existed,” but which the ALJ in this case did not address.  P. Reply Br. at 3.  Petitioner contends, “At the very least, this matter should be remanded so that the fact and date of the technician’s termination may be conclusively established, the rationale of the *Santa Rosa* case may be adequately addressed, and the conflict between the two subsections of § 424.535 [be] resolved.”  *Id*. at 4.  We discuss Petitioner’s arguments in more detail below and explain why we affirm the ALJ Decision.

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***I.        The ALJ’s determination that CMS had a lawful basis to revoke Petitioner’s billing privileges under 42 C.F.R. § 424.535(a)(2) is supported by substantial evidence and free of legal error.***

***A. Section 424.535(a)(2) authorizes revocation based on the federal exclusion of a supplier’s “health care personnel,” regardless of whether the excluded individual’s employment relationship ends before the revocation notice is issued.***

In appeals challenging Medicare enrollment revocations, the Board consistently has held that the ALJ’s (and the Board’s) role is to determine whether CMS had a lawful basis for the revocation.  If it did, then the Board is bound to affirm CMS’s action.  *See* *Horace Bledsoe, M.D. and Bledsoe Family Medicine*, DAB No. 2753, at 8 (2016), *appeal dismissed, Bledsoe v. Price*, No. 3:17-cv-00442 (D.S.C. May 4, 2017).  “In other words, . . . Board and ALJ review of a revocation determination is confined to deciding whether CMS has established the existence of one or more of the permissible grounds for revocation” under section 424.535(a).  *Id*.

CMS may revoke a supplier’s billing privileges if it determines that anyone among the supplier’s “health care personnel” “is . . . [e]xcluded from the Medicare, Medicaid, and any other Federal health care program” in accordance with section 1128 of the Act.  42 C.F.R. § 424.535(a)(2)(i).  As the ALJ correctly explained, the issue in this dispute reduces to the correct interpretation of the regulation’s phrase “is excluded,” that is, whether a revocation under section 424.535(a)(2) is permitted only if the excluded “health care personnel” is still in an employment relationship with the supplier at the time of the initial revocation determination.  ALJ Decision at 5.  The ALJ concluded that such a revocation, to be valid, requires only that the employment period and the exclusion coincide (or overlap), not that the notice of revocation be issued within the employment period.  *Id*.  Petitioner challenges the ALJ’s conclusion and argues in favor of the latter reading.  RR at 4-5.  CMS, on the other hand, maintains that use of the present tense in the regulation’s key phrase authorizes revocation if the individual at issue “is excluded” from Medicare at any point while also in an employment relationship with the supplier – regardless of whether the employment relationship has ended before CMS issues the revocation notice.  CMS argues that this interpretation is reasonable and also consistent with the Act and with the regulation preamble’s requirements to protect the Medicare Trust Fund and prohibit payment for Medicare services furnished by excluded individuals.  CMS Response Br. at 8-12.

The language of the regulation, on its face, does not specify that the employee or other individual must be both excluded and employed by the supplier at the time of the revocation letter, as Petitioner suggests, or simply excluded at any time during the period of employment, as CMS contends.  The regulation’s use of present tense thus arguably creates ambiguity with respect to the relationship between the time when the individual is

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excluded and the timing of CMS’s decision to revoke.  Assuming that such ambiguity exists, we consider whether deference to the agency’s interpretation – that CMS may revoke if one of the supplier’s “health care personnel” was simultaneously excluded from federal health care programs, regardless of whether the noncompliance continues to exist at the time of the revocation determination – is appropriate.  “When the language of a . . . regulation is ambiguous, the Board generally defers to the agency’s interpretation of the text if it is reasonable and the nonfederal party had timely and adequate notice of that interpretation or did not rely to its detriment on another reasonable interpretation.”  *Niemeyer*, DAB No. 2865, at 8 (citing cases).  Given the absence of language in section 424.535(a)(2) expressly limiting its reach to situations where the excluded individual remains in the employ of the supplier at the time of revocation determination, we agree that CMS’s interpretation of its authority under the regulation is reasonable and is consistent with CMS’s policy goals and the regulation’s rulemaking history.

The preamble to the 2006 final rule implementing the enrollment regulations, including the regulations for revocations, summarized the final rule as follows:

[T]his final rule implements provisions in the statute that require us to ensure that all Medicare providers and suppliers are qualified to provide the appropriate health care services.  These statutory provisions include requirements meant to protect beneficiaries and the Medicare Trust Funds by preventing unqualified, fraudulent, or excluded providers and suppliers from providing items or services to Medicare beneficiaries or billing the Medicare program or its beneficiaries.

*    *    *

In . . . [42 C.F.R.] § 424.535(a)(2), we clarify that no payments will be made to any providers or suppliers who are excluded from participation in the Medicare program. . . .  This includes any individual, entity, or any provider or supplier that arranges or contracts with (by employment or otherwise) an individual or entity that the provider or supplier knows or should know is excluded from participation in a Federal health care program.

71 Fed. Reg. 20,754, 20,754, 20,768 (Apr. 21, 2006).

The rulemaking history makes clear that CMS sought to protect the Medicare program by preventing payment of Medicare funds, to “any individual, entity, or any provider or supplier,” for services furnished by excluded individuals.  Revoking the enrollment of a supplier who hired and then employed an excluded individual, regardless of whether that individual continues in the employ of the supplier at the time of the revocation determination, therefore serves this ultimate goal, as expressed in the preamble, of

Page 9

protecting Medicare funds from improper use.  CMS’s interpretation also appropriately disincentivizes suppliers from employing or contracting with excluded individuals, even for short periods of time, as to do so would subject them to revocation and denied payments for Medicare-covered services furnished while the suppliers maintained employment relationships with excluded individuals.

By contrast, under Petitioner’s interpretation of the regulation’s language, CMS would have no authority to revoke a supplier who, like Petitioner here, hired and employed an individual who was excluded from Medicare, simply because the employment relationship had ended by the time CMS issued its revocation action.  Such a limitation would be contrary to the purpose of the enrollment regulations and would allow that supplier to retain Medicare funds for services clearly furnished by an excluded individual.  Such a time constraint on CMS’s authority to revoke where there is no such explicit limitation in the regulation itself would also place an undue burden on CMS’s ability to regulate Medicare enrollment and enforce the regulation’s prohibition on providers and suppliers from employing or contracting with excluded individuals.  *Cf. Niemeyer* at 8 (“Petitioner has identified nothing in the regulatory history that would imply that CMS was required to ensure that providers who have fallen out of compliance maintain that noncompliance throughout the process of investigation, issuance of a revocation determination, and even perhaps the reconsideration process.”).  In short, Petitioner’s interpretation would prevent the regulation from reaching instances of short-term noncompliance.  *Accord*42 C.F.R. § 424.516(a)(3)(i) (requiring that providers and suppliers enroll in and “maintain[ ] active enrollment status” in the Medicare program).

In summary, because no language in section 424.535(a)(2) requires an employment relationship between a supplier and an excluded employee or other member of “health care personnel” to be ongoing at the time CMS revokes the supplier’s billing privileges under that provision, and given that CMS’s interpretation of the regulation is reasonable and complies with the stated goal of protecting the Medicare program, we conclude that the regulation authorizes revocation regardless of whether the supplier’s employment relationship with the excluded individual has ended by the time CMS revokes the supplier’s billing privileges.  *See* *Niemeyer* at 9 (“Given the absence of explicit language binding CMS’s authority to noncompliance at the time of the revocation action, CMS’s interpretation of the regulation is reasonable and aligns with the stated goal of protecting the Medicare Trust Funds and beneficiaries, including from suppliers that do not comply with the enrollment requirements for short-term periods.”).

We therefore affirm the ALJ’s decision to sustain CMS’s revocation determination as based on substantial evidence and free of legal error.

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***B. The ALJ did not err in not discussing a non-binding and inapposite ALJ decision.***

Petitioner contends that the ALJ erred by ignoring a decision from an ALJ in the Civil Remedies Division, which Petitioner says concluded that section 424.535(a)(2) permits revocation only if the supplier employs an excluded individual at the time of revocation.  RR at 4-5 (citing *Santa Rosa Orthopaedic Medical Group Inc.*, DAB CR4722 (2016)).  Petitioner asserts that the ALJ in *Santa Rosa* determined that because the employment relationship between the petitioner and the excluded individual had terminated “as of the date it received notice of the revocation, the . . . exclusion was not a basis to revoke the supplier’s participation in the Medicare program.”  *Id*. at 5.  Petitioner argues that the *Santa Rosa*decision is “extremely relevant” to the current appeal, and that because the ALJ in this appeal did not discuss *Santa Rosa* or its reasoning, the Board should reverse the ALJ decision or, at minimum, remand the case “so that the rationale of the *Santa Rosa*case may be adequately addressed.”  *Id*.  For its part, CMS asserts that “Petitioner’s reliance on *Santa Rosa* is misplaced” because ALJ decisions do not bind other ALJs or the Board, and because “the *Santa Rosa* decision is not consistent with the preamble guidance [for section 424.535(a)(2)] and the Act.”  CMS Response Br. at 11.

Petitioner’s argument with respect to the *Santa Rosa* decision has no merit.  As the Board often has stated, “ALJ decisions are not precedential and are not binding authority on the Board or other ALJs.”  *Zahid Imran, M.D.*, DAB No. 2680, at 12 (2016) (citing cases).  Even if that were not so, Petitioner’s reading of *Santa Rosa*is inaccurate.  There, the ALJ determined CMS had no basis under section 424.535(a)(2) to revoke the billing privileges of a supplier whose former owner was excluded by the I.G. from participating in Medicare long *after* the former owner’s interest in the supplier had ended.  *Santa Rosa*, DAB CR4722, at 2-3.  The ALJ stated that section 424.535(a)(2) “predicates revocation on the involvement in the affairs of a . . . supplier by an excluded individual,” and concluded CMS lacked authority to revoke because the supplier ended its relationship with the former owner “more than two years *prior to the date of*[*the former owner’s*]*exclusion*,” not prior to the date of the revocation determination.  *Id*. at 3 (emphasis added).  In short, the former owner’s exclusion never coincided with any ownership interest in the supplier.  *Id*.  The ALJ’s conclusion in *Santa Rosa* did not turn on the timing of the revocation determination, but rather on a finding that the former owner was not excluded from Medicare until *years after* the former owner’s relationship with the supplier had ended.  In this respect, the facts and reasoning of *Santa Rosa*have no bearing on this appeal.  While the *Santa Rosa*supplier had ended its relationship with the former owner *before*the exclusion took effect, Petitioner admits to having employed E.S. for at least three and a half years while E.S. was excluded from Medicare.  *See*P. Pre-Hearing Br. at 4; P. Ex. 7, at 2.  The ALJ correctly recognized that this critical fact justified CMS’s decision to revoke.  *See*ALJ Decision at 5-6.

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***C. Petitioner’s other arguments lack merit****.*

Petitioner also takes issue with what it asserts were two “findings” by the ALJ that are “not supported by substantial evidence”:  (1) the finding that Petitioner “‘all but conceded’ that [E.S.] was still its employee at the time of the revocation notice[;]” and (2) the implied finding that Petitioner intentionally misrepresented the date of E.S.’s employment termination.  RR at 1-4.  Petitioner argues that, given these errors, the Board should modify, reverse, or remand the ALJ decision.  *Id*. at 2, 4.

The ALJ decision included just one finding of fact and conclusion of law:  “CMS may revoke Petitioner’s Medicare billing privileges because one of its health care employees was excluded from participating in federal health care programs” (bold and italics removed).  ALJ Decision at 3; *see id.* at 3 n.2 (“I make this one finding of fact/conclusion of law to support my decision.”).  It is clear that the ALJ decision did not rest on any other finding or “implied finding,” as Petitioner contends.  As we concluded above, the ALJ correctly found that CMS had a valid basis to revoke Petitioner’s billing privileges because Petitioner employed a simultaneously excluded technician, regardless of whether the technician was still employed at the time of the revocation determination.  The ALJ’s analysis makes clear that regardless of when E.S. stopped working for Petitioner, revocation under section 424.535(a)(2) did not hinge on whether E.S. was still employed by Petitioner at the time of the revocation determination.  ALJ Decision at 5 (“In any event, I am not persuaded that the language of the regulation excuses a supplier from employing an excluded individual so long as the excluded individual leaves his job before the [revocation] notice letter is released.”).  Likewise, while the ALJ may have drawn an inference regarding the “suspicious” timing of Petitioner’s disclosure that E.S. no longer worked for Petitioner on the date of the revocation, *id*. at4, we do not construe this observation as any kind of “implied finding” regarding Petitioner’s representations, and the decision did not depend on any such ALJ inference.  Accordingly, Petitioner’s argument that the late timing of its disclosure was because it “was not given notice that the issue of continuing employment was a basis for revocation until it received the hearing officer’s decision following reconsideration” shows no ALJ error and does not affect our analysis.7  For the reasons already discussed, because Petitioner employed E.S. while E.S. was excluded, the date when E.S.’s employment with Petitioner ended is immaterial for the purpose of determining the validity of the revocation under section 424.535(a)(2).  Therefore, Petitioner’s arguments do not serve as a basis to modify, reverse, or remand the decision.

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***II.        There is no conflict between 42 C.F.R. § 424.535(a)(2) and 424.535(e).***

Petitioner lastly asks the Board to remand this appeal to the ALJ because the ALJ failed to address a perceived conflict between 42 C.F.R. § 424.535(a)(2) and 424.535(e).  P. Reply Br. at 3.  Petitioner does not clearly articulate this perceived conflict, but instead merely refers the Board again to *Santa Rosa*, where, Petitioner vaguely asserts, the ALJ discussed a conflict.  Petitioner states that the ALJ in *Santa Rosa* “explicitly found that a conflict existed between” subsections 424.535(a)(2) and (e), but that the ALJ in this appeal did not.  *Id*.  Petitioner asserts that this conflict “is left unresolved, to Petitioner’s detriment,” and maintains that this case should be remanded to allow the ALJ an opportunity to resolve the conflict.  *Id*. at 4.

This issue is not properly before the Board because Petitioner did not raise it before the ALJ.  “A party appearing before the Board is not permitted to raise on appeal issues that could have been raised before the ALJ but were not.”  *Russell L. Reitz, M.D.*, DAB No. 2748, at 8 (2016), *appeal dismissed* *sub nom. Cent. Kan. Cancer Inst. v. Dep’t of Health & Hum. Servs.*, No. 2:17-cv-02012 (D. Kan. June 2, 2017); *see also Guidelines*(“Completion of the Review Process”), ¶ (a) (“The Board will not consider issues not raised in the request for review, nor issues which could have been presented to the ALJ but were not.”); 42 C.F.R. § 498.40(b)(1)-(2) (A supplier’s hearing request before the ALJ must “[i]dentify the specific issues, and the findings of fact and conclusions of law with which the affected party disagrees; and . . . [s]pecify the basis for contending that the findings and conclusions are incorrect.”).  Although Petitioner asserted generally before the ALJ that “this case falls squarely within the rationale” of the *Santa Rosa*decision, *see*P. Pre-hearing Br. at 6, it did not argue that a conflict between subsections 424.535(a)(2) and 424.535(e) existed, or that such a conflict precluded CMS from revoking Petitioner’s billing privileges.  Accordingly, this issue is not properly before the Board.  *See, e.g., Hiva Vakil, M.D.*, DAB No. 2460, at 5 (2012) (applying the Board’s Appellate Division Guidelines to exclude arguments not raised before the ALJ).

Even if the issue were properly before the Board, there is no regulatory conflict.  Section 424.535(e) affords CMS discretion to reverse a revocation based on adverse activity (including exclusion) against individuals, such as E.S., “if the . . . supplier terminates and submits proof that it has terminated its business relationship with that individual within 30 days of the revocation notification.”  This provision applies when the individual at issue is still employed by or in a business relationship with the supplier at the time of the revocation notice; provides the latest date for the supplier to terminate the business relationship; and grants CMS discretionary authority to reverse the revocation when the supplier submits proof of the termination within 30 days of the revocation notice.  Here, it is undisputed Petitioner did not submit such proof to CMS within 30 days of the revocation notice.  *See* RR at 4 (asserting that Petitioner made no representations about E.S.’s employment status before CMS’s reconsidered determination).

Page 13

Moreover, the provision is not at odds with section 424.535(a)(2), which, as we have discussed, simply authorizes CMS to revoke a supplier’s billing privileges if it determines that the supplier employed excluded “health care personnel.”  Unlike section 424.535(e), section 424.535(a)(2) does not address the issue of whether, or when, the supplier may notify CMS of the date of the “termination” of the relevant health care personnel, let alone whether CMS may reverse the revocation.  Rather than trigger a conflict, the regulations together grant CMS authority to revoke a supplier’s Medicare enrollment based on adverse actions taken against an employee but also grants wholly discretionary authority to reverse such a revocation when the supplier terminates and submits proof that it has terminated the business relationship with that individual no later than 30 days after the date of the revocation notice.  Thus, even were this issue timely raised, the ALJ committed no error of law in failing to recognize a regulatory conflict that does not, in fact, exist.8

Conclusion

For the reasons explained above, we affirm the ALJ Decision.

Endnotes

1 The current version of the Social Security Act can be found at https://www.ssa.gov/OP_Home/ssact/ssact-toc.htm.  Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section.  Also, a cross-reference table for the Act and the United States Code can be found at https://www.ssa.gov/OP_Home/comp2/G-APP-H.html.

2 We cite to, and apply, the enrollment regulations in effect on October 17, 2016, the date CMS’s contractor issued the initial determination to revoke Petitioner’s billing privileges.  *See*,*e.g.*, *John P. McDonough III, Ph.D., et al.*, DAB No. 2728, at 2 n.1 (2016) (applying regulations in effect on date of initial determination to revoke supplier enrollment).

3 The preamble to the 2006 final rule implementing the Medicare enrollment regulations provides that “health care personnel” includes any person or entity “who must be reported on the [supplier’s] enrollment application.”  71 Fed. Reg. 20,754, 20,769 (Apr. 21, 2006).

4 The factual information in this section is drawn from the ALJ Decision and the record and is not intended to replace, modify, or supplement the ALJ’s findings of fact.

5 The ALJ’s Pre-hearing Order advised the parties that an in-person hearing would be necessary “only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine.”  Acknowledgment and Pre-hearing Order, ¶ 10.  CMS did not propose any witnesses.  Petitioner proposed one witness, its Human Resources Administrator, and submitted the witness’s written declaration.  P. Ex. 7, at 1-2.  CMS did not seek to cross-examine Petitioner’s witness.  The ALJ therefore determined that an in-person hearing would serve no purpose and decided the case on the written record.  ALJ Decision at 2.

6 CMS objected to Petitioner’s Ex. 6, a one-page employment log excerpt purporting to show that E.S.’s employment had ended July 31, 2015, prior to the initial revocation determination, because Petitioner had not submitted that document at the reconsideration level.  CMS Pre-Hearing Br. at 4-5; ALJ Decision at 2.  The ALJ determined there was not “good cause” for Petitioner to submit the employment log excerpt for the first time at the ALJ level, and accordingly, pursuant to 42 C.F.R. § 498.56(e), the ALJ declined to admit P. Ex. 6, P. Ex. 7, at 3, and CMS Ex. 8.  ALJ Decision at 3.  Before the Board, Petitioner does not challenge the ALJ’s determination to exclude the employment log excerpt.  We therefore do not review that part of the ALJ’s decision.  In any event, the ALJ took note of Petitioner’s contention regarding the end of E.S.’s employment and admitted a declaration to that effect (P. Ex. 7, at 1-2), and ultimately found it not relevant to CMS’s revocation authority in this case.  ALJ Decision at 3.

7 Petitioner was given notice in the initial determination that its employment of E.S., a technician excluded by the I.G., was the basis for Petitioner’s revocation under 42 C.F.R. § 424.535(a)(2).  CMS Ex. 1, at 1 (“One of your technicians, [E.S.], was sanctioned by the Office of the Inspector General (OIG) on February 20, 2008.”).

8 The ALJ in *Santa Rosa also*did not find a conflict between these regulatory subsections.  Rather, the ALJ found a conflict between CMS’s then-interpretation of section 424.535(a)(2) and the language of section 424.535(e).  *See*CMS Response Br. at 10; *Santa Rosa* at 2-3 (both explaining that CMS in *Santa Rosa*argued that the supplier’s “failure to notify” CMS of the termination of its business relationship with the excluded individual within 30 days after the revocation notice allowed CMS to revoke the supplier’s billing privileges under 42 C.F.R. § 424.535(a)(2), as the individual was assumed to be still employed by the supplier when the individual was later excluded from all federal health care programs).  The ALJ stated, without explanation, that “[i]f I were to accept CMS’s contention with respect to 42 C.F.R. § 424.535(a)(2), that would render 42 C.F.R. § 424.535(e) meaningless,” *Santa Rosa* at 3, but the ALJ did not determine a conflict existed.
  
          /s/
        Michael Cunningham

                      Board Member
          /s/
        Christopher S. Randolph

                      Board Member
          /s/
        Jeffrey Sacks

                      Presiding Board Member Back to top
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